Good morning, everyone. We are now beginning the conference call to announce the results of the first quarter of 2023 for ENGIE Energia. I am Rafael Bosio, Investor Relations Manager, and I would like to say a few things before we start the call. Right now, everyone that is connected is in listen-only mode. Later on, we are going to have a questions and answers session when participants will be able to ask their questions through the Q&A tool in Zoom. This conference call is being recorded in our website, www.engie.com.br/investors.
There you can find the files, the presentation and the press release for the company's earnings, in addition to our reports and other documents filed yesterday at CVM, where you can see details of the financial statements, operational results, ESG indicators, and advances in implementation of projects, among other of factors that were important in the period. Before I continue, I would like to say that forward-looking statements made in this conference call, relative to the company's business prospects should be regarded as forecasts, and they're subject to change because they refer to future events. As a reminder, journalists who want to ask questions may ask them by email. Send them to the company's press services.
To present the performance of ENGIE Brasil Energia in the first quarter of 2023, today we have mister Eduardo Sattamini, CEO and IRO, Marcelo Malta, CFO, and also Eduardo Takamori, appointed yesterday by the board of directors to take office as CFO as of June 1st, 2023. I would like to give the floor to Sattamini to start the presentation. Sattamini, please.
Good morning, everyone. Once again, it's a pleasure to be with you here and to present the solid results of ENGIE Energia. As usual, the company's resilient results are a result of our long-term strategy for our assets and contract levels. We are going to go straight to slide number five, where we can see our financial highlights, and then we are going to talk about qualitative results of the company in the quarter.
If you look quarter-on-quarter, we can see an evolution of the company's EBITDA of 9.1%. When we look the first months of the year, we also grew, which is a demonstration and an evidence that our strategy is working. The result drivers on the right-hand side of the slide, you can see that transmission segment RAP, the annual revenue adjustment, BRL 100 million. Now we have another BRL 100 million. We also have BRL 86 million, the price increase related to escalation of inflation in our indexed contracts and a little bit more energy volume that was settled. TAG, once again, is a surprise with better results than expected, BRL 75 million, with very specific contributions in the adjustment of fees.
Another important factor, which is the contribution of the substitution of the operator. The previous operator was Transpetro, now we have ENGIE operating with costs that are much more suited to the levels of operation. We also had the net result of CCEE, the Chamber of the Electric Energy Trade. This is more favorable. We had lower fuel consumption, obviously, because of our decision to dispatch from Pampa power plant, also a reduction of energy purchase, also associated to the sale of Jorge Lacerda, and also because of higher generation, royalties, charges, and other costs when there were other elements that contributed to costs. We had 9.1 EBITDA. Net income, we had a significant increase, especially because of the reduction or drop of inflation in the period.
The quarter's inflation was 2.09% as compared to 3.20% in Q1 2022, with a significant effect. This was one of the important effects that we identified for the improvement of net financial result. That was BRL 104 million, and this contributed to our net earnings. We had a 36.7% higher than last year. Now, the non-financial highlights on the next slide. As we said before, here you can see. Gralha Azul transmission system is fully operational, and we have already started using Santo Agostinho Wind Complex. We had the first generator unit. Today, we have 11 units already operational, three already commercial, and eight in test mode, and we hope that it will be fully operational by the end of the year.
This is what we predict. Our Fitch Ratings was reaffirmed as long-term national rating AAA. It's 11th year in a row with rating. We always monitor this in our recognition by the Transparency Award by FIPECAFI, showing that our rating is related to the necessary transparency and value to be credible, respected by everyone. We have also signed an MOU with Invest Paraná last quarter for the production of green hydrogen projects in large scale. Invest Paraná is supporting us to develop this process for us to start producing green hydrogen at industrial scale in Brazil.
On slide number seven, we approved the payout of complementary dividends for the fiscal year of 2022, amounting to almost 1.5 billion BRL 1.78 per share. Shares will be traded ex-dividend as of May 9th, and the payment date will be decided upon later, decision by the management board. This is part of the management of flow and our investment obligations. The other highlight was the release of our sustainability report. I invite you, ladies and gentlemen, to take a look in our website where you can see our climate journey, you can see details. We'll be talking about investments in the communities where we operate and our integrity program and ethics committee, all monitored by the board of directors. You have a very.
