Companhia Energética de Minas Gerais - CEMIG (CMIG4) Earnings Call Transcript & Summary

[Audio Gap] Secretary of Development of the State of Minas Gerais, CEOs and all the other officers, good afternoon. I am Sara Kirchhof, and I will be with you this afternoon for the business meeting. With the CEMIG's top management, we will have strategic discussions, networking and a lot of [indiscernible], the Minas Gerais way. Of course, we start now CEMIG Day, the 30th investor meeting. I would like to ask you please to have your phones on silent mode. And also, we have WiFi available here in this room. Thank you all very much for being here with us, whether you are here in person or audience via Zoom platform. Now to start our agenda, I would like to invite you to watch CEMIG's institutional video. [Presentation]

When your energy meets ours, life is transformed. That's why CEMIG is working on its greatest investment and history. You may dream, produce and grow, our energy is by your side. It is a pleasure to welcome all of you here today. Our agenda will bring the market the company's main events and key initiatives. At the end of each presentation, we will have the microphone available for questions. If you wish to ask a question, we will have receptionists around the room, and they may bring you the microphone. Also, we would like to say that at the end of today's programming, we will have 1 hour for a Q&A session. Now to open this event, we have the pleasure to bring to the floor CEMIG's Chairman of the Board of Directors, Marcio Luiz Simoes Utsch.

Good afternoon, everyone. Welcome to CEMIG Day, but actually CEMIG's evening, right, because it's starting after lunch. I hope you were not feeling asleep. I'm sure someone will fall asleep. There's no way out. But anyway, I will address you briefly. I have no presentation. I only have some time allowed to talk, but I would like to tell you a little bit about what we have done at CEMIG and how this reflects into CEMIG's future. I can tell you that I love what I do. I am really in love about my work with CEMIG, and it is a great pleasure to me to be able to understand that in a public company, you have a little bit of everything. You have career employees; you have wonderful public employees and public servants and also people coming from private sector. Also, we have public servants that are kind of hiding as we also have private employees that are kind of hiding. We have to be encouraging them all the time. So I try to think about my life as an arch. The arch is a half a circle. It's the half a circle that I know from the day that I was born until the day that I die, nobody knows what happens before we are born and nobody knows what happens after we die. I don't know anyone that came back to tell us. And no one has ever told us what happened before we were born. I think that goes for everyone. That's why it is a cycle. It's an arch. It has a defined specific time, and we don't know when it's going to end, although we know that it's going to end. This is for individuals. We have to understand the past, what we have lived and what we are building for the future, how we can add new bricks to the ones that we already have to keep improving and really to program a good landing at the end of this arch. That's going to happen around 80. I am 66. I think I have 14, 15 ahead of time. So let's see what's going to happen after that. But this is life's arch, but this is for individuals. But we also have this arch for the legal entities, for the companies. But if for individuals who have an unknown but finite duration, for legal companies, we have companies with 100, 200, 300 years of age. And this is what I love about CEMIG. We can develop an arch at CEMIG using all the history since when it was created. We have our past President, JK note when -- he sent a note to create CEMIG. This was the initial part of CEMIG. And I am sure that we can turn CEMIG into an even long-lasting company, a better company, an excellent place to work, an excellent place to live, not only to work because you -- well, not only that you have to die working, you also have to have fun and you have to live, it has to be a nice place to work. It has to be a nice place to live. So that life moves on. And why am I telling you this? Because when I look back and I see when I started at CEMIG in 2019. And I had a project. Junqueira is here. He started with me at the Board, and we were invited by the governor. He was putting together a new administration. So yes, we had a number of projects, a number of things that needed to be done. All of them have been done, unfortunately not. But a lot of them were done, more of these things were done than the ones that didn't. So one of the promises that we had in his first campaign and first election in the second term as well was to have a state leaner, faster, quicker, the accounts of the state should be balanced and with investments and so on. And part of this involved CEMIG, still involves CEMIG, which is privatization. This is something very important for us. We do believe that this is not a decision that is on us, but who decides if it's going to privatize and not is the owner that's represented by the state administration, represented by our Secretary here. But this is something that we have to look at, and we have not done it yet. I hope we do have time to fulfill this promise that the governor made. But anyway, it's important to see that CEMIG is more productive. CEMIG had a valuation of BRL 8.5 million at the time when this governor was elected. CEMIG today, I have not looked at it, but it's around BRL 35 billion, BRL 36 billion. The dividends that we paid is around BRL 15 billion that we have already paid, up to last year was BRL 12.7 billion, approximately BRL 15 billion in dividends this year. So this is a company that is showing in its numbers, a thriving company with ability to grow, but what could hinder this growth? Then it's easy to talk about the past because everything that I talked about is public, you can check how much the company was worth, how many employees we had, what was the market value there and then that we did have a wall of that with the Eurobonds and millions of dollars. And so we thought that CEMIG was going to go bankrupt when we reached that wall, but it didn't. We were able to overcome that -- well, it was a very high wall, but we were able to overcome it. So if you are the only person in the world, you don't know if it's high, tall or ugly or not. So if you only know how things are, if you compare yourself to somebody else, right? So it's only a matter of comparison. The comparison allows us to have a reference. So the comparison of this -- of CEMIG was a comparison that would lead us to believe that it was not possible to overcome it, but we did. So what have we done then for that? We have done something that might seem -- something that speakers say, and I'm not a speaker, but we put people in the center, people first and second people as well. And third, also in case you have any questions, go back to the first one. So people. So that's what it has to be. Today, we have a number of people from CEMIG. Most of them are here on the first lines, and they are brilliant. They are referenced in what they do. They are very proud to work with you and say, look, we are together, we are managing CEMIG. We are very proud to work with them. I'm really passionate about because I do it with a lot of pleasure. This is crucial for me because look at what lies ahead. In 2027, the market will not be regulated. So will CEMIG be the preferred company? When you can choose at your home, who you're going to pay the bill -- the electric bill to. So in the past, you could only purchase a phone line from companies, specific companies. And now you can choose. So nobody chooses the worst. Nobody wants to be Alexander the small. They want to be Alexander the great. So if you want to be bigger, if you want to be greater, you want to build this company so that the arch of this legal company is really huge and bring us this inspiration to think that we will be the preferred company by clients when they have to do a choice and when they can choose. So today, if you want to have electricity at your place, you have to say yes or no, you cannot choose another company in the capital market. When they can choose, would you like to have electricity at home, so I can choose who I'm purchasing electricity from. So we have to think about that. So people need to think about our company. They need to have this good memory, good remembrance and a memory of effectiveness and ability. So the first tool is people. Second tool that we have, technology. CEMIG has given -- has taken a leap in technology. We have taken quantum leaps in technology. We have software as management, software as knowledge, cost economy in the operating area, automatic reclosers, substations connected via gas, which is much more modern than the other ones -- older ones and other changes that have been performed in our commercial model. So with the use of technology and accumulated knowledge, we really were able to take technology leaps that are quantum, and they really make a big difference. We also have to tell what we are. We have to have an efficient marketing so that people can see, look, this company thrives because if I talk about the past and if I don't tell what I do, no one will know what I do. So it's very important that we have a registered brand. The name that has to come to mind, like different names that we know of products. So eggs, you have to say a specific egg brand that you know you like. So this has to be in people's minds. And this is important also for us to have quality, quality and service, the service that people don't say, the worst thing in the world is to try to cancel a health care plan. So you never are able to cancel it or try to cancel an internet provider, you don't cancel it, you give up, but for CEMIG, I want to cancel it or cancel it right away. It's not good for us, but the guy is going to be happy. Maybe they come back. You want to connect, it's quick. They want to disconnect, it's quick. So we have to provide services that make the population feel safe in talking to us and exposing their problems so that this really can make it happen and really work. We have also something else that is very important. And it's our financial management. We have a very good and robust balance sheet, a balance sheet that allows CEMIG to make innovations, invest in expansions and network improvements, especially in assets that will then convert into the tariff because this is quality at the end of the day. If you don't invest, and things don't die. No one goes to a funeral of rock, but the rock is there. So we have to have attention to investments because they bring us a competitive advantage and also our ability to look at things and reinvent them. Also in CEMIG, we have other important things for our business, generation. Now separating generation, transmission and distribution. Generation and transmission, we have a very relevant investments to remunerate transmission results. At generation, we have technology, and we have clean generations, not that we have dirty generations because electricity is clean. This is water. If you have a plant, the water is going through that plant. So we just use the water. So it's clean generation. But we look at CEMIG and we start analyzing why this company could go wrong. There is no way we have Gasmig inside. It's another source of energy, CEMIG is seeing another source of resources. So what could happen? So we have a wonderful staff. We have efficiency. We have technology. We have distribution. We have already invested a lot in this period of time. At the end, it's going to be BRL 42 million. Is that right? BRL 42 million. BRL 36 million, BRL 36 billion actually in investments. So it's a lot of money to make the company grow and work. So all of our areas have improvements and trainings. We have made an important improvement in bidding process to buy equipment and to -- it's not like give me three estimates and I'll buy the lowest one. No, we have to have a public bidding because this is a public company, but it's a smarter way of doing it. It's smarter than what we used to do in the past because before we did have problems with it. So these are areas that are extremely relevant and significant. But we have to understand it and Reynaldo is here, he's, our CEO. He's our head of the whole team. And our CEO knows that there are a lot of things to be done. A lot of people have been here, but there is another important part of the path to be taken. We are going to generate more results, more growth. We are going to pay more dividends. The company is going to grow. We are going to improve our multiples, and we will make this company grow. But this is still to be done. So there was an old guy that went to the doctor, and he was kind of older than me. And he said, "Doctor, I'm wonderful. I'm doing great. I am -- I run 20 kilometers every day, very healthy. I swim; I play soccer. I see my friends. I eat barbecue, and I'm dating a lady of 20 years. And she's pregnant, 20 years. I didn't have any kids." so the doctor said, "Well, funny, I have a brother that loves hunting, he only thinks about hunting, hunting. And that's all he thinks about, one day, he got home so crazy that he wanted to hunt, he got an umbrella, and he went to the forest to hunt. And then he went to the forest, and he used his -- and then he shot the Lion with his umbrella" and he said, "Wait -- oh, wait, what has happened? Did he shoot the Lion? "Yes, yes. So pay attention that there is someone shooting at your Lion." So CEMIG is a hunter that uses a real gun, not an umbrella. So anyways, just to have in mind that this future, the thriving that we are aiming for CEMIG, that has to be built because if it had already been built, it would be the past. So we have to build it. And everything that is in the future is subject to the market, to growth, to financial matters, to macroeconomic conditions and microeconomic conditions to the macroeconomic environment of the country, micro environment of the country. So a number of circumstances that have to be plotted in your accounts, in your numbers. We are going to have that much cash. We are going to have this profitability. All that you do, you do this, and you have that in your spreadsheet, but you have to add the intangible. We have a spectacular team, a wonderful very skilled team supported by the government. The secretary is here. We don't have to fight against anyone. We have to pull and to be pushed by the government. We do what has to be done and all of that has a big weight on this spreadsheet. It's not a company that's always fighting. This is a company that is ready to make things happen. It's supported by the controlling shareholder, which is the government. And we are very glad to be with them because they're really pushing us forward. They make us look forward and they encourage us to be better. And I don't know how you can add that into your spreadsheet. But believe me, we have a great combination, a sophisticated combination of experience and practice and people that are here for a long time, people that are coming in that also know and this whole combination is the best flavor of this Brazilian dish. So my time is up. Just in time. Thank you all very much. Good afternoon.

Thank you very much, Marcio, for being here with us. Now moving forward, I would like to bring to the stage to give us a general overview about CEMIG and its delivery since 2018, company's CEO, Reynaldo Passanezi Filho.

