Alupar Investimento S.A. ($ALUP11)

Good afternoon, ladies and gentlemen. Welcome to the conference call. Alupar to discuss the results for the first quarter of 2026. Audio and slides of this conference are streams simultaneously on our audio channel. The presentation is also available for download. [Operator Instructions] Any predictions about future events are subject to risk and and for expectations may and they may be different from expected. These forecasts are the opinion for the date when they are made and the company is not obliged to update them. Present at this conference are Mr. Jose Luiz; and Mr. Luiz Coimbra, Customer Relations Officer of Alupar. Now I would like to give the floor to Mr. Luiz Coimbra, who will start the presentation. Please, Mr. Luz, you can start.

Good afternoon, everyone. Thank you for being here in our conference call. We have prepared the presentation highlighting 5 points. The first are the highlights for the first quarter of 2026, then we'll start about the evolution of our projects -- then we'll talk about results for the first quarter. I'll also talk about regulatory results then results allocation. And finally, we will review the company's performance in the capital markets in the year-to-date. First highlight is approval of dividends that we had at the AGM of the fifth arch. We have approved additional dividends as opposed to 2025 in the amount of $0.03 per unit. And now we had in our general meeting approval of those dividends, and then we have a perspective showing how dividends will be were distributed in 2025. And that was $1.08 per unit. We had a payout above 50%, 50.8% and when you compare those dividends to the ones distributed in 2024, we can see an expressive growth. We had distributed to BRL 275 million, BRL 0.87 per unit. So now we're paying 29% more as compared to 2024 in 2025. Next slide, we highlight something we mentioned in the conference for the fourth quarter, but the financial settlement happened in February this year. And this that is in our balance sheet. Just to remind, we have 3 projects ongoing in Brazil to MTPC. TAP was incorporated into -- so this is for the funding of debt and top BRL 2.45 billion were raised. The cost was -- we have raised in a very custom fashion with an amortization towards the end of the period, it was custom made. And basically, it's important to highlight that in the debt market is complicated at this moment, it had problems at the end of last year. It has improved a little now. So this fundraising we had gives us more security, and we have the raising to do along this year because we don't have time to wait for the market to see how the market behaves. Next slide, we highlight our sustainability report for 2025. This was the sixth report published by the company. The first was published in 2021. This is second report where we bring external auditing, independent external auditing, reviewing the document. But what about this one is that it had its made reviewed. We had a contribution of more than 250 stakeholders, including agents, suppliers, collaborators and investors. The report has 4 main highlights. First, the delivery of strategic assets in 2025 -- just to remind you, we have delivered the our first asset in Colombia for transmission, we delivered T&E a very strategic assets and also out in the Bashadantistta region. That's very important for the company as well. The report also brings some of the expansion of our generation portfolio and projects in both Brazil and Latin America. It shows the financial evolution for 2025. And finally, it shows -- it has an agenda showing advancements in governance risk management and ESG practices. And the next slide we have a different session where we talk about the evolution of our project implementation. There are 4 axes. We are working in and regarding land, we have advancements, especially in TPC. It has advanced 5% of contracts. And now we reached 91%. In licensing, we didn't have significant advances, but everything is advancing according to our schedule. Also, we have licensing issued for TCN everything within our schedule but also didn't have many improvements in contracting. And finally, we have specific construction progress. We have invested in CN and the fourth remesterof we had 28% and the other project that advanced significantly was stacked which has 31.6% of investment. We had 28% in the previous quarter. So we have a significant advance in the second phase, we are at 28.6% concluded, and the project is phased. So every time a phase is completed, we have the right to receive revenue. And when we complete Phase 2, we will have the right to receive 22% of the project proceeds totaling around BRL 18 million. Just to remind you, Phase 1, we advanced and anticipated it in 11 months. We delivered in the third quarter of 2025. It had a revenue of BRL 16.9 million with that money, we had an improvement above what was expected in our planning. And next slide, we have the evolution of regulatory results revenue grows 16.3%, with BRL 157.5 million in the first quarter of '25, to BRL 996.8 millionin the first quarter of '26. The 3 main impacts a variation in the transmission industry with BRL 102 million in the sector. We had a readjustment of 5.32% of BC 8 contracts and 7.02% in contracts with into -- we also had the commercial operation of