Companhia Energética de Minas Gerais - CEMIG - Q3 2023

Transcript

Operator (participant)

Good afternoon, everyone, and welcome to CEMIG's Q3 2023 earnings video conference call. We inform that this call is being recorded and will be available at the company's IR website, where you'll also find the company's presentation. Should you need simultaneous interpreting, the feature is available by clicking on the globe icon located on the bottom of the screen, choosing Interpretation, and then choose the language of your choice, Portuguese or English. For those that are following the call in English, you can also select Mute Original Audio. Now, I would like to turn the floor over to Carolina Senna, Investor Relations Superintendent. Please, Ms. Senna, you may proceed.

Carolina Senna (Investor Relations Superintendent)

Good afternoon, everyone. I am Carolina Senna, CEMIG's Investor Relations Superintendent. We now start CEMIG's Q3 2023 earnings call and webcast with the following executives: Reynaldo Passanezi Filho, CEO; Dimas Costa, Chief Commercial Officer; Leonardo George de Magalhães, CFO and IR Officer; Marco da Camino Ancona Lopez Soligo, Chief Participation Officer; Marney Tadeu Antunes, Chief Distribution Officer; and Thadeu Carneiro da Silva, Chief Generation and Transmission Officer. For the initial remarks, I now turn the floor over to our CEO, Reynaldo Passanezi Filho. Mr. Passanezi Filho, the floor is yours.

Speaker 2

Good afternoon. Good afternoon, everyone. It is a pleasure to be here with you on this new quarter, bringing consistent results, thanks to our strategy and to our discipline in terms of capital allocation and efficiency. These are the highlights for the Q3, an EBITDA of BRL 2 billion, net profit of BRL 1.2 billion, annualizing it, and I think this is the reality of the company. We are talking about an EBITDA of around BRL 8 billion a year and a net profit close to BRL 5 billion. These are very significant numbers that show how successful our strategy is. You see here the figure, the 28% growth in the adjusted EBITDA, quarter-on-quarter, and 20% for the net profit. And how are we able to do that? And it's always important to mention our strategy here.

Our strategy in terms of management. We have a very simple strategy. It's called To Focus in the State of Minas Gerais and To Be Winners. We are running the largest investment program in the company's history, focused in the area that we know and the businesses that we know. We are no longer investing in minority shareholders when projects outside of Minas Gerais, and all our efforts now are to invest to Minas Gerais clients. This is a very clear strategy, where the capital allocation is being done in the businesses that we know. In distribution, generation, transmission in Minas Gerais, we have also a trading company. We sell for the whole country, so we are also investing in gas in Minas Gerais and distributed generation in Minas Gerais. Here we are concentrating all our investments.

This is the capital allocation that we have been doing. This is the main investment program. It's not in this slide, but you will see the figures. We have the investments figures. Obviously, you don't need to pull up the slides because we'll go over that, but we have 954. We have almost four times the amount of the investment when we compare that to 2018. These are very consistent numbers of a capital allocation in regulated sectors with a known profitability, mostly when we invest in generation. Also, we invest with associated PPA, therefore, also with guaranteed profitability in sectors that we know. We follow our divestment process in the areas that are not a priority and that we are leaving.

Once again, we were successful in the auctions of the SHPPs, and also we concluded the sale of Baguari plant. These were two non-strategic assets for the company, so, we are focusing in Minas Gerais, and we wish to win, to have record investments, record capital allocation in areas that we know with assured profitability. And finally, always be looking for more efficiency. We aim to be within the regulatory standards. This is one of our mantras in the company, and once again, we are delivering consistent results. The EBITDA is within the regulatory limits, operating expenses, losses, all of those within the regulatory limits, and this is one of our permanent objectives in aiming for efficiency always. Of course, we are available to take your questions later on.

