Copel(US:ELP)2024-11-09 15:28Financial Data and Key Metrics Changes - Year-to-date adjusted EBITDA exceeded BRL1.2 billion, with reported net income also surpassing BRL1.2 billion, influenced by extraordinary events totaling approximately BRL645 million [5][24] - Adjusted EBITDA for Q3 2024 was BRL1.2 billion, a decrease of 10.9% from BRL1.4 billion in Q3 2023, primarily due to a reduction in average energy prices [17][24] - Net income for the quarter was BRL1.2 billion, with year-to-date profit reaching BRL2.2 billion, a 61% increase compared to the previous year [25][26] Business Line Data and Key Metrics Changes - Copel Distribution generated an EBITDA of BRL607 million in Q3 2024, an increase of 8.7% year-over-year, driven by a 4.4% growth in billed consumption [18] - Copel G&T reported an adjusted EBITDA of BRL649 million, impacted by a lower P mix and generation deviations, resulting in a double-digit reduction compared to the previous year [19] - Trading segment's adjusted EBITDA fell to BRL3.2 million from nearly BRL20 million in the previous year, reflecting market price differences [20] Market Data and Key Metrics Changes - The average energy price for Copel G&T's portfolio decreased to BRL176.31 from BRL204 year-over-year, influenced by the termination of a high-priced contract [17] - The company reported a 23% curtailment in wind generation, leading to a BRL67 million impact on results [17][19] Company Strategy and Development Direction - The company is focusing on organic growth opportunities and has announced a CapEx of BRL3.29 billion for 2025, emphasizing improvements in network efficiency and customer service [30][41] - Copel is committed to maintaining a leverage ratio of around 1.5 times net debt over EBITDA, with a minimum dividend payout of 50% [36][41] - The company is restructuring its trading operations to enhance sales capacity and efficiency, aiming for organic growth rather than external investments [31][41] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by curtailment and price volatility but emphasized the strength of their integrated business model to mitigate risks [16][52] - The company expects curtailment levels to stabilize, with improvements anticipated from new transmission lines [54] - Management expressed confidence in Copel's long-term strategy and its potential to become a major reference in the electricity sector [90] Other Important Information - The company declared dividends of BRL485 million to be paid on November 29, representing 50% of the payout based on first-half results [6] - Copel Day is scheduled for November 26, where the company will present its new C-level executives and discuss its value generation strategy [12][13] Q&A Session Summary Question: Will Copel invest in the free market after divestments? - Management indicated no expected investments in transmission auctions for 2025, focusing instead on organic growth opportunities [29][30] Question: What is the company's leverage strategy post-grant bonus payment? - Management confirmed that leverage will remain comfortable post-payment, with a focus on disciplined capital allocation and potential for increased dividends [34][36] Question: How does Copel plan to manage energy trading amid price volatility? - The strategy involves locking in energy sales during favorable market conditions and maintaining a diversified portfolio to mitigate risks [44][70] Question: What are the expectations for curtailment levels in the upcoming quarters? - Management expects curtailment levels to decrease, with improvements from new transmission lines already in effect [52][54] Question: Can you elaborate on the cost dynamics and personnel reductions? - Management noted significant reductions in personnel costs due to a voluntary severance program, while also addressing increases in third-party service costs related to quality maintenance [57][59]