Sorry for the delay. We had some technical problems. But welcome to the and I'll be conducting this call. Today with us, we have Gustavo Stella, CEO of CPFL Energia Mr. Pan, Vice President and Investor Relations Officer and other executives.
Due to the pandemic, all the executives are connected from their home. So we apologize in case we have any failures. We will be working to reestablish the reconnection. The presentation was made in Portuguese with interpretation to English. For that, you need to press interpretation button at the bottom of the page.
And also, the audio will be available in our RI site as usual. I would also like to stress that after the presentation, we'll start the Q and A session. To send your question, you can use the Q and A button at the bottom of the platform. You may ask questions 2 ways. You can either write on the Q and A and then I'll read the question for you or you can request the question and we'll open the audio so that you can do it yourselves.
It's important to identify yourselves with name and institution. Good morning, all. Thank you for attending this call. I would like also to apologize for the delay. We had some technical problems.
I hope we can carry on without any further problems. So I will go on to Slide 4, where we have our main highlights of the Q2 'twenty. This is the first quarter with this 100 percent of the impact of the pandemics in our results. So based on that, we had a reduction of 11.1 percent in the load in the concession area. I'll talk further about that, but we see that this reduction basically comes commercial and industrial classes.
Our EBITDA reached 1,208,000,000, a reduction of 19.7 percent compared to 20 19. And this justly has the impacts of the pandemics, but also the deflation of the IPC in the 2nd quarter of -0.72 percent compared to an inflation of 1.496 in 20 1,000,000 in loss. And the net income is of 462,000,000 represent a reduction of 19.4 percent, and we'll see the positive impact in the financial expenses due to the reduction of our interest rates. So our leverage is 29 times, 2.29 times regarding the results of 2019 of 2.21. We had a program of that's prepayment not only for CPFL Renovitis, but in the group at large using the loan with the straight grid, our holding for the prepayment of debt.
And in this, we had an important reduction in the cost of financing. Investments we reached BRL648 1,000,000 in investments, a growth of 24.3 percent compared to 2019. The company carries on with its investment plan, the original one approved in our budget of last year, and we carry on with our investments without impacts of the pandemics for 2020. We also declared dividends in the amount of BRL2.075 million, BRL1.80 per share. This dividend should be paid by the end of this year.
We also had the tariff reset of RGE. Historically, it should be in June 'twenty, but this year, it was enforced as of 1st July as well as the reset Paulista, which was not in April, but in July also. So all the impacts of these tariff resets were off offsetting our results and in our cash flow. We had the funding of the COVID account according to new Resolution 885 and the total amount of BRL 1,000,000 BRL382, and we received BRL 1,200,000 so far. We also made an important step, which was the delisting of the CPF Air Novavis.
The auction was held on the 10th June and was approved on the 7th July. We also entered the MSI portfolio, which brings an evolution, which is very important in liquidity for our shares. And it already reflected in the increase of liquidity of our shares in the market. We also celebrated on the 12th June our re IPO, which is an important milestone for our company and also one very important action to fight COVID-nineteen. The company made donations of BRL6 1,000,000, of which BRL5 1,000,000 went to 20 hospitals in our concession area, public hospitals.
And 1 €1,000,000 we adhere to the program of BNDES saving lives also to support public Brazilian hospitals. Going now on to the next slide, we will be talking about the energy sales. So we can see a drop of load in the concession area of 11.1%, of which 14% free clients and 9.6% in the captive market. As to sales, there was a drop of 10.1%, 11.9% in the free market and 9.1% in the captive market. When we look at it by class, as I said, industrial class has 17.7% reduction in the commercial class of 19.1%.
So these two classes suffered the most in this pandemic period with the reduction of consumption. The residential class was stable compared to 2019. We can see on the chart on the left bottom chart, there was compensated by what we call macroeconomy for an impact due to the impact of the social business and people want their home, they consume more energy. It's important to stress on the left hand side the sectors in our industry of activities. The vehicles was the one that suffered the most with 41.8%.
Its chain also suffers metal industry with 28.4% and rubber and plastic 18.6%, the 2 main classes of the market of CPFL Group. Food went down by 4.3 and the chemicals had a small increase of 0.1%. When we compare these numbers with the industrial Brazilian industry, we see that the 4 main sectors of the CPFL and EGR market had performance above the drop in the industrial production. Going on to the next slide, we see the reflects of delinquency and energy losses. We see an increase in delinquency a 23.3% increase compared to 2019, also due to the impact of the pandemic.
