Engie Brasil Energia SA
BOVESPA:EGIE3
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
38.19
47.07
|
| Price Target |
|
We'll email you a reminder when the closing price reaches BRL.
Choose the stock you wish to monitor with a price alert.
This alert will be permanently deleted.
Engie Brasil Energia SA
You don't have any saved screeners yet
[Audio Gap] through telephone and through the chat in the platform. This event is being recorded and will be made available at www.engie.com/ir and the release and in presentation you can find the detailed information on the operations, the advance of the projects and a financial analysis.
Before proceeding, I would like to clarify that all statements made during this conference call referring to the company's outlook should be treated as forecasts that depend on the country's macroeconomic conditions, on the performance and regulation of the electrical sector and other variables. They are therefore subject to changes.
My colleague is Marcelo Malta, the Chief Financial Officer, who will also talk about the company's performance in the third quarter of 2021. For journalists that would like to ask questions, please send them to the company's press office. I would like to give the floor to Malta. Malta, you may proceed.
Thank you very much, Rafael. Good morning to all of you. And it is a pleasure to be here with you to show you our results for the third quarter. Next slide, please. I believe the slide is -- we will begin on is Slide #5.
On Slide #5, we show you the highlights for the third quarter, and you'll see the main drivers during the quarter, both positive and negative. We had in this quarter, the approval of the law and a renegotiation of the hydrological risk. These were impacts that we underwent in the past and now in this quarter, with the enforcement of this law, we will be able to recover what was due to us in the past. I would like to remind you that last year, we also recorded the effects referring to the plants that had this problem with energy, and we are now referring to plants that fall under the regulation between the years 2012 and 2014.
We had a positive effect in our results this quarter of BRL 372 million because of this. It is important to also mention that we still have an amount that will be recorded in the fourth quarter of this year. And that refers to the plants in which we participate in as a consortium. This is a demand that was made by the National Electrical Energy agency and until November of this year, we will have to deliver all of the documentation that is required and sign it. Some of our partners have already signed these documents with others. This is still pending and we're depending on their governance. And we do have the expectation that until the end of November, all of this documentation will be sent to ANEEL, enabling us to record the failures that happened in these plants. And they represent a significant amount during the quarter.
We also have a reduction in our energy volume. This had already been foreseen in our strategy. And unfortunately, this became somewhat exacerbated because of the steep prices that were observed during this quarter. On the other hand, because of this, we had a reduction in the sale of energy as well. When we speak about amounts, the reduction in the purchase volume reached BRL 153 million. We had a positive effect in transmission of BRL 89 million, which basically results from the update based on the IPCA of some assets that we have in Gralha Azul, additionally to the advance in the CapEx that we had and the implementation of these plants.
We had an inflation that generated a significant impact on our revenues, considering that our contracts are indexed to the IPCA, most of them at least. And we had a significant impact on accounts payable. But we ended up having a positive result in our financial expenses of BRL 35 million, I believe.
Now negative drivers, an increase in the monetary restatement of IPCA on debts if compared to the third quarter of 2020, and we did pay an important installment of our debt, which led to an increase in our financial expenses of approximately BRL 210 million. We have already mentioned that we had a reduction in the volume of our energy purchases as well as a drop in the sale. Now this drop was also caused as a result of our portfolio management process and, additionally, by the purchase of energy, as mentioned previously.
If we compare the quarters, we had this negative impact of BRL 3 million referring to the transactions carried out at the CCEE because of GFS. It is important here to mention that the millions that I mentioned is simply a variation among quarters. In the third quarter of 2020, we had an impact in our transactions of CCEE of only BRL 80 million. I say only BRL 80 million because we presented the more significant impacts because of the hydrological issues that we observed in the country and a PLD that has reached a ceiling. If we look at the 9 months of 2021, we had a negative impact in the transactions carried out with CCEE of BRL 94 million. Now vis-à-vis, there's very serious hydrological crisis that we are facing in the country. We have carried out management of our portfolio, as we have presented during this entire year.
