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• Adjusted EBITDA: BRL1.3 billion, a 5.7% increase compared to the same period last year.

• Net Income: Almost BRL0.5 billion, a growth of 54% compared to the same period last year.

• Dividends Payment: BRL632 million related to 2023 results.

• Credit Rating: Maintained at AAA by Fitch.

• Distribution EBITDA: BRL556 million, a 32% increase compared to 2023.

• Transmission and Generation EBITDA: BRL676 million, 3% below the same period last year.

• Trading EBITDA: BRL35 million, a 7.2% increase quarter-on-quarter.

• Personnel and Administrative Costs: Reduction of 5.2% due to a decrease of 176 employees.

• CapEx: Historic performance, with 86% of expected investments realized.

• Net Debt to EBITDA Ratio: Approximately 1.9 times.

• Warning! GuruFocus has detected 8 Warning Sign with ELP.

Release Date: August 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Cia Paranaense De Energia Copel (NYSE:ELP) reported a 54% growth in net income compared to the same period last year, reaching almost BRL0.5 billion.

• The company achieved an adjusted EBITDA of BRL1.3 billion, with Copel Distribution showing significant growth with a 41.6% EBITDA efficiency.

• Fitch maintained Copel's credit rating at AAA, highlighting the company's strong financial profile and low cost of capital.

• Copel successfully concluded the sale of the Araucaria thermal power plant and a 51% stake in Compagas, generating significant proceeds.

• The company is focusing on operational excellence, efficiency, cultural transformation, and disciplined capital allocation as strategic pillars for future growth.

Negative Points

• The average energy price of Copel's portfolio decreased by 6% compared to the previous year, impacting revenue.

• The company faced challenges with wind complexes due to lower wind performance and maintenance needs, resulting in a revenue shortfall of BRL27 million.

• Copel's leverage is expected to increase to around 2.5 to 2.8 times net debt over EBITDA due to upcoming payments, which may affect financial flexibility.

• The company is still in the process of optimizing its capital structure and has not finalized its strategy for future leverage levels.

• There is uncertainty regarding the details of the capacity auction for hydro power plants, which could impact future investment decisions.

Q & A Highlights

Q: Can you elaborate on your capital allocation strategy, particularly regarding the divestment of Compagas and potential dividend payments? A: Daniel Pimentel Slaviero, CEO, explained that the company is studying an optimal capital structure, which is linked to their strategic migration to Novo Mercado. They plan to maintain a 50% dividend payment policy, with potential for extraordinary dividends as divestments like Compagas materialize. The company is also preparing for upcoming capacity auctions, which will influence capital allocation decisions.