Transmissora Alianca de Energia Eletrica SA
BOVESPA:TAEE3
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Transmissora Alianca de Energia Eletrica SA
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Good morning to everyone. Thank you for waiting. You are welcome to the video conference of the results of the second quarter 2022. [Operator Instructions] For those who are listening in English, you can mute the original audio in Portuguese clicking in unmute original audio. This is being recorded and will be made available on the site where you have the complete material of our call of results.
You can also download the presentation also on the Chat icon. [Operator Instructions] The questions can be sent during the presentation, and they will be read live by the Investor Relations Manager and responded by the speakers. The information and the declarations that we might make during this video conference about business perspectives, projections, targets and finance beliefs and premises of the company and also information that currently is available.
Future considerations are not a guarantee of performance. They involve risks, uncertainties and premises. They have to do with future events, and therefore, they depend on circumstances that might or not occur. Investors should understand that general economical conditions, market conditions and other operational factors can affect the performance and ending results that differ from those expressed about future considerations.
Now I'm going to give the floor to Andre Moreira, the CEO of Taesa.
Hello, everyone. Good morning. I thank you all for the participation in one more video conference of results of the company. I'm going to now talk about the second quarter 2021. I have here with me the Financial Director and Investor Relations, Erik Breyer. Participations and business file implementation resolves under Technical Director, Marco Faria and all our investor relation teams. You can send your questions through the Q&A button and the platform at any moment during the presentation. So let's move on.
First of all, let's start with our mission, our vision, our values on Slide 3. Our strategy is linked to all of these. Our responsibility and dedication as a company has, in its mind, a connection with a whole country with safe and trustworthy energy. This is our mission. Our vision is to be the best transmitter, highest value for society. And remember, the V is high caps, big caps because value is for all our stakeholders.
We have recently revised the pillars of our existence. So every day, we're always working thinking on this. It is our DNA. First of all, we generally take care of people. It's the most important thing of our business. We work with integrity, with trustworthy relationships. We search for excellence in everything that we do. And finally, Taesa is us. It's interesting talking about this, our results are a direct consequence of our mission, values and vision and even more important, there's nothing if there's no transparency and showing who we are and what moves this large company? What do we do and what do we do with a lot of dedication and passion because every idea, every opinion, every person, every life is important. We generally take care of everyone.
Now I'm going to Slide #4 for us to continue this important discussion. I don't know if everyone remembers, but this slide shows the pillars of our strategic planning that was presented in our Investor Day last year. On the day of the event, we detailed each one of the 4 pillars that are essential to maintain our relevance in the sector and reinforce our consolidating position, always associated to the value generation to our shareholders.
But today, I want to highlight the sustainability pillar, which is based on a robust program with several initiatives and actions to guarantee the perennity of our business.
Let's move on to Slide 5. Here, I'm going to talk -- we discussed internally, and we defined in our integrated management, this is a definition of our management system and the processes of the areas of the company to be managed in a unified way. This is going to make communication better. It's an integrated system. Each one knows their role and the way to contribute to the results of the company.
As you know, it is the certification of the company and 4 ISOs, the first one ISO-9001 quality, the second one environment 9014, safety and health. Another ISO and the management of assets, 55001. Here in the slides, we can see the commitments and the goals that are declared by a from a policy elaborated and very much discussed in the company. See how the commitments and the goals are connected to our mission, value and vision.
That's how it should be. It's essential to be consistent in our actions, attitudes, assessment of respect to -- for our objectives. A culture of safety, minimize the environmental impacts have assets and be more efficient with our profitability and have all this integration management of the company. Well, that's what we're working for so that our excellency and quality be higher and higher and always having in mind the sustainability of our business.
Now I'm going to jump to Slide 6 to talk about the -- our AP cycle. I'm going to talk about numbers that were published by ANEEL. And these numbers are valid from July to June 2023. You can see that the operational ramp of all that Taesa's concessions goes from BRL 3 billion in the cycle '21/'22 to BRL 3.6 billion in the cycle 2223. It's an increase of almost 20%. This increase is due to the inflationary readjustment of the contracts that we have, the IGP-M and IPCA, which adds up to BRL 3 million to BRL 7 million, but especially the new projects that have been concluded in the 2 cycles. The impact is almost BRL 400 million. So I want to say, even with the reduction of some concessions, the ramp of 50% category 2 that was already expected, the growth of the operational ramp is pulled by the -- by several new jobs.
