...Good morning, everyone, and thank you for participating in our earnings call for Q2 2024 for Eneva. Let's start on slide number 4, if you will, with the main highlights of the quarter. This was yet another quarter in which we sustained solid operating results. EBITDA total BRL 1.07 billion, an increase of 4.5% when compared to the second quarter of 2023, if we do not consider the results coming from the thermal Fortaleza plant in both periods. The EBITDA margin also grew, reaching 55.3%, an increase of more than 8% when compared to Q2 2023.
These numbers were driven by the continuation of thermoelectric dispatch to meet peak loads for the return of exports to Argentina, which were resumed at the end of May, after the restrictions observed at the beginning of the quarter, due to the extreme rain events in the south of the country had ended. With a reduction in temperatures from the end of June onwards, exports gained momentum and reached, in July, a record monthly level when we exported more than 500 GWh for the neighboring country in a single month. The trend continues uninterruptedly to date. In addition, the better, better improved performance of our assets also helped the results. Jaguatirica II and the Futura I solar complex increased availability levels with an increase of 15% and 7%, respectively, when compared to the same period of last year.
Our efforts in cost management and expenses also have led to good results. We've posted in the quarter nominal reductions of 8% and fixed costs for operation and maintenance, and 15% in SG&A when compared to the same period of last year, which accounts for an savings of over BRL 30 million when compared to the cost incurred by the company in Q2 2023. As for the commercial agenda, we had significant advances. We closed our first contract to supply natural gas from our Sergipe hub in a flexible basis to meet thermoelectric plants which won the capacity auctions. We announced another gas contract from our production plant within the Parnaíba complex, once again, allocating portion of its total capacity. Those milestones will be addressed by our Commercial Director, Marcelo Lopes , later today. On the financial front, we concluded 2 important operations.
The liability management process were improved, the profile of our consolidated debt, lengthening the average maturities and replacing part of the IPCA exposure by another index, which is the same for the most of the company's revenues. On a second front, we concluded the operation of receivables payments with a portion of the fixed revenue from UTE Porto de Sergipe I , which added BRL 2.7 billion to our cash, reducing our net debt and our leverage levels to an adjusted multiple of 3.7x in Q2 2024. Another initiative in the period that created significant value for the company was the incorporation of CELSE trading companies and SPEs into Eneva's holding company.
The reorganization optimized the company's corporate structure, and will also unlock a series of synergies, specifically in terms of tax and administrative costs, which will be better detailed later by our CFO, Marcelo Habibe. Finally, in mid-July, we announced the signing of memorandums of understanding with BTG for the acquisition of its thermoelectric generation portfolio and for a follow-on. I'll be talking about that in more detail on the next slide. Moving on to slide number 5 now, I have a summary of the transaction we announced with BTG, which will bring solid value generation for the company and its shareholders, and will make room for Eneva to continue using its competencies as it seeks new growth opportunities.
The first part of the transaction is the acquisition of the BTG's thermoelectric generation portfolio for BRL 2.9 billion, which is still subject to adjustments during confirmation due diligence. The four thermoelectric assets total 862 MWs of power. All of them are in operation, contracted with guaranteed fixed income revenue, and without significant financial obligations. Those assets bring about a robust and constituted cash flow until the end of 2025 and beginning of 2026, the most intensive period of capital expenditure for the company. The assets were valued at attractive rates, and on an as-is basis, considering only the portfolio's contracted cash flow. In addition to that, the valuation was carried out on a standalone basis.
In other words, without taking into account the operating, financial, tax and administrative synergies that will come about with the integration into our portfolio, such as, for example, the implementation of a more efficient capital structure with the refinancing of assets at Eneva's average portfolio cost, and the better use of the holdings financial expenses after the incorporation of the assets. In addition, the UTEs, which were contracted under the PCS, the simplified emergency auction, have their contract expiring between December 25 and January 26th, meaning that almost 150 MW of installed capacity could be contracted in a future capacity auction using a flexible gas supply solution from the Sergipe hub, since all these assets are connected to the grid and will be part of the portfolio moving forward.
