Good morning, ladies and gentlemen. Welcome to the Auren Conference to disclose the results related to the fourth quarter 2022. This conference is being recorded and a replay may be accessed in the investor relations website for the company here, and the presentation is also made available for download. We inform that all the participants will be but watching this conference here during the presentation and then at the end, we'll start with the Q&A session when further instruction will be provided. Before we get it started, I would like to emphasize that the prospective statements here are based on the Auren management's beliefs and the current information that the company has at hand. Those statements may involve risks and uncertainties that are related to future events. Therefore, they depend on circumstances that may or may not occur.
Investors, analysts, and journalists should take into account that any event related to the macroeconomic environment, the industry or anything else may cause the results to be different than the ones that are expressed here in the prospective analysis. Here in this conference, we have Mr. Fabio Zanfelici, CEO, and Mr. Mario Bertancini , CFO and Investor Relations Officer. The investors relations team is also present with us. Now at this point, I will hand it over to Mr. Fabio, that is going to start the presentation. Mr. Fabio, you may proceed, sir. Good morning, ladies and gentlemen. It is my pleasure to have you here in this call for the fourth quarter 2022 for the Auren results. Let us move on and get to the agenda. Then we can answer the questions at the end, as it was said.
First highlights for the fourth quarter. Moving on to the next slide number four. From an operation standpoint, we have some highlights here for the last quarter. We had an increase of 8% in the hydropower plant generation for the company, especially on our own assets, which today is concentrated in Porto Primavera. We also increased wind power generation in 32% compared to 2022. Much because the normalization of our operation for Ventos do Araripe III or three, which is the collecting substation we have. That facility was completely reestablished. From a financial standpoint, our adjusted EBITDA, BRL 521 million on our fourth quarter, 35% adjusted EBITDA and cash conversion index 68%.
One of the highlights in this quarter is that we signed an agreement with the Federal Union to receive the compensation for the Três Irmãos Power Plant. That was under works for over 10 years. Another highlight here for this presentation is the approval of the proposal for dividend distribution equivalent to 1.5 BRL per share. In terms of growth and innovation, we are now fully operational with Ventos do Piauí II and III on time and on budget, we're happy to say. All good with this project. Considering our solar panel parks in the last quarter, we hired all the suppliers and all the vendors for the construction of Sol de Jaíba and Sol do Piauí, constructions which are going very fast, very well.
We are also advancing our strategy to create an ecosystem for strategic partners to potentiate our ability to trade. That has gotten some further enhancements from outside. We acquired a share in the fourth quarter related to the distributed market. We're going to talk a little bit more about this acquisition. Moving forward to the energy market data, slide number six. Good news on that front. The water crisis from 2021 is now in the past. In 2021, we had a bit of an issue. In the prior period, again, there was a recession for the natural flow in energy or the Natural Affluent Energy. From December 20 and early 2021, it was 20 gigawatts below the historical average. That scenario was completely reverted now in 2022.
We are very much in line with the MLT, just 0.6 gigawatts below the historical average. That reflects on the recovery of our storage, as we can see on the graph here on the right. We concluded December 2022 with a storage level of 58%, the highest levels that we've seen in the past 11 years. As you can see here on the graph, this is the best, the best level of storage was in 2011 when we reached 89%. In this year, 2022, our top storage was 58%, which we achieved in May.
We go back to a very favorable hydrology condition, which of course cause the market prices to react, and we had a reduction on our PLD, which stays at the minimum levels currently, and the expectation is for it to stay low throughout the year in 2023. Very well. From an operational performance perspective, let's get into our hydropower generation, which has a positive outlook in the fourth quarter of 2022. Now, looking at the aspects of the system, we closed at a GSF of 77% compared to the 66% we saw on the fourth quarter of 2021, which was still feeling the effects of the water crisis. In 2022, our GSF closed at 85% compared to 73% on 2021. We had an improvement on the hydrological scenario, which also caused the cost of energy and the purchase energy price to drop in this last quarter of 2022 compared to 2021. On the graph below, we have a development here. This is the generation of the hydropower plant in Porto Primavera. This is a plant on theParaná Basin
It's a better difference than the average generation of the system. In the fourth quarter of 2021, you have 86%, and now in the fourth quarter, 2022, we generated 93% of our Physical Guarantee. The same can be observed for the previous year. In 2021, we generated 85%. Now in the last quarter, 2022, we hit 87% compared to the previous 77% that we observed in the previous quarter. Again, this is a positive outcome for the hydropower generation. Now let's get into wind power generation. Wind generation has had a very positive performance throughout the year. In the last fourth quarter, much because of some events of high rainfall rates, we had a fourth quarter with a generation below the expected.