Luis is going to highlight this further forward. The right side of the chart, we can see that we -- what still has to come into operation that will affect the next cycles, the new projects and the last cycle of the reduction of the RAP in 3 concessions, we will add another BRL 191 million to the revenue of the company, closing with a total BRL 3.761 billion already contracted by Taesa at today's rates. If we observe all the impact, we're talking about a growth of EUR 780 million of allowed annual revenue. This shows our ambition and well done execution for our strategy based on sustainable growth.
And now before giving the floor to Erik, I want to highlight that the dividends that we mentioned yesterday, considering cash flow, which always stable, and the indebtedness and a net position, which is very comfortable, our Board approved the interest of capital and dividends in the value of BRL 506.7 million, which is going to be paid at the end of this month. This gives us BRL 1.47 per unit of Taesa. And dividend yield of almost 9% up to now, taking into consideration the accumulated of this year in the payment of BRL 3.79 per unit in 2022, which has already been paid.
Well, guys, this highlights an important role. And the important message of value generation to the shareholders. That's what I had to say today. So now I'm going to give the floor to Erik for him to present the results.
Thank you. Good morning, folks. Let's move over to Slide 7. I'm going to talk about the results of the Taesa. Let's talk about the regulatory vision of the results. We can see a growth -- significant growth of 39% of the net revenue compared to the second quarter 2021, and 38% in the first semester of the year. This increase is due to the readjustment of the RAP in the cycle '21-'22 and also Janaúba and partial Sant’Ana operations. The EBITDA reached BRL 465 million in the quarter, 40% higher than the second quarter of 2021 with a margin of 83%. During the semester, the increase was 42% with a margin of 85%. This result is very much aligned with the increase of revenue, also benefited by the new concessions that began operating.
On the operational side, Taesa has maintained the constancy of the excellent performance. In the first semester, we registered a rate of availability of 99.95%, a little bit better than in 2021. The variable installment of the semester had an increase in relation to the last year, especially due to 2 nonrecurring events, which we highlighted in the last quarter that are referenced to prior years. These were motivated by external actions and completely beyond the company's -- these are very extraordinary, and they have no relation to the operation and maintenance of our lines. So they are [indiscernible]. When we talk about the current year, the variable installment dropped to 0.5%, which also shows the efficiency and the consistency -- the operational consistency of our assets.
The net profit also increased a lot in the quarter. And in the semester, we had an expansion from 27% and 31%, respectively, even with the growth of the net financial expenses. As Andre said in the beginning, this result shows our commitment with the expansion of the business, financial discipline, and the quality and reliability of assets, all aligned with our vision of being the transmission company with the largest value to society.
Now let's move forward to Slide 8. I'm going to talk about the dividends that Andre already mentioned. Considering situation, which is comfortable and the performance of the profit, the Board has approved the distribution of almost BRL 507 million in dividends and interest on capital based on the results of the first quarter of this year. This is the equivalent at BRL 1.47 per unit. It will be paid on the 26th of August with a database of 15th of August. Added to the payment of BRL 800 million that we did in May this year, the total paid up to now in 2022 is of BRL 1.3 billion. That means BRL 3.79 per unit.
Now let's move forward to Slide 9. I'm going to talk about the performance of the net profit, IFRS. We have a net profit, 10% less in 2021, and the revenue, we had positive and negative effects that ended up compensating itself. For example, the OEM revenue was affected positively by the inflationary readjustment of IGP-M, IPCA and Janaúba last year, the revenue have had an increase due to the same reasons. Now the monetary correction had a drop due to the contraction of IGP-M in these 2 compared periods going from 15.5% during the first semester last year to 8.5% in the first semester this year. Even with the increase of the IPCA, this IGP-M reduction ended up by weighing more as a result of this slide.
