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Good morning, ladies and gentlemen. Welcome to ISA -- to the conference -- ISA CTEEP conference call to present the results of the fourth quarter of 2021. This conference call is being recorded. [Operator Instructions] The audio and the slide deck of this conference call are being simultaneously presented on the Internet at the address, www.isacteep.com.br/ir. At that address, you can also find the slide deck for you to download. Before continuing, we would like to clarify that statements made during this conference call relative to ISA CTEEP business prospects, operational and financial projections and goals are beliefs and assumptions of the company's management and are based on information currently available. They involve risks and uncertainties, because they refer to future events and therefore, depend on circumstances that may or may not occur. Investors should understand that general economic conditions and other operational factors may affect the future performance of ISA CTEEP and the results that will be materially different from those forward-looking statements. Today here with us, we have Mr. Rui Chammas, CEO; and Alessandro Gregori Filho, CFO and IRO. They will be make the presentation to you. Other company officers of the company will be available for the Q&A session. So I would like to turn it over to Mr. Rui Chammas, who is going to start the presentation. Mr. Chammas, please?
Good morning, everyone. Thank you very much for attending our conference call. I am Rui Chammas, and I will be -- present the results of the first quarter of 2021 published yesterday. We are going to give you an update of the main numbers of the company. Please move to Slide #3. While the first quarter of this year was marked by the advance in sustainable growth strategy of the company with the acquisition of Piratininga – Bandeirantes, PBTE, so -- which connects 2 lines that went live on April 2020. So the acquisition was BRL 1.6 billion with an additional RAP of BRL 172 million, the consolidation as of March 2021. In this manner, we have recorded an increase in the net revenue of the company reaching BRL 852 million, adjusted EBITDA of BRL 770 million and the net margin of BRL 308 million. So the company invested in improvement in order to assure good quality in transmission systems totaling BRL 58 million in this field as well as investments in Greenfield projects that totaled BRL 232 million. For the maintenance of sustainable growth, we have made efforts to continuously and efficiently conduct our projects. ISA CTEEP has finished the energization of Aguapeí in January 2021, 6 months before ANEEL deadline, and a 40% CapEx. So we also obtained the license for Biguaçu so in Santa Catarina and Três Lagoas, connecting the states of São Paulo and Mato Grosso do Sul. This quarter, the company also decided to pay out BRL 531 billion in dividends announced in May 2021. In terms of ESG, we raised -- we had the funding of BRL 672.5 million in green bonds. It was the seventh issue of debentures. Please, now on Slide #4. On this slide, you -- we highlight an important subsequent event. On April 22, through a decision 251, ANEEL decided the result of an appeal that our company had filed, recognizing our right to have a parcel that had been suspended. And the way to pay the financial component for the cycle 2021. So there was a reduction in the payment curve for the cycle of '21-'22 and '22-'23. As a consequence, the cycle of payment is going to go back as it had been decided in a decision dating back to 2020. So the measure that has been established does not change the company's sustainable growth strategy and doesn't change our cost austerity and our pursuit of maximizing value generation for our shareholders and stakeholders. Now moving to Slide #5. The company is still focused on promoting the growth with value generation, reinforcing its commitment to create value with projects contributing for the expansion of the system of transmission of electric power in Brazil. BRL 58 million were invested in Q1 '20 in contrasts to BRL 7.1 million last year. The highlight in Q1 this year the retrofitting of the Taubaté substation, an important project that is going to provide more safety and sustainability for the services provided to part of the state of São Paulo. We want to double the level of investments that will be delivered in gradual growth. The company already has today authorizations from ANEEL another BRL 1.4 billion projects to be invested and will be adapted over the next 3 years. For 2021, the expected investment is approximately BRL 300 million. The projection that was announced in our 10-year energy plan involves almost BRL 60 billion in investment. And we imagine that most of these investments can be made in São Paulo's grid. Now for the Greenfield projects, we have invested a total of BRL 231 million in Q1 '21. We expect 4 to 5 projects to start up in 2021. One has already been energized -- Aguapeí with over BRL 1 million to be invested in 2021 in Greenfield projects this year. So our projections for PDEs to have Greenfield projects totaling BRL 30 billion until 2030, and this is the sector long term plan. In June this year, the first auction already plans investments of BRL 1.3 billion, 5 lots in 6 States, 515 kilometers of transmission lines and 3,000 MVA of capacity. Now moving to Slide #6, the Greenfield growth. So here on this slide, you can see all our projects in terms of installation, licenses, land, properties and evolution of all activities related to energization. We have met the time, the deadlines and the budget with disciplined in spite of all the impacts of the pandemic. We announced the completion of Aguapeí in January this year, and all projects are evolving within schedule. Now I would like to turn it over to Alessandro to give you more details about the results of the first quarter. Alessandro?