There's lots of information there. I would like to invite you to take a look at our website, our sustainability report. Now our ESG KPIs. We are scaling up our assets. This is the trajectory we are in now. We sold the asset in Pampa. Of course, in the first quarter, we had very low intensity. It's been going. Our dispatch from Pampa, we decided not to dispatch in the first quarter. Total emissions have dropped significantly because of that. Water input and consumption, as a priority is to be used for thermal electricity. We have increased the number of women or the percentage of women in the workforce. We've been creating opportunities for gender diversity to take place, not just at administrative level.
We are almost 50/50 close to that. In some areas, we have more women than men even. We are giving opportunity also in operational area with many diversity programs in the regions we where we operate. Bahia, Rio Grande do Norte, Santa Catarina. We have projects and specific trainings for women operators. As to our investments in social responsibility, we've been monitoring so that we can use 100% of the incentivized resources. We are slightly more cautious with these expenses, thinking of the total amount that we are going to have so that we may spend the funds, the social funds. On the next slide, you can see energy sales. As usual, we're highly contracted in the short term. This is part of the resilience of our business.
As you're going to see later, we have 65% of our revenues related to regulated activities that are contracted in the long term. In terms of sales of energy, we have something like 35% of our total volume. Even those 35% are reasonably well contracted in the long term. As you can see, the uncontracted amounts of 23%-25% are very small, demonstrating that this is a structural reserve of GSF, plus a little bit more energy that we are operating in the market. Diversification of our free energy is very important so that we can dilute the specific risk of one manufacturing segment. This is how we're always selling energy, and we end up protecting our average price from major fluctuations.
We had a good quarter in terms of sales, despite the low prices, without any major impact in our average prices, because of the volumes of energy that we sold in the past. On slide number 12, you can see our energy commercial strategy. We've been seeking quality at times of low prices. Our customers have prospects of growing in specific industries. We have also had, during 2021, a reduction of our total number of customers because of the lack of energy. Now we are likely to grow even more in the area of small customers with small units, with slightly better margins. Next slide. Slide 14, to talk about expansion. As we said, Santo Agostinho Wind Complex is in construction, with 52% of the project has already been completed.
We are testing it. We have eight generating units. If I'm not mistaken, we have already 11 of them being tested. We are commissioning wind turbines to deliver this complex fully operational by the end of the year. We also have Gavião Real transmission project. We already have the licenses. They were issued in the first quarter. The topography and we are in surveillance, in surveying, sorry, we are underway. With regards to ANEEL CapEx, we have closed the contract with a reduction of about 30% in CapEx, thereby providing a profitability to this enterprise, which is an enterprise that is going to complement our transmission system. The other project is Assuruá Wind project. Environmental licenses have been partially issued.
We can start our works. We have started construction without any major surprises and nothing much new, because it's very much in the beginning. It's going to be the same for our next slide for the photo voltaic project in Assú Sol. We already have the previous license, and we have land contracts that have been signed, and we are going to start construction in Q3 2023. Geração, we're always talking about it. We repeat it because the original idea was to transfer this asset to ENGIE Brasil Energia. There were no developments since we last talked in the beginning of the year when we presented Q4 2022.
As a reminder, there is the possibility that the controller might bring this asset to ENGIE Brasil Energia, as decided by the board of directors, and voted by the majority of minority shareholders advised by the offices and ENGIE Brasil Energia managers. On slide number 19, you can see our pipeline. We have 1.8 GW of capacity. The message is do not wait. Do not expect major developments in the next months or years while we have a very high energy surplus, which is driving prices down. Our message here is that we need the government to stimulate consumption, and the outflow of all the energy available in the market for prices to recover. This will stimulate investment in new capacity.