As we can observe from the numbers on the graph, throughout 2022, the wind, Ventos do Piauí has generated 12% above P90, only 3% below P50. Let's go straight to Ventos do Araripe, which is another project that was already operational in 22. It is 2% below P90 and 8% below P50. Ventos do Araripe III has suffered a little bit in its sub-collecting station, which has had an impact on year 2022 as a whole. Our two projects that are now operational throughout 2022, Ventos do Piauí II and III. As you well know, When you go operational, the availability is a little higher than the usual park productivity due to the adjustments.
Even considering all the adjustments in this period versus the seasonality of P90 and P50, in 2022, when Piauí Three was in operation, those two parks actually in conjunction were above P90 and were, or 1% below P90 and 6% below P50. The impact was on the fourth quarter when the projects, both projects actually were almost fully operational in their full capacity. Let's get into the performance of each of these parks. We'll go a little more on the detail regarding each of the park's performance, only considering both assets that were fully operational in 2022, which is Ventos do Araripe III and Ventos do Piauí One. This is the material that we use for disclosure of the results.
On the 100 basis, we compare to the P50 generation and how we achieved the current generation, allocating either positive or negative impacts for each one of those three variables here. The first variable is the wind resource. The second variable is the performance of the air generator and the availability of it. The third variable is the performance of the electric system, which is related to the connection point to the grid. We can see that from a Piauí One perspective, the wind resource was most prominent, and it reduced generation in 4.5%. However, with regards to what the company is managing, which is the air generator and the electric system, that's actually better than the project parameters. We concluded at 96.6% generation.
In Ventos do Araripe III, very similar to the impact on the wind resource, we had an improvement of 0.6% on the air generator performance, which explains the underperformance compared to the winds in Piauí One in the electric system. That is, as we had said before, there's still an impact due to the unavailability of the transformer in early 2022. Please slide, seguinte. In terms of the hiring profile, as we have seen in the previous statements, our hiring profile is very positive considering the current scenario. We are almost fully hired from 23 all the way to 25, up to 26. Our hiring level is 91%, which puts the company in a reasonable position.
We are well protected to low price scenarios, which is the scenario that we are seeing right now, and it should stay like that for a while. At a long term, the hiring bids of the company's portfolio is at around 60%. That is in the following period, 28 until 32. In terms of the financial performance, I'm going to hand it over to Mario Bertoncini. Mario has some good news for this release, which is profits and dividends. Go ahead, Mario. Thank you, Fabio. Let's go to page 13, financial performance. We can see the EBITDA and our revenue here. The revenue on the fourth quarter of 2022 had a bit of a decrease, but basically this is explained by the trading volume.
With regards to the hydropower plant generation, the revenue in the fourth quarter 2022 increased 12% compared to the previous year quarter, and the wind power generation also increased 18%. The trading, the expected volume is lower, not necessarily in the margins, but it's a lower volume due to the lower megawatt volume. Above all else, the drop in prices, which obviously affects the trading revenue. With regards to EBITDA, just like Fabio mentioned before, we closed our EBITDA at 521 million BRL the fourth quarter with a margin of 35% and a very important increase compared to the fourth quarter of the previous year. This is due to the delta of hydropower generation as well.
