Giuliano Ajeje

Giuliano Ajeje from UBS asked about Copel's expectations for the upcoming 2026 tariff review process, emphasizing its significance as the first review post-privatization. He also inquired about the potential impacts of MP 1304, specifically whether compulsory energy contracting could reduce the size of the LRCAP auction and the company's view on the possibility of hydroelectric power plant renewals versus rebidding processes.

Answer

CEO Daniel Slaviero highlighted the 2026 tariff review as a historical milestone, with a dedicated working group aiming to exceed market consensus for the regulatory asset base. Villela, the regulatory VP, added that the team is focused on optimizing AIC, DEC/FEC indicators, and revenue recovery. Regarding MP 1304, Slaviero stated that compulsory contracting might affect LRCAP dynamics but not structurally, and expressed confidence in hydro products' competitiveness. He also indicated that while the MP mentions renewal possibilities, Copel's base scenario remains a competitive bidding process for HPPs, given trends in other infrastructure sectors.

Giuliano Ajeje asked about Copel's expectations for the 2026 tariff review, noting it will be the first post-privatization, and what the company is doing differently. He also inquired about MP 1304, specifically if compulsory contracting could reduce the size of next year's LR Cap and the possibility of hydroelectric power plant (HPP) renewal versus a rebidding process.

Answer

CEO Daniel Slaviero described the 2026 tariff review as a historical milestone, with a dedicated working group aiming to exceed market consensus (around BRL 18 billion), leveraging the company's track record of zero denials in previous cycles. Vilela, the Regulatory VP, added that the focus is on optimizing AIC, DEC/BEC indicators, losses, and unrecoverable revenues, ensuring investment plan works are completed by December. Regarding MP 1304, Slaviero stated that compulsory contracting might affect LR Cap dynamics but not in a structuring way, and hydro products are expected to perform better. For HPP renewal, he believes the base scenario remains a competitive rebidding process, as the MP text did not fundamentally change this outlook.

Giuliano Ajeje from UBS Group questioned the feasibility of SABESP's universalization CapEx target, noting that only half of the 1 million new sewage connections for 2024-2025 were delivered by Q2. He asked if the remainder would be delivered in large blocks and which projects were critical for completion in H2 2025. He also requested more detail on the reduction in materials costs.

Answer

CEO Carlos Augusto Leone Piani confirmed the sewage connections will be delivered in bulk towards the end of the year, driven by 15 key projects in the northern metropolitan region, and expressed confidence in meeting the target. CFO Daniel Szlak attributed the reduction in materials costs to standardizing operational processes and enhancing procurement capabilities, which are less constrained post-privatization. Piani also suggested the current quarterly CapEx run-rate of approximately BRL 3.6 billion is a reasonable expectation going forward.

Giuliano Ajeje from UBS inquired about the status of the proposed 'federalization' of the company, the potential for privatization, and what measures are being implemented to preserve the current management's legacy and strategic plan through future political changes.

Answer

CFO Leonardo Magalhães clarified that federalization and privatization are agendas of the controlling shareholder (State of Minas Gerais), not the company. He stressed that management remains focused on executing its approved strategic plan regardless of external factors. CEO Reynaldo Filho reinforced this, highlighting that 75% of the BRL 35 billion investment plan is already contracted, creating structural, long-term improvements that are perennial and will endure beyond administrative changes.

Giuliano Ajeje from UBS inquired about the status of the company's potential 'federalization,' the possibility of privatization, and what actions are being taken to ensure the continuity of the current management's strategy.

Answer

CFO Leonardo Magalhães clarified that federalization and privatization are matters for the controlling shareholder, not the company, which remains focused on its strategic plan. CEO Reynaldo Filho reinforced this, stating that 75% of the strategic plan is already contracted, ensuring that structural improvements like new substations and a modern distribution management system are perennial and will proceed regardless of external factors.