Now I'm going to give the floor to Malta to talk about the financial performance. Before, I would like to thank Malta for the time he was the CFO of ENGIE Brasil Energia. Wonderful work. Really excellent. I wish Malta all the best for the new phase in his professional life. He's going now to work with our foundation. As Eletrobras with revitalization, he will be working, and the foundation will become much more important. We need very good management, and Malta will be the one dealing with that challenge in the next few months, restructuring our pension. Mauro, thank you very much for your contributions, your 18 years that you dedicated to the company, and good luck in your new challenge.
Hello, Malta.
Thank you, SattaSo now on slide number 21.
Here you can see the history of our financial performance. You can see the ROE and ROIC at very high levels that are very consistent, and this demonstrates how solid our financial performance is. On the right-hand side, you can see a few pieces of information that are relevant for our performance from 2016- 2022, a significant volume of investments, almost BRL 26 billion with high leverage, and also a significant use of our installed capacity, especially for renewable energy, with an increase of 36%. At the time, we acquired TAG, whose financial performance has been really great. Yeah, we started transmission, and this was fully successful.
Despite a very critical time, such as the pandemic, our EBITDA during this period went up 108%, net income went up by 65%, and we paid out almost BRL 14 billion of dividends. Now what I'm going to say here has partly already been addressed by Satamini in his initial explanations, and I'm going to try to give you a little bit more color and details to give you a more in-depth vision of our variation. Net revenue went down by 4.9%. Most of this reduction is due to the impact in accounting and economic aspects related to transmission. It went down from BRL 502- BRL 374 if we compare Q1 2022- Q1 2023.
Prices have gone up on average 3.1%, and it's slightly lower than inflation, especially, the prices were slightly lower in the recontracting of energy that we had in this period because of some contracts that matured. Sales volumes went up by 1%, this is due especially to the acquisition of Floresta and Paracatu that added to our portfolio, a significant amount of energy. For CCEE, we had a reduction of BRL 29 million. On the other hand, we had a drop in cost of BRL 66 million, which caused the impact in our impact that was positive by BRL 37 million, this is a result especially of exports of energy during the period and also, an elevation of GSF and spot prices during this period.
As to trading, we had a reduction of 64% in revenue, but also in cost, which added BRL 2 million to our EBITDA. As mentioned, we have had a reduction of BRL 128 million in our revenue, coming from IFRIC 12, but we also had a reduction in cost, which caused a positive effect in our EBITDA of BRL 54 million, the main driver for that was the payment of our financial asset of transmission activities. On the next slide. On this slide, you can see the result of our equity income, especially TAG. BRL 637 million is the cost of services.
Our share was BRL 248 million, was contribution to EBITDA, BRL 75 million above, BRL 173 million in terms of result that we have had in the first quarter of 2023. The reason for this higher result was especially the update of transportation prices and also the reduction of O&M because of the incorporation of the activities that were being conducted by Transpetro. Here, this is the EBITDA, it's an elevation of 9.1% between quarters. If we take out the economic effects of transmission because of IFRIC 12, incorporating the elevation of the RAP, driven by the upper, the beginning of operation of Novo Estado and Gralha Azul, we had an increase of our EBITDA of 13.1%.
As mentioned before, we had variation in price and volume in CCEE. These variations were positive in the period. We also had a reduction in fuel consumption at Pampa and also an increase in our volume of purchases as mentioned because of the contract that we signed with Diamante. We had an elevation of costs driven especially by the adjustment by the inflation of our contracts with suppliers, and also because we incorporated the cost of the new investments that we have made along last year. As mentioned before, we had a cash impact of the RAP that we received, and also our equity income in TAG numbers of BRL 75 million.
In terms of net income, we have had a significant increase of 36.7% as a result of the growth in EBITDA, especially, and better financial result in the quarter, especially due to the slowdown of inflation combined with lower financial revenue because of cash consumption of new investments that we made. Then, the higher income tax is because of higher EBITDA and better financial result. This is the breakdown of our debt since 2020. The leverage level remains okay, despite the significant volumes of investments that we have made. We closed the quarter with a net debt over EBITDA ratio of 2.6x , net debt to EBITDA of 2.1. We still have lots of room to support our growth.