The total EBITDA for the four assets amounted to BRL 1.8 billion in 2023, mainly from fixed availability revenues, and also, and as a result of the business combination, Eneva will strengthen its balance sheet and increase its firepower for future capital allocation opportunities and also organic growth avenues. In addition to the merits related to the acquisition of those assets, BTG is also committed to making Eneva its only platform for investments in power, generation, and natural gas. The second part of the transaction, which will be executed alongside, is a follow-on with a 100% primary offer, with a firm guarantee from BTG at a base value of 14 reais per share, which represent a premium of 10.7% on the share price in the 60 trading sessions prior to the signing of the MOU.
The base offer guaranteed by BTG totals up to BRL 3.2 billion, and may be complemented by a hot issue of up to BRL 1 billion. With the conclusion of the acquisitions and the capital increase, the company will optimize its capital structure and strengthen its balance sheet, further reducing its leverage and opening up even more space on its balance sheet. We are now moving forward with the due diligence to confirm the process, which we'll estimate will be concluded by the end of next month. Once adjustments are made, we'll move on to signing the final transaction documents and convening the shareholders meeting, which is scheduled to happen in early October, when we also hope to obtain approvals from CADE, the Central Bank, and conclude our follow-on.
We plan to close the transaction, finalizing preceding conditions to happen in the fourth quarter of 2024. We'll keep you all informed on the developments and relevant updates of the operation through the company's official communications channels. I will now hand over to Marcelo Lopes , who will update our trade agenda.
Thank you, Lino. Good morning, everyone. Moving on to slide number 6, I'd like to share with you the developments in our commercial agenda for the past few months. As mentioned by Lino, we signed a contract with Copergás, the local gas distribution company in Pernambuco, another contract to sell off-grid gas small scale, as we call it. The contract covers the sale of up to 40,000 m³ per day of natural gas, with an 80% take or pay, and valid for 3 years from the end of August this year.
Supply will be made from the natural gas liquefaction plant at the Parnaíba complex. In the scope of the contract, we will be responsible for delivering GNL and Petrolina and Garanhuns , and also the operation of the Copergás plants in those places, have thus expanded our trading of off-grid gas and ensure the contracting of yet another part of our liquefaction plant in Parnaíba, including a new client from a relevant segment for the expansion of our business. Local distributors of gas have also ensured yet another source of revenue in the short run, thus diversifying and strengthening the company's cash flow. Moving on to the bottom part of the slide, we had a very important strategic milestone in the quarter: the signing of our first 100% flexible natural gas sales contract with Linhares Geração.
The contract was signed to supply throughout its capacity reserve contract, which starts in July 2026, but which can be brought forward according to the rules of the auction. Under the scope of the contract, Linhares will be able to order up to 1.1 million m³ per day, and supply will be for the duration of the 15-year capacity contract, and that will happen through the Sergipe hub. The contract has a fixed price portion, which compensates for the capacity reserve and a variable portion when there is dispatch linked to the LNG indexing factor, which is called JKM. The signing of this contract shows Eneva's pioneering spirit in the Brazilian natural gas market, as it is the first contract for the supply of a thermoelectric plant signed between private companies in the country.
Like the other gas supply contracts we have announced, this contract also contributes to diversification and expansion of our source of revenue as we start to sell gas for the Brazilian on-grid market. In both cases, the contracts involve additional monetization of existing assets without adding-
... significant CapEx amounts, thus improving the return on our asset base. We continue to focus on ensuring new contracts on these fronts, while advancing negotiations with potential clients to close the remaining capacity of the Parnaíba plant and the Sergipe hub. I will now turn the floor over to Marcelo Habibe, who will talk about value generation we have achieved with CELSE so far, and advances of our financial and operating results for the quarter.
Thank you, Marcelo.