Good afternoon, everyone. Welcome. Welcome to our 30th investors meeting. I always say that it's not very easy to come to the floor after Marcio. He always mentions that enthusiasm, and we are very proud of that. And what we have prepared here has to do with what Marcio just said, which is this whole transformation process of CEMIG. And CEMIG's ability, and this is what we want to show you, CEMIG's ability today to face the challenges. The electric sector is changing. We understand that. We know what was the electric sector in the past. I'm sure it's not going to be the electric sector of the future, but we have the ability to face these new paths that we'll have ahead. So before I turn to my presentation, I would like to highlight the main topics in terms of the strengths of CEMIG and the ones that I would like to highlight. First, financial soundness. We just were awarded a new rating classification, AAA by Moody's. So we are AAA by Fitch, by Moody's. So it's over 6 notches of changes since 2018. So we had 3.5 EBITDA net debt ratio. So we did not have 100% of protection. And now we are AAA. So this means a financial soundness and ability of cash generation that is unique. Also, the largest investment program in CEMIG's history. This is huge, BRL 59 billion since 2019 up to 2029, an average of almost BRL 6 billion a year. And we will see in the presentation that in 2018, we were investing less than BRL 1 billion. So think about going from less than BRL 1 billion and going to over BRL 6 billion in investments. This is a huge transformation, and this is generating value. And you're not seeing everything yet. As Marcio said, this is going to show at every 5 years in the tariff reviews. And we were able to do that with financial soundness, which is not usual, right, to have -- grow 5x or 6x investments and to improve 6 notches our net debt EBITDA ratio for that. It's an amazing figure. So this is what I wanted to highlight. First is financial soundness, which I believe is very important. Second, the execution of this investment plan, which is already generating value, but it's not reflecting in the figures yet. And just like Marcio said, it's important that you know that our real EBITDA is higher than the number that we are bringing to you because it's being still sold and it's going to show really in the tariff reviews. And third, this is preparing ourselves to think about the future, and this is what we are going to tell you and to show you what we think about the future and how we want to be prepared. Nobody exactly knows how future is going to be, but what matters is how we are going to prepare ourselves for the path that will open with the expected changes in the electric sector and doing that with people, and once again, Marcio said it very well. We have this mix, this combination, which is amazing. We have a technical team that is unique, and we have a lot of people that we brought from outside, and we recycled the team in the company, and we created value with this diversity. So I would say that for me, these are the key messages. But let me start now mentioning a few topics here. And once again, I'll talk about Marcio. Marcio, never forget something that you said. A strategy there's something great in the strategy, which is the power of saying no, Marcio said that once, and I never forgot. So this is great. This strategy means that it's very easy for me to say no, it starts saying, wise investment in Minas Gerais. That means that if someone brings me investment in Rio Grande do Sul, I will say, no [indiscernible], no. So I believe this is very important. In the past, we have invested all over Brazil. And today, it's just no. Today, we want to make wise investments and wise because we had a lot of pent-up demand. And when we invest, it's a needed investment because we know that we are catering the market and load for the state's growth. So we invest in the state of Minas Gerais, so that we can better -- to provide a better service to our customers and to maximize results. So -- since this is a needed investment, it's an investment that needs the service for clients. It helps the state development. And at the same time, it maximizes the results because it is a regulated investment, which will bring us profitability. And that is done, thanks to an efficient and sustainable management, obviously focused in generating results and aiming to meet all the efficient standards, always looking for as much efficiency as possible in using our resources. Here, we have a comparison. I love this because it shows the transformation, which is how we were and what was the transformation process in the company. I will read the slides then. So from 2009 up to 2018, CEMIG never met any of the regulatory standards, whether they were operating expenses or technical and commercial losses. So during this period of time, you see that it did not meet those standards in over BRL 9 billion, that is expenses over the regulatory expenses, expenses and also losses. And that means that we do not have cash for investments because we had to use cash to cover these expenses also. This is a figure that surprises us a lot of times. It's how much CEMIG decided to invest out of Minas Gerais usually in minority stakeholders. So we have these figures here, we adjusted to inflation. So we invested over BRL 45 billion in Renova, Santo Antonio, Light, Belo Monte, Axxiom, Ativas. And the net amount here was a destruction of economic value of over BRL 16 billion. This is over. We no longer invest out of Minas Gerais, and we no longer do any minority shareholding investment. When we invest, it's 100% at CEMIG in our competitive advantages. Of course, then in a large investment outside of Minas Gerais, we -- our own market, our backyard was unassisted. Therefore, during this period of time, if we look at investments in distribution and transmission, they were lower than depreciation rate. So this today allows us to invest much more. We are recovering this period when we were non-assisted. So -- and we lost some of concessions here. Sao Simao, Jaguara, Miranda, and Volta Grande plants, almost 50% of CEMIG's total generating capacity. It was crucial for the company's revenue. We lost that, and now we have to recover it. And now when you look at that, CEMIG's stake in the generation market came down because we lost these concessions. So now what were we able to achieve? We were able to have the company in compliance with all the regulatory standards. This is what allows us to trust in the company in the future. We are meeting all the regulatory standards. We are within the regulatory PMSO in CAIMI as well and also within the losses. We divested from all of these businesses that were using up our cash. Some of them also went bankrupt and had bankruptcy protection. So we were able to recover these resources because we sold those assets and because -- and of course, we didn't have to invest in these assets anymore because they had problem, and we wouldn't have to invest capital to solve problems in those assets in order for them to continue going on. So I'm very happy also to work at CEMIG, and Marcio, but I'm very proud to work on this investment plan. We have already invested BRL 23 billion. I'll repeat. We leapt BRL 950 million now to BRL 6 billion. This is an amazing, huge transformation, and it is pro customer. And at the same time, this is a transformation that generates value. So we have already invested BRL 23 billion in a plan of BRL 59. And I think it would be worth mentioning, this plan is already contracted. Over 75% of this plan is already contracted. Marcio mentioned that as well, a huge transformation in the supply area. The figure, remember, we are a state-owned company. So sometimes it takes a long time for the bidding process. So this is an advantage. This one is contracted. What we are going to be showing here are real deliveries. And what we can tell you that for the future, it's almost everything contracted, like 75% is contracted. And obviously, we have a financial ability to face the concessions maturities. In case we need that, we have here Sa Carvalho, Nova Ponte, and Emborcaçao, we have the financial means to keep these assets, which are very significant for the company. Very well. This is kind of the same thing. I don't want to go beyond the time allotted to me. But here, we have some things that changed a lot, which are important. We used to have substation transformers with loading exceeding nominal capacity. This no longer exists. Today, we have the ability to change the transformers. So we have high technology, high reliability solutions. We're using green transformers and a very important innovation. The substation comes ready to install and the ability to install it is much greater. So we delivered 138 substations in that format. We facilitated the construction process of the substations because they come almost plug and play. We don't have wooden power line towers anymore. They are all metal built. They're being replaced, and we have very little preventive maintenance. In 2018, CEMIG pruned about 295,000 trees. This year, year-to-date until July, 700,000 prunings have already been completed. It is a big transformation, and this is OpEx. I'd like to mention this because we are in a tariff coverage in the regulatory requirements, but we are investing. We are having OpEx. And of course, we had an unmet demand, the pent-up demand due to lack of investments, and this is real. Sometimes people ask for access. And we just said, no, we cannot meet your needs. And this was a big transformation. And I guess that the Secretary is going to speak about this, how we effectively can say that we are development inducers in the state of Minas Gerais because we provide infrastructure for the state, for the state to prosper. So now we meet pent-up demand. We used to have 10,000 construction work delayed. And now we have 200 top 500 works that are kind of delayed. We used to have 10,000 of those. So I guess that this shows this kind of transformation, which is a financial transformation, but also an operational transformation. I'd like to remind you that this is exactly what the controlling shareholder requested from us. When I was elected, OR when I was appointed, I was with the Governor and the Governor asked me to do two things at CEMIG, #1, that CEMIG would become again an inducer of development in the state. And second, that CEMIG would provide the best service possible to the Minas population. This is what we're delivering, the largest investment plan in our history and the quality of service, which is much superior. And why? Because we have a turnaround of the company. And now we are in the regulatory parameters that were required and making investments. And now we're using all of our capital allocation to invest 100% in the state of Minas Gerais, and these are some of the results. This is just to give you some images. We can go over this very quickly. But I guess it becomes very clear what we mean by preventive maintenance. The absence of pruning, what this causes in these transformers here, they're being called because we just didn't have the money to exchange them. They were overloaded. We have to cool them down. And well, people have a way of saying this, about this process. It's called like a little shower, but it's not big. And this is a totally new substation, which is totally shielded. And of course, we don't have those wooden power lines anymore, the wooden power line towers. And this is our investment plan, BRL 59.1 billion, BRL 36.9 billion in distribution, BRL 5.7 billion in transmission, BRL 5.9 billion generation, BRL 2.5 billion natural gas, BRL 3.8 billion distributed generation, BRL 4.3 billion in innovation and digital transformation. What do I think is behind this -- behind the strategy? Well, behind the strategy, we have a focus of having CEMIG be an inducer of development in the state of Minas Gerais providing infrastructure in the grid. People are talking about an energy transition and people mean a grid, 75% of the investments made are in the grid, regulated investment. We have profitability, which is assured as long as the investment is prudent, but we are very confident that the investment will be considered prudent. And it's all about how we see our role. Our role is to let the private sector grow with generation and having a grid for renewable power to feed capital-intensive industries that require renewable energy. That is our role. We have to be right in the middle of that. Our strategic direction is very clear. In terms of management, we have to be as efficient as possible. And in terms of capital allocation, we need to provide a grid for the private sector for both sides, for those that want to consume energy and for those that want to produce power. And we are going to be the link connecting distribution, transmission, generation, natural gas, of course, not forgetting distributed generation. And generation is a very important topic. We resumed investing in generation, and Marco is going to speak about this. But there is a restriction. Sometimes this is asked, we're going to invest in generation, if we have an oversupply of power, then we have an associated PPA. If we don't have an associated PPA, our strategic plans are no. That is the constraint. We're going to do it. We're going to invest if we can presell this energy. And here, I am going to list some of our achievements. Actually, let me come to this, and then I'll speak about the achievements. Perhaps this is one of the charts that really summarize our transformation, how much we grew EBITDA, net income, share price appreciation, investments. We have the chart from 2018 until our latest balance sheet, June 2025, the last 6 months. And how much each one of these indicators grew? And how -- what was our share compared to other listed public companies. In EBITDA, we had BRL 3.781 billion to BRL 10.700 billion -- BRL 10 billion, 700 million EBITDA. We had EBITDA in the effect of BRL 5.8 billion to BRL 8.6 billion. In net income, we had BRL 1.7 billion, increasing to BRL 6.5 billion. And of the net income of the companies listed in the stock exchange, you can double check that. I hope you're right. We increased from 5.8% share to 14.9%. And the part I like the most, investments. We had BRL 954 million increasing to BRL 6 billion, BRL 6 billion. This means that we had less than 4% of the total investments made by electricity utilities listed in the stock exchange, increasing to 9%. All of these, to me, are very clear examples of the transformation and the market acknowledges that our shares appreciated way above the stock exchange index, the power sector indices. I don't know if this includes the proceeds or not, we grew 485% our preferred shares and 639% growth of our common shares. So it means that if you decided to invest in us in 2018, we are very happy. We improved our leverage from 3.2 down to 1.5 net debt over EBITDA. We increased our dividend from BRL 867 million to BRL 5.4 billion. And this is a frequently asked question, dividends proceed 50% of the net income of the company. This is what's in our bylaws, and this is what we pay out. And there's a big difference. We pay up the -- if we have capital gain, for example, as we had in the sale of Aliança, 50% of that will be distributed. There