As a reminder, the most restrictive covenant that we have is gross debt to EBITDA of 4.5x and net debt over EBITDA of 3.5x . This is the debt profile, as Sattamini mentioned, and we reaffirmed our AAA rating. Here in the middle, you can see the breakdown of the payment schedule that is very well-balanced. On the right hand side, you can see the breakdown of debt and the percentages indexed by the IPCA, which is the index that also indexes the majority of our energy sale contracts. Duration closed at seven years and two months, and the face cost of our debt is 10.5%. This is our investments, our CapEx since 2019. A significant volumes of almost BRL 15 billion.
In terms of expected investments for the upcoming three years will be about BRL 12 billion. I'm talking about Santo Agostinho, Assuruá and Assú Sol. This is our history of dividend payout. Most years we paid out 100%. Now, in this manner, I end my presentation. As Sattamini said, I am taking on a new challenge as the CFO of our foundation. It will have BRL 6 billion in terms of pro-properties with 6,000 members. Almost 3,000 of them are retired, so there is a major challenge. I'll give it over to Takamori, very experienced, very well qualified, and he will certainly be very successful in this role.
Thank you all very much for the time we spent together, and I will remain in the group, in the company, and the person chosen to succeed me is very highly qualified. Before giving the floor to Takamori, I would like to thank you once again, introduce Takamori, a professional who started his career here at Engie. He's been working with us ever since he was young. He still looks young. He has many years of experience.
Takamori, please introduce yourself. As of next quarter, he will be here with us making the presentations and talking to our investors and learning about your needs and answering your questions. Takamori, please, you can introduce yourself.
Before anything, it's a great honor and pleasure to have been appointed to take office as CFO.
I am especially grateful to Sattamini and also Mauricio. There's Chairman of the Board for the trust. My special thanks to Malta for the excellent work he did as CFO. As you are all aware, you in the market, he was once again chosen by the best CFO, by the sell side. I wish Malta full success in the new challenges that you're going to deal with. Well, I've been working in ENGIE for more than 20 years. I have held many different positions, I know the business, culture and assets very well that have brought me thus far. Obviously, financial discipline, strategic vision, consistent in deliveries and transparency, which have made it possible for us to come this far. My mission is to keep that formula that was very successful.
I'm really excited with the challenge and with you. Satta, the floor is yours.
Thank you, Taka. The formula is good, but it can always get better. We need to have new prospects, and this moves our company. We always have the discomfort of trying to do things in the best way possible, innovating and obviously, being conservative, because we have long-term investors, but always trying to get better and better, and I'm sure that new looks will bring new opportunities for improvement. We are counting on you. We count on Malta to help us. Malta will not be so close, but he will still be helping us. You are most welcome. Now, I think that we can move to the Q&A. Maybe there are some questions already.
Yes, we have two questions. I shouldn't fail to thank Malta for the partnership. It's impossible to work well investor relations working with the financial department. I would like to thank very much Malta and to welcome Takamori. We have two questions. The first from Guilherme Lima, sell-side Santander. He has two questions. The first, he asks us to comment in our interest in joining the capacity auction at the end of the year and which plans we would include in the bid. What would be the necessary investment. This is a good question for Takamori that is looking into the possibilities of our capacity of using new units, Salto Santiago, Jaguara, and what is our vision. Takamori can give his first message.
Well, I'm already on the spotlight.
You know a lot about it. Well, it's a very good question. We are not really sure about the capacity needs Brazil has. There is some surplus in terms of supply, but we will certainly assess the opportunity of complementing the plants of Jaguara and Alto Sertão. These power plants have space, technical capacity. We could add significant capacity to increase the company's installed capacity to permit the absorption of more renewable sources in Brazil. As a reminder, hydroelectric power plants are essential for the expansion of renewable sources. Yes, we are confident. It depends on the model that the government uses to take on new investments, but we're sure we will be able to take part in the auction.
Thank you, Takamori and Sata. Second question from Guilherme.