But once again, we bring to you a quarter of very consistent results, bringing in the new reality of the company. This is a live, dynamic company that is investing a lot and these investments, you may trust us, will bring a lot of value to shareholders, to society, and to the people of the state of Minas Gerais. Thank you very much, Reynaldo. So now I would like to turn the floor to Leonardo George de Magalhães, our CFO.

Good afternoon, everyone. Thank you very much for being here in our video conference call for the results of the Q3 of 2023. I'm going to talk about some highlights before I go into the details on the Q3 results. First, I would like to talk about the sale of assets. This is the execution of our strategy.

Since 2020, when we disclosed our strategy to the market, we communicated our intention to divest NAF assets that were very complex, where we could not have any control over. And the sale of the SHPPs were very successful, with a premium of over 100%, BRL 100 million in cash that will come into the cash of the company. And we know that for this strategy, we add more value for our shareholders, and these funds will be part of the cash of the company up to the end of the year. In addition to that, we also completed the sale of Baguari HPP, and this happened actually in October. And also, we have Retiro Baixo, we expect to conclude it now in the Q4.

These are significant funds that will allow us to pay some of our financial obligations, and this is also moving forward with our proposal of assets disposal. The sale of these assets, we are executing once again, this strategy. We divested in Light to Renova, Axio and other assets, and now we are going through this other stage, especially now in this second half of 2023, with these power plants, SHPPs, Baguari, and Retiro Baixo. Well, CEMIG is a reference in ESG. We are present in the most important ESG indexes, national and international ones, and there are two programs that we would like to draw your attention to. The first one is our involvement with the communities that are around the areas where we have the dams.

We have environmental programs, but also we have educational lectures in schools and in the area. I think this is the role of the company, to be close to the surrounding communities and that are close to our assets. And another program that is very significant to us is the first agrivoltaic project in Brazil. This is a partnership between CEMIG, EPAMIG, and CPQD. Here, we want to produce food under the solar farms, the solar parks. We believe this is very innovative, and it can change the environment of the solar parks. When we are developing those, of course, we have to make some adjustments in those solar farms, but we do believe that we can produce food under that area.

We believe this is going to produce a lot of value, and it has to do with the DNA of the company. We are very optimistic. We believe this can bring a huge transformation to the environment where we have our solar farms, and I believe that we will have good news on that front in the future. Now, talking about our investment program, this is a very bold one. It's BRL 5.4 billion in 2023. We have already invested BRL 3.3 billion in these nine months, 42% higher than what we invested in 2022. So CEMIG is investing more and more in a very significant fashion when we compare to the investments for this year, well, to what we invested in 2018, 2019. It's five times more than what we had five, four years ago.

These investments that we have made up to September, the conclusion of the Q3, we see that most of that was in distribution, BRL 2.3, transmission, BRL 123, and generation, and the other businesses where we also work. Within distribution, we are going to be executing this program over the year. We do believe that we will be able to execute 100% of our distribution program. Same thing for generation, maybe for distributed generation and gas. Part of the program will be postponed to next year, probably in the Q1 of 2024. But these are works that are already ongoing. It's just a matter of adjusting the schedule here, but we're very optimistic. We also have distributed generation, and this investment should be concluded in the first half of 2024.

But once again, we are sure that they will be concluded, and they will be generating additional revenue for the company. So this is a history of growth and sustainable businesses with low risk, and we are sure that this is going to add value to our shareholders. This is an example of one of these projects, the expansion of Boa Esperança and Três Marias, the solar farms. We have the pictures before and after. You can see that 80% of the works are already, already concluded, and we believe that in a very short period of time, they will be already generating revenue and EBITDA for the company. This is a company that has 100% of its energy matrix, renewable. And now we are going to turn to the results of the Q3.

