Good morning. This is ENGIE Brasil Energia Conference Call, where we will discuss the results for the third Q 2019. All participants are connected only as listeners, and later on we will open the Q&A session. Instructions for participation will be given. In case it is necessary to have help from an operator during the teleconference, just press star zero. We should remember that this teleconference is being recorded. This presentation, followed by slides, will be simultaneously transmitted through the internet through www.engie.com.br/investors. The slide presentation and the company's earnings release are also available on that website. Before proceeding, I would like to clarify that all statements that may be made during this teleconference regarding the business outlook of the company should be treated as forecasts, depending on the country's macroeconomic conditions, performance, and the regulations of the electric sector, besides other variables. Therefore, they are due to changes.
With us here, we have Mr. Marcelo Malta, Chief Financial Officer, and Rafael Bósio, Investor Relations Manager, who will talk about the company's performance in the third Q 2019. Right after, we will have the Q&A session with them. We remind that journalists who wish to ask questions can do so by email, sending them to the company's press office. It is now my pleasure to turn the floor over to Mr. Marcelo Malta. Please, sir, go ahead.
Good morning to all, and thank you for being with us in this earnings teleconference of the third Q 2019. This is my first call since I took over as CFO at ENGIE Brasil Energia last August, and unfortunately, Mr. Sattamini is outside Brazil, and therefore he could not be with us today, for which he apologizes. Certainly, he will be with us in our next teleconferences.
For those who do not know me, I joined the company in 2005, and in these 15 years of my professional life, I acted as Accounting Manager, also as the Financial Planning and Control Manager, and accumulated a very wide view of the processes and strategies of finances at ENGIE Brasil Energia, as well as all of our interests. To start our talk today, we have slide five with the main financial operating indicators in the period. As you can see, we have an important growth in the EBITDA and net profit in the period compared, and this financial situation was motivated by several factors. First, the level of commercial operations of our wind energy complexes of Uburana, and also of the commercial situation of our thermoelectric company. The operation of these complexes added BRL 140 million to our EBITDA.
Another factor that also contributed to this financial performance was the execution of a guarantee of the building contract for our thermoelectric Pampa Sul complex. The execution of this guarantee was duly motivated by the delay in the conclusion of the work. We had foreseen by contract to complete it on December 31st, 2018, and it was only completed at the end of June 2019. Therefore, to compensate the results we did not receive due to the delay in the completion, the execution of this guarantee made us receive the amount of BRL 334 million, and with this 14%, generated an impact in our EBITDA of BRL 321 million. In slide 26 and 27, we have the main events of the quarter. In the transmission segment, we had important advances in the transmission system Graal Azul, involving the construction of 1,000 km of transmission lines in Paraná.
Now we have this situation in Miranda. We issued some tranches with the due dates in seven and 10 years, and this will give us 3.6-3.9% per year increase. Most recently, we concluded the financing contract with BNDES around BRL 1.26 billion, and the financing of the construction of our wind energy complex in Uburana, it's a 19-year contract with a TLT rate of 1.7% throughout the year. In terms of our Graal Azul project, which is our transmission line of 1,000 km, which is being built in Paraná, we obtained two installation permits: one for the Ponta Grossa substation and another one for most of our transmission lines. Therefore, I would say that these are two landmarks that show our advance and progress of implementation of the line, and also for the achievement of our implementation program.
We issued the distribution of 100% of net profit in the first Q in the amount of BRL 893 million, and also approved the credit in the amount of BRL 354 million. Shares were ex-dividends and net interest rate as of December 3, 2019, and the payment quota will be soon informed to the market. In this quarter, we also had important awards such as the Company of the Year by Época Negócios 360°, and we were also awarded for the 10th time and the seventh consecutive with the Transparency Trophy organized by ANEFAC. Now, I would like to give the floor to Rafael Bósio, who will discuss the quarter's most important updates in the first sessions of our presentation, and then I'll be back to comment on the financial performance. Thank you very much.
Good morning to all. Thank you Malta.
