• Load Growth: 2.4% in Q3 2024; 4.9% for the first 9 months.

• EBITDA: BRL 3.155 billion in Q3; BRL 9.858 billion for the first 9 months, a growth of 0.7%.

• Net Profit: BRL 1.3 billion in Q3; BRL 4.1 billion for the first 9 months, a decline of 0.5%.

• Net Debt: BRL 26.6 billion with a leverage ratio of 2.04x EBITDA.

• CapEx: BRL 1.4 billion in Q3, a growth of 17.8%; BRL 3.9 billion for the first 9 months.

• Sales Growth: 4.1% in Q3; 5.2% for the first 9 months.

• Industrial Market Growth: 4% in Q3.

• Distribution Losses: Small increase noted.

• Wind Generation: Without curtailment, growth of 19.5%; with curtailment, a reduction of 3.7%.

• Transmission Segment Growth: 42.6% in Q3.

• Commercialization Segment: Drop of 61% in Q3.

• Financial Results: Negative variation of BRL 355 million due to mark-to-market effects.

• Leverage: Comfortable at 2.04x, below covenant of 3.75x.

• CapEx Expectation: BRL 5.9 billion for the year.

• Warning! GuruFocus has detected 7 Warning Signs with BSP:CPFE3.

Release Date: November 11, 2024

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

Positive Points

• CPFL Energia SA (BSP:CPFE3) reported a positive load growth of 2.4% in the third quarter and 4.9% over the first nine months of 2024.

• The company's EBITDA grew by 0.7% to BRL3.155 billion in the third quarter, with an accumulated BRL9.858 billion over nine months.

• CPFL Energia SA received several prestigious awards, including the most honored title for high performance in the institutional investor research and recognition in the Abradee award for ESG efforts.

• The company announced a green hydrogen pilot project in partnership with Mizu in Rio Grande do Norte, aiming to produce 3 gigabytes annually by 2027.

• CPFL Energia SA maintained a comfortable leverage ratio of 2.04, well within its financial covenants, and secured BRL2.9 billion in financing at a low cost.

Negative Points

• Net profit for the first nine months of 2024 declined by 0.5% to BRL4.1 billion.

• The company faced challenges with high delinquency rates, which remained stable but high throughout 2024, impacting financial performance.

• Distribution losses increased, partly due to difficulties in combating fraud and adverse climate events.

• The commercialization segment experienced a significant drop of 61% due to volatility in short-term prices.

• Wind generation was negatively impacted by curtailment, resulting in a 3.7% reduction despite potential growth without this effect.

Q & A Highlights

Q: Can you comment on the impact of the ONS changes on your assets and the regulatory side? A: Gustavo Estrella, CEO: The changes have not had a significant effect yet. Some restrictions were reduced in Seara, but a bottleneck shifted to Rio Grande do Norte. We continue discussions with the ministry and ANEEL regarding reclassification, but no official response has been received yet.