And maybe the main impact is the Resolution 878, where we had the ban of disconnections as of March 21. So our main instrument to control that fault is disconnection. And since March 24, we weren't able to do so for low voltage customers, which reflects in our default rates. The expectation to return to disconnections is in August, and we expect to recover at least partially this increase in default in this second quarter. When we look at losses, we see almost a stability compared to 2019, 9.1% against 9.09% with no impacts in the market for the time being.
Going on to Slide 7. We have some measures that the company has taken to make easier to collect and the payment of bills by our customers. So we have a series of new channels for payment that we launched during this period, and we see some of them with very positive results. So we have here payments with credit cards with 57,000 payments from April to July. The delivery with BRL28 1,000,000 collected also in this period.
Also, Also, credit card installment payments with 30,000 installment payments, payments via the Corona Voucher application with 52,000 payments directly to our account with BRL8.2 million collected. The collection through our stores that were closed and also our call center with 116 1,000,000 contacts and BRL 10,000,000 negotiated. And PayPay payment, digital electronic tool only in July, it had 43,000 transactions with almost BRL6 1,000,000 collected. This is the group of tools that we used and developed during this period to increase our collection. We had a positive impact of BRL 85,000,000 collected by these tools, most of which are tools that will carry on being used even after the post pandemic period.
Going on to Slide 8. We have the generation performance. We had a drop in the PLD of 42.5%. This is very low levels due to the reduction of market in this period and due to the hydrology that was positive, we had levels of reservoirs very close to the historic averages, which gives us some comfort for next month. GSFL was stable.
We closed it at 89 percent against 91% in 2019. The flow of our hydrological plants were negative because we had very low flows in the South, a drop of almost 70% compared to 2019. The small hydro plants has similar situation with 24% less compared to 2019. In the wind farms generation, we had generation little lower than in 2019. The performance on top of the wind, which was worse than in 2019, which brought a smaller generation.
On the other hand, we have availability that's higher than in 2019. This is a process of evolution, especially of the wind farms of Suzlos, which has been improving according to its availability. So it brought on average an increase of 3.4%. Going on to the next slide. I give the floor now to Mr.
Pan so that he can give us the details of the financial results. Good morning, all. Going on to Slide 4. ABDA in this quarter was EUR 1 point 2,000,000,000, a reduction of 19.7%. Then the distribution segment certainly was the most affected by the pandemic, having a drop of 28 point 7%.
The main impact was in the concession financial asset, which represent a reduction of 170,000,000 due to the deflation recorded in the period. In the Q2 of 2019, IPPCA was 1 point 46%. And in the Q2 of 2020, was minus 0.62%. The drop in the energy load also affected the result in BRL72,000,000 regardless of the positive effect of the tariff resets in the last 12 months. PDD also increased by 15,000,000 impacted by higher death fold observed since the disconnections of energies were suspended.
PMSO on its hand showed a gain of €29,000,000 in ABDA, whilst other items had a negative impact of BRL 24,000,000. In the trading segment, services and others, we had an increase of 20% due mainly to the better performance of the CPFL services operation. On the next slide, we have generation that had an add up 1.9% smaller due to the lower volume of energy generation, which impacted in BRL 16,000,000. The adjustment of prices of contracts on its sand helped with EUR 10,000,000. And CPFL Renovaris EBITDA dropped 19.2%.
The main effect is the seasonality of the small hydro France, which generated a reduction of BRL 40,000,000, returning part of the gains obtained in the Q1 of 20 20. The lower wind generation resulted in a loss of 23,000,000. But on the other hand, the pass through of inflation to the contracts gave us gains of BRL 24,000,000. The other effects had a total of minus €9,000,000 On the next slide, we show the performance of net income, which was BRL462 1,000,000 in the period, a reduction of 19.4% compared to the Q2 of 2019. In addition to the variation of 296,000,000 in EBITDA, we had in the financial 139,000,000.
Depreciation varied 24,000,000 and then the impacts were reduced by 70,000,000. If the higher effect on the financial result is the drop of CDI in the lower cost of the debt that gave us a gain of EUR 150,000,000. The other items together had worsened 11,000,000. On the next slide, we show the year to date results until June 2020. The start of the year had a result that very positive in such a way that EBITDA accumulated this recorded a drop of only 4.3% even with the impact of the pandemic in the past months.
We stress here distribution, which had a reduction of 5.1 percent of BRL 94,000,000, basically due to the concession of financial assets, which dropped to BRL95 1,000,000 in comparison to the to the 1st semester of 2019. The tariff resets were positive and smaller PMSO helped to mitigate the weak performance of the volume of sales and higher PDD. The commercialization segment was affected by the drop in prices at the beginning of the year, but it already showed recovery in this quarter. And CPFL Renovave's carries on having the impact of the lower wins in Brazil. Net income increased by 19.4% or 222,000,000.
