Good morning, and thank you for waiting. Welcome to CPFL Energia 2Q19 earnings results call. Today, we have with us Mr. Gustavo Estrella, CEO of CPFL Energia, and Mr. Pan, CFO and IR Officer, as well as other officers of the company. The presentation will be available for download at the website www.cpfl.com.br/ir. We inform that all participants will be in listen-only mode during the company's presentation. After that, there will be a question-and-answer session when further instructions will be given. Should any participant need assistance during this conference call, please press star zero for an operator. It's important to mention that this call is being recorded. Before proceeding, let me mention that forward-looking statements are being made under the Safe Harbor of the Securities Litigation Reform Act of 1996.
Forward-looking statements are based on the beliefs and assumptions of CPFL Energia management, as well as on information currently available to the company. Forward-looking statements are not guarantee of performance. They involve risks, uncertainties, and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions, and other operating factors could also affect the future results of CPFL Energia and cause results to differ materially from those expressed in such forward-looking statements. Now, I will turn the conference over to Mr. Gustavo Estrella. Please, Mr. Estrella, the floor is yours. Good morning, everyone. Thank you very much for being with us on this call for the second quarter of 2019 for CPFL Energia. I will start on slide number three, where we have a few highlights for this quarter.
The first one is an increase of 0.9% in the load of our concession areas. I think it is important to say that we did have a migration movement from free client to the national grid, the direct connection to the national grid. This 0.9% in the same comparison base will be around 1.5%, which is more or less what we have had in terms of load increase in the concession area in the past few years. We will talk more about that in the coming slides. The second highlight is about our EBITDA. We have reached BRL 1.5 billion, a growth of 9.9% vis-a-vis 2018. The net income of BRL 574 million, up 27.4% vis-a-vis the second quarter of 2018. Here we have an important variation in our net debt.
We are reaching a net debt of BRL 11 billion, and our leverage, which is an indicator of net debt over EBITDA, is of 1.93 times. Once again, I should highlight that this figure is already impacted by the results of our IPO, or re-IPO in June, where we had BRL 3.7 billion coming into the company's cash. Investments are BRL 521 million, also up 23.5% vis-a-vis 2018. Here, our forecast for 2019 is of a total investment of BRL 2.2 billion for the whole year of 2019. An important impact also was in the tariff adjustments of RGE, now combined to RGE Sul, with an important increase in our Parcel B, which basically had a transfer of the IGPM rates. We reached a growth of 7.14% in Parcel B of our prior RGE and 9.10% of RGE Sul. Two important impacts with a growth in Parcel B.
Finally, this is the effect of our re-IPO. As I said, in June, we had funds coming to the company of BRL 3.7 billion at 27.5 per share in this period of a little over one month. We had a variation in the share prices of almost 24%, starting on June 12th, which was the pricing, and also with a daily volume of trading of BRL 109 million, very significant to the company. Turning to slide number four, we have our energy sales. As we have mentioned, our load in the concession area had an increase of 0.9%, adjusting the impact of the migration of our clients to the national grid, and this client has zero margin, therefore it does not affect our results. That affects the perception of growth in energy consumption. In comparable basis, the load is actually growing 1.5%.
In sales, there was a drop of 0.8%, and this is an important effect in this quarter. It was the billing calendar effect. The billing calendar did cause a negative effect on sales. I think the most important figure is really the load, which is what is affecting the non-billed invoice. That's what's affecting the company's results this month. When we analyze sales by segment, and this is the figure that really has to do with the 0.8%, and we do have a negative performance in residential, industrial, and others. We have a chart on the bottom right of this page. We show the billing calendar effect, the temperature, and the migration to the national grid. If we make the adjustment in each one of these segments, you can see that the residential area goes from a drop of 1% to a growth of 1.9%.
If we adjust the billing calendar and the temperature, and if we hold the same analysis for the industrial area, it will go to a growth of 1.4%, and the commercial area from 0.5%, it would grow 2.4%. It's important to make this type of adjustment to show that you can have a consistent and realistic overview regarding energy consumption, which is maintaining at a 2% level as we have had for the past two years. Also important is to talk about losses. Losses are basically stable vis-a-vis 2018. We also have had challenges in the macroeconomic scenario, in which the country finds itself today in terms of loss of control. We are maintaining losses, but these are still above the regulatory losses. We do face a challenge there. I will talk further on about delinquency, but loss is a challenge for us right now.