Could we talk about the energy export dynamics for Argentina? What is the export expectations, pricing levels and payment dynamics?
Well, excellent. Well, the expert is here. We've been working together on this, trying to measure with CCE the value of exports of our investments on a limit so that we could extract as much volume as possible for the MRE. Takamori can be more precise. This is related to increase in hydroelectric generation, which is shared by all agents that take part in MRE. If you want to complement.
The question, what exactly do you want to know more, the form?
The dynamics, how does it work and how this is defined? Expectations too, whether this is going to continueAnd whether this is going to be perennial.
We are trying to make exports more perennial. Today, we have surplus of energy in Brazil, and we also have energy needs in other countries in Latin America, so we can supply energy at more competitive prices than, for example, they can have in Argentina or Uruguay. This might even facilitate energy integration in a continent with gas transmission from Argentina to Chile and a regional agreement. We are trying to do that, and we do not manage to do that in terms of having a regional agreement. We are going to contract terms that today are used in Argentina. They have contracts with gas, they have good gas generation capacity, and we should not consider that we may disarrange the market in our neighbor country.
We are thinking in terms of exporting to Argentina after a gas is exported to Chile, thereby making the integration happen. This is what we want when we think of sustainability. There is a question mark, and Takamori, maybe you could address regarding the effective need, considering we have a surplus and the contracting of capacity. I don't have much to add to what Satamini already said to relate this to the long-term and supply. From the operational aspect, it's a kind of simple generating agents in Brazil. They declare the availability to export with the existence of energy that can be offered the day after. The operator compiles everything, identifies the needs of neighboring countries, and they will accept or not.
NCC would also define minimal prices to define the amount to be exported. This is a negotiation process that is simple, efficient, and has been a major advancement compared to what we had in the past. In the past, we could only dispatch thermal power, and now we can also export hydro energy, providing income to MRE agents to the energy reallocation market. There is room for improvement because this is the end of the rain season. We think that the energy will no longer exist very shortly for this season, but our reservoirs are at very good levels, which makes it possible for us to advance in part of the reservoir in a more efficient way. This complements what Sattamini has just said.
Having a design that will make it possible not just to use intelligently, the hydro power, but also to use the excess from our existing reservoirs. We have room for improvement, but the government has been very fortunate in the design.
Thank you, Takamori and Sattamini. Let's move to the next question from Rafael Nagano, sell side of Credit Suisse.
Two questions. What are your expectations in terms of competition in the next auction for transmission that will take place in June? Is there a specific lot that is getting more attention?
The bidding expectations are always large. We know that major players are looking into it, looking into the auction, but the auction is quite reasonable in terms of total volume of investments.
Depending on how prices are positioned, we might have a slightly more an easier solution. We've seen players that are very aggressive and maybe based on assumptions that did not come true. This is our perception. We are really confident that our team is working in the best way possible within the levels of responsibility and the mandates that we have. We do not have the excessive discipline that might affect our competitiveness. We're always looking into that.
We reinforced our team, our development support team in the last few months so that we could have a bigger number of lots, to be sure that we did the appropriate technical work to provide the best engineering solutions, the best layout, best negotiations with suppliers and service providers, so that we're very well pre-prepared for the auction in the end of June. Unfortunately, I cannot tell you specifically which lots we are interested in. We'll try and find a reasonable volume of investments so that we could continue our strategy of increasing and diversifying the portfolio of ENGIE Brasil Energia. As we affirmed in 2016, we want to diversify close to our core.
Today, it really makes sense that we clearly perceive, not just us, we had that in the past when we made the decision, but the market can very clearly see that transmission is very important for energy because it makes it possible to bring energy and power close to our consumption needs. We hope that we will win a reasonable share of the auction that is going to take place in June.
Thank you, Satamini. Next question from Rafael Nagano. Again, what are our expectations for the implementation of generation projects?
Well, yes. Today we have three major projects, 1 in the final phase, close to operation, and two other portfolios. They're part of our sold energy portfolio. If you look, we have a major portfolio of sold energy that needs to be renewed periodically.