This result was favored by the lower CDI and the drop in the cost of the debt, which generated a gain of BRL217 1,000,000 in addition to the positive effect of the MTM at the beginning of the year with BRL 265,000,000. So far, we have a gain of BRL 480,000,000 in the financial result if compared to the 1st semester of 2019. On the next slide, we have CapEx. In this period, we made investments of 648,000,000, an increase of 24.3% compared to the same period of last year. By segment, we had in distribution total investments of 546,000,000 used to enlarge and upgrade and maintenance of the electric system.
For generation and transmission, we had BRL62,000,000 to Renovavis, continuing with the projects of Gamelera and Cherubim, EUR 32,000,000 for transmission to the projects of Maracanao, SOU1 and SOU2 and €1,000,000 for the conventional generation. Lastly, for the service segment, €7,000,000 were used. Going on to the next slide. We have the company is indebtedness. In the chart, you see that the debt net totaled BRL 15,000,000,000 and the ABDAB over the last 12 months reached BRL 6,600,000,000.
The leverage measured by the net debt on ABDA was 2.29x. On the chart to the side, we have the cost of the debt in the last years, both actual and nominal. The drop of the on the Q2 of 2020 is due mainly to the variation of the CDI and IPCA and also the replacement and prepayment of debts that occurred in the period. As to the composition of the gross debt, we see that the greatest exposure was in debt to CDI with 69%. The cash at the end of the Q2 2020 had BRL7 1,000,000,000 and coverage in debts of 1.43x the amortizations of low short term.
The average term of amortization is 3.03 years. On the next slide, I'd like to talk about what we have already done in terms of financing this year. At the beginning of the year, we funded in the market 3,400,000,000 with an average term of 4 years and the cost of CDI plus 0.83 percent, especially under Law 4,131 with 100% of hedge. This financing has already gone to the reinforced cash. CPFL financed more than EUR 3,500,000,000 with the MDS with a total term of EUR 28 at the cost of PCA plus 4.27 percent.
Part of that was disbursed in June, some EUR 1,250,000,000. In June July, we signed contracts of loans between CPFL Renovavis, CPFL Brazil and State Grid, totaling 2,400,000,000 at the cost of CDI plus 1.1%. The aim of both loans was to give continuity to the liability management strategy of the company. For CPFL Renovaris, €850,000,000 were disbursed in the Q2 of 2020 and €1,150,000,000 in the 3rd quarter of 2020 will be disbursed. These amounts were used to prepay the debts with BNB and BNDES.
In the case of BNB, the total prepayment was 841,000,000. In the Q3 2020, we'll make payments to BNDES of some EUR 2,000,000,000 and then we can free cash that was stuck of approximately €915,000,000 Thank you very much. And now I give the floor back to Gustavo Estrella. Thank you, Pam. Finalizing our presentation, we have some information on the COVID account and other measures that were taken by the government that somehow affected our business.
First of all, the Covidia account is important to bring liquidity to the companies and also to dilute the tariff impacts on the short term that would come naturally in the next tariff resets. So this is an important impact. We had BRL 1,400,000,000 from this COVID account already disbursed, already in our cash, but with an impact that was important dilute in the tariff adjustments. Also, we had subsidies to low income customers that ended in June. It's important that the low income customers, they suffer with the economy, with a drop in income and with the economy.
So it's important to have this subsidy until June. The postponing of tariff adjustments of Paulista with the and they had no impact for the company, but it's also important to postpone tariff resets for the month of July. Also, the transfer of sector charges to for the free client with an impact of 2,000,000 that helps mitigating this impact of tariffs in the short term for our clients. We have the 2 most important measures, which of which the economic impacts of the tariff review. The public hearing will be opened by 22 August.
This is an issue that has been discussed for quite a while with the regulator. 2nd one is the methodology to voluntary subcontracting. We already have this right recognized through a decree. And now we have the regulatory means through the agency. So these are two measures that are very important and that will be our focus in the next 2 months to address these issues.
These were the information that we wanted to share with you. And now we are available for questions and answers. Thank you. Thank you, Gustavo. Thank you, Pam, for your information.
Great presentation. Now we'll open our Q and A sessions. To ask questions, you have to use at the bottom of the platform, the Q and A button, which you can do in 2 ways. You either write on the Q and A your question, and I can read it for you. And you are or you request to ask it yourselves.
