Equatorial S.A. (EQTL3) Earnings Call Transcript & Summary

Good morning, and thank you for holding. Welcome to the Equatorial Energia S.A.'s conference call to present details on the CEEE-D acquisition process. With us today, we have Mr. Augusto Miranda, CEO; Leonardo Lucas, the CFO and IRO; and Tinn Amado, Regulation and New Business Officer. This event is being recorded. [Operator Instructions]. This event is being broadcast live via webcast and may be accessed through Equatorial Energia S.A.'s website, where the presentation is also available. Participants may view the slides in any order they wish. The replay of this event will be available shortly after the conclusion. Webcast participants may post their questions on our website. They will be answered by the IR team after the conference is finished. Bear in mind that forward-looking statements made during the conference call are based on the beliefs and assumptions of Equatorial Energia S.A. management and on information currently available to the company. These expectations involve risks and uncertainties, as they relate to future events, and therefore, depend on circumstances, which may or may not occur. Investors and analysts should understand that conditions -- macroeconomic conditions, industry and other factors could also affect future results of the company and differ materially from those expressed in such forward-looking statements. We will now give the floor to Mr. Augusto Miranda, who will begin the presentation. You have the floor, Mr. Miranda.

Initially, a good day to all of you, and thank you for participating in yet another conference call. We have brought you together to discuss our acquisition of CEEE-D. With us today, we have "Leo" Leonardo Lucas, our Chief Financial and Investor Relations Officer; and Tinn Amado, the Regulation and New Business Officer; Tatiana, the financial strategy superintendent and the person from the south. It is a pleasure to begin a story in Rio Grande do Sul by operating a new asset there. We're fully convinced that the implementation of this business with the talents of CEEE-D will enable us to make this concession well worked. We're known for our success and speed and operation, and we tend to work on several fronts simultaneously to attain financial balance in the company. Now it is important to do this to further leverage this concession and to allow for a deliberate energy with the quantity and quality that the people from the south deserve and also to have resources. Now all of this will be done by working with people and good management. And of course, our associates will be very important in this process. And based on our corporate culture, we have a great deal of talent that occupy a highlighted position in the group, and that will be part of the associates working in this new asset. To conclude this, I would like to underscore our discipline among investors, once again shown in this. We have been looking upon this since October 2020. And although it was not an obvious candidate for the company, our discipline has led us to carefully analyzing the asset and bringing together that capacity that we have for generation and enabling us to reallocate capital as another opportunity. We now go on to Slide #4, where I highlighted this acquisition reinforces our growth opportunity. And of course, it is a completely different acquisition compared to what we do at present. But it fits very well into our portfolio. In the coming slides, we will speak about the opportunities we have identified in this asset. But I would like to highlight the characteristics of our management model and how this will benefit the State of Rio Grande do Sul. Rio Grande do Sul has a strong vocation to grow. And as we have a management model that stands out for its investments, all of this will help us to catalyze the situation of the state. I would now like to give the floor to Leo.