Good morning, everyone. On slide 7, I'd like to show you the results of initiatives we conducted out of the hub Sergipe since October 2022. We have made progress on several fronts, seeking to unlock values in synergies and upsides. On the revenue front, as Marcelo said, we signed the first 100% flexible natural gas supply contract at Linhares, a milestone in our commercial strategy, and a business model that will seek to develop more and more over the coming years, with the expansion of power plant for the national interconnected system. We have also reviewed the PIS and COFINS tax basis in a move that unlocked around BRL 20 million a year for the asset. We also carried out the hub's first storage operation, yet another way to monetize our assets, and we will use it in time.
On the cost front, with the integration of the asset into the Eneva platform, we reduced our expenses on OM and insurance, a savings of almost BRL 16 million a year. Looking forward, we are implementing a compression solution to take advantage of the asset's boil off, which will allow us to substantially reduce the cost of that item. In addition to maximizing revenues and reducing costs, increasing the asset's EBITDA margin, we achieved important value levers in the financial and corporate spheres.
We restructured the asset's debts, moving from the complexity of a project finance structure, which involved creditors from different geographies and limited our capacity to develop our business plan, to a structure that now, in addition to being simpler and less costly, has reduced the gross debt by more than BRL 500 million , while freeing up more than BRL 240 million held in a reserve account. In addition, in June, we completed the incorporation of the hub into our holding company, initiating the tax use of capital gains amortization, improving the use of the holding company's current financial expenses, and in the future, speeding up the consumption of the accumulated tax loss balance. These are some of the initiatives we have completed at the Sergipe hub since its acquisition.
We have thus made progress in implementing the investment thesis of the transaction, which went way far beyond the acquisition of the thermal plants from revenue stream, bringing a series of opportunities for synergies with our portfolio and the potential to generate additional value for the companies and shareholders.
Moving on to slide 8. The second quarter was yet another very sound period in terms of operating performance. In the first graph to the left, we see the rebound of exports to Argentina, and we are now exporting in the third quarter. Since the end of June, we have been exporting energy from Parnaíba on a continuous basis, and we exported a record amount in July, 500 GWh, and we are still exporting uninterruptedly. If we consider the results until Q3, 2024, we have exported more than 650 GWh in this quarter. Year to date, we are very close to surpassing the volume exported in 2023.
This is because we had a signal of demand on the part of Argentina as of the beginning of May, but we could only start exporting at the end of the month because of the restrictions, given the extreme rains in the south. We also saw an expressive increase in the regulatory thermal dispatch to the SIN, despite the high levels in the reservoirs. In the first semester of this year, we generated 792 GWh, a 74% growth relative to the same period last year. On the right-hand side, you see the results of our initiatives to improve operational efficiency and financial discipline, with a reduction in our costs and expenses. In costs, in operational and maintenance costs, we had a nominal decrease by BRL 13 million relative to Q2 2023.
In terms of consolidated SG&A, the nominal expenditure was reduced by 15% relative to Q2 2023, a savings of BRL 18 million. On Slide 10, we see the main impacts of EBITDA quarter on quarter. If we deduct the effect of TPP Fortaleza between the periods, we see a 4.5% increase or BRL 45 million in the EBITDA in the operations of the company because of our operating performance. Several segments contributed to this growth, to this growth. TPP Jaguatirica II expanded by BRL 46 million in terms of EBITDA in the quarter because of the improved availability of the plant, an increase in variable income per dispatch. The Futura complex had an increase of BRL 20 million as a result of the reduction in the purchase of energy to fulfill the bilateral self-production contracts.
In Parnaíba, the increase was by BRL 19 million, which has to do with the increase in the fixed margin, which has to do with the regulated contract of Parnaíba V. Among the negative impacts on the EBITDA, upstream had a reduction by BRL 65 million because of the lower dispatch of Parnaíba in the period, and this should be offset in Q3 once the export window moves. EBITDA from TPP Porto de Sergipe I was reduced by BRL 22 million, especially because of the retroactive credits one-offs of PIS and COFINS for BRL 59 million. Additionally, the holding and the trading segment improved their EBITDA because of the one-off effect of the recognition of retroactive credits of Amapari, one of the controlled companies. Moving on to slide 11, we see one of the main impacts of the financial results between the quarters.