Today, we have 5.5 average GW of energy that has been sold, and one giga is third-party energy, so we could recontract energy. The thing is price. We understand that price cannot be for a long time below marginal costs of expansion. We saw the closing of GE factory of wind turbines in Brazil. Siemens Gamesa has announced that they will close their wind turbine plant in June this year. This situation of surplus that was caused by many market distortions, so the capacity was taken out from the free market to the auto production. They distorted the market, but they end up being harmful. It's only healthy if it's healthy for everyone, and also the value chain in the system. We need to pursue balance. This is part of our agenda.
We're going to have good surprises because the government can see this need. Our next question comes from Arlindo Souza from the sell-side from TC Investments. Good morning. Congratulations on your performance. Could you explain for TAG's performance above expected in the last quarters, does the company expect to keep these levels with TAG in the short and medium term? Well, there have been important factors, and TAG had a buyout leverage, so it has a debt. The debt is gradually paid. This is related to inflation rates. We are making the necessary adjustments. After the two years of operation with Transpetro, there was a phasing out with a level of efficiency and quality. The results that we're seeing are the results that should stay and be sustainable in the longer term.
We were expecting this. It was included in our business plan. It's slightly better than expected because of the management opportunities.
Thank you, Sattamini. I have a question from Yuri Goulart, buy side from Trília Investimentos. He says that over the past few days, the discussion on the calculation of spot price has become more intense. Do you have a vision? Can you update your vision on that?
Yes. Our vision is that the calculation of spot prices can be questioned and reviewed, but it needs to have a fundamental element, which is the sustainability of the country's businesses. There is a very low price that doesn't cover all the elements that are necessary to bear the costs of an operation, this will end up leading to losses and making the system weaker as a whole.
We defend that we should think about it, but it's a reflection that tries to find price levels that will keep sustainability of generation in the country. This has been our position. The questioning about using or not Itaipu cost, this is pertinent, but the formula that will remain is something that should be sustainable in the long term. If we were today with surplus lasting for a long time, there is a major likelihood the prices will stay at the floor of the spot price, and this should be sufficient for the power plant to do the necessary maintenance so that the turbines can generate an appropriate level of energy. This is what we defend, and I think that the decision should go at, in that end. Takamori, you've been working on that front.
Would you like to say something?
Yes. I would like to complement it briefly, Sattamini. It's a very good question. As to the merit of spot price, and Sattamini said, that this discussion started this year, because of an opportunistic action, of an agent at a legal level. We think that this is a very bad strategy. There's always room for improvement, but improvement needs to take place at regulatory, administrative levels with all the stakeholders, and at the opportune time, everyone involved should position in a timely and fashion, and suitable fashion. We think that the way it started was not good, but we're sure that ANEEL, the regulation agency, is aware of the relevance of the theme and will address this with sensibility and serenity.
This will be addressed at the appropriate field, at ANEEL's field.
Thank you very much, Satamini and Takamori. Our next question is from Marcelo Sá, Sell-side, analyst from Itaú. Could you talk about regulatory discussions about the potential compensation of hydropower plants? In which stage are the conversations? Could you say something? He has a second question.
Well, since we are in the field of regulation, well, Takamori is migrating from there to here, Takamori can answer. It really falls short from what we would like it to be.
Yes, exactly. We all know that ancillary services are provided at a plus cost by ANEEL. This does not make it possible for agents to coordinate in the best way possible. Whenever possible, market conditions should be correctly priced.
This issue of ancillary services has gained strength more recently, and the regulation agency has opened some spaces for discussions that are some public hearings that are open, keeping some level of ancillary services. This is a good time for us to discuss the repricing of these services. The regulation agency is paying attention to that, and there is room to improve it. We are at an intermediate point, but this is the right timing for us to discuss the theme.
Another question about the capacity auction. Do you think hydro will compete with thermal, or are they going to be different products?
Can I answer this question too, Sattamini?
Yes, please feel free. Floor is yours.
