Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- ENGIE Brasil Energia SA (EGIEY, Financial) won Aneel's bid for Lot 1, a strategic 780-kilometer transmission line project.
- The early commercial operation of 50 wind turbines at Serra do Assurua Wind Complex, with 27% of the project already installed, is a significant achievement.
- The Assu Sol Photovoltaic Complex began operations, contributing 15 megawatts to the grid.
- The company was awarded the Anefac Transparency Trophy for the 14th time, recognizing its excellent financial practices.
- ENGIE Brasil Energia SA (EGIEY) has shown resilience by maintaining similar results to last year despite high curtailment levels.
Negative Points
- Adjusted EBITDA saw a negative variation of 7%, dropping from BRL 1.707 billion to BRL 1.65 billion.
- There was a significant reduction of about 30% in adjusted net income, from BRL 867 million to BRL 658 million.
- High curtailment levels in the third quarter affected wind and photovoltaic generation, particularly in the north region.
- The company's net debt increased, contributing to higher financial costs and impacting net income.
- The TAG investment, while opportunistic, is not considered a core business, leading to reduced equity income contributions.
Q & A Highlights
Q: You have some large solar and wind energy projects to start operating next year. What do you expect in terms of Constrained-off for these assets annually?
A: We expect curtailment levels to remain high next year, similar to this year. Although new lines are starting to operate, which might help, the levels will depend on demand, risk aversion by the system operator, and efficiency in managing distributed generation. Our diversified portfolio, including significant hydroelectric participation, will help mitigate the impact of curtailment.
Q: What is the company's expectation for the two auctions anticipated for '25 in March and September? What is the optimal participation of the transmission sector in the company's EBITDA?
A: We are analyzing every auction and do not have a cap for transmission. Our focus is on obtaining returns for shareholders. We will evaluate each auction and participate if the projects are beneficial. There is no specific target for transmission sector participation in EBITDA.
Q: What is the expectation for anticipated delivery compared to ANEEL's deadline for the Grauna Transmission project?
A: We anticipate a significant advancement in delivery, better than the deadlines established in the invitation to bid.
Q: What is the expected payout return of 100% according to the company's current expectation?
A: The payout return will occur when there are no other greenfield and M&A projects. It is difficult to anticipate, but we aim to return to 100% as soon as possible without quickly deleveraging.
Q: What are the expectations and planning for the relationship with TAG, given its high margin and potential contribution to Engie's results?
A: TAG was an opportunistic investment made five years ago. We reduced our participation to recycle capital for this year's CapEx. TAG is not our core business, and we do not plan to increase our shares. Our focus remains on energy generation and transmission.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