Now we have the profile of our market. 38% of the market comes from the industrial area, followed by 29% coming from residential area, commercial area 17%, and others also 17%. Now turning to slide number five, we talk a little bit about the weather and the macroeconomic scenario. We have the two main impacts in our market, and they are related to weather. The first, the rainfall, especially in the South region, which is affecting significantly our irrigation market. You can see in the months of April and May, we have a rainfall volume that is higher than all-time averages. Therefore, we have an energy consumption related to irrigation that is lower than what we expected. Also talking about temperature.
We have a very specific effect in the South region, where we have an average of temperature in this quarter of almost one degree higher than the all-time averages. Consumption, especially residential and commercial, related to heaters, also that allows us to have a lower energy consumption. The bottom part of the slide, you see that we have a scenario of a slow economic recovery. The unemployment rate is still high, around 12%. Industrial production, there was a drop in the second quarter of 1%, and retail sales with a shy growth of 0.8%. All of these combined can somehow explain energy consumption at low levels, close to 2%, as we had in this quarter. Turning to slide number six to talk about delinquency. As I said, we also have a major challenge when we talk about delinquency.
In comparison to 2018, we had a growth of 53.7% of our ADA in the results from BRL 41 million to BRL 64 million. Also there's a shy or a slow drop vis-a-vis the first quarter of 2019. This is a subject that's really taking up our time, and we are dedicating a lot of attention to control delinquency. As we can see, the main action regarding collection is to disconnect energy. You see that there is a significant growth when we compare that to 2018 of over 30%, and not even that has been enough to control our delinquency. Of course, that this increase in the disconnections is recent, we expect that it does bring positive impacts over the next months.
On the bottom, basically doing the benchmarking with other companies, we see that in general, there is a upward trend in delinquency, not only in our concession areas, but also in other concession areas as well. That's something that's general that's happening. On slide number seven, talking about hydrology, the expectation to close the reservoir levels for August. Now it should be close to 44%. The all-time average is around 54% for the same month, August. We are a little bit below, this is not a concerning scenario, at least not in the short term. We see here as an expectation for the next three months. We should have rainfall that is lower than the average. This is already happening. For the southeast in August, we should have around 80%, and in the south region, 40%.
This is a point of attention, and it should bring the short-term prices to higher levels, but this is not a major concern as of now. To the right, we have what we expect for GSF. Remember, these are the most critical months for GSF, from July to September, and we should reach something close to 45%, but in the year average, it should be 15%-16% for 2019. On slide number eight, we have our performance on renewable generation. We have here our three main sources. The first of them, the biomass, has a positive impact of 21 gigawatt-hours, basically, thanks to better weather conditions that allowed us to have a sugarcane crop with a higher bagasse production, so that we could have also a higher generation than 2018.
In our SHPPs, we have an increase of 132 gigawatt hours thanks to Boa Vista do Sul, that allowed us to have a greater generation capacity when compared to 2018. Finally, in the wind area, we had a drop of 67 gigawatts hour, basically because of lower wind performance. We still have wind lower than the ideal curve, that is affecting generation in this quarter. Well, I will now turn the floor to Mr. Pan, he's going to go into the details about the financial results for this quarter. Thank you very much. I will try to speak Portuguese, I hope you may understand it. We have reached our EBITDA in the second quarter from 9.9%. It has increased.
We had an EBITDA of BRL 873 million in the second quarter in the distribution segment, an increase of 13.8% in the comparison to the same period of 2018. The main effects have been BRL 235 million in market growth. There was a variation of 0.9% in the net load of losses. Also, there was an increase of tariffs because of adjustments in the AEJPM in Paulista and Piratininga, as well as the application of the fourth tariff review cycle for RGE in June of 2018. We also had a higher restatement of the financial asset of the concession in the amount of BRL 63 million, thanks to a higher IPCA. On the other hand, we had a positive effect of BRL 93 million in the second quarter of 2018. That was because of the new regulatory asset base adopted with the tariff review. This has not repeated this year.
Finally, there was an increase of BRL 86 million of PMSO. We should highlight here, expenses with assets write-offs as well as same income CapEx, which are not related to inflation, BRL 25 million. ADA, which has increased to BRL 22 million because of the delinquency increase. Also, expenses that have been impacted by inflation corresponding to BRL 17 million. Legal and judicial expenses, BRL 8 million, and expenses with private pension funds, BRL 6 million. In the conventional generation segment, we had an EBITDA of BRL 334 million in the second quarter, an increase of 11.8% in the comparison to the same period of 2018. The main effects were the inflation transfer to contract prices, BRL 22 million, and a higher volume of hydro and thermal generation amounting BRL 13 million.
