To ask a question, please press star one. Our first question comes from André Sampaio with Santander.
Good morning, everyone. I have a question in relation to capital allocation strategy that you adopted. We have seen that the market is concerned about the investment plan of this cash available today. I would like to know if you have any sort of deadline when you intend to use this cash, and if not, according to this deadline, if you would start a more aggressive dividend policy.
André, I'm going to start answering your question, and then Mario will complement. We do not have a deadline for this strategy, as you know.
As we have mentioned, we have this stringent discipline in capital allocation, and we are always on the lookout for assets that can bring good return to the company, and that takes some time. We did not have any plans to have those opportunities in the first months of the company. This is a construction that the company has been implementing since the first day we were in the market and to look for those opportunities. Mario's teams, the team of new businesses, have been working a lot, evaluating and observing all the opportunities, and also the opportunities which are not so obvious in the market. We are making effort to find those opportunities so that we can meet those expectations in relation to our growth strategy.
Reinforcing what I said, we do not have a deadline. This is something we are going to be discussing in the next few months, and any changes in the strategies going to be communicated to the market timely. I don't know if Mario would like to add anything.
Yeah, this is it. The company is prepared for this step of potential growth. We have a cash position which is very robust nowadays, our net debts are very extended. We have current operations that can bring robust cash generation, so it's important to be ready. The external and the internal scenarios are very challenging from the fiscal and economic viewpoint, so this turbulence may even favor those players who are ready for a capital allocation and can offer better opportunities. It's important to have discipline, criteria, and to be ready.
We're not going to make hasty decisions that might destroy value. We can ensure that this is not gonna happen.
Okay, perfect. Thank you for the answer.
Our next question comes from Rafael Nagano with Credit Suisse.
Good morning, everyone. Along the lines of André's question, I would like to know if you can see any relevant aspect in relation to returns of the assets that are available in the market now. If we look at solar and wind opportunities, do you see any difference in those segments or opportunities? I would also like to know the development of the pipeline in relation to the sale of those contracts. How do you see the scenario of prices for those contracts, and what are the demands for sales of contracts? Okay, thank you.
Rafael, in relation to the assets out there in the market, we have observed that the competition is far more fierce in relation to the assets that are performing, and these have impact on the return of the negotiations. We have to look at the opportunities exactly where we have complementarity and where we can deliver value. We have to make the correct assessment of the asset. We believe that there are opportunities in the market where synergy can also add to those acquisitions. As I mentioned in the previous answer, we have been looking for those opportunities, the M&A team as well as the company as a whole. Yes, as you asked about preference. I can say that we are a player of renewables, that include wind and solar energies.
What we're looking for is a balance of those sources, hydro, wind, and solar. We may start making acquisitions in the hydroelectric area because we're always looking for opportunities of diversification. The search for this diversification, those synergies, is something always present at the company. This will help us decide where to invest. In terms of price, we have observed, as you have seen, that the CapEx has been allocated in solar and wind. In the long term prices, we do not see any direct increase. There are trends that we started to observe of a cost increase in the long curve. That this CapEx increase is likely to be consistent, so we continue working on the strategy of purchasing energy.
Some clients are looking for longer term contracts, and some of them look for shorter term contracts. That will depend on how much the clients are dependent on energy, and this will depend on the area of operation of each consumer. We are very active in the trading company, looking for opportunities in different ways of selling our energy. That's why we always say that it's necessary to have a very active trading company so that we can look at all opportunities, long-term, short-term contracts, and also self-production, which is also an activity that we have been developing for a long time. We're pioneers in developing this sort of activity. The opportunity that we have, that we see, is to seek types of trade, trading of energy as demanded by our customers in the next years as well.
Our next question comes from Henrique Peretti with JP Morgan.
Hello. Good morning, everyone. Thank you very much for the opportunity. I read in the press release that you no longer report the remote contingencies or litigation. I would like to know why you changed this criterion. Do you have a more updated guidance in relation to the level of disbursement you plan, or if you have any updates of anything relevant? Thank you.
Hello, Henrique. Thank you very much for your question. This is Mario speaking. Yes, in fact, the disclosure in the explanatory notes in the remote litigations is a practice that came from CESP before it was privatized for reasons that was quite understandable at the time. It was a litigation that evolved at aggressive rates at the time, and the state company had its reason to limit to be limited in its capacity to solve the litigation. It made a lot of sense to see the market following the case like this. After three years, three years after the privatization, we maintained the criteria of disclosure so that the market could monitor together with us the resolution strategy. Now after establishing Auren, we thought it was a moment to go back to normalcy. In other words, to have the quarterly disclosure of the possible and probable litigations and stop reporting the remote litigation. Some considerations I would like to mention, all the effort, all the focus and the priority of the company in solving the litigation is still the same.
