Good morning, and thank you for holding. Welcome to Ciotr Energia's Second Quarter 2018 Earnings Conference Call. Today with us, we have Mr. Andres Doris, CEO of CPLP Alamozea Gustavo Peva, CFO and Investor Relations of CPFL Energia and other allocators of the company. The presentation will be available for download at the Investor Relations website at cpsl.com.
Ir. We would like to inform that all participants will be in listen only mode during the company's presentation. Afterwards, there will be a question and answer session when further instructions will be given. Should I make a decision to complete the assistance during the call, I would like to remind you that this call is being recorded. Before proceeding, we would like to mention that forward looking statements are being made under the Safe Harbor of the Securities Litigation Reform Act of 1996.
Public written statements are based on the beliefs and assumptions of Ctrip, Energy and Management and information currently available to the company. Public statements are not guarantees of performance. They involve risks, uncertainties and assumptions as they refer to future events and therefore they depend on circumstances that may or may not occur. Investors should understand that general economic conditions, industry conditions and other operating factors could also affect the future results of CPFL Energia and could cause results to different activity from those expressed in such forward looking statements. Now, we would like to turn the conference over to Mr.
Andrea Dorte. Mr. Dorff, you may proceed. Thank you, and good morning, everybody. Welcome to another GPF Telemid year conference call about our results and this time about the Q2 of 2018.
As usual, we have a brief presentation and then we will be opening for questions. Slide 3, please. This is where we have the highlights of the quarter. The load measured in our concession area grew by creep of 8% in the period. And later on, we will be seeing that most of this growth, as we have been seeing over the last few quarters, has been in the free market, growing about 7%.
Also, we have growth of 16.5 percent of our net operating revenue, and we will also see that it comes basically from the distribution segment and 33% EBITDA. Our net debt, measured by our covenants, closed the quarter at BRL15.7 billion. Therefore, our leverage was 3.11 times by net debt to EBITDA ratio of the last 12 months. We also had an important amount of €3,400,000,000 in this quarter, albeit at competitive rates. In the quarter, we invested BRL422,000,000 in all segments where we operate.
Also in the Q2, we concluded the RDE tariff review with an average effect perceived by consumers of about 20 1%. Regarding growth, CPFL 0.7, we have number 9 of the technician auction that we had in June. So we won the Maraca Nao lot in Ciara with a CapEx projected by M and A of about BRL 100,000,000. And over the quarter, we also met some other relevant sectoral issues. It is important for us to say that flag which are flagged, these are the regulatory assets is a very important thing and you know that we accumulate regulatory assets.
And some of them have to do with GSF and thermal startups and the hydro situation, the variation that comes from Itaipu. And they should be covered by tariff flags, which has not been happening. So that means that we have been accumulating regulatory assets that are important over these months. And there are other things that is being discussed by us with the GSF with a short term settlement of Aticia and part of the solution is also part of the bill of law that is being covered by Congress and that has to do with privatization of the electrician distributed companies. And this has been extensively was extensively discussed during the quarter.
On the next slide, Slide number 4, we see our EBITDA per segment. In the Q2 of 2018, we had an EBITDA of BRL 1.370 million. And on the upper chart on the left, you can see the breakdown per segment of the business. So our distribution represented only 60% of the EBITDA, followed by conventional generation and renewable debt to EBITDA with 24% 17%, respectively. And the other businesses still represent a very small part of the period EBITDA.
And looking at this business segment and starting on the upper right of the chart, we see the evolution of the EBITDA in the quarter and in the half year. So a major evolution of the EBITDA and distribution, as you can see, BRL 778,000,000 in the Q2 of 2018, almost 70% increase vis a vis the same period last year, very much because of the growth of the market itself as well as the control of PMSL and the financial assets of the concession. So these are the 3 main positive impacts on the EBITDA, the distribution segment, concession remuneration, a slight reduction very much due to the reduction of the achieved energy of Cerro de Mayo or Cineza, our plant. In the U. S.
Generation, we had a major growth of almost 15%. And here, there were many impacts that are described in our release and the start up of the pelvisurro has been promised by NOLAN and then in commercialization services and other segments where they operate. The highlight here is our Services segment in Construction and Group Maintenance that had a positive contribution to this increase. On the next slide, we talk about the distribution segment. And we start by seeing the increase in the loan and sales in the period, and they were very much hand in hand about 4% each.