For CPFL Renewable, we had an EBITDA of BRL 251 million in the second quarter. Which corresponds to a drop of 1.9% in the comparison to the same period of 2018. The main factors here were of first quarter tax credit recovery in the second quarter of 2018, amounting BRL 17 million. Lower wind farms generation, corresponding to BRL 16 million. The end of the grace period in the O&M contract of the wind farms of the Campos dos Ventos and Tomé do Egito. Seasonality of contracts have brought a gain of BRL 28 million, thanks to a higher allocation of energy in the second quarter of 2019. Remember, this effect should be offset in the upcoming periods. Lower expenses with GSF. In the segment of commercialization services and others, we had an EBITDA of BRL 46 million in the second quarter, down 2.3% in the comparison to 2018.
The main effects were in commercialization, a drop in the EBITDA margin because of a lower commercialized volume. In services, on the other hand, new contracts and a higher operating efficiency have allowed an improvement in the results corresponding to BRL 11 million. Finally, our net income was BRL 574 million, with a variation of 27.4% when compared to the second quarter of 2018. In addition to the variation of BRL 135 million in the EBITDA, the main effects were in the financial result, an improvement of BRL 34 million, mainly because a drop in the net indebtedness, which already is adjusted by factorial financial assets and liabilities with a benefit of BRL 22 million, and the revenue coming from fines and interests, coming from late payments. It's important to highlight that this lower ADA or higher ADA is offset by a greater financial revenue. Depreciation has varied BRL 6 million.
There was an increase in taxes because of the improvement in the results. Now let's turn to the next slide. On the first chart, we show the financial covenants index variations and this calculation, the net debt is adjusted according to the equivalent stake of CPFL Energia in each one of its subsidiaries. Considering that the pro forma net debt totaled BRL 11 billion and the pro forma EBITDA for the last 12 months reached BRL 5.7 billion, the ratio pro forma net debt/EBITDA at the end of the second quarter of 2019 has reached 1.93 times. We should highlight that if we were not to consider the offering of the re-IPO, the net debt would be BRL 14.6 billion, and the ratio would be 2.57 times. In the second chart, we show gross debt and the breakdown by indexer.
As you can see, 64% of the debt is linked to the CDI, which explains that performance in the third chart, where we can see the reduction in the cost of CPFL Energia debt. In the last chart, we have the cost of the debt for CPFL Renováveis. In May, CPFL Renováveis has issued debentures in the amount of BRL 838 million, which have been allocated to prepayments of most or more expensive debts in order to get in line to CPFL Energia cost. Let's talk a little bit about the total offer, BRL 134 million, total offering BRL 3.7 billion. We had 58% of investors in Brazil, 42% of investors were foreign. Almost four times the subscription. Now, we should have about participating here at least one independent member as the Novo Mercado regulation defines. CPFL now has two independent members.
The committee meetings can only be held validly with the presence of all three members of the related parties committee. This is to show the market the concern about the subject on corporate governance with accountability and transparency. We have created a new department called corporate governance, and the director responds administratively to the chief legal officer, and functionally to the board of directors. On May 21st, CPFL has announced a payout ratio minimum of 50%. To pay more than 50% is going to depend on a balance between growth and yield. Thank you very much. Ladies and gentlemen, we will now start the Q&A session, which will be held in Portuguese and translated into English. To ask a question, please press star one. To remove your question from the queue, please press star two. Our first question is from Thiago Silva, Santander. Good morning, everyone.
Thank you very much for this call, and congratulations on the results. I have two questions. The first one is about the restructuring of the company and generation. Can you give us a guidance on how does this go, and what can be done in the balance or in the year-to-date fiscal office? Second question, is the growth via M&A. Just recently, the governor of the state of Rio Grande do Sul mentioned that CEEE is ready to be sold. They need no further approvals. Obviously, considering the synergy you have and the location, I would like to know if there are ongoing negotiations. I know this is confidential, but I would like you to talk a little bit about M&A, in general, and specifically on something on this initiative. Thiago, thank you very much for your questions. Let us start by generation.
We are still following this restructuring plan. The most important action in the short term is the integration of CPFL Renováveis into the CPFL Energia group. This is already happening. We have an important date. We had it last week on August 5, where we in fact started the integration process, and some employees came to Campinas, leaving São Paulo. We want to conclude over this year, still in 2019, this integration, basically, of our employees, all the processes and systems of the company, so that we can have the integration process minimizing any possible risks in both companies' operations, specifically CPFL Renováveis. Remember, we are still in the process of signing SPA, which is the purchase and selling contract of operations that we have now with the State Grid. The idea is to conclude that in the coming weeks.