Net financial result was negative by BRL 990 million in Q2, relative to BRL 308 million negative in Q2 2023. This variation can be explained by the non-cash impact of the foreign exchange variation of the lease of FSRU of Hub Sergipe. In Q2, the appreciation of the currency generated a non-cash impact, negative by BRL 388 million. In the same period last year, we had a positive impact of BRL 179 million because of the depreciation of the real. The impact is therefore BRL 567 million, as you can see on the slide. If we exclude the effect of foreign exchange variation in both periods, the increase in financial expenses would have been BRL 43 million. On slide 12, we see the main cash variations.
In the period, we generated BRL 934 million in operating cash flow, driven by the performance of our assets. In terms of investment cash flow, we had an outlay of BRL 508 million for our construction projects, such as Azulão, 950, and the liquefaction units in Parnaíba, in addition to the development activities upstream. In terms of the financing cash flow, we had an outlay of BRL 1,113 million, with a positive impact coming from the completion of the liability management in May, but which was offset by the amortizations of principal and payment of interest. We also had the impact of the FSRU, the payments of anticipation of receivables and cost of transactions and dividends.
Our cash position at the end of Q2 was BRL 1.7 billion. On slide 13, you see more details about our capital structure. On the left-hand side, the company's net debt, which was BRL 17.8 billion at the end of Q2, with net debt over EBITDA being 4.36x. If we consider the incoming BRL 2.7 billion in July, which had to do with the anticipation of receivables, our adjusted net debt would have been BRL 15.1 billion, thus reducing the leverage to 3.7x. On the other graphs on the slide, you see the quality of our debt, which, with the completion of liability management efforts, has maturities in the long term, with an average duration of 5.7 years.
The exposure of our debt has increased by nearly 10 percentage points to the IPCA, which is the same index of our revenues. I now turn the floor over to Andrea Monte, who's going to speak about investments and our capital projects.
Thank you, Habib. Good morning to all. On slide 15, you see the investments made by the company in the quarter, which totaled BRL 772 million, mainly in construction projects and in the upstream activities in Parnaíba. In Azulão 950 in Amazonas, we invested BRL 492 million in the quarter, mostly in this, in this way: BRL 139 million to pay for EPC contracts for services in the substation, transmission lines, TPP and GTU.
BRL 134 million to General Electric for fulfilling the milestones and the delivery of equipment having to do with the single and combined cycles. BRL 72 million for the acquisition and lease of equipment, and BRL 49 million having to do with logistics costs, port costs, and pipes. In the liquefaction plants that we are building in the Parnaíba compound to meet the needs of the Vale, Suzano and Copergás contracts, we invested BRL 88 million relating to the services of construction and assembly. In TPP Parnaíba VI, we invested BRL 20 million, mainly to pay BRL 16 million to the EPC contractor for the provision of services of construction and assembly. And upstream, we invested BRL 68 million in the quarter, and I would like to highlight BRL 61 million invested in the development of the fields in Maranhão.
Moving on to slide 17, I will give you an update of the recent milestones of the SSLNG project in Parnaíba. The project has 96% of adherence to the schedule, and all the equipment has been assembled. The physical progress is 95%, and we have begun the commissioning of the liquefaction plant, and we have completed the commissioning of the regasification plant located in the industrial facilities of one of our clients. The commercial operation should start during this quarter, and we are now looking forward to the completion of the commissioning of the liquefaction plants in Parnaíba. On Slide 18, you see the update on the Azulão 950 project. The physical adherence is 96%, and the physical progress is 32%.