The reduction of this revenue would have been higher if it weren't Janaúba coming into operation. That means every time we conclude something, we have a good news, not only regulatory wise, with the receivable of the RAP and positive impact with the revenue of IFRS. We had a reduction of the implementation margin due to lower investments in Sant’Ana because the works well advanced and also because we concluded Janaúba, a big economy, big savings.
So financial results got worse due to the increase of the IPCA and the CDI and also the higher volume of the net debt. And what I always mentioned to you on one side, we're benefited by the inflationary readjustment of the revenues. This defends us against inflation, but we're also partially penalized with the financial results with the increase of the IPC and the CDI -- IPCA and CDI. I'm going to finish now about the indebtedness of Taesa, always remembering you that this is vision of proportional consolidation. So subsidiaries, the net debt is -- reached BRL 8.7 billion at the end of the semester. And what's interesting is that even with the higher indebtedness, Taesa has maintained or reduced the level of leveraging because the projects are working hard, strongly, and they will be completing their first 12 months. We closed the second quarter with a robust cash flow, BRL 2 billion, as you can see on the chart.
The profile of debt is doing very well, very competitive with low cost, about 5.3% real and long time frame is 5.2 years average with a higher concentration of the debt in IPCA. Taesa has no financial covenants of leveraging, and we're also very well evaluated with the fixed revenue markets. both Moody's and Fitch, which puts us in a very favorable condition, competitive composition to get businesses that add more value to our business.
The big challenge is to maintain the leveraging, which supports the growth of our company. It flow -- it drops rapidly due to the continuous flow. So with the scenario or leveraging my drops rapidly due to the robust operational cash already contracted with the concessions that exists in Taesa. So this is a huge differential for us because we can maximize the utilization of our balance with cheaper capital to finance our growth. Of course, always maintaining the value for Taesa, which is financial discipline, with a good balance of the allocation of capital for new investments and the payment of dividends. So folks, that's what I had to say to you, that's what I had to present to you. I'm now going to leave you with Luis. He's going to talk a little bit about the projects and all the things that we recently have delivered.
Thank you very much, Erik. Good morning to everyone. Well, here, we have an image of everything that has been concluded. So ever since the beginning of 2021, we have concluded important projects, with a special highlight to 2022, where 3 projects have been concluded at [indiscernible], Alupar, Aimorés and Paraguaçu in partnership with [indiscernible] and Sant’Ana partially. These 5 projects add up to BRL 482 million of annual revenue to Taesa, putting into operation more than 300 kilometers of transmission lines to adequate the system of the south of Bahia. For the energy -- for the wind energy also integrating part of the Wind Energy of [indiscernible]. All these investments add over BRL 3.6 billion, where we refer to the CapEx of each project, showing the commitment of Taesa to contribute with the growth of transmission in Brazil.
And talking about growth, I'm going to give the floor to Fabio. Fabio is going to talk about the latest auctions and how well we've done. Fabio, the floor is yours.
Thank you very much, Luis. Good morning to everyone. Well, we're here on Slide 12 now. We're going to talk about the performance of Taesa in the last auctions, transmission of services at the beginning of 2011. Within detailed planning and to be competitive, we've done a lot of work to prepare for the auctions. We closed partnerships with strategic suppliers, and we detail premises and conditions to be able to really be competitive even in a more unfavorable macro economical scenario due to the hike of the commodities. So we mobilized our teams and we have a multidisciplinary work that mobilizes the whole company.
We put ourselves in a very different position. We participated in the second auction, and we got the most representative lot of the -- with an investment of BRL 1.75 billion and a RAP of BRL 59.5 million after it started operating. This was baptized Ananaí. Ananaí is a large job. It has an extension of 363 kilometers and 500 kV of extension, the regulatory time frame of 60 months for its conclusion. It is a structuring project, and it will supply the metropolitan area of [indiscernible].
It will also increase the interlinking South, Southeast, which is very important in the low availability of the generation part of the South region. We also got the Lot 10, with an investment of BRL 243 million, adding a RAP of BRL 19 million in the moment when it starts operating, this lot was baptized Pitiguari transmission, and it is located in the state of Santa Catarina, with an extension of 92.7 kilometers, 66.7 kilometers in double circuit and the regulatory time frame of 54 months for its conclusion.