Thank you, Rui. Good morning, everyone. Now moving to Slide #7. You can see the performance of the quarter. You can see the net revenue and the adjusted EBITDA. And so the net revenue has reached BRL 853 million, and the adjusted EBIT is BRL 770 million. And we also booked provisions for the actuarial liabilities for the benefits of supplementation and pension. So this impact led to expenses of BRL 11.9 million without any cash effect, because we still have a surplus by BRL 46 million, and we had cash disbursement in 2021 of approximately BRL 1.7 million, which is in line with the last few years. The financial discipline makes it possible for us to grow below the inflation. And inflation in the last 12 months in the same period was 6%, and we had 1.4%. So we grew less -- expenses grow less than the inflation. So we had BRL 308 million for the quarter in terms of net income. On Slide #8, you can see the consolidated debt. We are AAA assessed by Fitch. So we had the funding of BRL 672.5 million through the issue of -- the 10th issue of debentures, thereby reinforcing our cash and the company's assets. Gross debt totaled BRL 5.5 billion in Q1 '21 with a cash of BRL 1.3 million. And in March, we had 8.8% a year and with a time of 7 years. So we are still below the covenants for the common, which is 3x net debt over EBITDA. On Slide #9, we have the dividends for shareholders. So as according to the initial slide, we approved the payout of BRL 531 million. And the company is all the time assessing its capital gains, its debt capacity, and possibility of growing to allocate the funds, always seeking to add value to our shareholders. So we are not yet showing you the schedule for the payout of dividends, but we are committed to paying this amount. Thank you.
On Slide #10, we talk about our pillars of growth for this company. I think they've become majorly important in this quarter. We believe in sustainability, value generation and growth. We also want to have payouts for our shareholders, and we want to look for improvements. In this quarter, we had important growth, but we were able to work with efficiency and excellence. We also had growth in Greenfield projects. We had advances that were important for our portfolio. We were also able to work with the anticipation of costs regarding what we expected. M&A projects are going to bring us more synergy and growth. This has to do with the PBTE acquisition, which has become concrete in March. We also need to think about new business opportunities in retrofittings. We are definitely going to pursue these endeavors, still respecting the environment and sustainability. And we have an electricity business, which is paramount for the big revolution that is needed so that Brazil can -- have a better path forward for the electrification and its energy growth. Thank you very much. Thank you for your interest in our earnings release call. This is the end of our presentation, and we are now going to hold a Q&A session.
[Operator Instructions] We have a question from Andre Sampaio from Santander.
I actually have a question regarding accounting practices. How can this have an impact on dividends? And my question is initially related to how this can have an impact on that. Would this have short term impact in the second quarter? Is anything going to change in the financial calculations? And when we look at reports, this could have an impact on reports. And how are you going to have this booking or these records with less revenue? Are you going to follow the same thing you have done in the last quarters? And please answer the question about RBSE.
Thank you for your question. This is Alessandro. From an accounting perspective, we have 2 different impacts from RBSE. If we think about IFRS, in IFRS, we have our forecasts for the future. So we are probably going to have positive impact to be accounted for. This is going to happen as soon as we have the tariff review and the tariff adjustments, potentially in the second quarter. So this regulation should have a potentially positive impact because we take the forecasts into account. However, we will see a reduction in revenue. Since we're going to change that, and our revenue will come in the long term, we'll have a reduction for '21-'22 and '22-'23. This will have an impact on us because we will have less revenue coming in. Now if we think about dividends, we're going to use a 75% paying practice. So if we have less revenue, of course, payouts are going to follow this trend. And as we have seen previously, this company is trying to evaluate an optimal capital structure so that we can keep growing and making investments. We also want to keep on sharing our results with our shareholders through payouts. Depending on the leverage we get as a company and depending on the balance sheets, we may have a positive impact on our dividends for this year. With very low leverage, according to the figures we see throughout the year, we may be able to pay a little bit more, not only the minimum. But it's still too early to talk about it. We need to assess the opportunities that the market is going to bring to our company, and we need to evaluate our leveraging throughout the year before we make a decision.
[Operator Instructions] Our next question in our webcast comes from [ Sid Guilherme ].
Do you intend on having any acquisitions this year?