And finally, we had a greater fuel consumption during the quarter due to an increase in thermoelectric generation that was geared towards mitigating the hydrological effects. And this generated a greater consumption if compared with the third quarter of 2020, an amount of BRL 68 million. We have a non-recurrent amount of BRL 34 million that refers to the reversal of impairment on assets. And this reversal, of course, allows us a more positive outlook for the return on these assets.
You can see the increase of our EBITDA to BRL 265 million, representing a growth of 18.5%. And if we look at the 9 months of the year, we had an increase of 22.9%. If we look at net revenue, we had a growth in the quarter of 30.4% and for the 9 months as a whole, a reduction of our net income. This is mainly caused by the application of the variation of IgM and the accounts payable. And this generated a significant impact on our results.
We would like to remind you that the impact on our results has a cash hedge throughout that period and this is where we have a significant amount of our revenues also indexed to IGPM as some of our contracts will have their maturity during the year because of the difficulty of signing new contracts based on IGPM. We have requested to ANEEL to change this index to IPCA as this will allow us greater efficacy in terms of the hedge, and we have received the approval already beginning in the month of October. All of our contracts will stop being indexed based on IGPM and will be updated based on the IPCA.
To the left. You see, therefore, the main amounts that have had an impact on our EBITDA. And most of them, of course, have already been mentioned previously when we were speaking about the main drivers during the quarter.
We can now go on to Page #6. I do believe that the participants can already see this as a highlight. The Gralha Azul Transmission System received the authorization for a commercial start-up of the Ponta Grossa - Sao Mateus do Sul and Ponta Grossa Sul lines beginning in August of this year. And of course, this will add a slow ramp when compared to the total amount of our ramp up. This is at least the start-up of the operation.
Now our forecast for the conclusion of these works continues to be at the end of the year. And with this beginning in January of the year 2022, we will receive the full RAP referring to Gralha Azul System. Another highlight, we received the authorization from ANEEL for the operation of the wind power units of Campo Largo II. And this means that we now have the full asset under operation. It is important to mention that with this wind plant, we will have approximately 1.3 gigawatts of installed capacity when it comes to wind power.
Another highlight, we had the conclusion of the sale of the Jorge Lacerda Thermal Complex. Now this operation was closed on October 18 this year after we fully complied with all conditions precedent. With this, we are able to reduce by 75% our emissions and the outlook with the sale of this asset that operates coal for Pampa Sul, is something that will happen in 2022. This is the outlook that we have. We will once again re-manage our energy portfolio and work with more renewed energy.
We would like to remind you that because of the sale of Jorge Lacerda Thermal Complex, we continue to purchase energy in the year 2021. The purchase is for the full generation of the plant. And between 2022 in 2024, we will be purchasing a different amount. This has been very important for us as part of the portfolio management process.
Next slide, please. As another highlight, we have acquired Assú Sol Photovoltaic Complex in Rio Grande do Norte, very close to our Sun asset with an installed capacity of 750 megawatts. And this points to the continuous growth that we have in our portfolio in terms of renewable energy. Now, we have already received all of the prior licenses, we already have a lease contract for the areas that have been signed up. And we have an advanced process to be able to obtain the operation permits for this asset. It is very probable that we will be ready to make this project feasible with an additional benefit, which is a reduction in the cost of transmission and generation and distribution as well and this extends until March of the coming year.
Another highlight, we were one of the 14 Brazilian companies that were named as being be the most transparent in terms of sustainability among 70 companies that were assessed. Now this is an award that is given out by the Observatório da Transparência. And once again, this shows the commitment that we have with the ESG practices. And this is one of the factors through which we are able to maintain a very high Sustainability Index since we were created. And there are several Brazilian companies that are part of this Global Reporting Initiative, the GRI, in Brazil.