So since we have no questions, I will close the Q and A session. And in case you have any doubts or any questions to our IR team, we'll be available to answer them later on. I'll take this opportunity to see this question of Eni Muraj. He has a question first, so I'll return to the Q and A session, and I'll ask the question of Eduardo Moraes for the company's executives. Can you tell us how was the evolution of the results within the quarter?
Just to tell you again the question, what was the evolution of the results within the semester like all the quarter? Can you hear me? I think that in fact, we see that the most challenging month was April, when we had a great impact both on the drop of the market and also collection, we had a quarter that was very, very challenging. In fact, these two impacts are quite big in this quarter, but they kind of reduced along the quarter, especially as to the energy recovery. But within the quarter, we had April with a great impact in the industrial and commercial classes.
It improved in May, and we saw some positive impacts in July in June actually. Especially in the month of April, we had this impact. I will extend it beyond the quarter. We arrived in July already. We see a recovery in collection.
And this has the impact of the Corona voucher, which brings an increase in revenues that's very important to our clients, especially the low income customers. We see an improvement in the profile of collection along these months. And from May until July, what we can see is that of the total volume of overdue accounts compared to the total volume of payments received. We have payment in excess of default. So the aging of these accounts receivable, we have accounts receivable with an average term greater than the average, but the volume of payments start to revert as from May.
We still have a situation that's far from being normal, but it gives us a perspective, a positive perspective for the next month. Thank you, Gustavo. We have another question from Bruno Barel. He will ask it himself. So I'll open the audio for him.
Bruno Varela is from Solana. Good morning, Serino, Stil and Pan. Can you hear me? Yes, we can. My doubt regards the results of RGE, I couldn't see the details yet as to the results, but I saw that RGE was different from the EBITDA of the other companies, some 40% drop.
But the volume dropped in line with the others. It had a stronger residential, there were losses dropping. And was there anything specific in Rio Grande do Sul to justify this performance in the results? Thank you for your question, Bruno. Hi, Bruno.
This is Giovanna from IR. Can you hear me? Yes. Good morning. But we have some specificities in RGE.
Especially last year, we had some regulatory adjustments that ended up by increasing last year's results. It's more a problem of comparison that's uneven amongst the companies. Last year, we had some regulatory assets that were recognized and that were not provisioned. And we ended up by accumulating the effect that was 12 months, and it was totally accounted for in June. We have been very conservative basically it.
When you asked, we started looking into it. If there is anything else, I'll come back to you. Thank you very much, Giovanna. Thank you, Bruno, for your question. Ed Castro has another question.
I'll be reading it. What are the new steps for the privatization of C3E and the change in bylaws that they suggested for approval and that will be done in the next few weeks. Can you hear me? Yes, we can, Victor. Thank you.
Good morning. Thank you, Edith, for your question. I'm Victor Fagale, Business Development Vice President. What we have been following with this C3E, it's formulating to come to this privatization auction. So these adjustments to the bylaws delayed it a little bit.
What we expect in the next steps is the opening of the data room of the process. And following that, the publication of the notice of the auction, some internal processes of approval via legislation or all the internal approval by the company. And we understand that we are on the right track. So we believe that in the next few weeks, we will be able to give you any more news starting from the opening of the data room. Thank you, Victor.
Now the next question comes from Joanna from Studio Investmentus. I'll be reading it for you. Could you comment on the expectation as regards the RTE? Would it be through individual processes for each distribution along next year? Do you believe that subcontraction will be will be recognized and the that vote will be recognized.
Thank you for your questions, Joanna. We'll be passing it on to an executive to answer it. Can you hear me? Yes. Yes, we can hear you.
Thank you. Good morning. Thank you, Joanna. I'm Andre Guwame, Regulatory Affairs Director. The expectation as regards the RTAE process, you must have seen this is on the agenda for the meeting with Aneel and the public hearing regarding the economic rebalance.
We don't have a position, a clear position from Anil as to how this rebalance. So on Tuesday, we should have a little bit more of a view as regards this process. As regards the second question, I think that the over contracting is considered 100%, because it's very clear in the Korea's voluntary. The issue of debt fault and others, we're still waiting in the second part of the public consultation. And if everything goes well, we will know which methodologies will be used both for default and loss of income.
This over contraction, it's clearly already recognized in the decree. We consider that, yes, it will be 100% considered and also the methodology is biannual. Thank you, Andrea. We'll go on to the next question by Diego Rivera. I'll be reading it for you.