Marcelo, ENGIE is for competition because we believe that the best agents will do better. Within this context, we believe that in addition to competition and efficiency, whenever there are niches and sub-products, this limits competition and limits the market in terms of providing the best services. We prefer to have an auction that is more agnostic in terms of source and type of energy. It might be difficult to implement, but this is what we are after. We see no problem in having a competition between hydro and thermal. What needs to be very well-defined is which is the product, which resource is more scarce. Based on that and on mission, all agents and even other sources and other stakeholders may find combinations and solutions that are smart and efficient to address the problems to be solved.
Just complementing, we want to avoid that inappropriate decisions for the allocation of resources are made. Allocation should be the most efficient possible in terms of providing what the system needs at the lowest cost possible. That's why we say it's useless to try and offer offshore wind right now through a specific auction, because this is going to cause distortions and inefficiencies, we should rather use the existing resources to provide what you have. The best resource is the one that should be made available. This is the message that we are believing, that we're giving to the market, and we want to have a healthier industry in that regard.
Thank you very much, Sattamini and Takamori. Shifting gears slightly from regulation to sales. We have a question from Daniel Travitzky, sell-side analyst.
Could you talk about the energy sale dynamics and how we are positioning in a price-dropping environment? How do we integrate our sales strategies with investments in renewable energy?
Well, our strategy has been, for a long time, to be very well contracted, and you can see this very well in our energy balance. Obviously, when we have lower prices, our appetite for sale goes down. We can never stop completely selling because we have customers. Sometimes we are slightly more selective. We have a low cost of regretting not selling if prices are very low. Well, I didn't sell, and prices might drop even further, but they are not going to drop much because they're already very low.
All of this is considered once we define our sales strategy. This dynamics is discussed in our energy forum that meets every two weeks, where we analyze price movements, commercial, and we make the decisions. We are monitoring all the decisions of our customers. We cannot stop selling, but we can sell in a more selective fashion for the customers that we think have the greatest potential of staying with us in our portfolio.
Thank you, Sattamini. Our final question, both from Daniel, from Safra, and Joanna from Studio. They want an update on the transfer of Jirau, considering what Joanna said, considering the recent equalization.
We've been talking about that. This movement needs to be made by the controller whenever they think they should.
We have certainly been talking about this since the third quarter of last year with the review of Jirau transmission fees. The asset, Jirau, is a cash generator, and in this manner, the pressure of allocation from shareholders. It's better for controllers to have a cash-generating asset into the company. This movement needs to be made whenever they find it appropriate. Today, we are in the process of investing major amounts in new capacity. We think that, maybe bringing the asset. This should be combined with a financial solution. All of this is being taken into account by the controller. We as directors and managers of ENGIE Brasil Energia are not part in this discussion until it's brought to the board of directors. This is part of our governance.
That's why I do not have an accurate answer to give you. We are not taking part in this discussion, and we try to keep our impartiality in a discussion of a transaction between related parties.
Thank you very much. In this manner, we end our questions and answers session. Sattamini, Malta, and Takamori, the floor is yours for your closing remarks.
In whichever order, Malta, Taka, and then I'll close. Malta, you're muted.
Once again, thank you very much for the trajectory along these four years. The interactions are always very positive. As I said, and as you could see, Taka knows a lot about the market and regulation, considering this scenario in terms of supply. He might be the most suitable person to manage those matters.
I wish you all a good afternoon and a nice weekend.
On my end, I can only thank you for your trust. I'm very happy with the challenge. I'm honored with the opportunity. I am sure we will be able to build and keep contact and transparency with the market.
Let's move on. I'll meet you next call. I would also like to thank Malta, to welcome Takamori, and to tell the market that we are always very well-served by very good professionals at ENGIE, and we prepare all successions so that we always have this dynamism in our company. We tirelessly pursue improvement, as we had with Malta and here again, things are always to get better, and you're going to see this a long time. We need to keep the dynamic feature of ENGIE Brasil Energia.
This is what differentiates us as one of the top players in the market. Once again, thank you very much. Have a nice weekend.