Another aspect I would like to highlight is the completion of the upgrades in our generator at the Salto Osório hydroelectric plant where we added 7 megawatts to the energy portfolio. We are also presently undergoing the maintenance of all of the other units of this plant to be able to maintain the asset's operational performance and so that it can operate at its full installed capacity.
I did forget to mention that as Engie, we received the transparency trophy. This is a trophy that is organized by Anefac and it is a proof of our commitment with governance practices and transparency. And finally we were the winners of Exame Melhores & Maiores in the energy category. Once again, we have been awarded because of our good governance practices, transparency and the quality of the management.
I will now give the floor to Rafael Bosio who will be speaking on the next slide. And when I return, I will offer you more details on our financial performance during this quarter. Please, Rafael.
Thank you, Malta. Slide #9, please. This is a slide where we present an update, our energy commercial strategy. I believe that main novelty in this slide is the update of our energy balance that you will find in the graph to the left, where we have made an adjustment of our contracted projection of the company for the coming years. Already considering the sale of the Jorge Lacerda Complex, which means that we have taken away the capacity of Jorge Lacerda from the line of the company resources and we have made an adjustment for purchases for resale as mentioned by Malta.
We will acquire 400 average megawatts beginning the year and for the rest of this year. With this readjustment, you will observe that we still maintain a very comfortable position of available energy in the portfolio to mitigate the GSF impacts in the short and long term. Now, the volume of this available energy will be adjusted through time based on our forecasts of hydrology demands and as these become ever more precise.
In the rest of the slide, we show you how diversified our sales are in the free contracting market. We always attempt not to have a concentration in a specific segment and our gradual sales energy strategy. Although we have uncontracted energy for 2026 through the years as availability will be reduced until it comes to a position that we deem to be optimal.
Slide 10, please. Still speaking about the energy commercial strategy, here we can observe the impact of our strategy for protection against GSF. We held back the sales this year to be able to guarantee available energy, and of course, this means a loss of revenue. But on the other hand, it is a considerable reduction in terms of cost. As the acquisition price in the short-term market, especially in the third quarter, was much higher than our average sales price, it reached BRL 581 in the quarter. This also reduces our market share, but it is a one-off situation, which should begin to be reverted with an enhancement of the hydrological situation observed in September and October with a good forecast for November. We can continue to better gauge this availability and perhaps sell this energy in the coming years.
We go into the next session, beginning in slide 11.
We go on to Slide 12. More specifically, where we would like to update you in our projects under implementation. First, we have the Santo Agostinho Wind Complex. Santo Agostinho is a project with an installed capacity of 434 mega, the licenses have already been obtained and we are evolving in terms of the other documents. We completed the mobilization of contractors in charge of civil works. We already began the construction activities for access, excavation, the base for the generators, as you can see the pictures, and the installation of the medium voltage grid and the collecting station. The forecast for entry into operation continues to be March of 2023.
Next slide please, Slide 13, where we present an update of the implementation of the Gralha Azul Transmission System. As Malta mentioned, we celebrated the beginning of the commercial operation of what small lines. This is a significant framework for the company. It confirms that we are now also in the transmission business with Ponta Grossa II and Sao Mateus do Sul and Ponta Grossa lines and the rest of the project is foreseen for the fourth quarter, enabling us to fully receive the RAP that we are entitled to.
And the next slide. We would like to present an update of the Novo Estado Transmissora de Energia transmission line. At the end of September 2021, the project was at 90%. We continue with the assembly part, the transmission line conductor cabling installed, the substation is underway. And we are foreseeing the generation of the first systems in the fourth quarter, allowing us to receive about 55% of the RAP. The entry into operation will now be the first semester of 2022.
We go on to the next slide, Slide #15 where we present the assessment process for the photovoltaic complexes Paracatu and Floresta that now belong to our controlling company, Engie. Now we installed a process with related parties to assess this. We have had significant strides, we have contractor, the consultancy firms that will support this evaluation process. And here you see the list of companies, I draw your attention to Bradesco as the financial advisor, our legal advisors, as well as additional advisors. This process is moving forward with the necessary transparency.