Thank you, Augusto. Good morning to all of you, and it is a great pleasure to begin this new chapter in the history of Equatorial. On Slide #5, we highlight the main acquisition data of CEEE-D distribution. We are taking on the liabilities, and the amount paid for the acquisition 66.9% will be BRL 100,000, but we will have an additional of BRL 44,000, that refers to the subscription of additional shares because of the capital stock that CEEE-Par will do for us, and we will detail this further ahead. In this new structure, we will have 99.4% of the total shares in circulation. Besides the stock increase and other mechanisms to reduce debt, one of the conditions for the closing of the event is the approval by ANEEL and CADE. In the next slide, #6, CEEE is a company with significant debt. And the way to make this auction feasible was by taking on certain doubts on behalf of the State of Rio Grande do Sul and CEEE-Par once again to enable the strong resumption of investments. And these will be necessary to enhance the quality and reliability of the operation. And here, we show you the balance for the third quarter '20 and the liabilities that will be taken on by Equatorial Energia through the acquisition of the company. It represents BRL 4.1 billion debt that will leave of the balance of the state. Some of these financial debts that represent BRL 1 million will have to be paid in up to 12 months through specific funding for the government. We also have other liabilities that are being renegotiated and whose characteristics have been detailed here. The ICMS liability has a low-cost and is a long-term one, and we are applying the installment owned at 0.26 besides the possibility of having a partial discount in interest rates by carrying out a prepayment that will generate more resources for the state, we have liquidity, we have low leverage, and we can definitely have access to the capital market to work in the renegotiation of liabilities and the appropriate cost and term factors. And of course, these will become a priority in our plan. We now go on to Slide #8. Here, we would like to show you an overview of CEEE-D. This concession consists on an area with 72 municipalities with 1.7 million consuming units. The concession was renewed in 2015 with a new contract that will extend until July of 2045. The tariff review will be in November of 2021. Despite having a concession with higher purchasing power and greater population, the total level of losses is very high, 17.6%, and this will become one of our main fronts of action. In the graphs below, we present to you the figures, the pro forma figures and how this will add to us by number of consumers and market for the Equatorial group. If we consider the recovery base of all of the tariffs, Equatorial will have a net remuneration base of BRL 17.3 million, which will be added by the tariff reviews of Equatorial Maranhão and CEEE this year. With this acquisition, we will now occupy the fifth place in terms of number of active consumers standing out as a company that consolidates well and inaugurating our presence in the south of the country, where we still did not have a foothold. We go on to the next slide. If we look at our present day concession, we observed that CEEE operates in a geographic and demographic and economic area that is very different to that of the other concessions of Equatorial. And of course, this will strengthen the impact and diversification of our portfolio. Now there is a difference in the market structure of CEEE compared to our present day concessions. There is a higher number of customers, more industrial and commercial customers that are in the free market, and we also have a large number of low-income consumers. The highlight is the average ticket per consumer higher than other concessions, which gives us 366-kilowatt hour per client. The average income is higher than BRL 1,842. Now these characteristics, in our view, will allow us to begin with the new commercial activity, working closer to the client, diversifying our service, billing and the combat of losses, and we hope that the results will be even better than in our present day concessions. In the following slides, we will speak about the main opportunities found to generate value in this acquisition. The initial driver on Slide #11 is the reduction of PMSO. The PMSO per consumer and CEEE presently is BRL 392 per year, a level that is much higher than the one with which we operate are DisCos, that is about BRL 280 per consumer, BRL 290 per consumer. In the more recent acquisitions, it was possible to show that the company has been structured to accelerate the integration process of the new companies acquired with corporate areas that will look upon this process in a cross-cutting way, enabling us to reduce on operations. And each new asset that is incorporated brings us the evolution and learning. We can observe that after 2 years of acting in Piauí and Alagoas, we took the PMSO per consumer of these concessions to the levels of more mature concessions, a reduction of 43% for Piauí, 38% for Alagoas. Historically, we have been able to fit the PMSO within regulatory limits after 2 years of work. We go on to the next slide, and we can clearly see an opportunity to reduce losses here. Total losses/injected is quite high vis-à-vis the regulatory limit. The losses represent a burden for all of society, consumers, and the company pay for this, and the state government reduces the collection of taxes that could go back to the population with investments in health and education. We have a highly structured plan to reduce losses. And we have identified the opportunity by registering everybody, regularizing connections, and implementing an energy balance to gear our tax program to areas that are of greater interest. We go to the next slide, #13. We have several opportunities to generate value in the asset base, in November of 2016 was BRL 1.7 billion. Now the next tariff review in November of 2021 will define a new asset base. In the last cycle, approximately BRL 900 million were invested. Now historically, Equatorial speeds up the investments in new concessions, especially in programs to enhance quality, combat expenditures and to follow-up on the growth in the market. We can observe this with the investments that were made in 2018 before the privatization and after 2019 with the Piauí and Alagoas concessions under the control of Equatorial. We now go on to the next slide. Finally, I would like to underscore that there is a fiscal loss that generates a future opportunity, where we can take advantage of the credit, BRL 1.6 billion when the company begins to have profit. We will be able to offset 30% of the federal taxes to pay through these losses. We now go on to the next slide. ANEEL has initiated a process for the end of the concession because they have breached the technical features that were part of the concession. These are different from the target indicators for the payment of taxes. With the exchange of control, the trajectory of regulatory limits will be displaced for another 5 years. And it is worthwhile highlighting that the improvement in the quality of service to the clients is part of our commitment, the commitment of more mature DisCos that, of course, have a very high-quality ranking in ANEEL for some years already. And with this, I would like to return the floor to Augusto Miranda. Augusto? If you could please hold for a few seconds. Mr. Miranda will be with us soon. Thank you for holding.

