Release Date: November 08, 2024

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

Positive Points

• Energisa SA (BSP:ENGI11) completed the acquisition of 100% of shares in Infras, enhancing its position in the natural gas distribution market.

• The company reported a significant market growth of 5.9% compared to the third quarter of 2023, marking the highest rate in the last 11 years.

• Energisa SA achieved a Great Place to Work seal, ranking 19th nationally and 2nd in the state, highlighting its commitment to employee satisfaction.

• The company successfully extended its debt profile, improving its amortization schedule through a 3.8 billion debt rollover and a 1 billion exchange offer.

• Energisa SA's distributed generation arm reached 420 megawatt peak in installed capacity, demonstrating growth in renewable energy solutions.

Negative Points

• The recurring EBITDA fell by 13.5%, reaching 1.8 billion in the quarter, impacted by tariff adjustments and regulatory changes.

• The provision for profit sharing and bonuses negatively affected the quarter's consolidated PMSO by 61.5 million.

• The company experienced a reduction in transmission investments, reflecting the inclusion of new projects and a decrease in distributed generation investments.

• Energisa SA's total loss index was 12.83%, indicating challenges in managing electrical losses and temporary energy market disruptions.

• The company faces challenges with interest rates and variations in auction opportunities, impacting its strategy for energy transmission investments.

Q & A Highlights

• Warning! GuruFocus has detected 3 Warning Signs with BSP:ENGI11.

Q: Can you comment on the dynamics of costs for the distributor looking into 2025, especially regarding the renewal of concession contracts? A: CFO: The major rate adjustments were already made in 2023 to meet new quality standards. Moving forward, costs should align more closely with inflation.

Q: Regarding the recurring P MS O in Q4 2024, should we expect any impact on leveling with regulatory standards? A: CFO: The structure is set, and we don't anticipate significant changes. The focus remains on maintaining efficiency and aligning with inflation.

Q: Can you discuss the loss dynamics and PDD this quarter, and what actions are being taken to combat losses? A: Vice President of Networks: We've seen positive impacts from weather and technical losses. We're 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 reflecting in the results? A: CFO: Payments have been made, and we expect the cash flow to start reflecting by the end of December, with installments continuing into early January.