The civil construction works have advanced 77%, especially the generator, the positioning of the generator of the gas turbine, which took place in June 2024. The project continues with high adherence to its schedule in its different work fronts and include the pipelines, the clusters, the water mains, and the thermogeneration and electric generation units. Additionally, we are expecting the arrival of the second turbine in Manaus. The next milestones will be the completion of all the civil bases in Q3, and the energization of the plant will be completed by the end of 2025. COD for the single and combined cycle is expected for 2026. Moving on to Slide 19, we see the update on the Parnaíba VI project.
It is in the first phase in terms of the startup of systems and pre-operation, with a physical adherence of 97% to the schedule and 96% of physical progress. By year-end, we are going to conclude the mechanical assembly, and we are going to start the operation in test and commercial operations. The CCEAR should start in the first quarter of 2025. I now turn the floor over to Felipe Valverde for the Q&A session.
Thank you, Andrea. Good morning to all. We are now going to start the Q&A session. You should send your questions in writing on the Zoom platform. We have our first question. Comes from Guilherme Lima, from Santander.
Good morning. I have actually two questions. The company is raising BRL 6 billion with the securitization of CELSE. With the acquisition of the thermals of BTG, the company would be even more deleveraged.
Could you talk about the leverage of the company? Would it be just to focus on the CapEx execution?
Thank you for your question. I think that the first thing we should highlight is that the securitization of the receivables of CELSE for BRL 2.7 billion, we have received that in our cash position. It's a subsequent event, and this will be used to manage liabilities. We did this operation at a cost of CDI +1.39, and with that cash, we are prepaying shorter and more expensive debt which do not adhere to our profile. So this money came in and out, and we have been able to lengthen our debt profile and also lower the cost. This is a liability management initiative. This was the main reason for us to make, to do this transaction.
This was to improve the profile of our debt. As a consequence, this securitization is made, and in terms of covenant marking, it improves it. It went, therefore, to 3.7x . But the reason for this transaction was to improve the profile of our debt, to make it cheaper and longer. So this is not going to be capped in our cash position. With the M&A and the follow-on, we are going to strengthen our balance sheet and our cash position, and this makes us feel more comfortable in terms of continue with the investments, but also opens new avenues for growth. There is an auction at the end of the year. We are going to have new projects registered. This auction could be for a very large volume with a shorter timeframe for implementation.
So if we have a stronger balance sheet, we will feel more comfortable in terms of pursuing those avenues of growth. We are looking at other opportunities, but we cannot comment on them yet. If, once we have news, we are going to disclose them. And then, Marcelo, could you take the second part of the question? It's about the impact of the dispatch with the new parameters.
Thank you for your question. We believe that the review of the model with the adoption of the hybrid parameter will allow us to include in the price formation, a risk aversion, which we already do in practice. There's not going to be a huge impact in the dispatch. The operator, although the model does not indicate the need, the operator dispatches thermals outside the model to ensure the security and safety of the system.
So in terms of the impact and increasing the dispatch, there is not going to be a significant impact. But the price will respond better in terms of the risk aversion of the operation. There is going to be an increase in prices, and the dispatch tends to be higher if the hydrology is not favorable, and this is what we are seeing in the last few months.
Thank you, Marcelo. We have another question about dispatch. In coal, there have been dispatches of coal fired plants. So what has been generating this need?
Good question. We are seeing since the beginning of the year, we have been seeing a situation which has becoming more and more serious. Affluences are below average, month after month. The only month when we saw higher affluences above the average was March.
The level of the reservoirs today is below the levels that we saw last year. Additionally, there is a peak demand which is higher than last year, and the operator is resorting to all the dispatch resources that it has to meet the needs of the system. The coal-fired plants in Ceará, Pecém I and II , have been dispatched in the last 10 days, two weeks, to bring more dispatchable energy in a system where there is uncontrolled energy. There is a huge generation by wind plants, 18-20 GW, but it can go far below that. So in order to rely on dispatchable energy in those times, we think it's very prudent, and this could be recurrent in the next few weeks. Thank you.