Mr. Miranda, you may proceed, sir.

Well, we'll go back to Slide #17. Our history and all acquisitions were based on very serious work. And of course, we want to make things happen. We are recognized for delivering great results, balancing our commitment with stakeholders. I would like to conclude by reinforcing these commitments for our shareholders. We understand that this operation is one more demonstration of our commitment towards growth. We, of course, work with financial discipline and efficient capital allocation. We are known for this. And our asset recovery will enable us to move forward in terms of value generation for stakeholders. For the government, and society and consumers as a whole, we believe in the role of the company of acting as a catalyzer of investments and development for the entire region and society, not only with an increase in the tax collection area, but mainly through mass investments that will be carried out to improve the quality and reliability of the services rendered. This, of course, will guarantee consumer satisfaction and benefit society as a whole. In terms of our staff, and I would like to speak to those who have just joined the company, we receive you with open arms. Our values, such as the emphasis on meritocracy will enable us to continually recognize us, and it will be one of the best places to work according to the Best Place to Work ranking. We count upon you to overcome the challenges that we will have with CEEE. And we would like to thank the trust given to us by our Board of management and shareholders, also thank the staff, especially those involved in the acquisition process and those who continue making the company work day after day, delivering incredible results in such a challenging year. Finally, I would like to conclude saying that with the help of the Rio Grande do Sul society, we're going to bring this company back to the position of highlight that it deserves. We would now like to return the floor for the question-and-answer session.

[Operator Instructions] The first question is from Gabriel Francisco from XP Investments.

Augusto and Equatorial team, I hope that you are all well and congratulations for the acquisition. I'm going to limit myself to 2 questions. The first question refers to the line item of costs. In the privatization call notice, there was a forecast of transferring some of the employees that they should remain in the company. I would like to further understand this detail. If there's a timing for the transfer of these employees, if it is something automatic and how many employees and which will be the savings expected? That is my first question. The second question refers to the commitment with ANEEL. In truth, these are 2 questions. I would like to know if there's a goal of investment associated to this. You mentioned the amount of BRL 6 billion. And if the covenant for companies that have renewed their concessions and gone through complex situations such as RR divided minus SELIC, I don't remember this. But if you also have an extended term to comply with this covenants and if this pertains to each city of the concession?

Thank you very much, Gabriel. Thank you very much for the question. I'm going to give the question to Luciane, who is from Rio Grande do Sul. Perhaps she can clarify this for you. And Tinn will respond to the second part of your questions. Luciane?

Gabriel, if you could please repeat the question. The audio was cut.

No problem whatsoever. Can you hear me properly?

Yes, I can hear you well.

Therefore, I will repeat only the first question, which refers to the transfer of all Par employees. This is part of the covenant of the auction. First of all, I would like to understand the timing of this and the amount of savings that this could represent? And how many employees we are speaking about?

Thank you. Well, there will be a transfer of employees. Now most of them are not active. The large majority of these employees have already retired, and the state will take on BRL 400 million, so the liabilities involved in this case, and I'm referring to the pension funds, represents BRL 400 million. So it is the state that will manage these pension plans in the future. This is part of the notice. This was done before the closing. The other background was to have success in the auction, and as of now, we will have to comply with all of the rules of ANEEL and the transfer. This will also involve the transfer of assets that are part of the concession that represent BRL 120 million assets that are at CEEE-D, but will be returned to the state. And there's BRL 300 million that are missing, which means that we're going to take on the debt through CEEE-Par. I don't know if this responds to your question. So you will have an actuarial expense that will be lower in terms of personnel. Well, nowadays it represents BRL 1.3 billion in terms of our actuarial deficit. It will be reduced by BRL 400 million by transferring the retirement and pension funds back to the state.

Gabriel, if we will respond to the second part of your question regarding the regulatory issues. Because of ANEEL, we don't have to have a specific CapEx. Now this is due simply to the concession and the sale of the asset. Now when it comes to the financial goals or financial covenants, it's the same as the operational covenants. Everything has begun again. Everything begins as of when we come in. We have a covenant for EBITDA, the first year, and this will decline through time. And it follows the same logic 2 years up to 5 years because of the process of and of company. As we are continuing on with the company, it will count as if this were completely new contracts.

Our next question comes from Pedro Manfredini from Goldman Sachs.