The project will attend the western part of the state, bringing more reliability to the system. All of these are 100% Taesa, and they have important synergies with some of our operations, allowing us to benefit from the structure that exists with maintenance and operations. Besides these opportunities, we will continue working to get more CapEx optimization and the prior dates of all this as I said in the beginning, Taesa continues working hard with new projects, whether it be in the primary market, with the auctions or with M&A projects so that we can comply with our strategic planning, always observing our strategic pillars of sustainable growth, operational efficiency, discipline and generating value for our shareholders.
Well, those were the messages that I wanted to give to you. And now I give the floor to Cristiano to begin our question and answers. So thank you very much to all of you.
Thank you very much, Fabio. Good morning to everyone. Let's start a Q&A. Reminding you that you can use the a Q&A button on the platform to ask your questions. We're going to try to answer all the questions that we have, and it will be a pleasure to share with directors so that we can respond. We do have a question here from Marceline. I'm going to share with Andre. She says, good morning. Taesa is going to participate in new transmission auctions this year. I'd like Andre to talk a bit about this.
Perfect. Thank you, Cristiano. Well, it's easy to answer this after Fabio's presentation. He has just reinforced the fact that we are consolidating this sector, and we're always looking at all the possibilities to increment Taesa within the secondary market, which is the market of mergers and acquisitions, which we call brownfield and also the participation in auctions. We are already intensely working for the auction that's going to be carried out. And the 7, we're talking about an investment of about BRL 3.2 billion. And also, we're looking at the auctions of next year, a very important auction for the whole of Brazil. And we also are deepening our study.
So summarizing everything. Thank you very much for your question. We will continue looking at all the possibilities of increasing our portfolio. Thank you very much, and a wonderful event to everyone.
Thank you, Andre. The next question that we have, I'm going to give you here to Luis, and it comes from [indiscernible], I have information about this Paraná. What are the expectations?
Well, thank you very much for the question. [indiscernible], we are in the final phase of tests to -- for the definitive energization. So our expectation is that during the next weeks, we will already have this business ready to begin operations. It is very important that 600 kilometers of transmission lines in the state of Paraná. We're now in the final phase of test waiting for the conclusions to beginning the energy -- energization processes.
Thank you very much, Luis. I'm looking here for some questions. I'm going to give this question here for Andre. The question comes from Fabio [indiscernible]. Taesa have plans to work in other sectors like energy generation, for example.
Well, at this point in time, by planning our ideas to consolidate the transmission sector in Brazil from north to south, east to west. So that's our priority. If we discover any opportunity of any type of connection with renewable sources that integrate and that are parallel to business transit, then we will study with a lot of care. Thank you very much for the question, and I wish you all a wonderful meeting.
The next question, I'm going to give the question to Fabio. The question comes from Alexander, he says the -- he's talking about the challenges, which will be the strategies of growth for the company. Fabio, I give you this question.
Thank you very much, Cristiano and Alexander for the question. Well, -- as we said in our presentation, Taesa is near the growth. This is a position of our planning. And these -- what we -- you can see happening in this section is something that brings us a lot of competition, but Taesa, in the capital discipline and the work -- the allocation of capital, it observes all these movements. And we plan a lot to come into an auction. For example, we start to talk ever since the last auction. We're already studying intensely the auction of December and the one of 2023.
This allows us to make partnership strategies, a good CapEx and actions that minimize the risks and that also when we participate, we do it in a very -- with a lot of awareness, always observing our pillars of growth.
So what we can say is that we will continue participating in auctions as Andre said, and always making us competitive even with a market where the discounts are a bit higher and that bring to Taesa a satisfactory return to the shareholders.
Thank you very much for your question. We are available here for any other question now. I'm going to give another question. The question is the following. The drop of the profit. Is there any strategy to revert this?