The same people coming from CESP that were managing the liabilities with the same focus and with the same priorities. Point two, I would like to say that the remote litigation, even though it is not closed, continues to have a downward or reducing result. Henrique, I don't think we should anticipate any movement, but we have an expectation that we are going to continue evolving positively in terms of risk reduction. All the updates or all the judgments or decisions are going to be reported to the market on a quarterly basis.
Thank you, Mario.
Our next question comes from Daniel Travassoso with Banco Safra.
Hello, good morning. Thank you for the opportunity. I would like to comment on the trading strategy that you adopted. You have a very large trading company, so I would like to understand your strategy for the breakthrough of the market, if you want to reach the retail market, if you have any plan that has already been developed for that. I would also like to know if you have any plan to diversify to other areas such as transmission, for example.
Daniel, in relation to energy trading, we have been focused on the market and we are looking at the expansion of the free market according to the applicable law. The market in Brazil, just as in other countries, is having some breakthroughs, and there are very high numbers of consumers to be served in the free market. How can we meet the requirements of this new market?
We are going to invest in the revitalization of those processes, and this is something that we have been doing for some time. The way we serve customers is different from how we serve large clients. We are going to look at the retail market, and for that purpose, we have to have capillarity and also automated and agile processes so that we can meet their needs. In terms of digitalization, we adopted this as something important for our strategy. I mentioned capillarity, but something else is to increase the capillarity so that we can meet the needs of more customers. We are a very large trading company, and we have to change our attitude in terms of how broad we can be when meeting the needs of our clients.
Another point that we have been invested in is data analytics, data science, so that we can start to understand and use those tools, both as for energy trading using algorithms, and we have already been experimenting on some algorithms, so that we can find a position automatically. We use all those tools so that we can understand the market because the customers are going to demand different services and products, and they will wish us to be served with a lot of flexibility and simplicity, different from how we have been operating so far. We have to be very close to the distributing company that in order to meet the needs of the clients.
This is something that we have been making, developing products and services so that we can be prepared to meet the demand and the needs of the new clients that are going to be part of this market. As I mentioned in the beginning of my answer, we are always on the lookout for modernization, and we're making investments in this kind of a strategy, which needs to be aligned to the modernization scenario and how the market's going to play out. We know that those investments are large, and we have to be very well aligned so that the investments can be made correctly at the right time, so that we will not make any investments that will become obsolete in the future.
All of this is part of our strategy in order to meet this new market, and we are quite confident that we are prepared for that, because this is part of our growth strategy.
Okay. If you could talk about other business segments.
Oh, yes. Yes, of course. You're asking about transmission.
Yeah, that's right. Yes, please.
Okay. As for transmission, we also evaluate transmission opportunities, and we have made this very clear. We look at transmission as an activity that can be a complement to our portfolio. The challenge is to ensure return that's compatible to this portfolio. Transmission has other attributes that reduce the volatility of return of the company, so these are different ways of looking at the transmission segment. This is quite challenging, but it will make.
It will make sense to us, because we thought about investing in transmission using existing assets. We understand that if we invest in transmission platforms, greenfield, and to compete with the other players which are already established in the market, we understand that this is not the path that we're gonna start in transmission. It's not gonna be greenfields. We look for a minimum platform, and we are also going to be observing this, how this new activity can add to the portfolio and also can be a synergy to our portfolio according to the rules that we have established here when we add value to the shareholders.
Okay. Thank you. Perfect.
If there are no further questions, we would like to turn the call back to Mr. Fábio Zanfelice for his final remarks.
You may proceed, sir.
Okay. Thank you. I would like to thank everyone for attending this earnings results call. The results of the first quarter is a little bit different from what we had seen, but because as we said, Auren started to operate as such in the market as of March twenty-eighth. What we have now is a combination of the assets that underwent a process of two phases of consolidation. The first phase was when VTRM consolidated onto CESP in February, and then there was a consolidation of the shareholders' base in Auren. We have all this process of a corporate reorganization, and it does not incorporate all the synergy that we are going to add in the next few months in 2022 as of the combined operations of the companies under the name of Auren now.
I would like to thank you for attending this conference, and we will see you in a few months' time so that we can discuss the results of the second quarter 2022. Thank you, everyone.