My question is about your cash for the coming years. We are going to see you doing a good asset management. I don't know if you think you will need in equity contribution in the short-term because of this?

Leonardo, if you could respond to this question?

In the very short term, probably not. Not in the very short term, we're going to begin the negotiation for that first BRL 1 billion of debt. And once again in the very short term, we don't see a need for equity contribution here.

If you allow me for a follow-up, now the definition wasn't one of the best. I believe it won't be necessary during this year. But once you carry out investment on CapEx 2.5x, which is the rule in terms of asset management. And once you have your operational part in order, I believe that you will have to have a contribution in 2021, 2022? And if this is part of your accounts?

Yes. Of course, it is for the coming cycle, this has become part of our accounts.

If you allow me to add something historically, we want to match the capital structure of our assets, and we don't carry out the capital contribution foreseen because we have observed that it has not been necessary in these turnarounds. If anybody else would like to add something, please do not hesitate.

In the next CapEx cycle, I would like to ask if you think that in 2022, you will begin to add CapEx? Or if it will be the normal CapEx of DisCos that comes more at the end of the cycle? And of course, you're going to combat losses with CapEx. So how do you dose this? Will you add the CapEx at the end of the cycle because financially this will be more prudent? Or what happened in your other DisCos? How do you do this? How do you dose this correctly?

Well, Pedro, as I mentioned in the presentation, we have been looking at this initiative since October of 2020 and analyzing the needs. We take on the company, we look at the real needs. And of course, this depends a great deal on having financial discipline. We see which will be the necessary investments because -- in a specific region or city. And this is what we're going to balance out. We're going to look at the needs. We're going to have a view of what will happen initially. And we're going to do this very -- in a very disciplined way to efficiently allocate our capital.

Our next question comes from Carolina Carneiro from Crédit Suisse.

Two questions on my end. First of all, I would like to go back to the OpEx in terms of personnel more specifically. Is there obstacle, any problem with the unions, something that will have to be complied with before we reassess the program of voluntary dimission or the retirement program, something that could perhaps hamper the process and slow you down in terms of the cost reduction? You very clearly showed in the slide that you have a large amount that will have to be reduced. But would there be a temporary obstacle to this? And in terms of CapEx, my question is somewhat different. I would like to know if there is a need for having a more accelerated CapEx in the short-term? Because in the last few years, the company had to hold back its CapEx because of its financial situation. Or if this is not the case in terms of this asset of needing CapEx in the very short term?

Carolina, I'm sorry, perhaps you would like to conclude your remarks?

No, that was it. To see if you would have the need for a greater CapEx.

Carolina, thank you for participating in this call and for the questions. I think what has to be respected is 6 months for the collective bargaining agreement. But of course, this will not prevent us from doing the voluntary dismissal program. Some employees perhaps will not be willing to do this, but we can work on this voluntary dismissal of employees without any problem. In terms of the CapEx, there have been difficulties in this concession. We do have some provisions as part of our CapEx. When the time comes, we're going to reanalyze these figures and make prudent use of this CapEx.

Our next question come from Felipe Andrioli from Verdi Assets.

First of all, congratulations for the acquisition. I have 2 questions on my end. The first relating to the tax-pegged to the dollar. I see in the first dollar -- I'm sorry, in the first slide that some need to be paid. And as they are pegged to the dollar, it will take you some time to go into the asset. How are you going to protect yourself? Are you going to carry out a hedge at Equatorial? What is your planning for this? And where will your resources come to prepay what needs to be paid with anticipation? Are you going to refund the 3CD or have an increase of capital and which will be the amount of this increase? The increase of capital was done based on the share price, but the price was very low. I don't know if you can use the proceeds from this privatization? And secondly, if this acquisition will hamper other potential projects? There are some additional auctions in terms of sanitation and others. This is in the balance. So what will happen with your firepower after the acquisition?

Leo, if you would, please?

Thank you, Felipe, for the questions. In terms of the dollar-pegged debt besides having 2 months, we can observe this window better and we're in the final stages. We're concluding additional options that we have to lockdown the exchange rate, so that we will have sufficient liquidity or other options. Once again, we're in the final stage of seeing, which will be the best alternative for the situation. When it comes to Itaipu, we're going to carry out that prepayment as soon as possible. And we can do this through the number of partners that we have an injection of working capital for this company. We're changing the profile of creditors, as we have done in all the other companies. You can simply look at the Pará concession, where we began with a bank balance, then we had private players, and then we resorted to the market. And we finally began doing these other operations without guarantee. Now we understand that this will not hamper our plans, and we have the ambition of continuing to be very active analyzing other potential opportunities. And perhaps somebody would like to add something to this topic from the team present here.