The highlights once again, as Reynaldo mentioned, very consistent results, close to BRL 2 billion in EBITDA growth, 57% of our trading company when compared the Q3 of this year to the Q3 of last year. Also operating efficiency in CEMIG D. Not only operating, but also that reflected in financial indicators, our OPEX is lower than the regulatory limit, and the EBITDA is higher than the regulatory benchmark, and losses are fully covered by the tariff. Even with DG, which is an important part of our market now, DG grew 1% in our market when compared to prior year. For CEMIG GT, there was a reversion of the provisions related to SHPPs, and we were able to sell them to by a higher amount that the accounting value.

We have the Eurobond, and by the end of the year, we want to buy back another share of those. Here we have interest on equity, close to BRL 1.3 billion of interest on equity declared in 2023. As our CEO just said, this is a company that is committed to the discipline in capital allocation, is investing profitable assets, especially in regulated areas where we have guarantee of return. We know that this is attractive for our investors, and we understand that we're a company with a dividend yield, with a dividends payoff that is one of the most attractive in the industry. You're talking about between 8%-9% of dividends we yield that we expect to have this year, thanks to the results of our operations.

We believe this is very attractive because this is a company with consistent results, with the right capital allocation and assets and investments that represent low risk to our investors, and at the same time, paying dividends that we consider to be attractive, considering the business that we work on. Now, let's talk about the results in details. Now, Carolina Senna will continue the presentation then.

Thank you very much, Leonardo. So moving on into each one of the businesses, let's start on the CEMIG consolidated results. In 2023, this is a clean result. As a non-recurring effect, we have the reversion of the provision in the Q1 for the sale of the SHPPs, as we mentioned.

So the recurring EBITDA, when we analyze it, we grew 28% when compared to the same quarter in the past year, and our profit was up 20%. I draw your attention to the recurring result, as our CEO mentioned, closing, we should close the year with BRL 8 billion in EBITDA. Now, moving to the operating costs and expenses in the consolidated figures here, we did have a reduction in costs, but the MSO was up when we look at outsource services. That was up BRL 57 million, but this is that expense that is very much related to our investment program and the improvement that we are working on to serve our consumers. We are working with preventive maintenance, with corrective maintenance. In the average term, we are going to have a reduction in corrective maintenance costs.

But in this quarter, we still have a higher pressure regarding maintenance and also a cleaning of the transmission line pathways. This happens more in the Q3, and it ends up pressing the amount here for outsourced services, but we are still performing lower than the regulatory OPEX, even having these higher expenses. On the other hand, we also had an increase here for Resolution 1000. This involved a larger number of services and coverage of services here. So when we do not meet some of these services, we have to have financial compensations for consumers, and also the deactivation of goods. And because as we invest more in the distribution company and growing our asset base, it is just natural, it's common that we have more write-offs here. So this is our cash flow for the nine months.

As we can see, and we already mentioned, this is a company that has a strong cash generation. We generated, say, BRL 6.336 billion, and still in this cycle, we still are reimbursing tax credits to consumers. We paid interest on equity in the middle of the year. We are still accessing capital market, thanks to our robust investment program. We had a settlement for a SAG put option. It was provisioned in our balance sheet, but this was paid out then. And also, we had payments and expenses with our investments programs, and we ended here with BRL 4.168 million, and we still have BRL 1 billion of interest on equity and dividends to be paid up to December thirty-first, and also moving on with our investments program. This is a slide that we share, showing our debt profile.

Remember, we have that higher toll tower in 2024. This is the Eurobond for CEMIG GT. This is $1.5 billion to be paid, starting in December 2023. We can buy back with no penalties, no additional value. And remember, we have already had two buybacks in the past, and we are always looking for opportunities, for liability management in the company. And our leverage, it's still very low, below 1x. But this leverage, as we have already mentioned before, will go up naturally because of the new fundings and the investment programs that we will have to hold. This is a robust program. So in 2025, we expected that our leverage is at 2.5x. Now, turning to CEMIG D results. In this quarter, I already have 100% of the adjustments for the tariff review.