The EBITDA delta of the hydropower generation between those two quarters has had a positive development, BRL 146 million, and in wind power, BRL 92 million. Basically, we had this improvement in the results due to a better performance on the equalization or the management of our energy portfolio. It is worth pointing out that throughout the fourth quarter of 2022, we reduced BRL 492 million in our energy purchase price, which is because of the improvement of the GSF and the drop in prices, which in this case was helpful to us. We also received some higher dividends from the shares and the states that we have in hydropower operations throughout the year 2022.
We received cash dividends to the tune of BRL 235 million, of which BRL 128 million are concentrated on the fourth quarter. The last quarter of the year. This is not the accounting dividend. I mean, this is the dividend that we actually received in cash, is what I'm saying. We are correctly including it on our adjusted EBITDA. We got, we became fully operational with Ventos do Piauí II and III and VDP II and III in this ramp up of the fourth quarter, which contributed with BRL 18 million for the EBITDA of our fourth quarter. Besides that, we also received an indemnity from Ventos do Araripe III in this last quarter to the tune of BRL 93 million. Moving on to page 14.
Over here we have some considerations about the current capital structure at Auren. We concluded the year at a leverage of 1.4x in net debt, EBITDA. Our gross debt profile today is basically in its majority BNDES Development Bank at 54%, and the other 46% of our debt is debentures and market instruments. Now currently, from an indexation perspective for this gross debt, two-thirds or 65% is related to the IPCA and another 25% in TJLP and 10% on CDI. The cash flow position concluded in the year is BRL 3.4 billion but you can see on the graph on the right side, we have a elongated debt with no pressure for the short or long term. 7.2 years is the average term for that debt.
As it has been recurrent in other quarters and in other years, our free cash flow and our index of cash conversion is very substantial. The numbers that we have here for the conversion and cash flow numbers are related to the whole year. It's the closed year, 12 months of 2022. 68% is our adjusted EBITDA in the year. Basically, that became the operating cash flow. This operating cash flow that we see here basically is the cash flow before three events. Before the payment of the amount of the debt, because the interest rate are paid before. Right, it's already deducted from the FCO, so before paying the amount of the debt and the CapEx of expansion and the dividends paid as well. Moving forward on page 15, this is our liability contentious.
I'm going to start on the bottom side of the page, which is the development of this trimester here. Contingent liabilities. Considering the provable and the possible contingency, we reduce BRL 26 million in different proceedings. Now in this fourth quarter, because of the deflation of the IGPM index, we now have a monetary update, which is reduced, is only BRL 6 million positively in the quarter. Therefore, we conclude the year at a total amount of provision, which is the pink side here on the bar to the tune of BRL 1.18 billion. The possible one is at BRL 1.6 billion. On the top side of the page, this graph shows the development of this contingent liabilities, a great deal of which you have kept track on the last few years.
It's the contingent liability since December 2018. Even though the contingent liabilities is the consolidated amount at Auren, we know that it is comprised in its majority by the contingency that we took on when we privatized. When we took on that company in December 2018, the sum of the provable contingency plus the potential contingency was BRL 4.2 billion, and it is broken down in this pie chart here on the top left. After four years, in December 2022, the probable one and the possible one put together are BRL 2.8 billion. These are nominal numbers. It's a nominal development. From then on, I should say that there's been a very sharp decrease between negotiations and legal proceedings.
There was a sharp decrease of BRL 2.3 billion and a monetary correction and an adjustment to the tune of BRL 1.9 billion, which when you offset it, gives you the BRL 2.8 billion you see here. It's worth mentioning that in order to reduce these BRL 3.3 billion throughout those four years, we disbursed between agreements and settlements, BRL 715 million in four years, therefore, a little bit below 20% of the total amount. As it was said before, we did not communicate it, the remote one, but if we had included the remote development in this balance, of four years, we spent 7% of the total amount between probable, potential, and remote.
Today, our contingent profile is much more scattered. I should say that today, the 10 main legal proceedings on the contingent one are a good deal of the probable plus potential balance, and we don't have any remaining legal proceeding that will achieve 10% of the total. All those ones are more scattered. I'll hand it over to Fabio again, so he can move forward and conclude this side of the presentation. Thank you, Mario. Getting into our growth strategy for a second, besides, of course, the highlights of Ventus Two and Three, which is now fully operational, and besides our solar projects in Piauí, the highlight of the quarter is the acquisition of a stake at Flora Energia.