The first update we had to our presentation on the second Q earnings results, controlling interest in the controlling and simplified controlling yesterday on slide nine, where we now have a direct participation of 29.25% at TAG. Since in the month of September, there was the incorporation of the TAG Transportadora Associada de Gás. We had the direct participation of 29%, and then we will see now the results. Now, speaking about the segment of natural gas on slide 12,
ladies and gentlemen, please remain connected. We are reconnecting the line. Ladies and gentlemen, please remain connected. Please proceed, Mr. Bósio. The line went down.
I was speaking about slide 15 on the solar distributed generation. Going to this subject, besides the update numbers of units and installed power, I draw your attention to our geographic expansion, which was carried out in this quarter.
Now we will have our footprint in over four states since the end of this year's second quarter, and now reaching 17 states with the major contribution in segment B2B. Now, on slide 19, we have a 19% improvement. On slide 21, we updated the graph of canceled energy contracts with an increase in the availability for 2020 and 2021, as per what we informed on the second Q 2019. This is part of our new strategy to mitigate the impacts of deficits of hydroelectric generation through the adequate management of our portfolio. We also had a small decrease in the cancellations in years 2022 and 2024. They are small amounts, but this will intensify as we get closer to these years because it is very rare to see free market clients buy energy for more than a year, a year and a half earlier.
Now, on slide 22, we can see that as compared to the first Q, we had a reduction in the three years, 2019 to 2021, and an increase in the sales price in 2021 with stability for this year. This brings us a margin.
Ladies and gentlemen, we will stop now our Q&A session, and to pose a question, please press star one. To remove your question from the line, please press star two. Our first question comes from Mr. Caíque Villela, Banco Safra. Please proceed, sir.
Good morning all, and thank you for the call. I have two questions. The first, looking to your growth and analysis, I would like to know if you have any comment or any area that you'd be more interested in. Second, if you could speak about the commercialization and more visibility for 2020, and how do you see long-term prices.
Ladies and gentlemen, please wait while we reconnect the speaker's line.
Caíque, I'll ask you to be patient because our speaker will go on with his presentation, and then we come back to your questions. We now will go on with our presentation, and we'll return to your question. Entering in the extension details and speaking about the development and construction of our new project. Slide 26 shows the evolution of the development constructions of our new assets on slide. On this slide, we see the 3Q 2019 earmarked the beginning or the startup of the wind energy complex Campo Largo phase two, both with the execution of new exercises in the work of the connecting line. On slide 27, we show the advances in the implementation of the transmission system Graal Azul in Paraná.
In this Q, we had the installation permit to start the work of substation Ponta Grossa, and now last October, we received the installation permit to enable the beginning of the building of the work of the system's main first line. Now, as in Campo Largo phase two, we are maintaining forecasts for the startup of operations in this line with an anticipation of 12 months as to the deadline in March 2023. I now give the floor back to Malta for his comments on the financial performance, and then Mr. Caíque will go back to your question.
Thank you again. On slide 30, we show the demonstration of variation of the net operation income, EBITDA, and net profit.
Our net operating income shows growth in this three Q 2019, and this slight growth was impacted by a reduction in the positive effects of our transactions of BRL 49 million. As a counterpart, we have a reduction in our operations of BRL 412 million, and then the compared for the BRL 23 million. Since we had the negative impact of BRL 409 million in our revenues, we have here the result in our net operating income. In the EBITDA, yes, here we had an important growth of 11.1%, 56.1%, and a great part of this is the result of the operations at Campo Largo, Uburana, and Pampa Sul , and also the impact of the recognition of the guarantee that we received in August 2019. With the effect of the guarantee we recognize in our results, the variation of EBITDA would be around 25% in the comparing quarters.