So analyzing the recurring EBITDA, we went up almost 7%, with no, no effect that was not recurring here. All the effects here were related to 2022, not 2023, and our profit was up 4.4%. Now, talking about CEMIG D, as Leonardo mentioned in the beginning, this market grew 1%. A number of analysts expected a higher growth because of the heat wave, but we did take a hard hit with distributed generation. 17% of my total captive market today migrated to distributed generation. They are no longer in our base. So when we look at these significant figures, CEMIG D is the concession that it has the hardest time with distributed generation in the country.

This 1% growth is important because it shows that the investment program is able to cater to pent-up demands and also new industries that are coming to Minas Gerais and allowing the growth of our concession. If we look at transported energy here, that grew 4.2%. More information on distributed generation so that you can have a clear snapshot, the impact in our concession here. On the one side, we have CEMIG D market, and the other side, the market that migrated to distributed generation. And as I mentioned, you can see that even with the growing market of distributed generation, CEMIG D was able to grow an accumulated figure, 1.6%. We still have 2.5 giga of loads to be connected. These are future loads that depend on investments.

That's why one of the most important programs we announced is the program Energia Mais, Energy Plus, for substations. We have already finished the two substations, and we have 15 more substations to be concluded by 2023. For distributed generation, as we mentioned, when we compare September 2023 with September 2022, the market that migrated to distributed generation grew 57%. And here on the bottom, you see the number of orders that we had before the law changed, the Law 14,300, the number of budgets of connections, and you can see that we did meet in 2022, 102,000 orders for micro GD. As also mentioned, we are within all the regulatory limits for distributions, and losses is one of the important limits.

When we look at the limit, it is at 11, and our performance is 10.57. This is a limit that was reached in December of 2021. This is a successful trajectory, thanks to a number of good initiatives that we continue repeating, and I highlight here the impact and the exchange of old and obsolete meters, the replacement of the obsolete meters by smart ones, and also the regularization for low-income communities. Now, in terms of our delinquency, the digital channels for collection are growing. We have 63% of our collection coming from these digital channels, and we highlight here the Pix, our instant payment system, which is close to 18% of collection.

That's important because collection via digital channels has a much lower cost than what we had before, when most payments would have to be made in specific bank places. What we call RFA, the Receivables Collection Index, is very close to 100%, and year-to-date, in the Q3, we reached 100.53%. Now, about operating efficiency of what we have within the area of coverage of CEMIG distribution. As already mentioned, we are within our OPEX limit. Our performance is 4.7% lower than the regulatory level, and the EBITDA-

Of BRL 163 million is 7.6% above the regulatory level, showing this trajectory of change that happened in CEMIG's distribution, where we, in the past few years, were able to fall into the right limits for losses, OPEX, and EBITDA, the regulatory levels. Now, for CEMIG GT, we started the migration of the trading company for CEMIG Holding. So part of CEMIG GT was transferred to CEMIG Holding. That's why we have this additional here. And as we already disclosed to the market, we have already the published our supply and demand balance. And this strategy allowed us to have better results for the trading company. So we have grown vis-à-vis the same quarter of 2022, 112%.

The only non-recurring effect here is the loss, which was the impairment for the SHPP, a reversal that we had for the PCA. As SHPPs and net profit was up to 201%. In blue, you see how much of EBITDA has been transferred in this quarter for CEMIG Holding. Gasmig, which is a company also consolidated, and we always have information on Gasmig's results. This year, also, Gasmig has had an amazing result. EBITDA for this quarter, compared to the prior one, was up 42.6%, and net profit, 24.1%, thanks to the regulatory tariff receivables and also to the increase in the distributed and sold gas volumes, ones that Gasmig today also has raised clients paying for its gas supply.