are no regulatory adjustments as many other power companies actually have, 50% of net income. And also the number of individual shareholders that we have, which increased from 143,000 to 561,000. And looking at the percentage of capital, I haven't got this number in the top of my head, but it more than doubled in terms of the percent of the capital of CEMIG per individual investor. So this is the kind of the transformation that we are talking about. This is what allows me to be very optimistic about the future. This transformation that we implemented, our financial soundness and what this brings to people. It brings security. People can be confident that they can do it. Successful stories bring about more successful stories. I'd like to remind you of our achievements. BRL 844 million of our regulatory coverage requirement, average outage duration within the regulatory requirements, what we call DEC, regulatory DEC. DEC purchased from -- or excluded from extreme events and also perceived average outage duration per consumer. I want to know what the consumers are thinking. And our perceived DEC in this last 1.5 years dropped from 18.7 to 15.8, more than 2 hours, almost 3 hours, almost 3 hours. So reducing DEC, the average outage duration by 3 hours, it's a lot. And you don't see this if you just look at the regulatory DEC. You see the perceived DEC dropped a lot more than regulatory DEC because our speed to serve when there are exceptional events increased a lot. For example, customer service. all exceptional events when we digitize things, we have an ability to respond, which is much greater than in the past. So I don't need a call center with human operators. It's totally digital, and I can meet the needs in case of an extreme event. Elimination of unmet demand and all of that connecting DG, distributed generation. Everything I'm talking about with an increase of DG of 5 GW. So we have pent-up demand and distributed generation at the same time. And we were able to meet this need. So we have record investment deliveries, 138 substations. We have delivered 138 out of more than 400 and [ Renee ] will be speaking about triphasic grid. We have delivered 257 megawatts of photovoltaic plants and more than 9,000 kilometers of triphasic grid. And we have the Central-West Gas Pipeline that is being constructed. And this will be 108 kilometers long. And -- I'm sorry, we cannot hear out of the mic. And this will be officially opened on October 3, the best rating in our history by AAA by Moody's and Fitch. Investments with what we call quantum transformation. And we have to be very brief because bringing about a transformation of an aircraft while ship flying, that is difficult. We have legacy systems, and we have the new systems coexisting. And we know how difficult it was to overcome the culture that it was too risky to bring about a transformation. But we are going to have [indiscernible] for distributed resources and also the deployment of the new SAP S/4HANA that will amazingly increase the quality of information so that we can have a lot more market intelligence to operate the systems. Consolidation of our leading position in the free market, we are now # 59. We ranked 59 in the ranking of the most valuable brands in Brazil. Divestment in nonstrategic assets, and we didn't invest BRL 5.6 billion, which is a lot of money. And here, there was a risk. I know my time is up, but Marcio tells you some stories. I'll tell you about this. I remember that when I took over, Belini came to me with some notes, and he had listed the problems. And he said, Renova, Light, and that was all he talked about. And I remember, he said, 75% of my time, I spend on these assets. How much time do we dedicate to these nonstrategic assets? Well, we had a VP of shareholdings, and this VP was extinguished. We don't have it anymore. Our shareholdings are managed directly by CEMIG GT, Taesa, [indiscernible] but there was one extremely complicated topic for a state-owned company, which was if there were a court-supervised reorganization, we would be decharacterized, which meant that the debt of these companies could come to CEMIG, that was a big threat. So I know that -- I believe that this is an essential part of our current success. The fact that we were able to get away from this kind of risk, the risk of the decharacterization of a legal company. Two of these companies after we exited them filed for court supervised reorganization. So here, we have a number of awards that we got, but I ran out of time. So I'm not going to talk about that. It talks about this. It talks about this as well. And well, this is a fundamental theme for us, our net zero commitment. I really like this part on the right, how much we emit compared to the rest of the world. Our emissions are 2.8 kilos per megawatt hour, average of Brazil is 59. The average for the world is 445. So our emissions are totally neglectable in Scope 1. And we also offset that. So I guess that this clearly underscores our commitment with sustainability, which is proven in our Dow Jones Sustainability World Index. We are 25% in the Dow Jones Sustainability Index, always with growing rates, 78%, 84% and 87% in the last one. We will lead this in the categories of transparency, renewable generation and human rights. In renewable generation, we in-house think it's obvious. We in Brazil think it's obvious, but go around the world, let's say I have a company which is 100% renewable. People will look at you and say, what? Well, CEMIG is 100% renewable. The only thermal power plant we had is not that we sold it. We just closed it because if we just sold it, it would continue to have emissions. So we are really used to this, but when we travel abroad, these are achievements that we do have to highlight for the world. And speaking about CEMIG, SIN, and Gasmig, which I believe are important themes for us to talk about because sometimes we speak a lot about CEMIG distribution, distributed generation, but these are the numbers of CEMIG SIM. CEMIG SIM is a startup, but it is growing at an amazing pace. It made BRL 5 million in 2019, BRL 120 million in 2023 to BRL 187 million in 2024. And this is an exponential growth, which is expected for the future, explosive growth or exponential growth. The same goes for installed capacity and the same goes for CapEx and of course, in consolidated EBITDA. And here, we have a mix. And this is an important update for you. We want to grow with our own capacity and grow by leasing plants. So we allow ourselves to use the strength of our brand. CEMIG has a spectacular capacity to grow, not just because of what we can build or buy in terms of solar power plants, but also because of what we can lease. There's a big market out there, and we have the ability to sell. We have the commercialization risk, but we have a big potential of growth through leases. A good part of the leasing with options to buy the asset in the future. So this gives us some space for brownfield for M&A deals after we have tested to what extent those power plants are good. Gasmig, when we look at the numbers, they are spectacular. In 2018, BRL 347; in 2024, BRL 891 million and net income increasing from BRL 255 million to BRL 515 million. So -- which is officially opening the gas pipeline of the Midwest with a good potential to expand to other regions to the south of the state as well as to the Minas Triangle. So I guess that this is kind of what I wanted to speak to you about because it is about financial soundness, transformation and this record investment plan. All of that gives us confidence that we can face the future. And I will repeat this, when we look at the electrical sector of the past, it's not the electrical sector of the future. So we are taking the steps and we're experimenting to create the future. It's not that we know exactly what the future will be like. It's not like we have a clear direction, but we clearly have a number of pilot projects so that we'll know if there's something impacting us, we'll have the necessary experience to respond and respond accordingly. So let's mention some distribution, digitization, network expansion and meeting unmet demand. And the current execution is DSO model considering the amount of distributed generation in the state of Minas Gerais, 5 GW. But I also like to look at three phases. The first is what I mentioned, the turnaround of the company, a company that is a cash cow. The second is what I call an expansion phase, which is serving the market, serving the pent-up demand. That's the bulk of the investment because it is this kind of investment in substations, in triphasic networks that are required to serve the industries and the agro business. And we had a big demand that was unmet. And we witness this to the number of complaints that we used to get. I'm not going to say that complaints were down to 0, but they have been reduced substantially. So I have a number of stories to tell you, but I just don't have time to tell them. But sometimes, a guy comes to us, and I remember one guy that told me that CEMIG was late that CEMIG had acquired a part of land 15 years before, Marney is here. And Marney was in that meeting, and he can corroborate the story. And as I said, you bought this probably 15 years ago, and I haven't done anything, and I said Well 10 years ago, we were not here. We acquired a lot of land to build a substation. We were never able to do it. But look, it's written here. At this date, it will be open. It will be inaugurated. And that makes a difference because when we speak with an investor, we have a deadline. Sometimes it's not the deadline that the investor was expecting, but it is a date that we have agreed on that is contracted and that we will deliver. So we had a turnaround and then went through the expansion, do some works to serve the market and our biggest challenge is to improve the quality of service. Our consumers actually perceiving that our service has improved, and we have to invest a lot more. With OpEx, we are creating CEMIG Agro, 76 new bases to shorten the distances. We have a new ADMS that will improve the quality of management and of the operation because we'll know beforehand what's happening with the remote meters, smart meters so that we can send service in a more assertive way. So we are in a fine-tuning space so that users can perceive an improvement in the quality of service provided. And we have to be prepared. We have to prepare for the DSO model transmission. We continue to invest in reinforcements and improvements, gas distribution. We want to resume expansion of gas pipelines in Minas Gerais to the Minas Triangle and also with biomethane, which is a fundamental topic, particularly in the Minas Triangle, where we have a big advantage. And green hydrogen, so we can make the green hydrogen to gas, have a blend and serve the industry. We are a big supplier of the steel and metallurgic industries in the state of Minas Gerais. Generation, a lot about capacity reserve auctions, batteries, reversible power plants. We want to recover the fundamental role of the HPVs, which became kind of overlooked in recent years, but this topic about storing energy, which has an immense potential, distributed generation. We have some very positive pilot projects. I have two here about batteries that we should highlight because I think that batteries is a big point now. Whenever we speak about energy transition, we speak about the grid, and we speak about storing energy. I think that I spoke enough about the grid. And about energy storage, our main focus here are not in the major batteries. Our two main focuses are on DG to have more solar power plants with batteries so that we can have service at night. And we want to test the limits because we know that the grid is limited. How can we test the limits. And this is what we are studying in DG. In addition to the solar power plants, we want to have another one, battery powered so that we can have nighttime injection. And I'm addressing the themes of difficulty in growing the grid and also the first microGD hybridization network. When we think about Minas, that's our territory, our concession area, 774 municipalities in our concession area. And there are many locations where there's only one power source and building another one would be too expensive. So we're including a solar power plant, and a battery powered one. So we are inaugurating one, a solar power plant with a battery that can serve the status of that municipality for 48 hours. I think this is going to be a big transformation. And if that works, there's a big likelihood that we will replicate this in many other municipalities. And of course, we have to prepare to the free market under our leadership in energy trading in the free market, the regulated market, customizing products, allowing us to manage the demand. And with the possibility of regulatory changes, this will be very positive. I'll skip this or else I'll speak forever. This is kind of our innovation hubs. And again, take on messages we are experimenting to prepare for the future, not like we have all the answers, but what we want is to be prepared so that when we need to take a straight forward, we'll know what we are doing. And this is something we didn't manage to do with solar power plants. We were late in the process because we just didn't have the know-how. But here, we are testing batteries, we are testing integrated micro networks, we are testing AI, artificial intelligence, have the new Inova Cemig Lab. We're investing in R&D. We're investing in innovation. It's not just investing in R&D. This is our own money that we're investing to help start-ups so that we can deliver more efficiency and more accuracy in service to the market, more excellent asset management to support our operation. We have more than 50 projects ongoing. The smart meters, 500,000. The current cycle is 1.5 million. But of course, our plan is to have 100% of the network with that kind of smart meter data lake. But I'll leave this for Villani to mention. Green hydrogen, we delivered a road map for the state, which was a very positive theme. We talked about the project for Gasmig, and I will end with this slide. This is something that we like to show because this is a change in strategy. Our strategy in innovation has always been to use at house R&D funds. And now we use those for large projects, but for experimental projects, we now have Inova Cemig Lab. We spend around BRL 20 million a year, our own money, company's money to bet on start-ups, to bet on knowledge that is going to improve results, 45 challenges launched, 540 proposals received. We got awards, right? What did we get again, [indiscernible]. I cannot mention the town here, but what were we awarded again from [indiscernible]. So we have BRL 70 million per year in potential annual benefits for CEMIG. This is what I wanted to highlight. And I stress that when we look at the whole picture, we feel confident about the future. We have the whole picture that we wanted to bring to you, and we have all the seeds for the future that will prepare us for the challenges that will come up. We don't know exactly which ones they will be. But we know that we have to be prepared after we complete 7 years to have more 7 years and to be a long-lasting company. Thank you very much.