Next slide please. In this slide, you'll see an update of the Jirau electrical plant that still belongs to the holding company. They have 40% of this asset with other partners. This is already under operation and has provided highly consistent operational results. I would like to highlight a feed of 99.2% in the third quarter. Now, this is an asset that has overcome some uncertainties. And that can be offered to Engie Brazil participation as well as Paracatu and Floresta, but it has to undergo the assessment of the independent committee of related parties.
We end this session on Slide 17, where we are updating the volume, the number of projects and the installed capacity that we have in the most advanced projects with the acquisition of the Assú Sol Photovoltaic Complex that was already mentioned, that added 750 megas to the portfolio. We now go beyond 1.2 gigas, a very consistent portfolio and aligned with our growth in renewable energy and in accordance with our purpose of accelerating the transition to a carbon neutral economy with sustainable projects, environmentally sustainable projects.
I would now like to return the floor to Malta to speak about our financial performance on Slide #18.
Thank you very much, Rafael. We go on to Slide 19. On this slide, you can see the soundness of our financial performance. You can see the return on equity. We maintain levels that are always above 30%. In terms of return over invested capital, we had a significant increase in the quarter. And this is basically due to recording the effects of the renegotiation of the hydrological risk, BRL 372 billion, which I mentioned previously.
To the right, in the graph, we offer you information on the company's financial information during the last 5 years. During that period, we have invested over BRL 90 billion with a significant leverage. Our proprietary installed capacity grew 24%. We acquired a stake in TAG thus and trade the gas transportation activity. We are also in the transmission area, and we have 2,800 kilometers under construction. All of these initiatives are geared towards a greater diversification of our portfolio with truly expressive returns. Our EBITDA grew 74% during this 5-year period. Net income with a growth of 66%. And we have paid out dividends and shareholder equity of more than BRL 9.1 billion.
Slide 20, please. In this slide, we show you the evolution of our net operating revenue. And you can see, the transactions carried out with CCEE, BRL 102 million due to the increase in our thermoelectric generation. We also have inflation on our assets, financial asset, with an impact of BRL 49 million and price and sales volumes for energy with a reduction in the revenue line of BRL 60 million in transmission. We have added an additional BRL 104 million is to our revenues.
Slide 21, please. Here you can see the financial performance of TAG. During the quarter this was very expressive. TAG had an increase of BRL 147 million and our stake in those BRL 147 million contributed to an increase in our results of BRL 48 million. An increase that represents 46% of the TAG profit during this period. Now, the main reason for this increase in TAG's financial enhancement was the update of the sales contracts that it has. We would like to remind you that most of the contracts are indexed to the IGPM. And we are able to capture significant results for our own results.
Next slide, please. Here you can observe the EBITDA evolution. And many of the amounts that are here have already been mentioned as highlights at the beginning of the presentation. Nevertheless, I would like to reiterate in a more objective way, that the main component that adds value to the EBITDA was the register of the repactuation or renegotiation of the hydrological risk, that has added BRL 372 million to our results.
Other important effects are the reduction of the purchases in our portfolio, along with a reduction in the energy sales volume. If we consider the increase of our energy sales revenue because we have applied inflation to our contracts, so CCEE. It is important to mention that the variation between quarters generated a reduction of BRL 203 million. Now this happened because in the third quarter of last year, we had a creditor's position and this generated important revenues during the quarter.
Now, the impact of the GSF and the transactions carried out at CCEE this quarter were of only BRL 80 million in the transmission segment, as mentioned, an increase of BRL 89 million in the results because of the increase in the CapEx on works, besides applying the inflation on our financial asset.
Next slide, please. Here you'll see the evolution of our net income and the impact of EBITDA. As we have already broadly discussed, another negative effect in the result due to the update of some of our debts that are indexed to the IPCA.