Now, to concluding with our commitments, I will turn the floor to our CFO, Leonardo George, for his final remarks. Right after that, we will start our Q&A session. Thank you, Carolina. As we mentioned in other opportunities, since 2020, once CEMIG published its strategy and its new plan for the next years, we understand that we are executing this strategic planning thoroughly, and some of them have been already achieved. Divestment of equity interests is with complexity. When we talk about divestment, basically, we are talking about capital reallocation. This is a very different reality for this company when we compare that to prior years. We continue having some important matters for us to invest in renewables, to grow in retail electricity sales. This is a new market for the company.

We are very optimistic for the value generation to our shareholders, thanks to this new market. Also, digital transformation, same thing. For the next few years, especially 2025, the floating generation sources and renewals of generation concessions, this is something that we are following up and closely, that we can renew Nova Boa Esperança for more 30 years. Once again, we are following up this process so that we can exercise our right to extend the concession for these plants. Thank you very much for the opportunity, bringing to you these results, and we'll be now open to answer any questions you might have about the company's strategy and its results. We will now start the Q&A session. Please ask all your questions at once and hold for the company's reply.

To ask a question, please, we would like you to send them via the Q&A icon on the bottom of your screen, and your names will be announced so that you can ask the question live. Then, a request to activate your microphone will pop up on your screen. If you should not want to ask your question live, please let us know, and then the operator will read your question out loud. Our first question is from Antonio Alex de Moraes Araujo. Please, Marco Soligo, the question is, about CEMIG and TAESA, how is the divestment process? Will it be concluded by June of 2024? Thank you. Hello, Antonio. Thank you very much for your question. We do not have a perspective of sale of our TAESA stake in the short term. So the perspective is no.

We do not believe it will be sold by June of 2024. That's it, Carolina. Thank you, Marco. Our next question is from Carolina Carneiro, sell-side analyst from Safra, who has two questions. First, is for Dimas. Please, Dimas. She's asking, that CEMIG had a relevant result in its trading company. Can you comment how is the PPA environment in the free market in terms of prices and terms? The platform has pointed to upward trend after the records of temperature in October. Can you comment on that, please? Can you hear me? Can you see me? Yeah, I can see you and I can hear you. I apologize, I had a technical problem, but it looks like it's a question from Carolina. Good afternoon, Carolina. Thank you for your participation. Can you please repeat the question?

I did have a problem with my audio. Could not hear it. I will read it again. Miss Carolina Carneiro is asking the following: CEMIG had a relevant result in its trading company. Can you comment how is the environment and PPAs in the free market in terms of prices and terms? Well, PPA, with this drop that we had since the beginning of the year, there was a drop in the energy price and we had here a line of clients and this is a case of a high production.

We had a number of clients that were looking for self-production with CEMIG, and they themselves, because of the very low price that we have for the next few years, and we can understand that they just gave up, and that also turned PPAs unfeasible because it makes no sense, a client or a trading to have a PPA with such a low price. So we expect that by 2024, you know, the self-production, we still do not believe it, because the low price should be there for a while. We believe that with the reduction in the price of the photovoltaic equipment, and maybe with better prices, we expect it to turn feasible some self-productions. And I am sure that over 2024, we might have signed contracts, but not PPA.

We had to hold back in all our investments, and we no longer have the actions that we used to have of buying energy, because this is not feasible right now. It's not final, but we will have to wait the PPA issue to be solved. And is there a second question? Did you divide the question? No, she was talking about the CG. It was the same question, because the CG, because of the high temperatures in October, it brought the curve up. But the question was the same one. Well, I can talk a little bit about that, because there's a feeling in the market that the price will go up because of the high temperatures. But high temperatures and those higher prices that we had for a while, it was because of a number of adverse situations that will not happen again.

We, Madeira was not generating, we had restrictions in the northeast, Angra 1 stopped, and then Angra 2 stopped. The hydraulic reserve and the plants, those were not enough to meet that variation, especially in the peak hour, that at the end of the photovoltaic generation and the beginning of the other end, with lighting and everything, like 2-3 P.M., with air conditioning and high temperature, then we felt the need of having thermal dispatches. That's why PLD went up for two, three, four hours in a few higher temperature days, and it had a 10%-15% increase in our PLD or our spot price.