Well, thank you, Elisa. Yes and no, right? Because the IFRS has 2 elements that are not so important in these are not controllable. The first element is the CapEx margin. Every time that we invest in this by the IFRS, we count the CapEx, the investment as a revenue as well. And as an expense with a margin [indiscernible] of the concession. You can put this in the results of the period of the investment.
So this element, we tried to maximize of the -- so our strategy is to grow as Andre and Fabio said. We are present in all the auctions. Now in the last auction, we're going to participate again this year. So starting other types of investment and also with positive results. But it's always the second element, which is very important, which is -- has no cash effect, which is only accounting wise, which is characteristic of this, which is the marking of the contractual act.
So this is corrected by the IGP-M, 2/3 more or less of our revenue, 1/3 by the IPCA. And this is -- these values that I'm only going to receive at the end of the concession, and I show this through this result. So this is -- there's nothing that we can do, right? So if there's an inflationary, global inflation, then this marking of the contractual assets, this is going to continue. If inflation drops, then no. So due to the macro economical effects and then the reflects will be lower. And the revenue of monetary connection that has no effect on the cash or on the value of the business.
So the IFRS profit is something that we publicize due to an accounting obligation, but it has a logic of construction very much related to a country with a public and a nominal currency of low inflation. When you put an inflationary environment, all the future inflation that I'll have will be corrected, but the OpEx has not created the present value. So I end up by generating a form of presenting the profits with a disproportional inflation and an impact because I'm putting the revenue of the future inflation, but not the expansions.
But something -- this is something transitory. This profit has the impact of being the minimum value of the dividend that we pay out. Due to statutory obligation and the nature of the business, Taesa will always be a good payer. The statutes obliges to pay at least 50% of the IFRS profit by dividends. But we always pay much more. We have the capacity to pay more. And historically, we have the capacity to do this. So this does not have a big effect. It's something -- it's due to accounting. So we intend to participate in the auctions.
We put all our talent, our work. We invested a lot of time to be successful in the auction, and then we invest and then the monetary correction will depend on what happened.
Thank you, Erik. The next question that I have is from Mario. I'm going to pass this to Luis. He says the expansion of the transmission does this worry Taesa about the availability to build new projects?
Thank you, Cristiano. Thank you, Mario. So really, we will have, during the next year, a large volume of transmission lines and transmissions for the expansion of the system in Brazil. And as for the availability, we have several partners who work with us ever since the pre-auction studies the auction of the [indiscernible], the next ones of the next years. And these partnerships, they give us the possibility of counting on these companies to build the constructions that we choose to participate in the auctions, whether it being lines and substations or also the [Technical Difficulty] strategic partnerships that guarantee the availability, suppliers, materials, equipment, et cetera, for the next or the upcoming auctions.
Thank you, Luis. We have another one here, Daniel Travis. I'm going to give this question to Andre. Could you talk about the cost of the transmission lines? You had some problems with suppliers due to the commodity prices.
This is an important point for us. Very fundamental. What we've done and worked hard with is with these contracts, together with our suppliers, it's very fair, and there are clauses that allow us for readjustments with the macroeconomical indexes. We pass this over, and we always negotiate. So there is a margin for some negotiation, not all of them, but -- so that we accommodate whatever we contract. And so we always try to have this partnership we talk about this before, so that there are no surprises. This is the day to day for us. So there was a bit of an impact recently, but the whole sector suffered with this, and we are supporting the initiatives with [indiscernible] and everything to discuss these topics and to have this reflecting in our rates. Thank you very much for the questions.
Thank you, Andre. I have another question here from [indiscernible]. She would like to know more details about the increases.
[ Maira ], we had some events end up being sporadic. And in the line of third-party services, we had some challenges. And this payment will concentrate on the third quarter this year, it fell on the second quarter. And this ended up by putting a bit of pressure. The other one is other services. We had an increase in the expenses, labor expenses. So in the comparison, this also had an increased effect. So these are the impacts in the PMCO for the quarter.
There's another question here, which I'm going to pass over to Andre. So some wraps short and medium term, isn't it concerning? In the next auctions, will Taesa be sort of more courageous?