The major growth also in residential and commercial, 5.7% and 3.7%, respectively, and here mainly because of the high temperatures in April May. In the Dansu segment, although we had a trucker strike and also the economic scenario of the country is out of all that, we achieved a growth of 3.4% in this period. And the highlight in the class, in the industrial class are the metallurgic industry and vehicles and food industries that had a positive impact on this growth. If we look at the upper right, we see the sales in the concession area, as I said, growing 4% and very much impacted positively impacted by the customers in the food market 7.6% increase. On the lower part, starting at the left, we see the market breakdown in the concession area in Cochitro price, our biggest one and is regarded with almost 40% followed here by residential and commercial.
And when we compare our grade, And in the regions where we operate, we see a positive evolution as well. For instance, in the first map, in the middle chart, at the lower part of the slide, we see that the total 2% in sales and to be a positive 4% in the Southeast region. We had a growth of 4.2% and we grew 4.1% and in the south of the world, the region 4.2%, increase in 3.8%. On the right, we can see the evolution per consumption segment. And this figures have already been mentioned when we talked about our highlights on page number 6 now with the corporate delinquency.
Unfortunately, this is a very much fashionable thing, so to say. Our ABA evolution as a percentage of the gross revenue is, I could say, the other in this quarter, 0.6 4% of the growth revenue in provisions, which is very much in line with our historical average. And I would like to mention one point outside the curve, which is in the Q1 of this year and this was very much because of the reversal. A non recurring reversal in our ADA that we have in RBC in the Q1 and that was not repeated and will not repeat to repeat it from now on. So we are in line with our historical averages.
On the lower part of the slide, we see the total of past due build over 90 days past year as a percent of adjusted gross revenue and very comfortable 1.15% and our collection actions on the right, on the lower right in thousands of different actions per quarter. And we see in the chart a reduction in the number of disconnections. However, this is not a strategy of the company. It's not a change in behavior, but it was caused by the truckers' truck that we had in May. We should go back to the previous figures that we had in the previous quarters.
And some news here on Page 7. Here we included a snapshot of our operating indicators during the period and also the comparison with the previous period in the first chart. On the upper part, we have total losses, technical and commercial losses. And here, what we can see is a trajectory downward trend in our total losses compared to previous periods. And technical as well going down And commercial or non technical assets are also dropping, but a little bit more resilient because crisis and because of the economic scenario where we find ourselves.
And on the bullet points on the right, we made a list of some initiatives that the company has been putting in place in order to fight for the lawsuit. And so here, we are talking about new technology to combat the capability and the expansion of telemetry client networks, improving modernization and shielding of the distribution network, replacing of measuring equipment modernization of hubs and update our public lighting points and the inspection of new extensions and update in our client file our customer file. So these are some of the measures that we have been adopting to 5 launches and set. On the lower part, we see the evolution of the HAIB and or the lower the better in the sense of the two figures we see here in the middle, an evolution of our own distribution companies, a positive evolution that needs to be a evolution of our SAI and also our SAI FDI. Also going down, we see a positive evolution in all our disclosures.
And here, we made a where we calculated the weighted average of the SAIBR and the average rate by one of their customers and we got to 8.74 hours of interactions. And this is equivalent to an availability equivalent in the service, sorry, of 99% 0.9%. So on an average, we have an availability of 99.9% availability in our services. And these charts on this slide also have the objective of showing that although the company has been reducing confidence, showing that the result in the short term in the last few quarters, This did not happen to the detriment of quality of service or investment. The company continued to invest and continues to invest.
The company continues to improve and to build on board technology in order to deliver more quality and better indicators to our customers. On the next slide, we talk about Generation, our Generation segment. So on the upper part, we have the reservoir levels and that became a point of concern during the last few months because of that very dry weather that we had. And on the left, we show the shortage the mix reservoir levels, which closed last month or that is now on August 16 at 34% of the level compared to a historical level of 54%. And Southeast, which is very important, we had 41.6% on August 16 in comparison to 54% of our historical level.
Now to the left bottom chart, we have the performance of our spot price with volatility. If you look at it in the last 2 years, but now it's at between 500 and something riles per megawatt hour. To our right bottom chart, we have the GSF projection. And the market is talking about GSF very recent now of 39%. But the DSO is measured depending on the contractor.
So you can see here the factors 7, 6 in June July, respectively, and a trajectory of GSF that is negative or that is a factor that is below 1 for a long period of time over this year. Therefore, we did have in July 39% below in the generation of and that is 39% below of our assured energy. Now I end my presentation and I'll turn the floor to Mr. Gustavo Estrella, our CFO, and he's going to talk about the financial results. Well, we have here the results of the company in the Q2.
These are positive results. And so we can see net revenue was a growth of 16.5%, EBITDA growing 33.3% and net income of 265.5%. And as on your slide before, the main highlight here comes from distribution. We see here a total positive variation in the segment of BRL 315,000,000 coming mainly from the markets and tariffs. Once again, we have a growth in energy consumption.