TCM and also the start of commercial operations of out, the north sector started in July '25 and May '25. Besides above revenue, there was also a growth revenue in about BRL 145 million in Brazil and in Peru. There was an increase in price in the spot market. We had an average in the quarter of 300 and megawatt hour and BRL 160-megawatt hour for the same period last year. So we settled a great part of that at those price levels. And through the same movement happened, the price in the spot market there is -- $35 to $40 and now talking about EBITDA it was BRL 794.7 billion this year. This quarter, sorry, and variations. The first is evidence. It's BRL 102 million in the transmission and BRL 44 million in energy supply Also, there was an increase of 17.2% in general and administrative account. We had 2 impacts here. The first with in operation, we have expenses now. So we have BRL 5.2 million due to the start of operations of CE. And also, we have BRL 9 million in which was nonrecurrent in the first quarter of 25%. We had an accounting low things that are closed that period, and we had a positive of BRL 2 million in the first quarter of 2025. And now we have an expense around BRL 7 million. If you look at the personnel and administrative account, we had the start of operations of this. We also had incorporation since the third quarter last year TBO, an asset we bought from Realm. And also we had an increase in holdings outside Brazil. And due to demand in this current growth cycle we're going through. Finally, I'd like to highlight the variation in the account of other revenues and expenses, we had in the first quarter of last year, a low accounting for last year, we had expenses there, and we didn't have this quarter. So the total was BRL 148.9 million million of net income against BRL 140.1 million that we had for the first quarter of 25%. That's a growth of -- and both ends, I'd like to highlight here, there was a depreciation that through due to the start of operations of some assets, the financial results will not. It's important to highlight -- we had an increase of BRL 28 million in this account. And as we have some projects outside Brazil, we have currency exchange variation also in our expenses. In this quarter, we accounted a negative amount of BRL 20 million because the Peruvian currency lost value against the dollar and in the first quarter last year, we had a positive amount of almost BRL 18 million because there was a valuation of the incurrent as against the dollar. So we have BRL 28 million variation in financial results, BRL 28 million due to currency exchange variations. In taxes, we also had an increase from BRL 35.7 million. We had along last year. Some financial benefits in TAP PN. And this first quarter, we have higher tax burden than last year. Now talking about company corporate results. Besides the specific issue of IRS in revenue, just the big difference we have here when we look at revenue, it grew a lot less than in regulatory numbers from BRL 1223 million to BRL 1225 million. what we had here in monetary correction of concession asset is a subaccount for monetary correction of the asset -- and as industry, we had negative 0.33% and positive IGPM of 29% in the first quarter last year. The accounts -- so that's the third column here. And this is the impact on EBITDA, a number we carry to our profit and reduces the level therefore. Next slide, we have that profile for the holding company. We still have the same debt. It's our debenture issuance. It is due 2034. So it's a long debt only will be due in the short term. The cost is IPCA plus and we have hedged it. The total for this quarter was BRL 915 million, and we closed cash equivalents at BRL 1.116 billion. So we have more cash than a of BRL 202 million. This number is a little lower as compared to the fourth quarter, but we had relevant dividend payment in the beginning of this year. Next slide, you can see that profile of the consolidated debt it was a total of BRL 14.549 billion. Our cash position was BRL 546 million, and we have a debt of BRL 9.304 billion. So basically, this is in the debt profile when we look at the indexing of the debt in IPCA. We had about 50% to 52% of that in IPCA and about 30% of the debt in CDI. But as we had that fundraising in the beginning of the year, we had something in IPCA. The volume was on there. So we have 64% of the debt in IPCA and in CDI. Another important point when we talk about leveraging for this merit was 3.2% of net debt. That's a reduction as compared to the same period last year where we have BRL 3.4 million. Now results allocation. We had our Board meeting and it was recommend approved to distribute entering dividends for the first quarter of 2026. We will be paying BRL 69.2 million, about $0.21 per unit. These dividends will be received by shareholders that are on our basis on the 14th of May, our policy for payment is within 60 days of approval, so doing was yesterday for that and now showing the company performance against key market indices along the year our shares have had a appreciation of 26%. I would highlight here an average of daily volume for this year, it reached BRL 32.9 million for 2026, a growth at 19.7% as compared to the BRL 27.5 billion last year. With that, I close my presentation, and we can continue to the Q&A session. Thank you.