Leo, I think we have already referred to our strategy in terms of the exchange rate because of the high cost of the debt that we have to Itaipu. This is something that will be prepaid, and it is one of the first things that will be done once we have the company in hand. We have a waiver to carry out the prepayment in up to 12 months, and then we can choose the right window to do this. And with this opportunity, we're also analyzing alternatives of how to reduce the impact of the exchange rate. Does that respond to your question, Felipe?

Yes.

Our next question comes from Marcelo Sá from Itaú Bank.

And I do have a question regarding your CapEx. Which is the amount of CapEx that you expect for coming years in millions of reais? And another issue is to better understand the tax or fiscal situation. If you're going to be able to use this credit faster or are you going to only pay this off with the results of the CEEE?

Thank you for the questions, Marcelo. Leo?

I'm sorry, I only heard the last part. Regarding the investments, it is natural that the company faced with the volume of debts, was making investments below the necessary level. So it's natural that in this first cycle, we will have to fulfill these needs and perhaps have a somewhat higher level of CapEx, always being very prudent, a focus on quality, a focus on good service. And we have been debating the CapEx process. And we're going to warranty that everything we do will be with a great deal of prudence. I'm sorry, I was unable to hear the last part of your question, if you could repeat it, I would be very grateful.

Of course, my question refers to losses. And if you could use this fiscal benefit, it represents BRL 1.5 billion. Are you only going to use the future profit of CEEE-D? Or are you going to merge with another DisCo to be able to accelerate the possibility of paying this out if this would be another alternative?

The energy DisCos cannot be the controlling of assets, so this alternative does not exist. We're going to follow the traditional path, attain the financial balance of the company, reach for profitability. And based on that, limited to 30% of income tax and social contribution to pay, we're going to use those credits.

You said that the idea would be to carry out a prepayment until BRL 1.5 billion, something that you have to pay in the short-term and up to 12 months. And then perhaps you will use the ICMS to obtain some sort of discount. If I could gain a better understanding of how you can do this if you need to have a capital increase at CEEE-D and how you would do this?

Well, the possibility lies in the fact that as the controlling company, we're going to warrantee or guarantee these credits. And the idea is to lengthen or reduce the debt, of course, and improving the profile of the company regarding the ICMS. The term is 180 months with a slow amortization in the first 10 years. So in the next 9 years, the amortization will be of approximately 20% of the value, and this would be linear. So this is a very long payment, and we can reduce the cost or lengthen the payment during the first year that installment of BRL 1 billion, I believe. Marcelo, I don't know if this was made clear, but that debt is a very long-term debt. We still have 14 years to pay it off. And the amortization is done based on a multiplier. In the short-term, it is 0.23. And it then goes on to 0.33, 0.46. And only at the end, the multiplier will increase to some. It would not make sense to prepay this debt in the short-term, therefore, and we do have the advantage of if we decide to prepay, to advance this cash and have a discount of 60% because of the anticipated payment of interest in the first year. Luciane, if you will?

Though 60% discount extends throughout the contract, it is valid at the moment in what the debt is transferred or as of the initial moment. At any point in time during these 15 years, you can't carry out this prepayment and obtain the same discount. I simply wanted to underscore this. And the term and the possibility of doing the prepayment at any moment is very important. And it will enable us to carry out higher investments that will be done at the beginning to help us in the resumption of activities of the company. And at a timely moment with our own credit situation, we will be able to calmly analyze when to carry out the prepayment of the ICMS and receive that discount in interest rates. This will foster the cash for the state when we pay off this balance.

Our next question comes from Gabriel Francisco from XP Investments.

Simply a bit more detail of how the payment of the ICMS will be carried out. Based on that multiplying index, this has not been made very clear. And I would also like to understand why despite the long-term you are planning to prepay the [ ICD ] and other items that are in the presentation. I don't know if you mentioned this. I wasn't able to hear it.

Leo, if you could, please?

The [indiscernible] we have the obligation and horizon of 12 months of paying off these debts regardless of the terms. Itaipu, because it has a peak and because the size is calm, we can work with this to give you an idea. It is 1% a month in dollars. And it's important to pay this off soon. Now regarding the ICMS, has that been made clear? Or do you still have doubt?