Slide 24, Please. In this slide, we see the position of our debt. And you can see our capital structure which is quite favorable. If we consider our ambition to grow our leverage, net debt EBITDA ended the quarter at 2x, a very comfortable, appropriate level if we consider our growth strategy. And the increase in the debt is basically due to the withdrawals that we made for the funding of Gralha Azul and Novo Estado plants. We ended the quarter with BRL 4.6 billion, a very robust sum, and a net debt of BRL 14 billion.
In the next slide, #25. Here you see the debt profile and the makeup, a duration of 6.9 years. Another important factor is that, in the past, we made the decision to swap the debt index to the CDI. And we have debts that will mature this year, in 2021, and will also mature in the year 2022. So, because of this decision, we have an important impact on our financial results, significant impact, the composition of our debt, most of which is indexed to the IPCA and the nominal cost of debt of 12.8%. This quarter equivalent to an IPCA plus 2.3%.
Next slide, please. Here you see our CapEx, our investments throughout the last few years, significant investments. As you can observe here in 2021, a concentration of investments in our Gralha Azul and Novo Estado transmission projects, beginning in 2022. As mentioned, we have a forecast for CapEx for the Santo Agostinho project that is already undergoing implementation.
Next slide, please. This slide shows you the background of our payout of dividends and confirms the commitment of paying out as much as we can in dividends, we have during the last years, had a payout of 100%. In the first semester of 2021, we approved the payout of the results of the semester, and the amount is approximately BRL 790 million. What we expect is that until the end of the year, these amounts will all be paid out. It's possible that in the coming months, we will be communicating this to the market, informing the market on the date in which these dividends will be paid out.
With this, we would like to end the presentation and I would now like to offer the floor for questions and answers. It will be a pleasure of course to share with you additional information or to dissipate your doubts.
[Operator Instructions]
I have received a question here from Maria Carolina Carneiro from Credit Suisse.
On the contracting of energy during the half year PPA and prices, it's a semester in which liquidity was quite low. If you could remark on this?
Thank you for the question, Carol. Well, this was a critical quarter because of hydrology. We had to have uncontracted energy to be able to mitigate our GSF risks. Now, the market had very limited liquidity and of course, it's natural that potential clients will try to access us for a medium-term purchase of energy. And we have to supply this energy beginning in 2021 or 2022 so that we can maintain balance in our short-term portfolio to mitigate the GSF risk.
And because of this, and the average energy price, we do have to include the price to replenish our portfolios, especially for the years 2021 and 2022. Now to be more objective, the sales volume for short-term contracts was very small because of the prices, of course, and because of our need to protect the portfolio, and we did have some sales operations for the medium term.
There was a large demand for renewable assets, several companies by portfolios for the quarter, both solar and wind power. If we could share what we think about the valuation of these assets and if there is a very healthy demand for these assets in the segment?
Of course, for renewable energy, yes, there is a heated demand and we observed a significant competition for projects. During this period, we had a significant volume of projects with the goal of capturing a reduction in transmission and distribution costs. And because of this demand for the reduction in the cost of fees, we have approximately 8 gigas of projects that are under development. We have a portfolio that we are going to approve and fully define. And our preference was to sell this energy to the free contracted market, where we are able to capture more attractive prices to make our projects feasible.
Now when it comes to the CapEx that we have, we have verified new projects and we're surprised with the levels of CapEx in the case of Santo Agostinho, for example, the estimate is of 5.3 million per megawatt installed. And we have seen projects that have an outlook for becoming feasible with a CapEx of BRL 4 million per installed megawatt. And because of the significant increase in the price of commodities, our expectation is that this CapEx will go beyond what we have made available to Santo Agostinho. And the outlook therefore will be between BRL 5.3 million and BRL 6 million per megawatt hour. It is important to underscore here that despite the increase in the price of commodities regarding Santo Agostinho, we have a contractual protection.
