Release Date: May 15, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Equatorial SA (EQUEY) reported a 14.5% increase in adjusted EBITDA, reaching 2.9 billion, reflecting strong financial performance.
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The company achieved a reduction in costs, with adjusted PMSO decreasing by almost 4% in the quarter.
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Investments increased by 34% compared to the first quarter of 2024, focusing on the distribution segment.
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Equatorial SA (EQUEY) maintained a net debt to EBITDA ratio of 3.2 times, showing a slight improvement from the previous year.
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The company achieved regulatory compliance in quality indicators for four out of seven distributors, with significant improvements in DEC and FEC metrics.
Negative Points
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The transmission segment experienced a 13.3% decline in regulatory EBIT due to deconsolidation and other impacts.
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Despite improvements, Rio Grande do Sul remains above regulatory levels, indicating ongoing challenges in quality compliance.
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The company faces a competitive environment in the sanitation segment, which may impact future growth opportunities.
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Interest rates are at a peak, which could affect the company's leverage and financial flexibility.
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The company is still working on reducing losses and improving quality indicators in some regions, indicating ongoing operational challenges.
Q & A Highlights
Q: We saw a solid PMSO cost performance in the distribution segment, especially in the concessions acquired in the last few years, such as Goyas and Rio Grande do Sul. What are the company's perspectives for costs in the future? A: Augusto Miranda Da Paz, CEO: We've been focusing on aligning our PMSO with quality, particularly in Goyas, where quality was a major issue. Despite high PMSO for consumers, we've made progress in quality and cost management. In Rio Grande do Sul, a strong recovery plan is in place, and as events stabilize, we expect further improvements.
Q: What are the company's expectations for the next steps in the sanitation segment, given the competitive environment in recent bid tenders? A: Augusto Miranda Da Paz, CEO: We see significant opportunities in the sanitation segment and have a dedicated team exploring these opportunities. We are committed to pursuing growth in this area while maintaining a strategic approach.
Q: With the proceeds from the transmission sales, what is your target leverage for the next year, and is there room to expand CapEx in distribution companies? A: Augusto Miranda Da Paz, CEO: The use of proceeds is under discussion, with options including debt reduction, M&A, share buybacks, or dividends. We aim for a leverage target around 3 or below, depending on interest rates. We have room to maneuver and will act responsibly.