Good morning. What's the dynamic expected by the company for the 2nd semester as to the volume of default in distribution since July August. This is the question, and I'll be passing it on to our executives. Basically, it's like I said, we see clearly a signal of recovery in consumption at the beginning of the second semester. Looking to the month of July, August, we're already in the middle of August.
We see recovery. We also have the positive effect of temperatures above the averages of the month of July, which brought higher consumption and we see a trend of recovery of the market. Our expectation is that this trend as we have a slack and we have normality in the cities where we perform, we expect that this sign of recovery will be carried on through the end of the year. As to the collection, we see signs of improvement. One doubt that we still have is has to do with the dynamics as to the help or assistance from the government.
In the past few months, we had the BRL600 of the corona voucher, but we don't know how it will be from here on. If reduced, we'll have the effect of loss of collection due to this loss of income. So this is our doubt as to these dynamics of revenues for our consumers. On the other hand, we have the return to the disconnection, which should bring an important response to the collection control. We see a positive signal.
It will all depend on the recovery of economy and the unemployment rate. But the return to disconnections brings us some perspective as to the collection. Thank you, Gustavo. So let's go on to the next question. It comes from Fernando Andre.
I'll be reading it for you. Can you talk about the mechanisms of safe security in the area of energy generation? Are there clauses like a pay for pay? Thank you. Thank you for your questions, Fernando.
I'll be passing it on to our executives to answer. Good morning, all. I'm Karen Lucchesi, I'm Market Business's Vice President. As regards to your question, it's important to stress that most contracts of CPFL generation are contracts on the ACR. The rules in the ACR are fixed volumes, so there is no variation of volumes regardless of consumption.
Part of our contracts, which is a very small part, is sold in the free market. And there, they have as a market practice take or pay of a volume and this is about 10 percent reduction possible. So there is great protection on the standpoint of the contract of sales of energy for this variation in consumption that we have been experiencing? Thank you. Thank you, Karen, for your answer.
Another question from Caio Magnum. Thank you, Caio, for your question. How are the studies for a possible state grid in Brazil? Are there any discussions in the short term in regards to that? Thank you, Caio.
I'll be sending your question to the executives. Thank you, Pam, for your answer. So going on to the next question from Vladimir from Kiran. What's the schedule of integration of CPFL Renovavis and CPFL generation? Can you characterize the situation of the events for the Q3?
Thank you very much, Vladimir. I'll be forwarding your questions to be answered by one of our executives. So first of all, we carry on in our schedule as regards the reintegration of CPFL Renovavis with CPFL generation. The expectation is that by the end of next month, we will be able to do the integration between the two companies as foreseen. I would say that the great step or most important steps have been taken.
We have now a homework to carry on with the process, but it's totally within our expectation and our schedule. As to your second question, we have the 3rd quarter. We can see that from the beginning of this Q3, it has been on levels that are much better than in the Q2. It's important to remember that we have wind blowing in the Q3 that's normally higher. So our expectation is that we'll be bringing results in the comparison of quarters, very important as to generation that will be higher than in the previous quarters.
Thank you, Gustavo. Having no further questions, we close our Q and A sessions at this time. And afterwards, if you have any doubts or any questions, we are available. Our IR team was available. So I give the floor back to Gustavo Estrella for his final remarks.
So thank you again for attending our call. I think that we're still experiencing a very challenging times. The company carries on very focused in prioritizing the safety and health of our collaborators. This has been our attention focus in the past few months. And unfortunately, we should still have some months ahead of us with this pandemic.
And our focus is on these points. As regards to perspectives, in general, we see some sign of return, positive return. We talked about consumption and the control of that fault. So yesterday, we had the approval of TR-three thousand nine hundred and seventy five as regards GSF. Less as regards to CPFL, but thinking of the sector at large, it's a great improvement.
CPFL has been discussing that for many years. The so this brings a positive perspective as regards the PRT75. We have been talking that as from next week, based on the discussions of the public hearing, which is also an issue that has been discussed with the agency for some time. It's a consensus that the pandemic does bring limitations that demand further discussions as regards tariff reset. So we start new talks about that next week.
We also had a great improvement as regards CPFL Renovavis. Now we'll promote this integration to bring more synergy and more optimization, tax optimization to our generation business. Now we did the payment dividend declaration. So we are balancing and we have over BRL2 1,000,000,000 to be paid by the end of the year. And this is very important to our investors, of course.
So generally speaking, we carry on very focused on the issues connected to the pandemic, but always seeking new investment opportunities focusing on the return of the economy for the next months. Thank you very much and have a good afternoon.