We saw it here that there was an increase in temperatures, bringing therefore better consumption in residential areas. But also we have the tariff review process that we have at Citecle de Palis and RGU South also with a positive impact on the results from May June. And we also had a positive impact from the concession financial assets is BRL166 1,000,000. Basically, the 2 main factors here, first, the adjustment of the inflation by the IPCA and the second effect here is the productivity indicators that also brought a positive effect to our results. And that's how we get to the BRL 160,000,000.
We also will have the results of project pension funds of positive BRL6 1,000,000. And as Andre has mentioned, a variation of our PMSO of BRL36 million positive. We had less expenses vis a vis 2017 and the main highlight here is coming from legal and judicial expenses, which were provided us BRL26 1,000,000. And conventional generation, we have a negative total variation of BRL 9,000,000. Here, we have an agreement regarding GSF and lower exposure that we have to GSF and that was rather stable and also because of the inflation.
Here specifically, we will have the effect of the reduction on semaertes assured energy by 5%, which represented minus BRL7 1,000,000 and commercialization of plus BRL3 1,000,000 and renewable generation, we had a total positive variation of BRL33 1,000,000. And this quarter, we have lower wind farms generation because of lower wind speeds with a negative effect of BRL 14,000,000. But that was more than offset by other effects. The first one is a credit recovery of CIS and Cofield, adding up BRL 80,000,000 out of the privatization of the MSXCD, allowing us a positive effect of BRL13 1,000,000 in our results and the start up of the Baja Sura's land fund complex also bringing BRL 8,000,000 to the quarter. Now turning to the net income.
We do have here the reduction of the interest rate, which allowed us to have a reduction in our financial expenses of BRL 123,000,000 now. So a positive effect of mark to market is BRL 58,000,000. Now turning to Slide number 10. We have our indebtedness and the main highlight here is the reduction of our leverage. Now we are at 3.11 times net debt EBITDA ratio at the end of this quarter.
And the main highlight here probably is the robust growth of our adjusted EBITDA for the last 12 months over BRL5 1,000,000. And remember that in spite of that lower leverage, we still have here, as Andrea mentioned, some regulatory assets and that makes us carrying towards that BRL 1,100,000,000 of regulatory assets that we have to transfer that to tariffs just next year. Now in terms of that profile, we have a cost of 7.6% stable vis a vis the prior quarter, but we are back to the scenario of interest rates going down in Brazil. Regarding our indexes, half of our debt today is prefixed. So these were that initially were indexed in the TBI.
Now they are prefixed. And so these are our main indicators and we have very low volatility for the year. On Slide 11, we have our debt profile on the amortization schedule. You can see that for 2018, the company since the beginning of the year, 100% refinanced and we are working already with the refinancing already for the second half of twenty nineteen. We are doing that, as Andre mentioned in the beginning of the presentation, in the second half of the year, we have funded BRL 2,400,000 and this was basically to recognize existing debt.
We are expanding the debt and also we are having lower rates there. Therefore, in August, we will be almost BRL 1,000,000,000 more, just extending that profile in the short term. Now on the next slide, I should highlight the conclusion of the tariff review process of RWE, EU. And the main highlight here is the growth of the regulatory EBITDA. We see that there is a leap of 103%.
We reached the BRL 543,000,000 in this 4th cycle and this is very relevant and it starts to affect basically starting now in the Q3 of AET. And another important highlight is the participation of the company in the transmission auction that happened now at the end of June. We now won the number 9 of Maracao in the city of Juerra and we estimate an investment of BRL102,200,000. So this is our service transmission project that we'll have here in the company. We have already have concluded 2.
And this is a new lot that is in the construction process. Hello, Eduardo. Can you spell it? Good morning. I have a few quick questions.
The first one is about consumption now in the 2nd quarter growing at 4%? My second question, debt leverage of 3.1x, did you believe this is feasible considering a stronger EBITDA after the review and a leverage for the next for the end of the year around 2x.5. Would it make sense to think on the lines? And third question, the transmission process that you were awarded in Cerrand, we have a discount of 54%. I have a return rate that is very low.
I would like to understand what would be an optimized CapEx on your side? And is it possible to tell us more about the IRR that you foresee for the project? And finally, about safety prioritization, what is your idea? Do you expect it to have a complex M and A because of the amount of contingency? And but what about after the agreement with the prosecutor's office that the company has made, is that has changed your understanding about the productization?