Please Mr. Reynaldo stays on the floor, if we have any questions. We have 5 minutes for question only. If not, we will move on with our agenda. Thank you. Thank you, CEO, Reynaldo Passanezi Filho for your presentation and for bringing relevant information about CEMIG's achievements and accomplishments throughout these years, thanks to a lot of hard work and education, of course. Now we turn the floor to the Secretary of Economic Development of Minas Gerais, Mila Correa.

Good afternoon, everyone. It is a pleasure and a privilege to be here in Sao Paulo today in another CEMIG day addition. I would like to start by greeting everyone at CEMIG on behalf of CEO, Reynaldo, Cristiana, Simone, our Internal Minister, the Chairman of the Board, Luiz, Andrea, Sergio -- Sergio Cabral, a joke about him, [indiscernible] and everyone else that are here with us. Now the minister is here, I apologize. I made a mistake. I would like to thank you for this opportunity. Also Roberta, Institutional Relations and the President of Gasmig, Bernardo, Also, he was for the same soccer team than I do. I apologize. So Mr. CEO, I would like to take this opportunity to bring a few words from our Governor, Romeu Zema and Mateus, our Vice Governor as well to show you a little bit of the context because CEMIG has these figures, and they are extraordinary. And we do have a context since 2019, where we are developing an economic system, and we are building government guidelines for the state-owned companies owned by Minas Gerais, and that allowed us to have this successful partnership as we have already seen. So I would like to share with you a little bit of this story. I will start by the end. Let me see. I had asked to make a change on my slides. Let me check. I don't think this is working. This is what I wanted to share with you. Simone was from [indiscernible] she knows. And today, I am the Secretary of Economic Development, but I was the General Director of the Metro Agency today is connected to things. I also was the Deputy Secretary of the government. And so I am a witness since 2019 of a hardworking development because of the context that this current management got in this company at the time. So Reynaldo and Marcio have said it very well. Our management really aims the technical aspect and also a very robust data and statistics as you have already shown.And because I have been in different positions and they joke with me because I have been all around. But thanks to my experience, I am a witness of how serious this administration is and also the results that you have seen. Because of the Governor's room on his wall, there is a board with the signature of all the secretary saying, "Our mission is to improve the quality of life of people of Minas Gerais," period. This is our mission in Minas Gerais administration. This is the mission that has been given to all of the state-owned companies. And why I wanted to start with this slide? In 2019, we had a management format of an administration that was starting in an initial cycle, in the second cycle already with a number of difficulties overcame. I don't know if you know, but in the prior management, we had a huge deficit. We had lost over 300,000 work positions -- work posts. And I will show you that in this cycle. Not only we did not lose, but we also created 1 million formal jobs in the current management. We had debit, which is the state government was discounting from the payroll from over 300,000 employees that serve as public servant, and they would not transfer these funds. So 300,000 public servants ended up having their names are blocked because they were not being paid that debt. So at Cemig's case, this is -- we had a number of investments that were done out of the state of Minas Gerais. In 2019, being the Director of the Metro Agency that was supervising 50 municipalities, I had three problems that were unanimous problems among all the mayors. They complained about Cemig, COPASA and 0.5 years in that agency. And these were the main complaints and the main claims. And there are serious problems. We did not have the Minas 3-phase program. We did not have the substations to attract investments to the metro area, energy peaks, for instance, Florestal, which is a relevant area, loss of milk production because of these energy peaks. Wells -- artesian wells that COPASA would drill and Cemig connect. So my daily activity was like that. And to add to it, we had the pandemic. 853 municipalities of Minas Gerais, and Minas Gerais has an extraordinary challenge compared to the other states. We have a political administrative division, which is the most complex in Brazil, 853. Sao Paulo state has 600 and something. Cemig cater to 774 municipality. These are extraordinary figures. That means that we have an additional difficulty in management because we have to be there at the end of 853 towns in the state, which is the size of France. Actually, Minas Gerais is larger than France. So when I got to this agency and spent all these years there, the main complaint was about Cemig. And I told Cemig CEO when I left the agency in 2023, there were no complaints anymore. This was amazing. It was an extraordinary transformation, a work that started with Belini, then our CEO; and Marcio Luiz, Head of the Board since the beginning. So it was a full reformatting of Cemig of the company's investments, a company that is a reason of proud by the people of Minas Gerais because it was created by Juscelino Kubitschek because it has 70 years of history, because there is a team of public servants that is amazing. Also this leadership team that is here today that have technical skills to be ahead of the guidelines that the government established at the time. So we see the whole progress. And then in 2022, in the second cycle of Zema's administration and Governor Mateus takes on at the time. So a second administrative reform has been made. And what did that reform prioritized? The development of an economic system that was robust with synergy to drive a second round of management, the economic development of Minas Gerais because Governor Romeu Zema is an entrepreneur. He comes from the productive sector, and he brought to his administration all the pains from the productive sector. I was talking to Marcio, he's also an entrepreneur. We are discussing about the bottlenecks of the productive sector in any state of the country, environmental licensing, different tax regime, energy supply, roads and railroads infrastructure. And Minas Gerais has an additional challenge, the largest road system in the country, the second largest railroad network in the country. How do you maintain that size of a road system with a broken state? And you were also following that up by the media that Minas Gerais is working hard to comply and to adhere to Propag. And once again, a commitment show a sign of severity of seriousness by this administration. The adherence to Propag only makes a difference in terms of the state treasure after 2028 up to '27, '28. The parcel that the state will be paying if they are in the different systems, it will be the same. But the Minas Gerais administration is thinking about the state policy and the commitment of the ability to invest, the ability to be sustainable about the nation -- the state treasure. We then are thinking about the maximum terms, so that we can adhere to Propag by the end of October of this year. So thinking about the robust economic development that could consolidate results up to the end of the second cycle of 2026, this was the system that we considered with 13 companies associated. So in the economic development secretariat today, we have public policies, taxes that in other states is completely separated. For instance, being a Secretary of Economic Development, I participate on the National Forum of the Minas Mines and Energy Secretariat, and also the National Forum of Science, Technology and Innovation. Each state separates differently, differently from us because here, we bring together all topics that are regarding economic development, encouraging and stimulation in a single secretariat and associated to economic development. So I was sharing with Marcio. We have the sub-secretariat, and I also worked there for a while. So all the assets that can be leased in the state are under the secretariat, thinking about the assets leased as an induction for economic development. At the same time, to attract investments, science, technology and innovation, economic freedom because it's not possible to think about attracting investments to induce investments if you do not have a good business environment, an environment with no bureaucracy. That's why we have Minas Livre para Crescer, Minas Free to Grow. Today, we have 930 possibilities of licensing in the states that are free. And along with the partnership with the whole commercial system because there is an agency that helps in opening companies in Minas Gerais. And this agency has an amazing role in automating the approval of these licenses that today no longer depend on the complicated process. So the economic development, assets lease, also regulation of rural areas of science, technology, innovation, economic freedom, mines, energy, mining, gas regulation, that's why gas make the -- the Secretariat of Economic Development regulates the gas and Gasmig is the subsidiary of Cemig. So this is the whole system of economic development. We have a bank that signed structuring credit lines. Just like Cemig, we have Cemig Agro. BDMG also has a credit line for the agrobusiness and look at the impact in the figures of Minas Gerais. For the first time in history, Minas Gerais' GDP was over BRL 1 trillion of GDP. Never before in history that had happened. We never had such a high GDP meeting that number. And for the first time in history, if you know Minas Gerais, you get to the airport, you go and you pass in front of the administrative city and you probably saw the sentence that is there. For the first time in history, agrobusiness is higher than mining exports. This was a reason for a big fight already because the mining did not like the comparison. But it is just to tell you that the state that has in its DNA, the brand of mining. We are called Minas Gerais, a general mine since its origin. The main economic activity of the state has been mining. And Cemig's work, BDMG, the Secretariat of Invest Minas, which is also here attracting investments to agrobusiness, that has been so successful that we were able to be outstanding when compared to mining. Now with Cohab, which has always worked with housing, working together with the Secretariat with land regulation, which is a policy that is mostly valued by our governor. And he always says that one of the most moving events is that when he gives the title of a house, of a place to a family because this brings the guarantee of loans and also this provides a lot of good to people. So this is a structuring policy to the state. Sergio has been the President of Codemge. If you don't know Codemge, you have niobium, and it's one of the largest mines in the world. It's Araxa, they work with Codemge and Codemig. This is the Minas Gerais development company, COPANOR and COPASA. COPASA, just like Cemig, started to disappear from that complaint list over the years that I was at this agency. Thanks to this professional management of these two state-owned companies. And these are also listed companies with an amazing performance. And COPASA, as all of you know, is in a process of a possible privatization. It is depending only on the approval of the legislative assembly, now also depending on Propag. FAPEMIG is our research institution. It receives a percentage of the state's revenue to support R&D policies. And FAPEMIG today is very relevant in the system, so much so that it has out a number of publications that joined together the academy, public policies and the productive sector. FAPEMIG is very much aligned into the economic development system, considering what we have in the Secretariat that area of technology and innovation. Gasmig, I already mentioned, and Invest Minas. And the numbers are extraordinary also when you think about attracting investments. In the prior management, BRL 24 billion came in, in investments for Minas Gerais. Up to -- from 2019 up to today, September of '25, we have BRL 506 billion being invested in the state over BRL 0.5 trillion. Almost 2,000 projects and countless municipalities that are contemplated with this BRL 500 billion, an impact in our GDP and also an impact in that figure of 1 million of jobs. Because the promise of our administration is not to attract investments, but also to have income diversification and also the creation of jobs. So we are at full employment. Thanks to this work that was developed here. Jucemg, I already talked about it. MGS, this is the company that supplies outsourced labor, not only for the state administration, but also to a number of towns in Minas Gerais and Espirito Santos. It has a [Technical Difficulty] result today. MGI, which manages the assets in Minas Gerais, and also Loteria Mineira has a surplus and is committed to social assistance, social service and important social projects, for instance, different hospitals. And there are a number of projects that have received funds from the Minas Gerais Loto. So now let me go over the story. This slide -- well, the CEO is not here, but the government in all the meetings with entrepreneurs, he shows this slide to show the figures. This is a consolidated of our state-owned companies from 2011 to '14, from 2015 to '18, and now under Romeu Zema administration from 2019 to 2024. This shows the commitment of a professional management of our state-owned companies. Thanks to the sale of assets that are out of Minas Gerais. The other day, right, Chris, we were at Monte Carlos opening a plant. Cemig was with no openings for decades, no inaugurations for decades. So we also had the opening of service in Betim that will cater to a number of towns. So this is a clear proof of the guidelines of Minas Gerais administration regarding the state-owned companies. I'm going backwards here in my presentation. Here, we have the matrix, but my time is up. Also, our CEO talked about this. And I would like to share with you other information. Reynaldo said that Minas Gerais was the first state in Latin America to look for ratio 0. We have this commitment to reaching ratio 0. This is very complex, but this is very valued abroad. We were in China and in Japan now in June. And the main interest of investors -- foreign investors in Minas Gerais has to do with the Cemig's capacity, not only of distribution and investments that the company is making today, but also green hydrogen. And Cemig with Invest Minas today are developing a road map, which is a project for green hydrogen, especially with Japan. And Japan is very much interested in investing in hydrogen production in Minas Gerais. They have a joint venture in Yamanashi working on this project, and they see great potential here. Cemig that already has a GDP that is 100% renewable, this is wonderful for investors. They look at Cemig with this potential. And more than that, here, we have some of the projects. And I will end with this specific project, which is from the Valley of Lithium. You all know about it. It was also -- it was listed in the New York Exchange market in 2021. The idea here is not only to exploit mining for lithium in the region, but especially to bring development because we know that, that area really demands a lot of attention from the state public administration because of the difficulties that the region faces. So today, we have a task force from all the secretariats of the state that is coordinated by the Economic Development Secretary at Cemig, COPASA and a number of these companies that I also mentioned, so that we can bring actions to this valley within the scope of the Valley of the Lithium, not only to bring investments, but also a hospital, regional hospital that's going to be open there that will cater to the region, high investments today and of safety and security in the area. A number of notices of FAPEMIG that once again are bringing together studies for lithium and also for the region -- for that region of Jequitinhonha. And without the partnership of Cemig, that would not be possible. With this committed serious results -- committed to the results with the results that Cemig has today, we would not be able to have the numbers that the Minas Gerais administration is posting up to today. Once again, thank you very much for this invitation. And congratulations, Cemig, for the results that have already been shown. And thank you, Marcio, for this partnership with the controlling shareholder, with the state administration. It has proven to be very successful. Thank you once again, and I hope this is a very fruitful year.

Once again, if you wish to ask a question, we have time for a question. Please raise your hand. We'll bring you the microphone. Or we'll have another time for questions and answers at the end of the all the presentations. Thank you very much. Now moving on, we would like to invite to the stage, CFO and IR Officer, Andrea Marques Almeida. Please, Andrea. Thank you, Andrea.

First, it is a pleasure to be here with you. This is my first Cemig year. I am one of the young people in the team, and I am very happy to be here with you. Welcome, and it's very difficult to talk after our Chairman of the Board, after our Secretary, our CEO, Reynaldo. I will be brief because I'm going to go over figures that you already know by heart, but I will talk about some relevant topics on our financial policies. And also, I will talk about something that really makes me pride at Cemig, which is our sustainability plan and also how the market recognizes this plan and is awarding Cemig over time. But I will try to be brief. So now talking about the figures that you already know. But of course, approaching them specifically, we have been posting sound results, and we always talk to you over the way in our calls. We are -- and here, we are showing recurring results and also results for the half of the year. So the first half of the year, we reached BRL 4 billion in EBITDA and BRL 2.3 billion of adjusted profit -- net profit. And if we look at everything that happened when compared to last year, we find that most of our businesses, and this is the beauty of diversification of Cemig. So most of our businesses had positive results and even greater than last year in distribution. And I'm looking at Marney, he had BRL 400 million in EBITDA of delta vis-a-vis last year. We already talked about this in the last quarter. It had to do with the reimbursement of subsidies that was a relevant amount. It was posted in the second quarter. We had a tariff rebuilding. So definitely, in distribution, it's posting a positive contribution year-on-year. So Marney, okay, keep on the good work. But also my friend, Marco has contributed. So in the transmission and generation business also added to our EBITDA when compared to last year. And we also have been always telling you in a very transparent fashion since last year that maybe this is the effect that has a negative effect is that we had a change in model, the new wave that affected the volatility of prices. We are working with higher energy prices. In addition to prices volatility, we are seeing definitely prices among submarkets, and difference in submarket prices that have been an exposure that we always had, but we are seeing now maybe the price differentiation in a more relevant way after the model changed. And maybe this has been the most relevant effect that we have seen when we compare last half of year to this half of year. So the trading company had a hit of BRL 200 million in addition to margin compression, which we already were expecting the trading company and also minor effects. When we compare year-on-year, we see a positive growth of 2.7%, lower than inflation by the effects that we discussed here. And net income, same thing, BRL 2.3 billion of net income in the half of the year is very relevant. That shows the benefit of our diversification. I think our CEO has mentioned and he did not like our bond very much. So in the past, we did have the hedge expense and that had a negative effect. And now we have greater effects maybe affecting with a greater depreciation because we have larger investments. Wonderfully, we have a mega investment plan, generating greater depreciation and also some financial expenses that are a little bit higher, of course, because of interest rates that are affecting all over the country. So definitely, these are the main effects. This is nothing new for us. I just would like to go back to them. But once again, these are very relevant results that we are having. And even with these results and also with the trading company, we still had very positive evolution showing the strength of the Cemig portfolio. Now speaking about our capital structure, our financial management, I think Reynaldo has touched on this. He spoke at length about the things we're achieving, but we are definitely at a moment of deleveraging the company. We have a very low net debt over adjusted EBITDA ratio, 1.59. Comparing to our peers, we're doing quite well. And this is helpful because we have quite a substantial investment plan to be executed in order to execute that investment plan. Well, I normally joke that we have to juggle the many plates. Well, this is a very nice and cool investment plan. But at the same time, we have to remain with a AAA rating. So we have to have a financial soundness and efficient capital allocation. We are doing this by getting longer durations for our debt. And we can see the average maturity of debt 6 years now. And we will be pursuing average maturity of debt that is higher, avoiding concentration of debt service because we know how relevant is our investment plan and how we are being observed and how we are being awarded for this capital management and this capital structure. Now speaking about an efficient capital management. We have been benefiting from the local capital markets, which has been a good source of funding for us. We love to issue debentures. I am a buyer. I love to buy debentures of Cemig. And it is a nice market offering good volumes and costs for Cemig. We issued very close to the sovereign, the issuance of BRL 5 billion in the first half of the year. So this was really nice. However, we have to diversify. I normally tell Marcio Luiz that we cannot put all the eggs in the same basket. Well, and he knows a lot about eggs much more than I do. So since we cannot have all eggs in the same basket, we have to diversify. In order to diversify, we have to look at other funding sources, and we are doing that. There are a number of sources. The local capital markets is great, and we are going to continue to go to the capital market, but we use the 4.131 loan. It was a very successful auction. We were able to renew our concessions with a lower premium than the auction as a whole. But we are working also with multilateral agencies, development of banks. We can have receivables discounts, and some of these structures can even bring us off-balance sheet structures. So these are the kind of works that we will continue to do to diversify our funding sources. And now we're speaking about our sustainability plan. As Investor Relations, I am happy to speak about this at Cemig. I think that Cemig resorted to market sustainability trends. And we added to that what was most relevant for Cemig. And we put together the sustainability pillars that we wanted to implement at the company. Based on that, we put together short, medium and long-term plans with clear goals of creating value to our shareholders and of course, managing the climate risk, which we know is very relevant. And we communicated this to the market. We communicated several of these plans to the market. I will touch on some of those, and I will do so on behalf of the sustainability department who is here attending the event. Our friend, Denis and [indiscernible], they always help me speak about sustainability in the right way. Well, one of them is to offset 100% of direct emissions by 2026. Today, we already use biofuels in our light vehicles, so that we can achieve that goal. And we've been doing this. We are also working with equipment that reduces consumption. And we do a lot of work with the families. We have a goal to benefit 120,000 families by regularizing their energy supply. So far, more than 40,000 families have been regularized. And that is very important work because indeed, we are bringing citizenship. Electricity for these households oftentimes means life. And we also bring with it an added service, which is to raise awareness regarding the use of electricity. With the energy efficiency program, we exchange the equipment of these households by more sustainable fridges, light bulbs, and we've been doing this. So 40,000 families have been regularized and benefited. With this mega investment plan, there were many electricity towers that we replaced. And we generated a lot of industrial waste, and we have a commitment to recycle or reuse at least 99.5% of all industrial waste generating. In 2024, 99.3% of industrial waste from power generation, distribution, et cetera, were recycled. Well, we want to have a zero accident culture, and that's not negotiable at Cemig. We've been working a lot on this topic, and we have actually simplified our golden rules so that everyone knows very quickly and exactly what they need to do. So first thing, they have to think about the risk. And if they think twice and if they think there's a risk involved, they should avoid an accident. And this is super important. We have been reducing our accident rate by 15% in 2024. And now in 2025, we tend to reduce accidents even more. We have a program to benefit at least 60,000 people with projects for infancy, the elderly and sports. And we intend to comply with 100% of the global compact transparency movement requirements. And with that, we got some recognition and acknowledgment that makes us very proud. I'm not going to mention these, but we are proud perhaps to highlight CDP which is the carbon disclosure program. We got the maximum rate in 10 out of the 16 criteria for a number of reasons because we have efficient management, because we have a net zero plan that is effectively clear and transparent. So that's -- the criteria is transparent disclosure. We trade, we are among the 10 B3 companies that rank the best in this index. Among those, there are only three better than us in the electrical sector -- the electricity sector. And this Clean200 and here, they choose the top 200 green utilities companies based on carbon emissions and renewable energy. We are the second best Brazilian company in the world's top 200 green utility companies. So I am very proud of the work that we are doing as it relates to sustainability. And with this, I would like to [ handshake ] that we are very proud of everything we are doing and that we will continue to do in order to continue to improve our quality and to make sure that all the strategic plans that we have will be actually put into action and so that we can do this in a sustainable way. This is my take-home message for you. Thank you very much.