The net profit also showed an important growth of 16.2% and 56.2% in the quarters. If we combine the effects of the execution of the recognized guarantee, the variation of net profit would be around 12%. It is important to mention that in recognizing our financial expenses in the amount of BRL 400 million, motivated by the growth of the company. On slide 31, we have a breakdown of the composition of our net operating revenue, with an increase of BRL 215 million due to the increase in the sales volume, which was mainly mitigated by the operations of Campo Largo and Graal Azul . We also had an increase of BRL 98 million in revenues, and we also had an increase of cost of BRL 53 million, which gave an impact in the operations at BRL - 25 million .
We also have BRL 68 million revenue from the building of infrastructure for transmission, and with the cost of the construction, we had BRL 424 million with a net positive result of BRL 4 million. The sales aggregating BRL 29 million in our net operating revenue, mainly due to the inflation, with an increase of 4% in our average sales price due to inflation. The installation of solar panels also impacted the revenues, and this represents the control of solar panels in 2018, which now helped us consolidate this operation. Now we have the contribution of our complexes of Jaguara and Miranda due to the increase in financial assets remuneration. As we mentioned before, we had the reduction with the transactions, which resulted in a decrease in our net operating result, and also a reduction on the amount of BRL 409 million.
The motivation on the decrease in our short-term market or in our PLD, our energy reallocation mechanism, with a result in the quarter of around BRL 214. We also had the lower impact in our generation scaling factor, much lower and better than the other assets. We had the recognition of the reduction of our sales position at the energy trade with a lower generation in thermoelectric, and the recognition in the third Q of the uptime ratio of San Antonio. Now, in our next slide, we go back to EBITDA, where we have an expressive and important impact, growing 55.1%, and we received the BRL 321 million referring to the indemnity due to the delay in Pampa Sul, which I already mentioned. Excluding the income reconciliation, the increase of EBITDA would be 25.4%.
We had the reduction of BRL 45 million in the purchases of energy and also a drop in the fuel consumption of BRL 41 million, mainly due to the reduction in the thermoelectric generation in our contracts with Jorge Lacerda. We had a positive result in our equity income at the TAG, and we had BRL 21 million added by TAG to our EBITDA in the quarter, and parts of the financial assets of Jaguara Miranda, BRL 10 million. We had reductions due in the cost of FG&A and personnel, motivated mainly by the limits of the commercial operations, by the startup operations of Campo Largo. As we mentioned, we had an increase due to the recomposition of revenues due to the charging of indemnity due to signatures as per contracts, and also the renewal of operating risk policy. Also in transactions as CCEE due to commercial operations of non-expressive amounts.
Besides everything that was commented on the EBITDA, as a consequence, we had an impact of the increase of interest rates and social accounts, as mentioned, and also an increase of BRL 100 million of the net financial expenses. To conclude, we had the growth of depreciation and amortization of assets, and also Campo Largo and Uburana, a specific situation. Now, on slide 34, we had a small non-expressive reduction, and the major drop is represented on return on invested capital of 19.6%, and also an increase in the sequential comparison of the company. The next slide shows the composition of our indebtedness. This on the third Q, we had a growth in the relation between gross debt and net debt over EBITDA, motivated, as we mentioned, by the increase of the indebtedness of the company, mainly due to acquisitions and the projects we are developing now.
We attained 2.7% of the debt, of the gross debt, EBITDA, and 2.2% net debt over EBITDA in a very comfortable leverage level still. The next slide, 36, shows this movement in our net debt in detail. The main components of this evolution are the reduction of 1.2% in the comparison with last year's same quarter, with the impact of BRL 776 million in dividends and IOE. The exchange variation is compensated by an effect of BRL 213 million in this graph with the exchange-hedging operations, with BRL 11 million of appropriated interest, and BRL 121 million of income tax and social charges. Besides, we had an investment amounting BRL 93 million, amounts that were paid by the obligation of constructions of BRL 18 million, and all the expenses were paid, and the capture that was generated by the operations of 1,434.
