Release Date: November 14, 2024

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

Positive Points

• Energisa Mato Grosso Distribuidora de Energia SA (BSP:ENMT3) reported a 5.9% market growth compared to the third quarter of 2023, marking the highest rate in the last 11 years.

• The company completed the acquisition of 100% of shares in Infras, enhancing its presence in the natural gas distribution market.

• Energisa achieved a significant milestone in distributed generation, reaching 420 megawatt peak in installed capacity.

• The company maintained a strong financial discipline, with a debt-to-EBITDA ratio of 2.8 times, indicating sound financial management.

• Energisa was recognized as a great place to work, achieving high rankings in both national and state levels, reinforcing its commitment to employee satisfaction.

Negative Points

• The recurring EBITDA fell by 13.5% to 1.8 billion in the quarter, impacted by tariff adjustments and other factors.

• The company faced challenges with overcontracting, which required provisions impacting regulatory assets and liabilities.

• There was a notable increase in the provision for profit sharing and bonuses, negatively affecting the quarter's financial results.

• Energisa experienced a reduction in investments in distributed generation due to the completion of several power plants in 2023.

• The company is dealing with the impact of heat waves and high temperatures, which have influenced energy losses and operational dynamics.

Q & A Highlights

• Warning! GuruFocus has detected 6 Warning Signs with BSP:ENMT3.

Q: Can you comment on the cost dynamics for the distributor in 2025, especially regarding the renewal of concession contracts? A: CFO: After significant adjustments in 2023 to meet new quality standards, most adjustments have been made. Moving forward, costs should align with inflation.

Q: Regarding the recurring P MS O in Q4 2024, should we expect any impact from leveling with inflation or is it already reflected in the results? A: CFO: The structure is set, and we expect no significant changes. The goal is to maintain stability, with no major deviations anticipated.

Q: Can you discuss the loss dynamics and PDD this quarter and the actions to combat them? A: Vice President of Networks: We had positive impacts from weather and technical losses. We are using intelligence models and centralized measurement systems to combat losses, especially in areas with higher loss rates.

Q: Could you provide more details on the Infras acquisition and when the cash flow will start? A: CFO: Payments have been made, with the first installment at approximately 109 million and the second at 121 million. Cash flow is expected to start by the end of December.