Do we have any questions addressed to Andrea, while she's still on stage? Okay. So let's move on. Well, again, thank you, Andrea, for the presentation. We will now proceed with Cemig Distribution. I would like to bring to the stage our Chief Distribution Officer, Marney Tadeu Antunes.

Good afternoon, everyone. I'd like to start congratulating the whole Cemig team, and thank you for the support so that we could execute the highest employ annual plan. I would like to be brief to try to recover some of the time because Reynaldo went way beyond the time allotted to him. He used some of our time. Energy transition is transforming the whole Brazilian electric sector, given the inclusion of renewable sources and also due to those consumers who are also generating energy and because of BESS. And this is creating some opportunities for us, and it is what I am going to talk about. In addition to the opportunities, there are some great challenges. Some terminology was not used in distribution that we didn't use before. For example, electric vehicles. If you buy an electric vehicle, there are chargers with 40,000 watts. And they use this at least for 6 hours in evening. It's the same time they use the shower for 7 days. So a charger has 40,000 watts. Can you imagine what this is going to cause in the electrical grid and how much work we will need to do to face all that? So in order to face all that, we had to adopt the biggest investment program in our history so that we could prepare for the future. So this is the investment program of first cycle from 2018 to 2022, BRL 7.2 million. And now in the second cycle, BRL 21.904 million. We are actually in the middle of the second cycle. We are halfway through the execution. In July, more than BRL 10 billion. So we had 50% execution of our investment plan. This is going to generate for us a number -- in addition to a lot of benefits to those unavailable loads that we could not provide. In addition to improving availability, we will improve depreciation. In 2018, we had a grid that was depreciated, 64% was depreciated. In 2022, about 61%. And now the depreciation of our network is expected to drop to 56%. So every cycle, we are recovering the regulatory remuneration base. Reynaldo -- this is also one of the goals of the investment plan. Reynaldo talked about the deliveries of substations with works completed in 2025. So here, we have these compact substations. If they were not compact, we would not be able to execute so many. We had to look for technology and engineering brought us this compact substations. I'm going to quickly mention losses. I normally say that losses and delinquency work hand in hand. Efficiency in managing one is not enough without managing the other. If you give up losses -- energy losses, your delinquency will increase. Or if you work a lot on losses, it is only natural that delinquency will increase. So you have to be efficient in both access. And that's why the first restructuring, we brought these two departments together, and we manage these indicators with separate teams. Of course, they each have their own characteristics, but these are energy losses. We are below the regulatory losses with 11.43% compared to 11.48% regulatory losses. As you probably know, we had an increase in losses because this was the victory of our regulatory department together with PRORET and ANEEL. When we reconsidered the losses of the DGs, we considered energy metered and not just build. And that is why the losses of discos increased. And still, we continue below regulatory losses with 11.43% actual losses. Our collection process, we maintained a level of excellence. And going back to losses, this has been the fifth year where our energy losses will be below regulatory losses. In our first meetings with you, you questioned this. And you didn't want to have losses increasing and dropping ups and downs. But this is the fifth year in which our actual losses are below regulatory losses. We have ARFA with an index of 99.3% projected for 2025. And according to the ABRADEE award, that's another methodology to measure delinquency, by the way. For the second year running, we are the company with a delinquency of about 1.5%, lowest default of all distributors, which is kind of the opposite of ARFA, which is the revenue collection index. And Secretary Mila mentioned regionalization and decentralization of distribution. It's the opposite of all the other discos are putting into practice because experience has shown to us that you have to be close to customers and to what the problems are, particularly in Cemig's concession, which is a very large territory. So we realized that what are the motivators. We have to ensure excellence to be sure of the execution of our strategy, a culture of safety, our leaders working together with the teams. We have to have representation and presence of Cemig's leadership. And the state of Minas Gerais is practically all Cemig. It's hard to get a benchmarking. And so we do internal benchmarking. Here, we have six regional senior management offices. We didn't have any of those decentralized. We had just one single central senior management office. Now we have six in Uberlandia, Pouso Alegre, Montes Claros, Governador Valadares. And we created 17 regional medium and low-voltage management units. And the regional high-voltage management unit. All of that used to be centralized and located in the city of Belo Horizonte. And we needed to monitor all high-voltage works. Can you imagine that? Last year alone, we built more than 1,000 kilometers of 138 kV lines. Can you imagine negotiating the expropriation with each property owner? And then, of course, we had to build the network. So this kind of regionalization started bearing fruits for us. We started with this last year, and it is impressive to see how service improved to -- in the eyes of the municipal governments and the city representatives. I used to see at least four municipal representatives bringing complaints. They would bring to us mayors, their own customers, and we didn't have decentralized service, but we restructured. And now we're working closer. We started with 45, now we have 65 agents to serve the city halls in-person. And with this, we reduced substantially. Now we have two, three state representatives or city counselors. So this was a big change. Speaking about Cemig Agro, that's kind of interesting. Our minister, the coordinator of Cemig Agro can correct me if I'm wrong, but I got the numbers yesterday, and I thought that they were really interesting. 61% of Minas Gerais municipalities have agrobusiness among the top 3 economic activities. We have 6 million hectares used for agriculture. Only 17% of them are irrigated. And believe it or not, we're just finishing the survey about irrigation. So for irrigation, we need electricity, and that's why we created Cemig Agro. This is the true energy transition, right? We have to stop using diesel and use electricity. And this is one of the first purposes of Cemig Agro. And of course, we want to improve the quality of energy supply, of power supply for all clients in the rural zones. The average outage duration in the rural zones was about 40 or -- it was 60 hours. Now it is down to 40 hours. Average time to service was also reduced. Average time of service was also reduced by 10%. So it was reduced by 10%. And this helps increase resilience of the grid. And ANEEL has been putting a lot of pressure on all power companies given the extreme climate events. Cemig had about 3,000 closers. And now we have those smart reclosers. Hopefully, very soon, they will all be smart ones. This is our purpose. And preventive maintenance, we didn't do -- we didn't use to do preventive management in the rural zones. Even yesterday, the minister mentioned this. We have 10% of our customers in the rural zones, and 90% of our transmission lines are in rural zones. If I provide maintenance to 10% of the lines, I will serve 90% of the urban customers. And that was the previous strategy, and that's why there was no preventive maintenance. And that's why we had around an average of 60 hours of outage duration, which is now down to 40 hours. As Reynaldo mentioned, 76 new bases in 76 municipalities. And this is the secret of our success. The electricians are closer to the points of complaint. So in a nutshell, it's Cemig closer to customers. This is an example that Reynaldo mentioned, which is cleaning the lanes. We cleaned 44,000 kilometers. And this year, 51,000 right-of-way clearing. It is a lot of pruning, a lot of right-of-way clearing. Now we are completing, and we are going back to the points that have been served. This was the expectation to reduce what we call the green average outage duration. And so prunings, 747,000 prunings that will be performed this year compared to 295,000 in 2018. We will just prune the trees in urban areas in the past. I remember when we joined the company in our budget, Andrea, our budget was put together with no OpEx for rural zones. And then a little bit was added. And I said, but this is too little. And the answer was, but this is just for emergency cases. We all know that emergency service is much more expensive than preventive maintenance. And now we changed and we're able to reduce our OpEx for rural areas with corrective and preventive maintenance. We -- every year, we increase preventive maintenance. And this is the type of machines that we are using for this kind of right-of-way clearing. And this was mentioned, a lot of people saw what we put outside of Serra da Saudade. BESS is a challenge for us. We are learning how to use BESS. We have BESS installed in two situations, one in the Mineiro region, which is the Cruzeiro football court. And we have another pilot project for the DG with funds of the disco, with the approval of ANEEL and Serra da Saudade, which is double fitting of a municipality, which is the first integrated micro grid of Brazil. It will be inaugurated just this month. And we will be expanding this and suggesting to the Board that another 25 municipalities should be served in this way. And why? Because in 2021, we had 144 municipalities without double supply. Now we still have 70. Some of them will be served with a conventional grid. 20 will be served with this technology. Well, the DGs, 5.12 of connected power. We have 7 gig already negotiated of DG. And this means half a Itaipu power plant. Solar panels in the state of Minas Gerais. We are ranking first in installations and connections. More than BRL 5 billion have been invested in connecting the DGs. DEC, Reynaldo has mentioned. Just wanted to highlight that we reduced perceived DEC by almost 3 hours. Regulatory DEC, we are slightly above in the month of June, but our commitment is to end the year within the regulatory DEC, like again being the average outage duration per consumer. Yesterday, we had the best performance overall, and this is the moving average of the last 12 years. Now we are at 9.71. And by year-end, we will be delivering within the regulatory DEC. But the customer perceived DEC with a considerable improvement of almost 3 hours. I'm coming to the end of my presentation. This whole investment that we made also deserves an investment in our operations center. We are building an integrated operations center. According to Denis, our mastermind, it is the largest operational data center in the sector in Latin America. We have an operations data center, and we aim to have generation, transmission, distribution, smart metering, which is part of distribution. But today, we don't have an operations center for that. And this is going to be the transformation of the conventional operations center through smart meters. We will be able to monitor the whole evolution of the electrical system. We are going to also have some cybersecurity, security of the assets and asset management. All in this new integrated operation center to be built in our headquarters in Belo Horizonte. Delivery scheduled for 2027, investment of BRL 271.2 million. And also, there will be a redundancy center for disaster recovery in case of an emergency. And it is a Tier 3. It has international construction standard. So this is very important because this is the heart of our operation. It is what will control the challenges ahead because the challenge in the future is exactly this, the distribution company will become a DSO, the operator of the distribution system and in Serra da Saudade. Can you imagine the solar panels serving the municipality? And then we have the curtailment which is a new terminology. The one in charge of this operation and this connection and the management of this power will be by the disco. We have the pursuers as mentioned here. These are the customer generating their own power. Sometimes they are consumers, sometimes they are generators and our renewable sources. And here, LTE, there's a tower here, and we are creating a big telco company. Our three biggest municipalities in Minas Gerais will have their own Cemig mobile phone network. I like to say that we have a logistics company as part of Cemig. We even deliver paper bills to be paid in rural zones where the postal office will not go. And we are going to have our own mobile phone network. And we have Cemig Agro, of course. Cemig Agro is -- I'm talking a lot about Cemig Agro because the potential of growth of the distribution in this area is huge, and these customers most likely will not migrate to the free market. They will be captive customers also because there is an incentive just like for low income, public lighting. And of course, the market opening is also a challenge for the disco. But this is how we are working right now. And I would like to end my presentation now. Thank you all very much. We will be available to take your questions later on. Thank you.