As mentioned, the effect of the indemnity for the execution of the guarantee at Campo Largo. This is the other part of the execution of the guarantee, and we had to cover negative impacts with the results we had, or the results we did not attain due to the delay in operations. We also had the execution of another guarantee to cover the exceeding cost in the amount of around $18 million, which are represented by this amount in BRL. On the next slide, we have the profile and composition of our debt updated, considering that we had the contracting of debt for 2022, mainly with the operations we had recently, and also the share of the execution of the sixth and sixth issue of deb entures. For July 19, in July 19, we had a very high issue of debentures.
It's important to mention the reduction of the nominal debt cost, 7.2%, if compared with the first Q, 7.6% versus 8.6% in three Q. On slide 28, we have our investment plans. We had important expressive amounts to take into account, the acquisition of shares in TAg of BRL 3.5 billion. In Pampa Sul, we had investments of around BRL 700 million. In 2020, we estimate having CapEx around BRL 2.1 billion at Campo Largo, at Graal Azul, and Campo Largo Phase 2, which should be around BRL 900 million. For 2021, we also have for Graal Azul and Campo Largo, with approximate BRL 1 billion investments in CapEx, maintenance CapEx.
On slide 36, we show the evolution of the dividends proposed and paid by the company. On slide 39, our board of governors approved the distribution of dividends in the first Q 2019 at the price of BRL 4.39 per share, and also an increase in social capital, giving the payment of interest per share of BRL 0.43. Adding up these dividends in the first Q and equity capital, we have the amount of BRL 1.32 per share. Having said that, I conclude my presentation and open for Q&A.
Going back to our Q&A session, if you want to pose a question, please press star one. To remove your cue from the list, please press star two. Mr. Caíque from Banco Safra, please resume.
I'll repeat my question.
First, I would like to understand if there is any region in the next transmission auction that you're interested in, or how do you analyze the competition and the situation. The second question, do you have any view on how next year will proceed in terms of energy transmission, and if you have plans for the long term?
Thank you. The law has not published yet transmission auctions, and the loss in auctions, but we have interest, of course, in making a presence in these auctions. In terms of the forecast for next year, EGTF, we are now entering in this commitment. Naturally, we hope to have a better visibility, but anyway, we are already prepared with our portfolio, and we want to have a GFF in a level close to what we have been practicing in 2019.
Anyway, we will try to have as our strategy this position. As our prices, we hope that in the short time, the prices will be very much pressed because this year we had something similar to what we had at the end of 2018, but with much higher volatility. Now a decrease in energy because I would consider the last one was the worst month in our history, and November generally has very weak energy consumption. We are pressing on prices for 2021 as well, 2020, 2021. Naturally, as of 2022, prices will start to go down because they will separate from the energy pressure, and prices around BRL 60, slightly more or less. I think that is what I wanted to answer.
It is clear what you said. Thank you.
Our question now comes from Fernando Diz, Banco Itaú. Mr.
Fernando, please proceed.
Good morning. I would like to pose a question on Laffer Energia because there was a document from the modernization of the electric sector last week. I would like to understand if you already have a study on how this could impact your company because all the hydroelectrics and reservoirs should have a higher reserve. I would like to comment also on how you will separate the energy concession according to the contract you have today. Thank you.
Fernando. I understand that this alteration will impact new contracts as to last for energy for the future. It won't impact the past contracts. Our team, which deals with regulations, are following this very closely.
I think that there will be more positive impacts because we will have the opportunity to create new products such as the normalization with some wind energy generators with improved generation and giving a good opportunity for a possible auction. I think that first, if you want to contact, we will get into more detail with you. That is what we can say. Thank you.
I would like to remind you that to pose the question, please press star one. We now close the Q&A session. We give the floor to Mr. Marcelo Malta for his final considerations. The floor is yours, sir.
First, I would like to thank the presence of all of you in our teleconference. As usual, we are at your service for any further questions with our team of investor relations.
The eventual questions that remain from our presentation, if you have any questions, we are here at your service. Good afternoon to all and hope to see you next time. This concludes ENGIE Brasil Energia's audio conference for today. Thank you very much for your participation. Have a good day, and thank you for using Voitelo.