Just to recap a little bit of that strategy to create the ecosystem on the trading side, at the end of 2021, we did an acquisition. We acquired Way2, a stake at Way2. Way2 is a company that is very robust on Telemeasurement. We saw an advantage to be present in this market, which is a growing market. There are some fantastic opportunities in the future. The second stake that we acquired on 2022 was Aquarela.
That acquisition is very focused on AI and data analytics and to optimize our portfolio, digitalization and automation of the entire trading process, and also to create some capacity to be in a better position to work in the free market, which is ever more scattered and where the customers have a necessity for new products and a lot more flexibility in the consumption of energy, as well as other products that are coming down the pike. Now that brings us to Flora. This is the distributed generation, so we are investing in it, and we are investing in this marketplace for distributed generation, which connects the captive consumers from the distributors to actual generators. Also, with this initiative, we are increasing our capillarity, we are increasing our reach in terms of our trading operations. Very well. Next slide.
As it is our custom, we talk about the environments as well as governance and social aspects. Here we have some governance initiatives. Today we are going to get a little bit in our environmental initiatives. We participate in preservation initiatives in many regions around Brazil. One of the highlights is in our wind park areas. We have the Reserva de Exu with 240 hectares of Caatinga, which is a specific biome. We also have our hydropower plants in the region of Mato Grosso do Sul, over 3,800 hectares of Atlantic Forest and Cerrado. The third project that Auren was a part of, we were actually involved in the foundation of it, is the largest Atlantic Forest reservation in Brazil, which is close to São Paulo.
The reservation is called Legado das Águas , that has 31,000 hectares of Atlantic Forest that is completely preserved. We are also partners on creating this project and maintaining this project. That's a little bit of what we do from an environmental perspective, as well as all the obligations that we have in our generation activities. This is something that we are adding to our portfolio as far as preservation for these very important areas in those three biomes, the Cerrado, the Atlantic Forest, and Caatinga. That takes us to our final remarks. Some of the highlights for this quarter are here. We're still on top of our management. We're going through a very intense process in our energy balance. We are at a comfortable situation considering the current price outlook.
The energy is almost sold for the next three years, which reduces the volatility of our results. You have to consider that the scenario here for hydrology is very favorable at the moment. The second point, which makes us very proud as well, is that we concluded the project of Ventos do Piauí II and III, as we said, on time and on budget, in the throes of the pandemic. Fortunately, we were able to accomplish the objective, and we built those two parks, which are already operational. Even considering the ramp-up period we just went through, the generation is above P90. We started the construction of Sol de Jaíba and Sol do Piauí.
Like we said, all the contracts have been signed for the last, in the last quarter, so we contracted all the services and all the equipment necessary to build those two projects, and they are going to be operational this year, and the ramp-up is going to happen throughout 2024. One highlight for the quarter, I think it's a historical moment for the company, is that we had a positive conclusion for our legal proceeding in terms of the, in terms of the amount we were to receive from the Três Irmãos plant. This is a legal proceeding that spanned for over a decade, and we were successful, and we were able to reach a good agreement later last year, and we were going to receive the indemnity in 84 installments throughout seven years.
As usual, we have a balance between the capital allocation and the payment of dividends. We have this dividend amount that we just announced. We still have room for growth. The company continues in an upward trajectory, very much engaged, and we are trying to expand our generation capability and our trading capability, and again, very much in line with our capital discipline. We have a lot of focus at this moment to give a good return to our shareholders. Okay. Very well. These are some of the highlights. That's the information that we wanted to share with you, ladies and gentlemen, and we are here at your service for all your questions. You may ask whatever questions you have. At this point, we're going to start the Q&A session for our investors and analysts.
