Renova Energia S.A. ($RNEW3)

Good morning, and welcome to Renova's Energy Results Conference Call. [Operator Instructions]. Joining us today are [Joao Cunha], CFO and DRI; and [Bruno Duci], IR Coordinator. Before we begin, we would like to inform you that this event is being recorded and will be made available on the company's website along with the disclosure materials. We will start with the presentation followed by a Q&A-answer session. The statements contained in this report regarding Renova's business outlook, projections and growth potential constitute forecasts and are based on management's expectations regarding the company's future. These expectations are highly dependent on market changes, the overall economic performance of the country, the sector and international markets. Forward-looking statements are not guarantee of performance. They involve risks and uncertainties and depend on circumstances that may or may not occur. Investors should understand that general economic conditions, market conditions and other operational factors may affect Renova's future performance and lead to results that differ materially from those expressed in such forward-looking statements. Now I would like to turn the floor over to [indiscernible] to begin the results presentation.

Good morning, everyone, and thank you for joining our results conference call for the fourth quarter, the full year of 2025. Moving on to the agenda. Today, we will discuss key indicators and highlights, the context of the energy market in Brazil, energy production data, availability, wind and generation and the consolidated financial results. It's important to begin by noting that the year of 2025 was a period of significant pressures for the renewable energy sector in Brazil, marked by the curtailment of historic high levels by the volatility of energy price and by price disparities between some markets and a source of pressure. For Renova Energia, however, was also a year of overcoming challenges and concrete progress of operational records and advancement of structural projects and initiatives that consolidate our commitment to the energy transition and the creation of sustainable valuable. We managed to navigate an adverse environment with financial discipline, operational rigor and strategic clarity, delivering results that reinforce the solidity of our business model and the confidence we have in the long-term potential of our assets and projects. Turning now to the key indicators for the fourth quarter. In the fourth quarter, we achieved net generation 217.5 gigawatts. This represents a decrease of less than 6% compared to the previous quarter. Net operating revenue reached BRL 137 million, an increase of approximately 50% compared to the third quarter. NBE, meanwhile, was BRL 43.6 million. Adjusted EBITDA reached BRL 15 million, representing a 24% decrease compared to the previous quarter. Net loss meanwhile, stood at BRL 59.9 million, a 12% decrease compared to the fourth quarter 2024. Looking now at the year-to-date figures 2025, net generation totaled 1,018 gigawatt hour, up 5% year-over-year. Net operating revenue reached BRL 515 million, a 9% jump compared to 2024. NLB totaled BRL 177.8 million. The adjusted EBITDA was BRL 94 million, in line with the previous year, and the net loss stood at BRL 162 million, representing a 39% increase year-over-year. Moving now to a strategic topic. The Satoshi project is our initiative to integrate data processing centers with our generate parks at the Alto Sertao III. This is an innovative strategy that combines renewable energy generation with high-performance digital infrastructure, which aims to absorb part of the energy wasted by curtailment, restructurally reducing the effects of this restriction on our results. December 2025 marked the start of the operational ramp-up, representing a significant milestone in the project's implementation. Today, we have 40 megawatts in operation and all the containers have been properly positioned. The project's infrastructure is approximately 9% complete, progressing steadily and expected to reach full operation by the second quarter 2026. The project has an estimated total average consumption of 90 megawatts and when fully operational, will significantly increase the utilization of our installed capacity, enhancing the operational efficiency of the complex. The project established a new strategic front for the company and demonstrates Renova's ability to innovate and generate value even in a challenging scenario. Very well. Now let's talk about the energy market in Brazil, which is essential for understanding our results. In the fourth quarter 2025, total energy consumption remained stable compared to the same period of the previous year. Despite this overall stability, there was a significant shift among the segments. The residential segment recorded 0.5% growth driven by higher temperatures during the quarter. In contrast, the industrial and commercial segments posted declines of 0.4% and 0.2%, respectively, reflecting lower utilization of production capacity and a drop in the sector's confidence levels. On the price front, average PLD for the quarter rose significantly by 22% in Southeast, 23% in Northeast compared to the fourth quarter of 2024. This trend, especially in November and December, put pressure on the system's marginal cost with less favorable hydrological conditions. The situation required increased dispatch from thermoelectric plants, which are more expensive sources of energy with a 37% decrease in November, 24% in December, raising the overall cost of the system. This context directly impact price dynamics -- moving on to the next slide, starting with availability. The fourth quarter 2025, we recorded an increase of 1.7% compared to the fourth quarter 2024, totaling 85.1%. And for the year-to-date in 2025, availability grew by 8% compared to 2024, totaling 87.5%. And this result is very significant because it highlights the effectiveness of the initiatives we have adopted over the period to sustainably improve the operational performance and technical availability of our assets. Regarding wind, the average wind speed in the fourth quarter 2025 was 12% higher than the fourth quarter 2024, registering an average of 8.23 meters per second. For the year-to-date in 2025, the average wind speed was 13% higher than 2024, reaching an average of 9 meters per second. An important point, the actual wind speed in the fourth quarter was 6.4% below the certified wind speed, but 9.8 percentage points above the figure recorded in the previous year. Meanwhile, for 2025, realized wind exceeded the certified forecast by 2%, representing an improvement of 11.7%. Now let's talk about generation and curtailment, which is a central issue for our sector. We had a record high in gross generation in 2025, totaling 1,489 gigawatt hour, a 25% increase compared to 1,192 gigawatt hours of the previous year. In the fourth quarter, gross generation prior curtailment reached 324 gigawatt hour, a 9% increase compared to 273 gigawatt hour in the fourth quarter 2024. However, the effects of curtailment had a negative impact on operations. In the fourth quarter, the volume of energy curtail reached 107 gigawatt hour, representing 33% of gross generation compared to 42 gigawatt hour in the same period, which equaled 15%. The curtailment in the quarter consisted of 3 categories: RE 56 gigawatt hour, increase of 277%. Electrical reliability, 40 gigawatt hour, increase of 123%. External unavailability, 10.6 gigawatt hour increased 14%. It's worth highlighting a very important point. Outages related to power reliability and external unavailability are eligible for compensation, which partially mitigates the financial impact of this restriction. As a result, the net generation totaled 217.5 gigawatt hour in the quarter, 6% lower than the same period of the previous year. However, the year-to-date in 2025, net generation grew by 5%, reaching 1,018 gigawatt hour compared to 973 gigawatt hour in 2024. The estimated financial impact of curtailment in the fourth quarter was approximately BRL 14 million for the year-to-date, BRL 84 million. This is exactly why the Satoshi project is so strategic. It aims to absorb part of this restricted energy and strictly reduce the effects of curtailment on our results. Moving on now to the financial results session. Let's start with an overview of the market context that underpinned our figures. As I mentioned earlier, the energy price landscape was quite dynamic with direct impacts on our revenue streams and energy acquisition costs. Thus, the net operating revenue for the 4 quarters was BRL 137 million, a 50% increase compared to BRL 91 million in the fourth quarter 2024. This growth reflects the combination of 2 factors that act simultaneously, Renova's commercial performance in an environment of higher prices and the resilience of our generation portfolio even during a period marked by operational constraints. In the year-to-date '25, the net operating revenue totaled BRL 515 million, up to 99% from BRL 259 million in 2024, consolidating a year of significant growth in revenue generation. Regarding EBITDA, the fourth quarter, we reached BRL 9.8 million, reversing the negative result of BRL 20 million in the fourth quarter 2024 with growth 149%. Adjusted EBITDA, which excludes the effect of curtailment, market-to-market, nonrecurring items reached BRL 15 million in the quarter, a 24% decrease compared to BRL 20 million in the same period last year. Year-to-date, EBITDA totaled BRL 104 million, a 12% decline compared to BRL 119 million in 2024 and adjusted EBITDA reached BRL 94 million, remaining stable compared to the previous year. Continuing with the financial results, the net loss for the quarter was BRL 59.9 million, a 12% decrease compared to the fourth quarter 2024. For the year-to-date, the net loss totaled BRL 162 million compared to BRL 117 million in 2024. The cash balance ended December 2025 at BRL 72.3 million, down from BRL 149 million in December 2024. The negative change for the period is mainly due to nonrecurrent investments made through 2025 with operating cash flow having exceeded the payments of PRJ even in a challenged revenue scenario. To conclude, I would like to reinforce the key messages we have shared today. The year 2025 was a year of overcoming challenges for Renova Energia. We achieved a record high in gross generation, demonstrating the operational maturity of our portfolio. Net operating revenue nearly doubled, driven by our strategies of diversification between generation and sales. We reduced the net loss for the quarter and made significant progress in managing Renova's financial liabilities with a reduction in debt from BRL 1.5 billion to BRL 976 million. Last but not least, the Satoshi project represents a watershed moment for the company, serving as a key mitigator for curtailment. We conclude our presentation here, and we'll now open the Q&A session. Thank you so much.