I'm not quite sure how that amortization takes place with a multiplying index.

It's basically 180 months and 12 have gone through already. In the 9 months that are left, instead of the amortization being linear, it is 23%, 24% of the amount of amortization. After these 10 years, amortization is 12.2%, 2 or 3x more than the lineal increase. And this is a way of lengthening this debt. I don't know if that has been made clear.

Yes, now, it has.

Our next question comes from the webcast from Daniel Travitzky from Safra Bank.

2 questions. Which is the level of investment that you have as of now until the tariff review? Are you going to negotiate a delay of the payment of debt? And the debt level is quite high. Which are the negotiations that you're going to carry out? Do you think that you can renegotiate the ICMS debt with the Government of Rio Grande do Sul.

Well, the next review is in November. I'm going to ask Tinn to respond to this question, please.

Thank you, Daniel. There is no outlook of changing the data review. The base date is May, although the review will take place in November. And we think that this is when we will have the rollout of assessment for the company. As was mentioned before, when we get to the concession and the transition process, perhaps we can reevaluate this. But I -- it is my understanding that there is no idea of changing the date of the tariff review. Regarding the ICMS, the debt is set with the profile that has been detailed, and there is no more margin to rediscuss this profile. It is very well aligned with the needs of investment and the recovery of the company, I believe.

Our next question also comes from [indiscernible].

If we consider the present asset base, can you revise the asset base of CEEE-D as you did in other concessions?

Thank you very much. Tinn, if you could respond to this?

Thank you for the question. In that case, there is no forecast to change this asset base. It is a shielded base. What we're going to build based on that asset base is to build a new asset base for the 2021 tariff process, but we cannot do anything with the old asset base.

Our next question comes from Pedro Manfredini from Goldman Sachs.

This is somewhat more a strategic question. Now this investment that takes you away from the hub in the north to the south, will it help you to think about an expansion, not only in distribution? Of course, you have limited possibilities, but perhaps you could go into sanitation. Is this a way of having a hub in the south, geographically, at least.

Pedro, if you look at this, we have said that this acquisition is very important for us. It has the customer profile that we want, the low-income process that we want from Rio Grande do Sul. This is good for the Equatorial mix. From the viewpoint of operations, it will facilitate our corporate structure. It was easier to operate a company like this one. Now the corporate structures, for example, [indiscernible] and others were not incorporated, now they are fully incorporated. Once we have a similar profile, although it is geographically remote, this is good for us. We're operating in [indiscernible] and in all regions. And of course, this location is very important for us. And as we are already in that location, it will facilitate any of our movements and will pose several new possibilities. So you end up knowing the environment better, and this is a significant step for a company such as ours, especially a distribution company that has brought reach a good interaction with society. And if we do good work, of course, all of this will be very positive for the Equatorial portfolio.

[Operator Instructions] Our next question comes from Felipe Andrioli from Verdi Assets.

The PR of [ CDEEE ], when you speak about complementing the retirement of some of the personnel, states as in the past, the company was able to receive from the union a significant amount to pay off its obligations and that the amount received covered the exercises of 1991 through 1993. And later, they tried to do this for the payment since 1993. Has all of this remained at [ CDEEE ]? How are they paying this up? Has the state taken on some of the obligations referring to this? And is this part of the new package you have acquired?

I would like to ask Luciane to respond to this question.

Thank you for the question, Felipe. The liabilities are all included, not only the pension plan deficit, but also the liabilities and contingencies, all of these will go back to the state. And if there is success in these actions, everything will be completely separate from legal causes related [ CD5 ], so there is that amount of BRL 450 million, and all of the obligations, the issue of the shares as well.

Yes, that's what I believed. I simply wanted to confirm this.

With this, we would like to end the question-and-answer session. We will now return the floor to Mr. Augusto Miranda for the closing remarks. You may proceed, Mr. Miranda.

Once again, we would like to highlight how satisfied we are with this acquisition now that we have duly clarified everything and we reaffirm our commitment with all of our stakeholders. Thank you once again for participating. Have a very good day, and thank you all.

The Equatorial Energia S.A. conference call ends here. We would like to thank all of you for your participation. Have a good day. [Statements in English on this transcript were spoken by an interpreter present on the live call.]