Should you wish to ask a question, please press the reaction button and raise hand. If your question is answered, you may exit the queue by clicking on or by deleting the raise the hand sign. Carolina from Credit Suisse is the first one. Good morning, everyone. Thank you. Two questions. The first is about the hiring environment. In this quarter, your energy balance for the period of 23 and 25, you had a bit of an increase on your traded energy percentage. We also noticed here that there has been a slight drop on the energy prices. I would like you to please comment on it. What about the PPA closing? How are things on that front? The second question is about the capital allocation that you just mentioned.
In terms of the receivables from Três Irmãos, I think it's ever more clear that you have room for growth and you have room for paying dividends. What would be your focus at this moment, given that the generation environment still seems a little challenging? I don't know if all the M&A deals are this interesting at this point. Are you considering perhaps a stake on the transmission auction? Or maybe your focus is to develop your renewables pipeline? Thank you. Thank you, Carol, for your question. I'll start answering your last questions and then my colleagues can comment on it. Our strategy continues the same as far as growth.
The M&A environment is really challenging indeed, but in our opinion, this environment has changed, and it has done so in a significant way in the last few months, considering the scenario that we are looking at. We are still focused on growth, we're focused on inorganic growth with acquiring assets, and we are also focused on organic growth. At this point, we are at a building stage, so we are considering some different opportunities on new greenfield projects. Today, the focus of our company evidently is on this period, on this growth and construction period. We don't have any decisions made with regards to the transmission auction. Our opinion about the auction is that it's a different one compared to the previous ones, just because of the volume of the investment.
I think it was BRL 25 billion in this, in this one. Both ones I think are estimated to be at BRL 50 billion. It's a very substantial volume. In terms of the unitary investment value, it's also very substantial and it's very appealing to us, much more so than the previous auctions. We have not made any decision yet with regards to participating on the next transmission auction. I'll hand it over to Raul so he can talk a little bit about the hiring environment. Hello, Carol. Hello, everyone. Thank you for your question, by the way. In the trading environment, from a structural standpoint, I think we are in a very good position. This decision to leave our portfolio at a zero from a structural perspective comes from 2021 and early 2022.
With regards to this more structural side, we are very comfortable to work on our balance in a way as to create value. What is happening now in the hiring environment, given the low prices that you can see, what has happened is that there is a movement from end consumers closing their energy, taking advantage of the low price, whether it's medium-sized or small customers. Also, we are seeing an acceleration in the market. We are providing energy to these customers, we are extending some contracts, and we are also always closing some positions to be able to capture a margin. Maybe not that much of a significant margin, but it helps the company and it helps us on the volume of customers as well.
The strategy now and the environment now is good for the consumer. We are very comfortable working and selling this energy and repurchasing it to make sure our balance stays good for the next three years or so. All right, folks. Thank you. Nossa próxima pergunta vem do. The next question is from Mr. Henrique Peretti from JP Morgan. Henrique, you may ask your question. Hello, good morning, everyone. Well, Mario and Fabio, I have a question about the dividends in Três Irmãos. I want to know, in order for you to pay those BRL 1.5 billion, would it be necessary for you to secure the receivables of Três Irmãos? What would be the timing for that operation, the timeline, and what is the cost that you estimate for it? Thank you. Henrique, thank you for your question.
Within our schedule, it will make sense throughout the year to anticipate some of the Três Irmãos receivables. Yes. That is a real possibility for us. We include that, and we factor that in in our calculations and our CapEx investment estimations, and we also consider it when it comes to the second part of the dividend. From a cost perspective, I'm not going to mention it at this point, Henrique. We are analyzing some alternatives. We are talking to a few agents. I apologize, I'm not going to comment on the cost because we don't wanna, we don't wanna misalign the expectations, but we have been speaking to some agents about it. You don't have a timeline to complete the operation, maybe the second quarter, third quarter, this is still pending, right?