This is Silvia Wada. Thank you for your question, [ Sid ]. This is what we are working towards. As a strategic goal, we wanted to have sustainable growth, so we are always keeping a look at the market. We've seen acquisition opportunities in the market either through privatization or through private companies or consultants selling their assets. And our role here is to take a look into these opportunities and to understand which ones are going to better fulfill what we want as operators. And according to the risk that we want, we want to find transactions where we're going to have controlled risks and an appropriate return. We don't have any specific opportunities to mention at the moment. I can't tell you that we have anything that is a guarantee right now. But this is something that the company has been working on to identify opportunities that could lead to acquisitions.
Our next question in the webcast comes from [ Fernando Seco ].
You have the profiling of the RBSE or basic network of the existing system. How is this new profile going to impact the payouts for 2021, 2022 and 2023?
This one has to do with what I said to Andre. It all depends on the leveraging that we have for the company throughout the year and the growth opportunities that we are able to find. We usually have at least 75%. So we could see the payout being impacted, but depending on our leveraging, we may pay more than 75%. It all depends on leveraging, and it all depends on our growth throughout the year.
Our next question is from [ Rodrigo Munoz ].
What do you see for the company in the upcoming years when it comes to the type of debt it has? Should we have an indicator closer to 3x -- threefold? Let me repeat the question. What do you think is going to happen with the company when it comes to the type of debt it has, the type of debt EBITDA?
Let me talk about the type of debt we have right now. At the moment, we have an average deadline of 7 years. And with this, of course, we could find better leveraging than what we have right now. It all depends on our fundraising and costs. So we are looking for a capital structure, taking into account that with long term debt in the power market, we need to think about our debt and EBITDA with our covenants. It all depends on the opportunities we can find in this market, but we could find healthier leveraging to keep on working on our growth strategy and payout strategy. But we don't have a specific indicators. We don't have a specific figure that we are looking for in the long term.
What is the expected term for return for the investments that you are doing in reinforcements and improvements?
Well, [ Rodrigo ], from a regulatory standpoint, we're going to have a return on these investments throughout the granting period so during the grant period, we're going to receive payments according to the regulations. We're going to receive [ BISWAC ]. And that is going to happen up until the end of the granting period. Now if something hasn't been paid, it is then returned to the company when this concession or grant is over. So this is paid by the regulatory agency for the term of the grant. This is a deadline that we could use.
Next question is from [ Marcus Andrade ].
Does ISA intend in any way to use its preference right for buying CEMIG or Taesa?
Thank you for the question, [ Marcus ]. This question should be asked to ISA, not to ISA CTEEP, to our controllers, not to us. But what I can tell you is that there is a shareholders agreement in effect, and it's public, and there are many rights. And then if they really sell the shares, we could consolidate the control should there be an acquisition. So this is not something that we can answer to you. This is a question that you need to ask to ISA for a more accurate answer. And they might have answers to your questions.
Our next question comes from [ Murilo Galati from Empresa Brasil ].
What is the influence that the rising interest rates may have on your company?
Well, the rising interest rates is likely to increase the capital cost, and this will make us need more profitability overall to pay for this type of cost. So the overall likelihood once costs go up, whether it's equity or third parties, is to have a lower premium in 4 new projects, for example, in other auctions. So this is a potential impact that may take place. But this is only likely to happen if the long term interest rates are affected. But if it's just short term interest rates, it will be not enough to create this type of effect.
Our next question comes from [ Gabriel Martins ].
How is the company going to participate in auctions? What are the prospects for the year with that regard?
Thank you, [ Gabriel ]. We are working in advance to structure some of the lots for the auctions, the ones that may provide the most synergy with our assets. We are conducting previous studies in engineering so that we may have very competitive offers for future auctions, both in June and September. Thank you.
[Operator Instructions] Excuse me, if there are no further questions, I would like to turn the conference over to Mr. Chammas for his closing remarks.
Thank you all very much for your interest in ISA CTEEP, in our results. I hope you enjoyed our operational results, the operational results that we've been reporting and been attaining in a solid way, in a sustained way and our growth strategy that we've been designing, and we've been disclosing it to you for a while. We have many projects. Consistent growth and delivery in Greenfield projects in addition to some significant improvements in M&A projects, such PBTE that we have recently completed. Thank you all very much, and I wish you all a very good day. Thank you.
The conference call of ISA CTEEP has now ended. We thank you very much for your participation, and have a good day. Thank you. [Statements in English on this transcript were spoken by an interpreter present on the live call.]