Thank you. Good morning. Please let's see if we have any immediate question from the audience. Otherwise, we'll move on. Very well. So we'll now have a quick break. Please do not leave because right after that, we will hear our Chief Generation and Transmission Officer, Marco Soligo. We will also have our Chief Information Technology Officer, Luis Claudio Correa Villani; and also our Chief Commercialization Officer, Sergio Lopes Cabral. Thank you. [Break]

Welcome back. We are now continuing our Cemig Day. Before we start our agenda, I would like to ask you to place your phones on mute so that we can have a smooth event. I would like to bring to the floor to continue our Cemig Day, Marco Da Camino Ancona Lopez Soligo, our Chief Generation and Transmission Officer.

Hello, everyone. Good afternoon. Good afternoon also to those that are following us online. Let's start the presentation. Well, I have been at Cemig for 40 months. And for 36 months, I was a Chief Stakeholding Officer. And then I took over generation and transmission area. And for a period of time, I was wearing both hats. Considering all the years of Cemig, we have also been rookies here. So let's talk about generation and transmission. Under this management, we have two approaches: one, very much focused on engineering; and also a strong focus on the financial area. So we are aware of the millions of reals that transmission and generation bring in terms of cash flow and how these different areas are important for the final results of the company. On this first slide, we have the plant of Emborcacao. This is the largest hydroelectric power plant of the company with 1,192 megawatts of installed power. It was opened in 1982, and it was then retrofitted in 2022. It has four Francis machines, each one with 400 megawatts. It is fully tele-assisted by our operations center, which is in our center in Belo Horizonte. You cannot look at it, but the dam is 1.5 kilometer with a height of 158 meters. So in its generation business, the company has 30 HVPs. It has four photovoltaic plants, two large and two smaller ones. And it has two wind farms. So we have in total 159 generating units in the generating business. Out of these, 97 are hydro. Diving deep in generation regulation, we know that one of the crucial points for this business to work is the availability of the generating units. And there is an indicator, which is the availability indicator of these plants. The indicator -- this availability indicator says, of all the time that you should be available for generation according to ANEEL's reference of 5 years, how long were you available effectively? It could be a little bit higher, a little bit lower that reference. If you are a little bit lower, you will have financial penalties. Considering the whole business of generation, we have BRL 2 million of penalties. So BRL 2 million of revenue that should come to generation business, which represents 0.05% of net generation -- net revenue of generation is not coming to us. So how can we achieve this result? So one of our guidelines and one of our objectives here is that assets have to be available. They have to be available. In our monthly meetings, we bring to the Board of Directors our availability factors. So turning to the next slide, we will show you, look at this. Our availability for HVPs, here 96% and the sector reference is 89%. We have the forest unavailability. This is what I was not able to control. And there was a problem, an expected problem. There was an unplanned stoppage. So how much is that? 0.8% in the year. And also look at solar plants availability. We are at 98.9%. And our availability for the wind farms, which is 89.9%. This wind farm availability tends to increase in the second half of the year because we have our planned maintenance done in the first half of the year because we will have less wind. In the second half of the year, we can generate more. So generation business. For that, we have to maintain everything that we have and maintain it very well. And we also have to grow. Now let's turn to the next slide. Here, we have two undertakings that represented growth in the company. And they were Eduardo Suares solar plant in Montes Claros Minas Gerais, and Jusante solar plant. These are centralized plants. We are also building some of them already energized and different distributed energy units to mega, for instance, like Reynaldo mentioned. Eduardo Suares plant is not dispatched by the ONS, so we do not have curtailment there. But Jusante, we have curtailment. The maximum curtailment of Jusante plant for this year, the average was -- a monthly average was 20%. This is lower than the average curtailment for the solar power plants in the Southeast market, which is 30%. So what have we done here? How did we do it? Our CEO told us, look, we also always want to have an associated PPA, a pluriannual plan that can be minimized. And most of you check our balance sheet and our -- also our quarterly returns. And you will see that these two undertakings, we invested around BRL 850 million. And we were able with no risks, make them feasible economically because we signed a partnership with six companies here. The Jusante, the supermarkets and an economic group also related to retail. With the help of our trading company, Sergio is going to talk about this later. Our trading company helps us a lot so that we can turn this growth feasible in generation, and it will help us in the future growth as well. So let's move on. We have shown here. And we already know very briefly, we organized ourselves and we were able to participate on GSF auction. Andrea mentioned that in the second quarter results call. And what I would like to stress is that we were able to get what is equivalent of a plant of 65 megawatts for 30 years for BRL 200 million. This is 1/3 of what it would cost, not counting the risks to build it and also environmental risks and others that we might mention. So it was a very good deal. This goes along the lines that our CEO already said. We will be prepared for opportunities. To be prepared for opportunities means also to have a great M&A team, which nowadays it's under Andrea, our CFO. We can quickly bring together finance, regulation, legal, operations and participate in an auction with a low goodwill and to be able to get a good business for everyone: the company, investors, the state of Minas Gerais and so on. Now this is Irape plant, this one in the picture. This is one of the largest, over 200 meters high this dam has. This is a beautiful undertaking. It was developed around 20 years ago. So now we are going to show you -- and you remember that I mentioned we have to keep and maintain well what we have, and that means to modernize our assets whenever that is needed. Most of the large plants of this company has been built in the '60s and the '50s or '70s. And of course, just like everything in life, these assets depreciate, and they need to be fixed or renovated or potentialized. And this is what we are doing in this plant. It's a 2-year work. It's going to cost BRL 200 million, and we are working on the three generating units. We have studied the other assets modernization. This is the first one, but we know that we have to modernize Tres Marias plant, also Itutinga plant, Camarosa and others. So we are getting ready. We are running internal studies so that when the time comes, we are able to work on them as well. So growth there and growth always associated to this pluriannual plan to take good care of what we have to modernize the plants and also to care for the safety of our dams. The company has over 40 dams, and dam safety is something that is in our minds every day in generation and transmission. And every week, we talk about this, we discuss a topic of maintenance work or an improvement. We have this dam here from Peti that has 79 years of age. It is safe. But looking to the future, we know that in a few years, it would not be safe anymore. So preventively, we are building a new dam, which is that one. Every other month -- usually, every month, actually, I go and visit this construction works. And from time to time, we update to the top management about what's happening. This should be ready in September of next year. And our time frame with ANEEL is December of next year. This is another example that we are going to grow. This should be ready in September of next year and our time frame with ANEEL is December of next year. This is another example that we are going to grow. We are going to take care of what we have of our assets that generate revenue. Let's take good care of our dams. This way we are taking care of citizens because there are citizens, there are dwellers on the path of this dam, of course. So now what do we foresee for the near future? We want to be part of the capacity reserve auction next year, Tres Marias. These are 2 machines. These are the official numbers, 163 megawatts to be added. We want to participate in the energy capacity reserve auction for the provisional measure 1304 to contract gigawatts of small HPPs. We have 2 projects for the capacity reserve auctions for batteries. And also, we are working with the possibility of up to -- starting next year if the Board of Directors approves to build a photovoltaic plant of 210 megawatts associated to Tres Marias that is going to make use of all the connections already existing. This is a point of connection already from this plant. So we are getting ready to the future. We are taking care of what we have. We are looking to the future. We are thinking strategically. That's what we have been doing for generation, and these are examples. This is the portfolio. And there are other projects as well that are being developed internally. So let's move on. Concessions renewal for 40 months that I've been in the company, 40 months that I hear talking about this topic. I believe that we have been working very well in the regulatory aspect when we talk about our financial modeling, when we talk to ANEEL, what is worth, what is not worth and the possibilities of renewing all of this. And right now, we are moving forward with a renewal per quotas. Sá Carvalho already had a recommendation from ANEEL. This is in the ministry and not [indiscernible] yet. But anyway, we are working on that, and it's not under our radar. anything that -- I mean, it's not under our radar not to renew these concessions. Therefore, we intend to keep them in our portfolio. Moving on. Well, a vision for the future, our perspectives. We talk about renovation, modernization, repowering of existing assets, and that depends a lot on hydrology. It's not always that this can be done. We will be doing that in some plants that add 10% and some not. There are some that you can do it some and you can't. And we will always try to increase the installed capacity and assured power, contracted energy so that we can deliver energy to our trading company. Of course, we also look for opportunities in auctions as we just saw the one from GSF that showed up as an opportunity, M&A. We also have mapped all the assets in Minas Gerais of generation that somehow can have -- that we can have a conversation with. Do you have interest of selling it or not? Can we talk about it? That's it. And we are working on it. We also take into consideration the associated, the reversible plants, the ones that are not a huge engineering challenge. We are also mapping all the potential of reversible plants in Minas Gerais and also floating plants. We are taking them into consideration. We have studies to eventually develop some. So look, I talked about maintaining what we have, maintaining well to fix what needs to be fixed, the planned maintenance, planned downtime when needed to grow at a very low risk, to look at opportunities in the short term that might allow us to be successful in the generation business and also look at the mid and the long term towards development and product portfolio so that we can grow in that segment as well, always analyzing the availability of the assets, the safety of the ability of doing more. We want to do more in generation, and we want to be able to grow. But now let's look at transmission, which is very different, as you well know. So this is a transmission. This is our substation of Tres Marias. We have the plant, and this is the substation. We have here from one end to another 430 meters. And the whole size, one end to the other end, we have 230. So the middle here is 130. So it's very large. These substations are very large, and this one has an annual permitted revenue of BRL 23 million. And somehow, it is related to serving to 139 cities. Therefore, it needs to be available 100% of the time, ideally. The company has 42 large substations of transmission. They're huge. We have some that are even larger than this one. And we also access 11 substations from other agents. And also in transmission, we are obsessed by available assets, always available, available, available, available to minimize discounts by unavailability. And all of that is a matter of weekly discussions around the top management. Now here, we show you our permitted annual revenue performance. It's very satisfactory. We had the tariff review, and you know that we had the acknowledgment of the BRL 1.5 billion of extraordinary results, the recognition of investments in a higher amount that those were accounted for. We are investing to minimize or to zero out the permitted annual revenue because of the end of the RBSE. And now when you look at the variable deduction, this is a percentage of the revenue, you see that this is very close to the sector. We have 135 and 136 in the sector. And look, here, it increased in 2023, increased 1.10 in '23, 1.9 in '24. What happened here is that a transformer of 500 kV, which is a very large one in auto substation that burned. This happened from the third to the fourth quarter of last year and fixing this transformer, it takes a long time. So we had a discount of variable parcel of BRL 535,000 per month because of this problem. So it should be back in operation in November, and we believe that we'll be able to energize it up to February of next year. Well, net of this effect, we would have a PV of 0.77. And for the year, it would be 0.95. In old assets here, we are talking about assets here of 30, 40 years. A lot of them already depreciated. And here, we have the regulatory compliance. You can see this indicator, IRCOT, we check it every month. We check it with Andrea's team. We discuss this indicator every month, and we are below the regulatory compliance, and we will remain below the regulatory compliance in this management. If you look at our annual balance sheet and also social responsibility report, you see that transmission has less people. So we are being able to do more or the same with less people. At the end of 2023, we had 100 -- 3,183 employees. And at the end of 2024, 1,081, and we still are reducing the headcount. Therefore, this contributes to these indicators and everything that is related to productivity. So we are doing very well here regarding our revenue. Moving on. We show what we are doing. Today, we have 41 contracts that are active. We have 22 suppliers. That means works in 45 transmission components and the ones that I mentioned. So I would say, basically, all substations of transmission of the company have active construction works or some type of work being done. We have already increased in our APD, Annual Permitted Revenue in BRL 200 million since 2021, and we are going to show you what is contracted, what we intend to do. And easily, we'll be able to estimate the additional annual permitted revenue that we are going to have in the next 3 to 4 years and everything that we are doing is finally energized. So we have here some examples of works, a new reactor of 500 kV. This is huge. We have 3 floors of the building, the substation of [ Simao ], [ Balta, Grande substation ]. We have new equipment and new transformers and a new section of 138 kV. So we have been able to accelerate our investments in transmission in the past 2 years. Now moving on, we will show you that. In 2019, like Reynaldo was saying, BRL 50 million for transmission, 2023, BRL 111 million, 2024, BRL 488 million, and we have already contracted BRL 1.2 billion for this year in investment. Remember that our CEO talked about a special care that the company had in creating new groups of suppliers and improving its contracting process. [indiscernible] is here. This has been done in generation and in transmission as well in the last 16 months, and we were successful. Our purchase area with Guilherme and Daniel, they were very helpful with this bidding process because this is a public company, and we have been able to hire good suppliers. We could count on reliable people, people that will deliver on time and also with good quality doing the best they can. And the Superintendent of transmission always tells me, Marco, this replacement that we contracted here this year. These 2 years, they mean a replacement of transformers that correspond to 1/3 to the capacity of 20,000 MPA of the transmission business. So we are switching transformers that were 100% depreciated with a higher risk of failure problems and all kinds of accidents risks that we can think of, and we are replacing those by new pieces of equipment. It's just like getting a new car. You had an old car and you change it for a brand-new car. So the chances that you're going to have a problem is very little, this is what we have done here among other improvements. And here, we show you what we intend to do in the next 2 years. We'll keep on investing in reinforcements and improvements. If you ask me how much is reinforcement, how much is improvement, 20% reinforcement and 80% improvement because we are exhausting the possibility of switching equipment. So some piece of equipment that could be considered just a reinforcement. But in the last tariff reviews, we had no disallowances and the investments that we have made in the transmission business, which is very good. We have also asked now authorization to switch to reactive compensators, and we are also working in retraining for transmission lines. And this is going to gain traction. We have already started looking at this looking to the future. Now our perspectives, like I mentioned, the capacity upgrade of transmission lines, digitization of substations, we will try to approve a digitization project still this year, and we want to quickly install this work and also opportunities for acquisitions to look at what's happening in Minas Gerais and the possibilities that the company might have to grow and transmission. This is what I had to bring to you. And if you have any specific questions, I will be available during the Q&A. Thank you very much.

