• Regulatory Net Income: Up 22.9%, totaling BRL294 million in Q2 2024.

• Net Revenue: Down 7.2% quarter-over-quarter, totaling BRL579 million in Q2 2024.

• EBITDA: Down 7.8%, totaling BRL485 million in Q2 2024; EBITDA margin decreased from 84.3% to 83.7%.

• IFRS Net Income: Up 81.9% quarter-over-quarter, totaling BRL403 million in Q2 2024.

• Total Debt: BRL11.1 billion at the end of the first half of 2024.

• Dividend Distribution: BRL223.3 million announced for Q2 2024, equivalent to BRL0.65 per unit.

• Cash Position: BRL1.5 billion at the end of the first half of 2024.

• Leverage: 4.0 at the end of the first half of 2024.

• Average Cost of Debt: 4.99% with an average term of 4.7 years.

• RAP (Annual Permitted Revenue): Stabilized slightly, increasing to BRL10.2 million when comparing cycles.

• Dividend Yield: Approximately 8.1% based on recent prices.

• Warning! GuruFocus has detected 8 Warning Signs with BSP:TAEE11.

Release Date: August 13, 2024

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

Positive Points

• Transmissora Alianca de Energia Eletrica SA (BSP:TAEE11) reported a 22.9% increase in regulatory net income, totaling BRL294 million in Q2 2024.

• The company announced a BRL223.3 million dividend distribution related to Q2 2024 earnings, maintaining a strong commitment to shareholder returns.

• TAESA's operational RAP increased by BRL10.2 million due to inflation adjustments and new project completions, with a future RAP expected to total BRL4.1 billion.

• The company achieved significant progress in sustainability initiatives, including diversity and female empowerment, with 29% of leaders being self-declared Black and 26% female.

• TAESA maintained a high availability rate of 99.38% in its operations, indicating strong operational performance and reliability.

Negative Points

• TAESA's net revenue decreased by 7.2% quarter-over-quarter, totaling BRL579 million in Q2 2024.

• The company's EBITDA margin fell from 84.3% to 83.7%, reflecting a decrease in operational efficiency.

• Environmental licensing delays impacted CapEx, particularly affecting the Ananai project, which could lead to potential project timeline setbacks.

• The periodic tariff review resulted in a negative impact of BRL46 million due to adjustments in the RAP of reinforcements, affecting future revenue streams.

• TAESA's leverage ratio stood at 4.0, indicating a relatively high level of debt, which could pose risks if not managed effectively.

Q & A Highlights

Q: Is there an inflection point for the company's debt, and what can we expect regarding leverage in the coming months? A: Rinaldo Pecchio, Interim CEO, explained that the company is committed to distributing at least 75% of the regulatory net income as dividends in 2024. The financial planning includes amortizations and dividend distributions. For 2025 and beyond, the company aims for a minimum of 90% distribution, maintaining financial strength and preparing for future bidding processes.