I think this operation is going to be done by the middle of the year. Okay. Thank you. Nossa próxima pergunta vem de Julia. The next question is from Julia Zaniolo from Santander. Julia, you may ask your question. Good morning, everyone. Well, on our side, our question is more related to cost. There were some non-recurrent effects in the quarter, and we were struggling to understand what is the recurrent manageable cost from the company. Regarding the transmission cost and energy purchase, what do you think is the situation for the next few years with Auren? Julia, thank you for your question. Indeed, when you analyze the fourth quarter alone and when you look at the holding segmented aspect, and again, I just remind you that at the holding, we segment our corporate expenses, but we also include the project expenses in there.
When you look at the recurrent from the fourth quarter, there was an increase to the tune of 13% compared to the fourth quarter of 2021, where a great deal of this 13% is due to the inflation, is due to the monetary correction by the inflation. I think the levels of the fourth quarter from that perspective, from the 13%, I think that's a good basis for the expenses as a whole. Considering those expenses, that is related to the development of projects because they have their own dynamics. Yes, it's clear. Thank you. Next question from Daniel Travitzky from Safra. Daniel, you may ask your question. Good morning, everyone.
I would like you to please comment on the CapEx level for these projects that you are developing, just so we have an idea in terms of how the situation looks and how the cost curve looks and how we were positioned in this front. Thank you. Hello, Daniel. With regards to CapEx for the Sol do Jaíba project and the hybrid project. The CapEx, maybe you recall that in November last year, when we first announced that these projects were approved, we gave an indication to the market about what the CapEx should be. At that point, we announced BRL 2.25 billion for the two projects put together. From then on, we already did the hiring process. We contracted the majority of those projects, whether it's solar panels, whether it's services, whether it's different equipment and machinery necessary.
The contracting basically is completely in line with this CapEx, BRL 2.2 odd billion. Yeah, it's very much in line with this CapEx. If you compare that, Jaíba plus hybrid, those CapEx levels are very competitive. In Jaíba, we are basically talking about a CapEx of BRL 3.2 billion per megawatt. You know, that puts us in the first quartile from a, you know, solar project perspective in Brazil. Excellent. If I may follow it up. What is your vision with regards to... I mean, there are so many projects that are being developed, correct? The perspective is that we're going to have more and more projects being developed down the road. I wanna know what your take is in maybe reviewing some of the contracts that you close in CapEx.
Is there a possibility of you reviewing those contracts? Let me just add on to that. Daniel, reviewing the contracts that we already have, I think there's a low probability of that happening. That has never happened, you know, in terms of contracts that are already signed and underway. Companies are already in construction. There was an expectation, actually. I'll use a word that is a little ill-illustrative. You know, there was an outpour of projects coming into the market due to the expansion of this offering and considering what was happening with the energy authority. Considering the market conditions, a lot of those projects we think are going to struggle to advance, and especially because of the connection issue as well. A lot of them struggle to connect to the grid.
We don't think that there will be a that high competitive scenario for the projects that we work in the solar segment. We don't see as competitive a scenario. In the past, we had a panel that had a lot of discussions due to the pandemic and situations. From our point of view, those problems are solved. We don't see any other restriction with regards to receivables or any other cost-related matter. Just like Mario said, based on what we contracted, this is a good sign with regards to the industry stability. We are expecting to see a considerable CapEx level, and when we went to the market, we contracted according to it. Business as usual, really. We don't see any abnormality in the supply chain for those projects that we are developing. Excellent. Thank you.
I remind you that in order to ask questions, all you have to do is raise your hand. Please wait while we collect the questions. Again, in order to ask a question, please click on Raise Your Hand. The question and answer session is hereby concluded. We would like to hand it over to Mr. Fabio so he can make his final remarks. Thank you so much for attending this disclosure. To us, this is very emblematic. We are very happy to be able to disclose this final result for the solution of our active contingency related to the Três Irmãos situation, and the payment of a dividend of 1.5 BRL per share. This is a premium for the investors that have stayed with the company, that believed in our company's capabilities to solve problems, and we are very much happy about this situation.
The problem was maybe one of the most daunting risks that we had, and the problem is nearly solved completely and totally mitigated. Again, thank you so much. Have a great weekend, and have a good carnival. Thank you. The Auren conference is hereby concluded. Thank you so much for participating, and have a great day ahead.