We have worked with hedge for exchange rate and commodities, which is always necessary to mitigate any risk. And we have the confidence that we will deliver the project with the levels and returns that we deem necessary. It's very probable that we will suffer pressure from our suppliers of course, but as mentioned before, our contract is quite robust with warranties and significant amounts. Should we have the need renegotiate with vendors, this will not generate a significant impact on the project.
We now have a question from Andre Sampaio from Santander Bank.
The inorganic growth strategy for the coming years, which will be the focus on segments and how to have a good growth to have an impact on such a large company as energy as Engie?
Our focus continues to be on renewable energy. We truly believe in opportunities, not only in wind projects, but also solar projects. We have realized that it is relevant for us to diversify our investments and solar energy to complement our wind power portfolio. We know that the intensity of wind is more significant during some periods early in the morning, for example, and wind and solar projects have a greater energy consumption during the day. And we see that we have to have a better balance in our portfolio.
We have observed some opportunities in the market. And we're always extremely attentive to any possibility of enhancing our portfolio with these investments in transmission as well. We have acquired vast experience with the implementation of our 2 projects. We entered this activity recently. And we had already mentioned our performance in terms of the implementation and compliance with deadlines and CapEx and all of this gave us greater security to expand our investments in the field of transmission.
And as I mentioned, we have verified several of the projects that have been made feasible with an estimate for low CapEx in the short and medium term. Without a doubt very interesting opportunities will arise for M&As as we have already had in the past. So we will be prepared to capture these opportunities. And as we have already mentioned, we have a capital structure that will enable us to have this financial soundness and will give us tranquility to capture good opportunities in the market.
And in terms of capital structure, a question from [ Juliano ] from UBS.
Engie is a company that has always had a very good balance sheet and less volatile results. The question is, if the increase in SLE salary will lead us to review our CapEx plan or our capital structure?
As mentioned, we do have a robust capital structure with room to fund the equity of these projects. And when we were speaking about the 5-year history, we have a leverage of 85%, which is very significant. Despite what we have observed in the financial market, we can still capture very good deals. And in the recent issuance of debentures to finance the Santo Agostinho project, we saw that the levels of the rates were quite favorable.
But I do agree that if we think about the short and medium runs, the outlook is to always assess the possibility of anticipating some fundraising. We need to have a more positive outlook to be able to make feasible new projects and new M&A opportunities. This is a very important factor that, of course, is something that we constantly think about and that we deem necessary to have a strategy to alter our capital structure. Now if we need to do it, we will.
We have received several questions. I'm trying to filter them so that we can have a more logical sequence here. We have a question that refers to growth here, in truth, 2 questions from our individual investor, Antonio, that refers to the generation activity of the company, thinks it's important to have intermittent energy assets operated by gas.
In terms of gas fueled thermal plants, our current outlook is that we have more interesting opportunities in the market. When it comes to return, the focus is on solar, wind and renewable energy at present. Now, those who enter the gas field thermal plants will have a competitive edge in the implementation of the projects. When it comes to the investments in hydroelectric assets, in the last few years, what we have seen are scanty projects that could become feasible.
We have significant environmental issue that will make it difficult or make it almost impossible to build large reservoirs because they take away the competitiveness of hydroelectric projects. There are several M&A opportunities. While we have a great deal of experience in the management of hydroelectric projects, and this could generate a competitive edge. And in our portfolio, we have a great deal of diversity. But we have seen very few interesting opportunities in terms of hydroelectric plants, because of that vast experience. Nevertheless, we will be very attentive to good opportunities.
Malta, we're going to change topics. We have several questions on growth here. But let's change topics. A question from another individual shareholder that is always with us. He's asking about the interest of developing the distribution. Despite the growth in the market of solar energy, perhaps this could be an opportunityy.