[Operator Instructions]. Our first question is, can you talk about Satoshi project? Is it working? And when it's going to be fully operational?

Yes, we can talk about it. Currently, Satoshi project has 50% of its operational consumption. And we hope by the end of the second quarter, we would reach 100%.

Second question, the company is managing and increase the energy for more data centers.

Yes, the company has plans under operation to expand data centers, but it's still -- we are in the initial steps of negotiation.

Next, can you give us more detail about the operation increase in capital announced to the market the day before yesterday? When this was considered and what is the context?

The capitalization of [indiscernible] was in August 2025, BRL 1,700. A formal processing is now in the authorized capital private underwrite. The value is not material for the capital structure of the company, but it was informed because we opened the underwriting of the shareholders complying with the legislation.

And what are the expectations that Renova has for not approved and if this could be good for Renova or if it does not make difference.

[indiscernible] data is positive for the company. We are following the negotiations, but we do not have specific expectations, not even a term for approval or re-approval.

What generates more compensation for Renova, selling energy to the market, data centers or mining crypto assets, what compensates best?

I would like to highlight that currently, this final part, Renova does not operate mining crypto coins. We provide services, data processing services. This is not part of our revenue, mining of crypto coins and all the other activities, I believe they are complementary activities, especially data processing to mitigate curtailment. It's hard to tell which one is more profitable because they are all complementary.

[Operator Instructions]. Next question. In this context, can you detail the Renova payment in Satoshi project will be revenue from leasing infrastructure, energy supply contract, data center result participation or any other model?

Yes, that is revenue for Renova coming from a supply agreement and data processing provisioning services.

We are still collecting more questions. Please hold. About curtailments, electric reliability and unavailability. What is the payment? Is there a regulation enforced and a near future payment?

Yes, that is the estimate for payment, but it is not 100% communicated by the Ministry of Mines and Energy. The company tracks the unfoldings with the legislation bodies. As soon as they communicate their rules, they are going to be shared with the shareholders.

We are collecting more questions. Please hold. We received some questions about specific estimate for Satoshi project.

I'd like to highlight the company do not communicate guidance.

We conclude the results Energia conference call. We'd like to thank you so much, and we are here for you in the IR channel of the company. [Statements in English on this transcript were spoken by an interpreter present on the live call.]