Release Date: October 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Auren Energia SA (BSP:AURE3, Financial) successfully completed the business combination with AES Brazil, increasing its free float by 11% and raising BRL550 million.
- The company reported a significant EBITDA increase of 7% year-over-year, reaching BRL484 million, driven by strong trading performance and the commencement of JaÃba Park operations.
- JaÃba Park began commercial operations at full capacity, adding 500 megawatts to Auren Energia SA's portfolio.
- Net revenue grew by 26% compared to the same quarter last year, bolstered by a 37% increase in traded energy.
- The company raised BRL2.5 billion through the third issuance of debentures at favorable costs, supporting short-term obligations.
Negative Points
- A significant recession in affluent natural energy was observed, 30% below the long-term average, impacting storage levels.
- Porto Primavera, a key asset, experienced lower operation levels due to reduced resource availability, with generation at 93% of the fiscal guarantee.
- The company faced curtailment issues, with a 5% impact on wind assets and 14% on solar assets, affecting operational efficiency.
- The integration of AES assets presents challenges, with some assets not economically feasible as initially designed.
- The energy market experienced high price volatility, posing potential systemic risks and impacting future trading performance.
Q & A Highlights
Q: Can you comment on the impact of curtailment on wind and solar assets and the expected normalization of operations?
A: Fabio Zanfelice, CEO, explained that curtailment was a significant issue this quarter, particularly affecting AES assets. He noted that hydrological conditions and thermal dispatch contributed to the curtailment. The company is evaluating potential reimbursement for these impacts and expects improvements with upcoming transmission line operations.
Q: How does Auren view the recent price volatility in the energy market, and what are the risks and opportunities?
A: Fabio Zanfelice, CEO, stated that most results will be realized in the short term. The company has taken advantage of price volatility by locking in future positions at favorable rates. He emphasized that while there is a surplus in the system, the dynamics of renewable energy and pricing changes will continue to present opportunities.
Q: What is the strategy behind the high contracting level for 2027-2028, and how does Auren plan to improve AES asset availability?
A: Fabio Zanfelice, CEO, mentioned that liquidity and market conditions influenced the contracting strategy. Regarding AES assets, he noted that improvements have been made through joint efforts and equipment purchases, with further enhancements expected as part of the integration plan.
Q: How is Auren addressing redundancies and integration challenges following the merger with AES?
A: Fabio Zanfelice, CEO, confirmed that redundancies have been mapped out, and plans are in place to capture synergies. The company has engaged consulting firms to assist with integration, focusing on operational alignment and system integration.
Q: What are Auren's future plans for capital allocation and expansion opportunities post-AES acquisition?
A: Fabio Zanfelice, CEO, stated that while the focus is on integrating AES, the company continues to explore opportunities in capacity and transmission auctions. The M&A team remains active in identifying potential investments that align with the company's strategic goals.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
