Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Centrais Eletricas Brasileiras SA (EBR, Financial) achieved a strong cash position by diversifying fund sources, raising over BRL22 billion this year.
- The company successfully reduced its liability by over BRL1 billion through effective management of compulsory loans.
- EBR received permission to operate the Coxilha Negra wind farm, enhancing its renewable energy portfolio.
- The merger with Furnas positively impacted results, streamlining operations and reducing costs.
- EBR's commitment to operational efficiency is evident with a target to reduce PMSO to BRL5.5 million by 2026.
Negative Points
- There is volatility in operational costs, with fluctuations observed between Q2 and Q3.
- The energy market faces challenges with price volatility and potential risks of delinquency.
- Some employees did not accept the Collective Bargaining Agreement, leading to potential labor disputes.
- The company is exposed to fluctuations in hydropower generation prices, impacting revenue stability.
- Equipment costs are rising due to increased demand and raw material prices, affecting profitability.
Q & A Highlights
Q: Can you provide insights into the cost trends, particularly the PMSO, and what we can expect in the coming quarters?
A: Ivan de Souza Monteiro, CEO, explained that the company is committed to reducing PMSO costs, aiming for below BRL7 million this year, below BRL6 million next year, and around BRL5.5 million in 2026. This reflects a consistent downward trend due to strategic initiatives.
Q: What are your strategies regarding energy sales and market trends, especially with the volatility in energy prices?
A: Antonio Varejao De Godoy, EVP of Operations and Safety, noted that the company has expanded its client portfolio and is leveraging price fluctuations. Long-term, Brazil's energy market is undergoing changes, with challenges in integrating intermittent energy sources, which could push prices higher.
Q: Could you discuss your investment plans for reinforcements and improvements, and how regulatory processes are affecting these plans?
A: Elio Wolff, EVP of Strategy and Business Development, mentioned that investment volumes are increasing, with expectations to exceed BRL3 billion this year. The regulatory environment is supportive, encouraging more investments to grow and improve operations.
Q: How is the Collective Bargaining Agreement progressing, and what are the implications for employees not accepting the agreement?
A: Renato Carreira, EVP of People, Management, and Culture (interim), stated that about two-thirds of associates have accepted the agreement. Those outside the agreement are under the CLT agreement, and while the company offers advantageous terms, some employees have opted not to participate.
Q: What are your views on the market's delinquency risk and its impact on energy prices?
A: Italo Freitas, EVP of Commercialization, acknowledged market volatility and some companies facing critical situations. However, Eletrobras maintains a healthy counterpart range and sees this as an opportunity for market maturity, with no expected negative impact on future prices.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