Well, I think this is something that we discuss every single day. We have some RAPs, and we don't have a lot short term. I think, especially Category II. In the due date or the maturity, the impact is not large for us, as I showed you in the beginning of the presentation. [indiscernible] on Fabio, Erik, Luis, yes, more and more. We want to be more competitive in the auctions. Always remembering that we have financial discipline, and we want to generate value for our shareholders. We're not going to join auctions to buy concessions. We do to make value and profitability to our shareholders. Thank you for the question.
We have a few more questions. Let me see what the next questions are. We have quite a lot of people congratulating us for the presentation. I'm going to pass over to Erik now.
The drop of the PCA is -- if this is going to have an impact on the revenue assets. Is this going to impact the revenue and the dividends. This is a question for the next quarter?
Yes, and not necessarily. And we hope no. This reduces the monetary correction revenue. We had a huge impact of the inflationary correction during the last 3 years. And now we have the hiccups in short term. This goes directly to the monetary correction revenue. But since this has practically no impact in revenue, cash and where we really base ourselves to pay the dividends. When we pay dividends, we see which is the best use of our cash and our leverage capacity and our balance. We look at the opportunities of investments, the cash flow, the leverage and access to the debt market to take decisions of payments to maximize the value for the shareholders.
And it ends up that -- when we see if the situation is comfortable, if the opportunity of investments are aligned, this would not impact the final payment. Our decision is focused on these factors. It changes the revenue, the minimum value. But since we pay always above the minimum value, this -- not necessary, these things will change the value of the dividend. Remember that we don't give dividend guidance. We do not give any idea of what the future dividends are. It's decided event by event according to what the company decides. It depends on the leveraging, debts, investment opportunity. And it's always been above the minimum. So I do not consider that this is anything that can affect the flow. But of course, we never know what happens in the future, and we don't give any guidance for payment to future dividends.
Thank you, Erik. The next question that I received here is [indiscernible]. I'm going to give this question to Luis. Question is, are there future projects in relation to the states of Ceará and Rio Grande do Sul?
Thank you, [indiscernible]. It's an interesting question. All the projects that we participate. It comes from IPE, which is the planning, the planning agency linked to the ministry. And in the website itself, you can identify the planning of expansion of the transmission during the next 10 years. And for sure, the Northeast region of Brazil due to the potential -- the wind potential, especially the state of Rio Grande do Sul and Ceará, with the implementation of new wind farms, for sure, there will be transmission projects for connection for these new wind farms. But the detail is important. If you want to access the Energy and Mines website, you can see all the detailing of the next projects that will be coming for the next 10 years. Thank you for the question.
Thank you, Luis. There's a question here from [indiscernible] Soares. Good morning. I'd like to know who are the 3 main clients of Taesa, and how the contracts work? I'm going to give the floor to Andre for him to explain.
This question is cool. I think it's important to clarify what is the role of a transmitter in the energy sector. We have 3, 4 segments that we call the 3 main segments of physical assets. And what's nonphysical is the commercialization of energy. It starts with generation, whether it be wind, solar, hydrolic, thermoelectric. So we received the energy of the generation. We connect this to the distribution, which is another segment of the electrical sector.
So first of all, we have the generation -- between the generation and the distribution. So at the end of the day, we established this connection. Our main clients are the distributors. Since we are present in almost all the country, the main distributors are our main clients. And they will distribute the energy, remembering that this generation, transmission, distribution and commercialization, which is the softer side, let's put it that way.
The negotiation of how this energy and how -- who pays. It's a free plan and there's another discussion about this topic. I'm not going to go on about this. I hope I answered your question. Thank you.
Well, we still have some more questions. Some questions are repeated. Others have to do with the future projection. So we, unfortunately, cannot answer these questions because we don't have -- I'm going to pass by these questions. Let me see is if there's anything else. Some other people are congratulating us, let's give a bit more time for other people to ask their questions. We don't have anything new coming in.
Okay. We don't have any more questions. So I'm going to finalize video conference of the results of Taesa for this quarter. And we are at your disposal if you have additional questions about the results or about any topic of the country. Good morning, everyone, and thank you all very much for your participation.