Good morning, Bruno. This is Andre. And I will start by the last two questions and then I'll turn to Gustavo to talk about leverage and market growth. About the project in Thera, yes, we do have a streamlined CapEx, more than the one estimated by Enel. We do not have closed our internal estimation for CapEx.
But what we can tell you is that we are maintaining our financial discipline and economic discipline of the company. So we are not letting go of internal return rate very much on the contrary. We have an attractive project considering the CapEx estimated that we have. Yes, we are assessing all possibilities of growth that we have here in our segment, and I'm talking about that. And for us, that is under the radar.
I don't know if today we would have alternatives to grow that we'll be closer to what we expect to have in our business. So we are assessing it, but we do have other possibilities that are more encouraging. Now the problem, I'm turning to you. We are talking about the consumption in the Q3. The expectation that this recovery will remain in this quarter, it started basically in the second half of last year.
We expect it to keep the same pace. But when we compare a percentage of growth, considering that we have a consumption base that is already higher last year, we start having a percentage growth that is a little bit lower. So we believe that this will be closer to 3% now to the 3rd quarter. But that recovery in fines are still there. Now the second question about leverage.
We are clearly at a downward trend for our leverage. And the main factor that we have here is that regulatory assets that could affect our short term leverage. Today, we have a volume of assets of BRL 1,100,000,000 and expect it to grow, maybe not stable, but that is growing not a lot by the end of the year. So we will not reach 2.5 of leverage. I would say that basically because of the high regulatory asset.
But when you start transferring that to tariffs over 2019, you will have a drop in leverage that will be even more significant. We are not going to get to 2.5 right now, but without that regulatory effort, we would get to bear. Thank you very much. Our next question is from Fabienne Moris, Absolute Investments. Thank you very much.
My question has already been answered. Thank you very much for the original question. Don't have a doubt about losses. I understand that, of course, the overall economy impacts commercial losses, of course, but there is a specific point in Agathe's SUE. Looking at the technical losses in the last 12 months, we see an increase in the last 12 months of about 40 bps vis a vis the Q2 of 'seventeen.
And then you have a drop of nontechnical from the Q3 and then going up again in the Q2. So I would like to know what specifically affects the technical losses in RJ Sue than you have consistently in the last few quarters? And what about what about the environment regarding the nontechnical losses? Do you see anything different in the environment, different from the other concession areas, mainly in RDE because the technical losses are very low in RDE. So could you please talk about the environment in which SUE operates our view to operate?
Brinde, good morning. This is Luis Enrique. Regarding the nontechnical losses of RGE, so Ever since we acquired the company, we have been doing work. In terms of the calculation of losses, we have been improving it or streamlining it because the difference is in calculations in the technical losses and with the bookings you have the non technical losses. So these calculations, you have been true lining them every single month, ever since we acquired the company and better understanding and installing the necessary and adequate measurement instruments so that we have the most precise calculation possible.
So we did the calculation and we are streamlining it and cleaning it up, so to say. And this is the reason why there was an increase in technical losses because we were streamlining those calculations. And this is based on technical losses, of course. And in this quarter, largely, surely, you have seasonality. And this is Santo, particularly, you have the in the south where you have a lot of rice cultivation or palpations and this causes an absurd difference that we are monitoring and other consumption characteristics of the company that we are assessing and that bring about the seasonality and what are we doing about it.
So having a good calculation of the technical loss, the 2nd week, we're advancing a lot in the good and the flexibility of the grade itself and this is translated into a reduction of technical losses. However, this is not true in the short run. It will take some time until we see results. And about the others, we are having a project to install such as we did in the Thakaui company, we are going to shield and invest in telemeasuring and everything will be telemeasured. And with that, we are going to monitor the consumption of these customers.
And with that, we will be able to visualize and therefore, we will be able to make measures in the Group A and which is very important for the period of this year and for this reason. We're still getting to know and getting to streamline these calculations, but the plan is already set up for the next few months. Thank you very much. And now the Q and A session. I would like to turn the floor back to Mr.
Andre Borch for his final remarks. Very well over the Q2 of 'eighteen, we have completed 2 years since we started the transition and the stakeholding of the company. So you have been able to see that over this period of time, our team was able to focus on operations to improve the officers team also in our operations team and also we are able to focus on the capital discipline. Everything that we have discussed today and the results of the first half of the year as a whole did show our efforts and also our commitment to the results in the short term as well as with the sustainability and the results in the long term as well. So I now end the presentation and the discussions about the results of the Q2.
Once again, thank you all for being with us and thank you also for your support. Thank you. The conference call for Cepatielli and Nigeria has ended. Thank you very much for your participation and have a nice day.