After that, we should concentrate the share of CPFL Renováveis in CPFL Energia so that we could then further on evaluate the upcoming stages of the integration and restructuring process. Remember, CPFL Renováveis is a listed company, so all the requirements of CVM and the stock exchange market will be respected over the process. The idea is that over 2020, we are able to conclude this restructuring process. I would say that in the very short term, our main focus is on the reintegration of CPFL Energia into Energia, obviously maintaining all activities of the different companies throughout this period. Now, about the M&A. First, specifically about CEEE. We are following the movements of the State of Rio de Janeiro on this subject of CEEE privatization. We do not have any new information on this after they published the possibility.
Just as every market, it's our expectation also to see the government placing the company in the privatization process. Analyzing our strategy of focusing on growth, specifically in the businesses in which somehow we have a leadership, whether in distribution or renewable generation. This asset, because of its geographic location, makes all sense in the world for CPFL, and we will assess it if this privatization process really comes up. Not only this one, I think the idea is really to look at the opportunities for investment in distribution that come up. We have an expectation that in addition to CEEE, to see other assets that might be on the market, and for each one of them, we will have a focus and we'll analyze if it really makes sense to the company. I'm sure that the group focus on growth and distribution.
Talking about generation, this integration process of the generation arm, and also for us to be better prepared to address this type of growth we have here in addition to possible future M&As. The growing new projects. We're also looking at opportunities to address that growth as opportunities come up. I believe that growth is especially relevant and a priority to the group, and our radar is out there to check all opportunities that we might find in the market. Thank you.
Our next question comes from Marcelo Sá, Itaú. Thank you for the call. I have two questions. The first one has to do with the regulatory act in transmission, and the contribution period has already come to an end, and ANEEL will be publishing the procedures. I would like to understand, if you can discuss this, or if it's all in writing at the distribution side, because ANEEL has not sent any proposal yet in this regard about the WACC. Thank you, Marcelo. I will give the floor to Andre Guimaraes, our Regulation Officer. Good morning, Marcelo. In fact, today ANEEL has segregated the public hearings. ANEEL is discussing generation and transmission, and we are waiting for the second phase to be opened for distribution.
In fact, it was a request on the part of the distribution segment in terms of separating the WACC from distribution and generation and transmission because they are different segments. We met as a board with Pepitone and into the directors, and we expect in the second half of the year to resume the discussion about the distribution WACC. There is nothing I could add to that. One of the points of the proposal for the WACC of generation transmission that drew the attention of the market was the very small window, about five years, if I'm not mistaken. You were with ANEEL, do you think this window could be expanded to 10 years, or is it too early to say?
This is the reason why we are to separate the discussion because of the risks in the distribution segment, because they are different from transmission and generation, so that we could separate it and look at the distribution business separately as it has always been. In the WACC, you have to look at other segments different from the generation transmission. We have no details to give you, and we believe that in the second phase for distribution, we will be able to discuss also this issue of the window because we have not received any second phase, or we have not talked of a second phase. In the same way that there was for generation and transmission. Thank you very much. I would like to understand now what you think about the prices for energy.
You said that the rainfall expectation has worsened, but not enough to have a very big impact on the spot prices this year. What about this for the next year? If we take a contract for 2021 or 2022, what will be the price of energy today on a contract, let's say, if you had to sign the contract today for these years, 2021 and 2022? Marcelo Ricardo Mutián is going to answer your question. Marcelo, good morning. Where is Mr. Sá? We see this about 80% of the Southeast and the South, and around 40%, and we have the reflex. We see the ENA or the Natural Affluent Energy. We don't really talk about these prices. We cannot disclose the prices that we are going with or we're working with, so the market doesn't have this practice in place.
There are some no big calculations regarding what has been negotiated in the last, let's say, three weeks for more long-term prices. Thank you very much. I would like to remind you that in order to ask a question, you should press star one. The Q&A session has come to an end. I would like to give the floor back to Mr. Gustavo Estrella for his closing remarks. Once again, I would like to thank you very much for your presence, for your questions, in our evaluation, we are delivering a very consistent result in this quarter with the major growth in our income and also in our EBITDA. This is the conclusion of a very relevant process for the company, our relisting in June. In fact, this addresses our perspective and prepares the company even better for the growth in the next few months.
I talked about our integration cogeneration process, which is very relevant, and we have been preparing the company to address this level of growth. Pan talked about our dividend policy and the other changes, and especially in our related parties committee. Very important steps towards corporate governance, and this is the way preparing the company to address this growth and operating as we have always operated in the market in a transparent and open fashion with the full disclosure of information and looking at the market as a major partner of ours in this process of growth and of new businesses as well. Once again, I would like to thank you very much for your presence in this call and wish you a good day.