Thank you very much, Marco, for your participation and presentation. Now we would like to bring to the floor our Chief Information and Technology Officer, Luis Claudio Correa Villani.

Good afternoon, everyone. I will try to be brief. I've been in the company for 6 years. In the technology area, I work with IT and telco. I'm going to stress my presentation on a digital transformation program, as our CEO already mentioned. And in this cycle of 10 years from 2019 to 2029, it represents BRL 1.7 billion, which for technology is a lot of money. So far, and I will show you a slide on that, we are very close to BRL 900 million in investments. So we'll be moving on in a linear fashion. We have worked in different areas of digital transformation. There is a slide at the end, which is a wrap-up, but I would like to focus on a single project which has already been mentioned a few times. And we understand it is what allows us to have this leap in digital transformation for the company, which is a system that manages the distributing electric grid of the company. We operate in old systems developed in the '90s in the beginning of the year 2000. The technology has evolved a lot. Marney already talked about a huge expansion in the distributing company. We have more digitization in the substations and the reclosures. Therefore, to make use of this possibility of this huge automation potential, we need a system that has intelligence to expedite all the intervention and the planning on top of this environment. So the objective of digital transformation as a whole is to improve management as well as customer service. And talking about the electric grid, customer service has to do with the resilience and availability of the electric network. This project that we call ADMS and ADMS means Advanced Distribution Management System that started as a project in April of 2023. And in April of '24, we started adding modules into production. So there are lots of letters here. I will try to explain it in a very simple way, but this system involves several layers. The basic layer is what we call SCADA, which is a supervision system here in the network that knows if the circuit is energized or not, if it's open or closed. And then we have a slide right after that, we have another one million of electric points that signal their status for the supervision system. This system, SCADA is implemented in low and mid-voltage. So we have more than 520 substations operated by this new supervision system. We started going live in November of 2024. And in June of 2025, we launched SCADA for medium tension voltage. So all the supervision part of the electrical grid, more than 1 million points controlled, but they're already operating on this new platform. It is a market platform positioned by Gartner in the technology evaluation as the best electric grid management system. And we are working on the other modules. OTS, Operating Training Simulator. This is something we never had before. We can simulate failure situations or disaster situations or extreme climate events and ensure that the systems operate or will be able to operate in any difficulty scenario we might face in the grid. This module was deployed in April of this year. And now we are completing the outage management system in [indiscernible] just mentioned, the distributed energy resource management system in [indiscernible]. The remaining of the modules will be deployed by the end of next year. So in the coming months, this project is going to deliver a lot of value for the company. These are the 3 last lines, the OMS module for outage management system. So any unavailability, the system will identify other failure allies, isolating it and trying to restore the affected areas as a side effect or the area itself by another power source. And OMS outage management system looks at the quality of the energy, energy balance, power flow. And thus, it issues the quality of the power supplied. And the rims that will, like I said, manage all distributed energy resources, not just the photovoltaic plants in Minas Gerais, could be the wind farms as well. And in the future, eventually, the electric vehicles will also be part of this energy injection in the grid. Please click on the slide. This shows what [indiscernible] is all about. We have distributed energy resource, power generation, battery systems, electric vehicles, flexible loads. And the objective of [indiscernible] is to do the orchestration. Traditional distribution of energy was always radial, having a power plant, delivering power to the edges of the grid. But when we start adding in micro and mini DGs, there is an imbalance in the power flow. There's energy moving in all directions, and that can oscillate tension frequency and reaction of the grid. If we don't have a system to manage all that, the grid will get worse. DERMS is the first DERMS project in Brazil. And this is the biggest distribution company running this kind of solution, Cemig Minas Gerais. This in the southern hemisphere of the planet. This is a big project. It is very representative for the solution provider without which we will not have a DSO model, as Marney mentioned. In other words, for us to be able to dispatch micro plants, mini plants at the edges, the regulation does not allow that for now. But soon, it will need to because ONS on its own will not be able to manage all that. So every distributor company will become a mini DOS, a mini distribution company. And this is a ticket to play. Very well here, we summarize on the slide the advantages of the system. So we are talking about fast detection and significant reduction in the outage duration and frequency. To give you an idea, you already know the concept of DEC. Our regulatory DEC is about 9.5 hours rounding it. And this is the expectation of a minimum gain of 30 to 40 minutes in reduction of DEC by using automatic incident restoration systems. We start having more efficiency in energy flows, reducing technical losses, which means efficiency and money in our pocket. We have more resilience because energy will be a lot more balanced. Any disturbance perceived, this system will react faster. And of course, we have a smarter decision-making because I see a dynamic energy balance. I can see, for example, where it is useful to have new distributed sources, strengthening my grid, my network from the technical standpoint because I started having a track record of seasonalities of all of the renewable sources connected to the system. These are the numbers I mentioned, almost 2 million data points. In average voltage, we have more than 18,000 pieces of equipment, most of reclosures. Marney expects that this will serve everyone. We'll expect to get to 50,000 reclosures, more than 500 substations and more than 2,000 feeders and more than 500,000 kilometers of networks. Now with this system, with the ADS, we will have a lot of improvement in managing all that. And these are the benefits of DERMS. We monitor all distributed power sources in real time. We can predict energy generation and consumption, avoiding [indiscernible] which is a big enemy. We optimize dispatching when we become a DSO, the suspending ANEEL regulation. But we believe that this is going to happen in the short term. We avoid overloads and voltage fluctuation. We reduced incidents by doing so, we reduced financial compensations as we improve the financial efficiency of the operation. And this allows us to create virtual power plants, VPPs. I'm going to explain this very simply. Imagine having a neighborhood where everyone has photovoltaic panels on their roofs for more efficient management, we could group together all these micro DGs, almost as if they were a virtual power plant and dispatch has a bigger load. So these modes of operation will allow us if the regulation evolves, will allow us to provide this kind of service to the owners of DGs in the future. It is a monetization option if the regulation evolves in that direction. And moving to my last slide, just to say we're bit going. In this BRL 1.7 billion to be invested by year-end, BRL 900 million. Well, BRL 700 million have been contracted. And hopefully, in this quarter, we'll complete that cycle. Basically, with 3 pillars. One is infrastructure availability with a good response time and cybersecurity, which is a constant concern. All of our environment is now in the cloud. And now we are moving to a multi-cloud system that is very resilient. Second pillar with the sale of Axxiom, which was a company of the group and Marco divested, we stopped doing in-house development and moved to market solutions. So our model is using the best market solution we can have for every need we have, which brings us time to market to evolve as AI software automation parts evolve. And the third part, which is the most relevant, is that we are going to have network sensoring, smart middling, billions of data points collected in short periods of time. So we'll have the infrastructure, data lakes that are able to transform this huge amount of data into useful information for decision-making. So perhaps we have the largest data lake integrating smart meters in the Brazilian electricity sector. This data governance is what feeds into the creation of AI agents with high-quality data. If no use having a wonderful AI that has hallucinations because the AI is collecting not so good quality data. If I limit AI to work with quality data, data that I can trust, and in which I know the semantic layer and in which I can trust the quality, the AI application becomes much more useful for the business. So this is what I had. And summarizing everything in one sentence, by managing elections, providing excellence in services and information to the company and clients in a way that is resilient, timely and safe. This is what we are pursuing from now on.

[Operator Instructions] You have if you have any questions to Marco, he's here as well and he can..

Technology, as we know, is getting more and more integrated to people's daily life and its advantages represent a valuable opportunity to improve processes, efficiency and innovation in the works carried out by CEMIG. Moving on with the presentation, we will address the trading strategy of the company and its outlook. With that, we invite to the stage the Chief Trading Officer, Sergio Cabral.

Hello. Good afternoon, everyone. I have a difficult task of making the last presentation. I've been with the company for about 7 months, and this is my first [ Investor ] day. I'm very happy to be here. We have a lot of challenges ahead of us, but also many, many opportunities as we are going to see now in trading. Andre spoke a little about this, our CEO as well. We have been -- we and the market have been suffering with 3 points, one more specifically related to us. The first one is the price differences between submarkets. In other words, the prices in the North and Northeast are different than the prices in the South and Southeast. The difference in March was BRL 268, but we can observe that there is today a movement by the regulator to [indiscernible]. And we see that in June, this is -- this price difference has been almost 0. In August, it increased a little, but we don't expect this to increase more than this. In other words, the effect of having transfer increasing interchange of power between the South, Southeast, North and Northeast is being captured by the model. We had a problem of reduction of liquidity in the market, but we are talking about the exposure of gold, a counterpart that defaulted in the market. And until June, we have a loss of BRL 28 million already booked. And of course, these are good moments for us to review our risk policy and try to add more security to our modeling. But also, it is an opportunity to look at our partners with whom we are relating to purchase power. There was also a change in the price formation model. This impacted us. If we look at this curve, the blue curve is our budget. We're looking at future prices with the previous model and what was actual. For example, we see the detachment in March 2025. I think that all of the effects happened in the same month, shortage of water, change of the transformation model. There's a price difference. We had budgeted at BRL 59 and the price increased to BRL 327. So these are the 3 impacts that we are dealing with in the market. But like I said, we have some opportunities and some strategies, strategy options. First, we have to seek growth in the most profitable segments. We, as a company, offering the highest number of consuming units in the free market. And this is a very important piece of data because it means how much CEMIG has bet in the free market since the beginning of the free market, and that gives us some opportunities. We are the ones that know our customers the most, the customers of our portfolio. So we can have more customized products, adding value to the customers in our portfolio. Of course, we'll continue to look out and to prospect customers, but we will also focus on our own customers in our portfolio where we are sure we can extract more value. I mentioned differentiated product creation, trying to tap into more profitable segments. And we have been increasing sales in the North and Northeast regions. This is something that we are observing an effort we are making, and I'm going to speak more about that. This is a little bit of our balance sheet. We started adopting a strategy. Given those 3 facts that I mentioned, we started adopting a strategy which is more risk averse. We kind of stepped on the brakes to understand the market and what our peers are doing, and we decided to close our positions. So in 2025, we practically closed our position in 2026, BRL 127 million, 2027, BRL 128 million and a little more in 2028, BRL 326 million. But when we observe this number proportional to our portfolio, we have less than [indiscernible] exposure in 2025. And the maximum is 12% in 2028, and we're wing for that recomposition. Starting in 2029, we have an opportunity to sell power this part in gray, which is energy that is not contracted. It is available for sale. So we are operating, aiming to maximize gains and to increase the margin. I think that this is our primary focus. This is what I mentioned, sale of energy increasing in the North and Northeast submarkets. In 2017, we sold 118 megawatts there. This year, we'll get to 359. We more than doubled our sales in these submarkets. And a little bit about the margin. And this is a take-home message for this slide. We are suffering with low margins in 2025, '26, '27. But we project very interesting margins in 2028, '29 and '30. In other words, we have a positive horizon. Although it's not such a good moment for the market, we understand the whole sector is suffering. We envision a bright future compared to what we are having now. This is our position. We remain ranking first in the retail market. Like I said, we had 10,000 consumer units, 7,000 in wholesale, 3,000 in retail. We are present in all states of Brazil with the exception of Roraima, which is not integrated yet. But about that, we operate all over Brazil. And here, our trading strategy. First, we acted on wholesale, now in retail. And this is positioning us for the future, which is opening of the market for low voltage. So here, we have e-commerce, the first -- our e-commerce in Brazil. The customer journey all happens in our site, and simulation to signing the contract. It's all done in our website. It's very interesting. It's technology bringing us a tool. We see this happening in retailers, but in low voltage, this is convenience for the customer. It's flexibility for the customer. And one part that we've been working on is to expand our partnerships to have partners who will help us sell power to the rest of the country. With a program that we call Synergia. And here, we see the improvement, the evolution in the number of partners we've had since 2023. In 2025, we are reaching 661 partners, helping us sell power all over Brazil. I think it is an important point that we want to keep our margins. We are working to close our positions, but also keeping an eye on strategic sales to strategic partners when it makes sense to open our position, ensuring margin for CEMIG. This is one product that is growing in sales, CEMIG REC and IREC. These are energy certificates that our energy is 100% clean. We can see that this kind of certificate is selling more. In other words, we are adding more value to our product, added value to our clients. They can use this in their sustainability reports. And I think that this carries an intrinsic value. And again, this sets us apart in the market once we offer this kind of solution. And this is the future prospects. Here, like I said in the beginning, we are going through a moment of a lot of changes in our industry, many variables playing a role. And on the other hand, we have a lot of opportunities, and it's up to us to position ourselves to control them. CEMIG with a number of customers and clients we have and our experience in the free market, might be one of the first companies that can take advantage of the future prospects because we are seasoned. First is market opening. We are preparing processes and systems, optimizing them to pursue the best margins. That is our focus in the low-voltage segment. For new products and services, we're carrying out some studies using BEVs to optimize the system. As our CEO said, we have a lot of pilot projects underway so that we can capture value based on these products. Development of customized products, we are starting to use the customer journey via our [ BLD ] or spot price and the things that will bring us the best margins and conditions to operate in the assessment of our supply services, such as data centers. We are looking at this with a magnifying glass with a lot of care. We know it's going to happen, but the data center cannot be just a fad. We shouldn't just pursue data centers if we don't have visibility of the profitability of this kind of asset. Well, I guess that this was my last slide. Thank you very much. And I will be around for questions. I take home messages. We still have a hard second half of the year, but we have a very positive horizon in trading.