So we believe that, you know, we know that we might have higher temperatures in November and December, but with all of these factors that and adverse factors, they are not as significant now in November and December. So we do believe that we might have a higher spot price in two to three hours, sometime, but nothing that will affect that much to say that the market price, the spot price was so much higher than is going to affect the short, medium, or the long runs. Thank you very much, Dima. So our next question is from Guilherme Lima, a sell-side analyst from Santander, and for Marco Soligo. Marco, please, the question is: About divestments, have already made a decision, about Gasmig sale. Would you sell the stake or you could detach assets? Guilherme, good afternoon.

Thank you for your questions. About Gasmig, the process of this strategization from CEMIG is more important, so this is not a decision that is on Gasmig's hands. So we are on hold for the process. What is the other question? The what can you expect from this alliance, to sell the stake or the asset? Well, about this alliance. We are working to have a total sale of our stake. That is, to sell all the assets. Thank you, Marco Soligo. Next question, also from Guilherme Lima, and I'm going to ask to Leonardo to comment on it. Leonardo, he's talking about our CapEx and the guidance for 2023, and he asked us to give us more color on GD and gas for 2024, and how other segments will be.

Well, our investments program, as we mentioned, is BRL 5.5 billion a year. We know that the investments in generation distribution were fully executed, and this year, part of this, as we said, maybe- they may be executed in the first half of 2024. But in terms of absolute amounts forecasted for the year, we believe that we'll be close to 85.9% of the whole program for this year. So this is a success in the implementation of this program. We are confident that we'll be able to execute almost all of it. What happened here is a process that we understand that is only natural. That is, part of the program is a smaller share of the BRL 5.5 billion, had a delay of a few months, but it will be fully executed in the following year.

Now talking more about our investment program for 2023-2027, that we disclosed to the market, close to BRL 18.5 billion, and we are confident that we'll be able to execute the whole program in full, up to 2027. The company has already organized itself internally, its supply, logistics areas, also execution, hiring suppliers, material, services, so that this program is executed. So we are confident that this will be executed. So the message is, for this program of BRL 5.5 billion, the largest one, and the company will be able to execute close to 90% this year. Just a small percentage will be executed in the Q1 of next year, 2024. Thank you, Leonardo. Our next question is from Filipe Andrade, sell-side analyst for Itaú BBA. I will ask to Dimas to answer that.

The question is: Considering the recent volatility of the hourly spot price, how CEMIG believe that the price will behave in the wet period? Guilherme, right? Filipe. Filipe. Thank you, Filipe, for your question. I have already mentioned that another answer for Carolina. This is what I believe. As I said before, there was a combination of adverse factors that ended up causing a dispatch for the TPPs. We know that we might have, you know, this wet period rains in December and January. So we believe that we are now having a return of Angra Two and Three, and we believe that with the wet period that we are going to have, there will be an increment in hydraulic reserve to face these high temperatures. So we do not believe in a price variation, as I said.

I believe it's going to be very small on a monthly basis. Maybe there is a specific time where you might double or triple the spot price, but we do not believe that it's going to triple it. We might have an increase because we might have a need for thermal dispatch, but the reservoirs will be able to supply the high temperatures. But we do not believe this is going to have an effect. We are ending the dry period with the reservoirs at all-time high, close to 75%. And we believe that when the wet period ends, the reservoirs will be close to 90% or 85%. And again, this is a combination of load growth, temperature, and also we still have. Well, GD, DG never stops, right?

We have already heard here that the amount of photovoltaic energy that comes in from DG, and that involves the increase of available energy. So we have an over-contracting year, close to 30%, and in this decade, it will end the decade close to 22%. So it is very difficult, even with temperatures, to have any effect on the price, unless it is something very momentaneous, but we don't believe it, on it. I don't know if I answered your question, Dimas. Thank you. He has another question for you. CEMIG believes that this volatility may impact its results and the trading in 2024? No. As I said, we are going to have an impact in 2024 trading, but that is because of the generalized price drop that we had.

