Release Date: October 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Net revenue grew by 8% in Q3 and 18% year-to-date, driven by several factors including the incorporation of the RTP contract effects.
- Consolidated EBITDA increased by 9.4% in Q3, with a margin improvement to 81.3%.
- The company continues to invest heavily, with total CapEx of BRL868 million in the quarter, marking a 64% increase compared to the previous period.
- ISA CTEEP is advancing in its sustainability agenda, including a reduction in SF6 gas emissions and the Jaguar Connection program for environmental conservation.
- The company maintains a strong position in the capital market, with significant growth in Average Daily Trading Volume and inclusion in major Brazilian indices.
Negative Points
- Net income for the quarter decreased by 9%, impacted by temporary effects of the periodical tariff review.
- The company's gross debt increased to BRL11.5 billion, with a net debt-to-EBITDA ratio of 2.49 times, due to new funding for investments.
- Financial expenses rose due to a higher gross debt position, impacting net income.
- The periodical tariff review resulted in a reduction of BRL349 million from the RAP for the economic component of the RBSE.
- The company faces challenges in executing greenfield projects, with some still in the process of obtaining permits.
Q & A Highlights
Q: Could you talk about the adjustment installment, which part was booked? Which is cash? And what is the term to receive that? Could you also talk a little bit more about the sale of the land in Jundai?
A: The adjustment installment has three main components, including a deferral that will be received and paid over the '24-'25 cycle. Retroactive revenue from reinforcements will be received over four tariff cycles. The land in Jundai was sold for BRL22 million, providing a net revenue of BRL22 million this quarter, and we are exploring more real estate opportunities.
Q: Could you update the status of the negotiation regarding 4819 CFS?
A: This is an attempt at settlement led by the court of conflict settlement. Meetings and negotiations are ongoing, with lawyers and representatives from each party involved to find a suitable resolution.
Q: With the fires in September and October, was any substation or transmission poll damaged?
A: No damages were reported to transmission assets, substations, or transmission towers during the fires in September and October.
Q: Could you please give us an update on the execution of greenfield projects?
A: We have seven projects in execution, with five under construction and two obtaining permits. Projects like Menno and Riaan are progressing well, with significant completion percentages.
Q: What are the prospects for the company regarding the two transmission auctions in 2025?
A: We are focusing on execution and will assess opportunities based on profitability and financial discipline. There is one auction in 2025, and we will return to two auctions per year in 2026.
Q: Is the company considering bidding in the battery auction?
A: We are monitoring battery regulation decisions and are interested in participating. We are preparing projects and will assess opportunities based on profitability and financial discipline.
Q: Is the company going to expand to other countries in Latin America?
A: Our current mandate is restricted to Brazil. We focus on opportunities within Brazil, while ISA operates in six Latin American countries, sharing best practices and experiences.
Q: What are the three main goals for the company for the next year, and how will they impact your results?
A: We will focus on operational excellence, executing greenfield projects, and investing in reinforcements and improvements. These efforts will enhance capacity and service quality, supported by disciplined financial management.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