The goal of entering this activity was to get a better grasp of the market. What we observed was enormous competitiveness. We have competitors with cost levels, with cost structures that are much below ours. And we do have governance standards, we have our controller that also participates in the management of our business as it participates in several of our investments worldwide. And what we have realized is that it's going to be very difficult to be competitive if we significantly expand our portfolio. We have seen some important players investing in this case.
We have heard comments that the results can end up being significant. But our experience in this market is somewhat beneath what we have expected. So our outlook is to focus on more significant investments that will add greater value. As I mentioned, to set up a portfolio that is -- has a more robust production of solar and wind power is not an easy task. So our decision is to practically leave this market. We are mapping the market to check on potential buyers. This is our vision on this activity. And this is our investment strategy.
Thank you, Malta. Once again, we'll change focus somewhat. [ Victor Borge ] asks -- well, this is a very difficult question, which is the company's expectation for GSF in 2022. Perhaps you could deal with this?
Well, the hydrologic scenario still generates a great deal of uncertainty. We had a very positive surprise with the rainfall in October. It was one of the best levels, the best rainfall levels, historically for this month. And we do have a positive outlook for the month of November as well. As you can observe, the prices had a significant drop in October. And this will be repeated in November. It's still premature to speak about the outlook of GSF for the coming year.
Everything will depend on the end of this wet period, and the -- another uncertainty is the load factor, the growth -- economic growth outlook. And we cannot forget that the levels of the reservoirs are still below what they should be. And they are at approximately 25% or 28%. This is our outlook. So despite the uncertainties and because of the present day scenario, what we can say is that we will still have less severe levels of GSF than we had this year.
Who knows the outlook will not be very positive once again. We hope not to have to go through another year like 2021. It was one of the more critical ones in our historical series. It is also important to mention that this quarter was the most critical in terms of GSF. GSF stood at 51.3%, very significant. And with PLD at the ceiling, at the very top, I mentioned the impact of negative BRL 80 million in our result. And this is very low if we consider the outlook of a more severe GSF.
Thank you, Malta. As I showed you our energy balance in the presentation, the company is prepared to face up to and mitigate the impacts of the GSF. We have adopted a more conservative stance and our strategy will be adjusted according to our advance and this will enable us to be more precise in our estimates. We are well prepared. The GSF has improved. There is a reduction for 2022. But it still merits attention. And without a doubt the government will act upon this to avoid this happening again with positive impacts for the final consumer and all of the agents in the sector.
Rafael, I would like to underscore what you said for 2022. As a process of portfolio management, we are protected. We have been very conservative initially when it comes to risk mitigation, and of course, month after month, we assess the GSF outlook. It is very difficult to know what will happen in 2022. But based on our monthly assessments, well, they're practically daily or weekly, we do make adjustments in our portfolio and perhaps we could release some energy for sale if the outlook ends up being one for a better behaved GSF. This always and when we have more favorable prices for energy. I don't want to have to convey a very negative outlook for the GSF. The challenge of course is to foresee what will happen with GSF.
Thank you, Malta. We still have some questions that I have not asked here, but they do relate to other questions that have already been read, that haven't been responded fully, they have been responded partially. We are at the disposal of the market, and we can dissipate your doubts after the close of this call.
With this, we would like to end the question-and-answer session and I would like to give the floor to you, Malta, for the closing remarks.
Thank you everybody for your participation and for the opportunity of conversing a bit about our results. It is always an enormous pleasure for us. At this point, we would like to end our video conference call. I wish you all a very good week and hope to see you the coming quarter.
Thank you very much. And a last piece of information, on December 10 we will have our Investor Day at Engie we do count upon your participation. Thank you very much, and have a good weekend. Once again, and unfortunately this year Investor's Day will once again be virtual. We hope that the coming year we will be able to meet face-to-face. It is important for us to have this opportunity to hold conversations face-to-face with you.
Thank you, the Engie video conference ends here. We would like to thank all of you for your participation. Have a good afternoon and thank you.
[Statements in English on this transcript were spoken by an interpreter present on the live call.]