João Pimentel

João Pimentel with Citi questioned Copel's long-term growth strategy beyond current operations and already mapped opportunities like LRCAP and batteries. He sought to understand the company's approach to inorganic growth, particularly in light of challenges faced by other renewable players, and how Copel balances dividend payout with its ambition to become a larger company.

Answer

CEO Daniel Slaviero clarified that while paying good dividends is a priority due to mature assets and strong cash generation, Copel also aims to be prepared for structural inorganic growth opportunities when they arise, maintaining a disciplined capital structure. He stated that the company is not actively looking at external assets currently, focusing instead on internal digital transformations and significant organic investment opportunities with low risk and attractive returns in distribution and generation, which will be detailed at Copel Day.

João Pimentel questioned Copel's growth opportunities beyond the mapped LR Cap and battery auctions, specifically asking if the company is considering new segments or inorganic growth within existing segments, and how it balances dividend payout with the ambition to transform into a larger company.

Answer

CEO Daniel Slaviero clarified that while paying good dividends (with a 75% minimum payout policy) is important due to mature assets and strong cash generation, the company does not create long-term value solely by cutting costs and selling assets. He stated that Copel is not actively looking for inorganic assets currently, as it is focused on internal digital transformations, Copel Day, and low-risk, attractive-return organic CapEx plans for distribution and generation, including regulatory walks and smart grid initiatives.

João Pimentel asked for Copel's perspective on the postponed reserve auction, including a potential new timeline and any expected changes to hydro plant products. He also inquired about Copel's participation strategy, potential CapEx for its projects, and its approach to anticipating project delivery.

Answer

Executive Daniel Slaviero called the auction's cancellation a correct decision and stated he expects it to be rescheduled for late 2024. He confirmed Copel is prepared to participate with two advanced hydro projects but remained cautious about disclosing specific CapEx details. He noted that any potential for early project delivery would be carefully evaluated as part of their competitive strategy.

João Pimentel inquired about the progress in eliminating remaining tariff discounts for large clients and asked how SABESP's potential EBITDA margin compares to the 75% margins seen in more mature private concessions.

Answer

CEO Carlos Piani stated that the company is confident it can cancel roughly 80% of the remaining BRL 300 million in discounted contracts. Regarding margins, he noted that while reaching higher levels is achievable over time, the immediate focus is balancing efficiency with the aggressive CapEx plan for universalization by 2029.