We have received another couple of questions from Marcelo Sá , from Itaú. First one, for Habibe. With this transaction at CELSE, how much of the revenue will be lost, and for how long will that revenue drop? Would it be a fixed amount?
Good morning, Marcelo. Thank you for your question. As we mentioned, BRL 2.7 billion received immediately. That's a discount on the future revenue for four years, 2026, 2027, 2028 and 2029, to the tune of BRL 675 million per year. Revenues do not drop, actually, just to make sure. Revenues for those years will be exactly the same they would be without a transaction. What we're doing, we are bringing forward some receivables.
So we'll see, receivables for those years will be accounted for, but with a lower cash flow from BRL 675 million, plus interest on the transaction. CDI plus 139, as I said, had to include and factor that in, as a discount on those receivables throughout those four years, as I mentioned, 2026 through 2029. So there is a grace period for this year and next year, so no discount in 2024 or 2025. It starts in 2026. And as I said, those resources will be used to prepay more expensive debt. In other words, money borrowed at 139 plus CDI, and repaying debt that on average, cost more than 100 basis points in terms of additional cost, on that, in comparison, and at a shorter term.
So we'll provide some relief to our cash flow for 2024, 2025, improving our debt profile and making it cheaper also.
Thank you, Habib. Now, second question from Marcelo, for Marcelo Lopes : What can you tell us about the highway infrastructure today, as is, to ship gas from Parnaíba to Copergás ?
Well, those are federal highways, well-paved, and in the same or better conditions compared to those of Jaguatirica and Azulão. In the case of Juazeiro, we're talking about 800-some km. Garanhuns, a bit over 1,000 km. No points of attention to mention, worth mentioning.
Thank you. Next question from Marcelo, Sa, also for you. For the Linhares contract, you also have a variable margin on the sale of gas, only you only get more fixed revenue coming from availability. We can have variable margins.
This will depend on the conditions, provisions for the purchasing contracts throughout time. Because we are selling based on an index formula, JKM, as I mentioned, we will likely have some more margin throughout time. The answer would be yes.
Thank you, Marcelo. Next question? From Daniel Travitzky , from Banco Safra. In terms of the new thermal assets you have acquired, can you comment on how you see competitiveness of those assets for the next capacity auction? And what would be the plan should the assets, not be recontracted?
Thank you for the question. I think the assets which are under contract, which end by the end of 2025, tend to be quite competitive when the auction comes, and the plan is to work hard to recontract those units.
If that's not the case, we'll have to reassess and wait for another opportunity, another window for recontraction.
Okay, thank you. Well, I have yet another question from Felipe Andrade , from Itaú. He has two questions. Number one, about the exports of energy to Argentina . CAMMESA indicates that there will be demand for imports at least until October. Since there is an expectation of an increase in thermal dispatch in Brazil in September, in your opinion, will the export window close as of next month? Well, as Brazil starts to demand more energy, that possibility of shipping to Argentina drops. But the national operator has to address an issue which is more related to the origin of the energy. I think both dispatch modes are expected to coexist in the coming months, September and October, if Argentina continues to have high demand.
That has happened before, July, August, and I expect it to continue going forward. In other words, the operator will ask for a dispatch starting at 5:00 P.M. to 10:00 P.M., 11:00 P.M. Outside of that window, thermal plants will be able to export to Argentina. That's what I expect to see happening in the coming months for as long as Argentina has a demand.
Question number 2 from Felipe, also for you. As for the contract with Copergás , is the contract structure similar to what we had before with NFE?
It is an NFE. It's a contract to sell natural gas, signed directly with Copergás , by which supplier is responsible for the logistics and operations of the regasification units. I think it is similar. I'd say it is similar to the contract we had with NFE, which was then replaced by another company.
Okay. Thank you, Marcelo. Well, with that, we close our Q&A session. Thank you all for participating in our results call, and we'll see you next quarter. Thank you, everyone.