[Operator Instructions] Our question is from Ricardo Bello from Safra.

Good afternoon. I'd like to ask a question about what you see about the public audience of risk behaviors and how you see the impact -- potential impact in the price curve and effects for the marketer and also about the second quarter? What are your perspectives, the prospects you can share with us.

Thank you for your questions. about there's pressure on the part of some marketers that we're at a short position. betting a low price for the long run and great pressure to change the sever rules. It's hard to say what's going to happen. I think if we analyze the current setting of reservoirs, and we look at Savateway it was we would be in a very critical situation nowadays considering the possibility that's very, very likely that El Nino will come very strong semester. You can imagine the situation of our reservoirs in this period. So I think a change in Savara would be running unnecessary risks. And that if it's kept the way it's calculated today, I think there is a trend for higher prices surely because of the structure of this system, you can see that in our CAP auction, the cheapest view is BRL 800. This is the cheapest. So we will have lots of changes in the future. We also evaluated the costs of wind energy to create a plan nowadays costs have raised a lot. So I think prices will just go up but this is still a very punctual perception without knowing exactly what's going to be decided. Second question, you asked about pertinent. It's very hard to predict that there are many variations Theoretically, the second quarter -- if you look at retrospect of curtailment, it's slower basically because there's a reduction in the generation in the north market, which will allow for a greater supply of energy from the Northeast. So that will reduce a lot in the second semester, but that's very regional. You have a general thing, but each locality and point of may have higher, lower curtailment depending on the electricity status at that point in time.

Next question is from [indiscernible] from Itau.

Congratulations on your solid results. What's the strategy for auctions outside Brazil, such as in Peru and Chile this year considering the company's and an interest in looking at the battery auction. -- yes, there is interest. There's a lot of synergy with our strat auctions outside Brazil. It's hard to know because we must see what actually will come out, what will interest us. I still don't have that vision nowadays. We have many projects to put in practice to execute. So we have to be careful all about leveraging vis-a-vis our return that's both for foreign and Brazilian auction.

[Operator Instructions]

The next question is from Felipe T. Recent drops in the dollar against the real, do they influence the company's capital expenditure or investments in Chile, Colombia and Peru? Or will the CapEx be financed by debt in foreign currency?

Well, we are a very conservative company. So we don't work with that marriage of indexing. So if our revenue is dollarized, we will raise funds in dollars. If our revenues in reais, we will fund raise in reais, and that's both for CapEx in dollar and cost of debt as well. We see some of our competitors, sometimes they consider reductions in debt, betting in interest rates and sometimes currency as well. We don't work like that. We are a fund -- hedge fund that operates short and long in currency inflation, interest rates. So we always work everything to do. If it's in dollar, revenue in dollar, debt in dollar in real, debt in, revenue in peso debt in peso and so on. Thank you.

We are ending now our Q&A session, and we give the floor to Mr. Jose Luiz for his final remarks of the company.

Again, I'd like to thank everyone for participating in another earnings call of our company. And also, we are at your disposal. If you are interest, we are always open to welcome you and talk to you. Good afternoon and see you next time.

The conference call of Alupar is closed. I thank everyone for your participation and wish you a good afternoon.