Yes, there will be an impact. And the results for the trading for next year, but not because of volatility or spot price, this will not affect the results. Only the macro issues, something temporary and very much specific, will not affect the process here. Thank you, Dimas. Next question is for Marco Soligo. For Gasmig, Marco. And the question is from Guilherme Lima, from Santander: What can we expect from Gasmig's EBITDA, if the EBITDA of BRL 230 million is a recurring one? And what can we expect in terms of EBITDA for this company? Hello, Guilherme. Thank you very much for your question. Yes, you may consider that annualized EBITDA as a recurring one, and for next year, you may expect an organic growth. You can project a little bit of volume, and you will get to a very consistent number.

That's it, Carolina. Thank you. Only two questions more to go. The next one is for Tadeu. Please, Tadeu, the question is: Will CEMIG take part in the next transmission auction in December? Good afternoon, everyone. Thank you for being here with us. We will not be part of the auction in December. The lots that Ana is offering have no synergy with the lots that we have in operation today, therefore, will not be participating in that auction. Thank you, and our last question is for Leonardo. Leonardo, the question is from an investor from Liberty. The funds from the non-strategic sale can be turned into higher dividends or interest on equity for shareholders? Thank you for your question.

We believe our strategy is very much sustainable, and we want to invest in assets that will add value to our shareholders, especially in regulated markets, where we understand that return is very attractive for investors. At the same time, we want to maintain a dividends policy that is also attractive. We want to invest and create value, and also to have dividends among the best ones in the sector, and to maintain leverage at comfortable levels, which will allow the company to participate in a business opportunity in which it might have a buffer in its liquidity to take part in a possible business opportunity. Our leverage today is very low. It's close to 1x the EBITDA. Considering the investments that we have planned for next years, we'll get to a better and more efficient leverage.

We understand that it's close to 2.5 times our EBITDA. So this is what we plan. Of course, the corporate environment is very dynamic, but today you understand that maintaining the 50% payout, this is a very attractive dividend. Very few companies from the electric sector pay a yield close to 8%-9%, as CEMIG does today. And we understand that maintaining this policy and investing in low risk and profitable assets will be meeting the strategic objectives and create value to our shareholders. Basically, that's it, that we would like to execute. Another related action, if we couldn't be updating the amount of the dividends or shortening the payment terms, well, we have been going to the market frequently for fundings that may turn this investments program feasible.

That's why right now, this is going to be our policy. We understand that this is attractive, and we believe that the balance that we have today between attractive dividends, 50% of payout, which is in our bylaws, and that's what we pay. Plus, the investments program will be a winning strategy for our company, and will create value for our shareholders. Thank you very much, Leonardo. We have no other questions. I will turn the floor to the operator to conclude the call. If there are no further questions, we end the Q&A session. And now, I would like to turn the floor to the CFO and IR Officer, Leonardo George de Magalhães, for the final remarks from the company. Once again, thank you very much for being here with us in this earnings video conference call.

With another quarter bringing consistent results, this allows us to be very optimistic about the company's future. We are very much focused in our operating efficiency to improve our efficiency even more. We are higher than our regulatory benchmarks. We also want to invest in assets that will generate value for our shareholders. We will divest in the state, as has been mentioned, in the stakes where we have no control over the assets. So in Taesa, Aliança, or Belo Monte. So we are no longer interested in those, so we want to sell them. So we thank you very much for your participation and our IR division will be available to take any other questions or comments that you might have.

We do believe these are very good results, and we believe that for 2023, we will see very good results at the end and very attractive results for the company. Thank you all very much. Earnings video conference call for the Q3 of 2023 for CEMIG's ended. The IR department is available to take further questions that you might have. Thank you all very much for your participation, and have a nice afternoon.