And now we will start the Q&A session. Please choose one of the chats because you're going to be here with us. This is a time for us to exchange more information, answer questions and share knowledge. I would like to bring to the stage our Chief Distribution Officer, Marney Antunes, our Chief Generation and Transmission Officer, Marco Da Camino Ancona Soligo, our CFO and IRO, Andrea Marques Almeida; our Chief Legal Officer, Cristiana Maria Fortini Pinto Silva, next Chief IT Officer, Luis Claudio Correa Villani, who's already here on stage; our Chief Trading Officer, Sergio Lopes Cabro; our next CEO, Carlos [indiscernible] de Colon. CEO of [indiscernible]. And so we have everyone here -- and this is the time for the Q&A.

And if you have questions to Sergio Cabral was the last one to present. Please, you can ask. And we can also take questions from people following us online. We have hands raised.

I'm Daniel [indiscernible] with Safra Bank. I have a question about curtailment. Actually, I have 2 questions in one. I just want to understand how the company is evaluating ideas to solve this topic. You mentioned one of the solutions to use distribution companies to operate kind of an operator. And you mentioned some tech solutions that can make this possible. I would like to understand that if you think that this is one way to solve curtailment and how you could implement this, how long it would take? And still on this topic, how do you evaluate the idea of a competition mechanism similar to what was done with the GSF mechanism to deal with the curtailment issue. How do you see these possibilities?

All right. Well, first of all we are waiting for the regulation regarding curtailment. As presented here by myself and [indiscernible] information curtailment, we are preparing the company because we are thinking that technically the DESCO, will need to have the curtailment. We are doing joint work with ANS and we've had some meetings with them to evolve in this discussion and to see how we are going to be doing this.

What would be the percentage of curtailment for the plant? Will it be 0.1 or a different percentage for all?

So this is not regulated yet. We're still waiting to see what we will be doing. What's your name? Daniel, Safra Bank Sapre, Well, thank you for the question. Regarding curtailment, this is being debated extensively in our industry, both by associations, power companies and the agents that are impacted by it. As we all know, we don't have a definitive solution yet. Actually, no solution for the case. We cannot really tell you how this issue is going to be resolved. Hopefully, it will be satisfactory for the whole industry, the whole power industry, but we haven't got any definitions yet.

Victor Silva from [indiscernible] Investments. So right now, in Minas Gerais legislative house, the bill of law has been approved, and this removes the mandatory aspect for a popular vote for privatization. Talking about a subsidiary of yours, Gasmig in the past, you have considered the possibility of an IPO. And I would say that after this bill of law is approved, you could even privatize it. Does that make sense? Still -- are you too still considering the possibility of generating value with this specific asset block or CEMIG's plans for Gasmig?

Let me start. Talking on behalf of CEMIG. We have a strategic plan to prepare Gasmig for an IPO. This is what we had in our strategic plan. What's being actually discussed at the legislative house has no participation. We are not participating. It's not up to us. It's not our decision what is going to come out of this bill of law. This is a strategic decision of the state, and it has to do also with [indiscernible] , that involves CEMIG as well. So about CEMIG in regards to CEMIG, we are prepared, and we will be prepared for a possible conversion and corporation. That is for CEMIG itself. But we have had no communication regarding any other company, just CEMIG. And in a way, we will just prepare ourselves and get ready if the state requests and if they request us to convert stocks to become a corporation. But in fact, the only thing that we have today in our strategic plan is to prepare Gasmig for a possible IPO. And in a way, the company is prepared. And of course, Carlos can talk about it.

I think Andrea said it all. This is a decision that is on the hands of the controlling shareholder. The controller of our controlling shareholder. This is a state decision that is being discussed by the legislative panel and we have to wait for a decision. But Gasmig is ready. If we had to go for an IPO tomorrow, the company is ready for that. But there are no plans today for anything. This is a state's decision.

I have 2 questions. First, I would like to hear from you about [indiscernible] and [indiscernible] and the whole process because there was a ruling from the Supreme Court. I would like to know what is your understanding, although we do not have the final ruling, especially regarding the possibility of not being able to have the expected amount, the amount that has already been transferred to consumers? And the second question I want to know is about the potential M&As of Broomfield assets, a possible partnership with Taesa for the acquisition of Quantum's assets.

We are waiting for this final ruling because for now, we do not understand what is the Supreme Court's decision. Actually, what we realize is that there is a shared question here because you can interpret that the 10 years that are in the decision would be retroactive. The company has to reimburse. For instance, it received in 2019, and it has to reimburse up to 2019. That could be done also for the past. So we need to wait for this final ruling to try to understand. But CEMIG has already paid some of those amounts. So we have an understanding, an initial understanding regarding what was disclosed for this ruling that there is no loss for CEMIG after the Supreme Court judgment. But we need to wait and see what's really written in this ruling. About your second question, we did see the news in the market, but we don't talk about news. But what I can tell you is that we are considering opportunities that fit into CEMEG's strategic plan. And when we come to a conclusion that is then approved by the Board of Directors, we communicate to the market. We have nothing to communicate to the market, but this is our position right now. We have seen the news, and we do not comment on news, and there are a lot of them in the market usually.

I am Vladimir Pinto with Bloomberg. My question was about CPM 2. What is the company's view of CP? And how would you be positioned? What is your preliminary position?

This is regarding modeling of the cost of [ Tradesco]. Again, what's the name again?

Vladimir.

Okay. Well, actually, this cost modeling for Tradesco, the way in which it is done, CEMIG is actually going to take advantage of that. It's going to be in a favorable position because it is including the complexity of losses, mainly technical losses. There's also a separation of urban and rural networks. And again, this is in our favor. So we believe that with this modeling, we are actually going to become a benchmark. The big distribution companies with long rural transmission lines where technical losses tend to be better. Well, they might have an advantage, and we hope that this will happen, but this is still at the public hearing stage.

Are there any more questions from the audience, please just raise your hand. And we still have about half an hour. So I'd like to invite on stage -- well, I'm actually going to ask questions that came from the online audience. The Superintendent of Investor Relations Officer, please come on stage. Raise your hand and go ahead and ask a question. You have a priority. Please go ahead.

Actually, I'd like to ask one more question regarding trading margins. You showed in the chart a reduction, an abrupt drop in the years of 2025, '26 and then a substantial recovery, a rebound. Could you elaborate on the reasons why there is such a volatility in the margins?

Your name again?

Daniel [indiscernible] with Safra Bank.

Thank you for the question, Daniel. Well, actually, we suffered a lot with the submarket. This stressed a lot our margins in the years of 2025, '26 and '27. That's when the margins are going to be more impacted because we lost our positions. But after that, we understand that we are going to have a solution for the submarket and the margin will improve. So the difference of prices in the submarket is what impacted our margins in these year and in the coming 2 years.

Yes, go ahead. Two more questions.

This is Andre with Santander. First, I'd like to hear from you about the auction that happened a few months ago about the HPPs, the hydro plants. Why didn't you participate with the 3 plants that are about to expire because you submitted a renewal request and that did not allow you to take part in the auction? And the second question is about dynamic of post-employment.

Yes, name is Andre from Santander, right? Okay. Are you asking about the GSF auction? Okay. That was the strategy, I cannot explain our strategy. I'm so sorry. If the company's strategy, we preferred to apply for a smaller one, smaller plant, but we didn't win. But I'm not going to explain our strategy. It's about the strategy of the company. Well, actually, we looked into the value of that. And if we won the auction, we might lose the value we currently have in the hydropower plants today. Perhaps [ Robinho ] is the best person to explain this. in, get the mic and he can explain this. He can explain this brilliantly. So I'd like to ask [ Robinho ] to explain this. It's not a problem. He's the expert in valuation. [ Robinho ], please?

Well, thank you. Actually the 3 power plants would have the contracts expiring very soon. And because we had started the process to renew the concessions with ANEEL and the Ministry, Mines and Energy, we would run the risk of bidding, gaining an extension. And according to the law in force, we would have an anticipated renewal at the discretion of the current in power. So part of this extension could be lost in the process of concession renewal. And this was the possible risk that we considered. And this was the kind of evaluation we did of the assets. Still on post-employment, We have 2 big post employment fronts. One is a discussion about parity in terms of subsidy of private pension and one related to the health insurance plan. In both cases, we are in the process of negotiating regarding [indiscernible] we have a partial agreement already advancing to release values that were deposited and to make payments directly to [indiscernible] of the part that is not debatable. We still have one part of the payment, which is debatable. And as regards BSI or the health insurance, the process of negotiation is unfolding. It is evolving. It is very important that we remember that the company has a concern, not that it doesn't exist in another case. But speaking about the health insurance, we want people to have a sustainable health insurance plan that has financial soundness that will continue to exist in the future. CEMIG is guided not only by legal aspects, but also by this approach, one of ensuring the future of the health insurance plan. Hopefully, very soon, we will bring you more on these 2 topics related to post-employment in particular, the health insurance. And let me add something to this. It was very positive that the unions have submitted proposals, something that we didn't have before. I think that we are finally getting closer to an agreement.

Thank you. So let me know if you have any other questions, but I'll move on to the online questions. There are 2 of them that have not been addressed yet, and they came via chat. And first one, I'm going to turn to Andrea. It has to be with the credit risk. Once we had a situation with trading. So the question is what the company is doing to mitigate negative effects regarding that considering we have other contracts with the trading company. If you can talk about this, what we are doing internally on this front, please?

So we are strengthening the risk governance, the financial risk governance that has to do with the market risk and credit risk as well. And we are bringing that to the finance area, which will be establishing risk limits for the trading company to operate. And in the credit area, we are running more robust analysis. We are then in this process of applying more severe criteria. And so that's how we are going to move on. In case of some trading companies, we have a critical situation, but we are going to start now to follow up on the trading companies and also on individuals, the owners of the trading companies because sometimes they open and close trading companies. And so we have to have an open close follow-up of these counterparts. And we believe that would make sense to have a stronger governance to do that under the financial area in partnership with Sergio, of course. So we will be doing that in my area as well to do the risk evaluation for marketing for credit in that area.

The other question is to Yuri from CMI. Reynaldo presented an exponential growth of EBITDA for CEMIG in terms of energy generation. How is the strategy? Are you developing new projects? Do you have acquisitions, M&A? So if you can give us more details of CEMIG that explain this growth. So our accelerated growth is following our strategy of reaching 1 gigawatt peak of capacity. Currently, we have 355 megawatts speed, 100% traded and occupied with clients that is keeping up with our growth pace. But our strategy, as our CEO said, has a greenfield model. We have some ongoing constructions right now in some mobilized works already. And we are also considering brownfields as opportunities, especially in our asset-light strategy of using assets that can be leased with the right to purchase in our growth strategy for time to market with the level of energy balance and risk mitigation according to our behavior and our growth. So we have a leader in the market with 20% of market share in Minas. And last month, we are not leader, but we reached the leadership of the process. And now we are working to have 60% of our capacity strategy on top of our own assets and 40% of our strategy being asset-light. And finally, this year, we expanded our area, CEMIG distribution, the group CEMIG is in 744 towns and Minas Gerais has 853 towns and CEMIG already has 7% of the capacity out of the distribution traditional area, completing 100% of Minas Gerais penetration. And this is one of the options to offer energy by subscription for low voltage. So we are at a very good growth pace, and we tend to expand to the Midwest and Southeast as we have announced not long ago to maintain our growth in the market and also the trading that is already national. We understand that as a group that it is only fair that we participate in the market, the competitive market being as one of the options nationwide. So growth is happening. We have taken the first step in Minas Gerais as a whole. And now we are looking for new opportunities in other states. Thank you very much. Any other questions from our audience? No? So if there are no further questions, I will turn to our MC to end the event. On behalf of the IR area, I thank you all very much for being here with us. Have a nice evening. Thank you. So once again, I thank you very much. Please stay on the stage for official picture. Thank you all for your participation. I would like to start by everyone that is here in this afternoon. Chief Distribution Officer, Marney Tadeu Antunes; Chief Generation and Transmission Officer, Marco Da Camino Ancona Soligo; Chief Financial Officer and IR Officer, Andrea Marques Almeida; Chief Legal Officer, Cristiana Maria Fortini Pinto Silva; Chief Technology Information Officer, Luis Claudio Correa Villani; Chief Trading Officer, Sergio Lopzcarrao; CEO of Camigo, Carlos Camo CEO of CEMIG's team [indiscernible] and also Carolina Sena for your mediation. Thank you all for being here with us and also for all of those that have been with us online. And thank you for those that asked questions either in person or online that allows us to have a very enriching exchange. We end today's event CEMIG's. Thanks, everyone, for being here, and we hope to see you soon in another edition of our investors meeting or CEMIG Day. Have a nice day.