Good afternoon, ladies and gentlemen. You are welcome to the teleconference for the second quarter of 2019 results. The audio for this conference is being broadcast simultaneously through the internet on the website at ri.energisa.com.br. On that address, you can also find the presentation available for download. We would like to inform that during the company's presentation, all participants will only be able to listen to the call. We will then begin the Q&A session when further instructions will be given. In case you need any assistance during the conference, please request the operator's help by pressing star zero. We would also like to inform that the conference call is in Portuguese and will be presented by the company's management. For the English conference, there will be simultaneous translation available.
This conference call contains forward-looking statements that are subject to known and unknown risks, and uncertainties that could cause the company's actual results to differ materially from those in the forward-looking statements. Such statements speak only as of the date they are made, and the company is under no obligation to update them in light of new information or future developments. They depend on circumstances that may take place or not. Investors should understand that the industry conditions and operational factors may have an impact on the future results of the company, leading to results that are materially different. I will now turn the conference over to Mr. Maurício Botelho, who will start the presentation. Please, Mr. Maurício, you may proceed.
Thank you very much, operator. Good afternoon, everyone. I would like to thank you for your participation in this conference call for the second quarter results.
We have Ricardo Botelho, President of the Energisa Group, Alexandre Nogueira, who is Regulation Vice President, Fernando Maia, Regulation Vice President. We also have Cláudio Brandão, Director of Corporate Finances, and also Mariana Rocha and Bruna Alvarenga with the investor relations team. I will present some slides on the results, and then we'll open for the Q&A session. I would like to remind you that as done in the previous quarters, in the last two quarters, in the case of operational items, we have included the companies that were recently purchased. Also for the financial aspect, we're going to present the pro forma values, which do not take into account the acquisition of these two companies. Now, moving on to slide number three, I will go directly to the highlights, which is the adjusted EBITDA totaling BRL 899 million for the quarter, BRL 1.8 billion in the first half.
Regarding the results, even though the profit was BRL 119.9 million in the first half, in the second quarter, we had losses of BRL 8.9 million. This negative results include recent results of the acquisitions of Ceron and Eletroacre. These companies negatively contributed with BRL 153 million in the quarter. In terms of the pro forma aspects, not taking into account these two companies, we had a net profit of BRL 151.5 million. Later during this presentation, we will provide details of other effects which had an impact on the group's results. Moving on to slide number four, we're going to talk about the energy market. CEAS had an increase of 3.5%, and Brazil only grew 0.3%. For the first quarter, we grew 4% compared to 1.7% for Brazil in general. In this first half, all of our distributors had a positive growth.
The highlights for this quarter were Energisa Mato Grosso, EMT, with a growth of 6.5%, influenced by the residential segment and market. Their distribution was greater because of the industrial factor, with a reduction of 0.5%, which was caused by some technical shutdowns in the cement and fertilizer industries. We're now moving on to slide number five, and we will talk about some of the highlights, which were our efforts in the low-income sector. In 2014, we started demanding more information from benefited consumers, and we observed that some of them were discontinued, and there was a potential to expand default payments. Because of this, and in addition to the campaigns, to the re-registration campaigns we had, we started using analytical tools, crossing public data, and we're able to expand the number of eligible consumers.
You can see in the graph slides that we have an increment of 92,000 clients reported as low income between June 2018 and June 2019, with a highlight to the recently acquired concessions with an increment of 67% in Ceron and 43% in Eletroacre. In the next slide number six, on the left side, you can see the electric losses, and you can see that this indicator was 13.55%, considering all of the group's distributors and 0.45 percentage points above the regulatory target. If we do not take these two into account, then this would be 11.50%. In other words, 0.25 percentage points below the regulatory target. The highlight was for EMT. Even though there was a slight reduction in the quarter, it had the second-largest reduction when compared to June 2018, which was 0.82 percentage points.
This utility in Mato Grosso continues meeting the regulatory target. We're actually 0.16 percentage points above the target. Energisa Paraíba had a slight decrease when compared to March 2019. There was an increment of 0.45 percentage points when compared to June 2018. This is explained by increment in non-technical losses. We are trying to overcome this with an additional plan to fight theft, and was implemented at the end of last year and intensified in 2019. Energisa Sergipe was once again below the regulatory target because of all of these actions to fight energy theft. Eletroacre follows below the flexible regulatory target, with Ceron is approximately six percentage points above the regulatory target. We adopted different measures to overcome the situation since these utilities had an increase in losses since August 2018.
In June 2019, there was a decrease when compared to May, indicating the first outcomes of these measures in the region. We're now going on to slide seven with the service quality indicators. You can see that except for Ceron, all of the distributors were below the quality regulatory targets. Many of them continue breaking their own historical records in terms of quality indicators, as it was the case of Energisa Mato Grosso, EMT, and Energisa Paraíba, EPB in DEC, and Energisa Sergipe and Energisa Paraíba in FEC. Energisa Mato Grosso had the best performance of the group in terms of quality, with a reduction of 4.8 hours in DEC and 3.04 times in FEC. Energisa Tocantins was ranked as number 2 with improvements of 4.16 hours in DEC and 3.02 in FEC.
In Ceron, there was an increase in DEC when compared to June 2018. After the acquisition, Energisa prepared an indicator reversal plan, and the fact that the DEC in May and June presented a significant reduction when compared to January and April reinforces the trust in the measures that were adopted. Now, we will focus on the explanations about the companies not taking into account Ceron and Eletroacre results. We had an increment of 0.4 percentage points in the quarter and 2.2% in the first half, both below the inflation rates for this period. A large part of the increment in personnel is explained by the salary readjustments and increase in the number of companies in the group, especially in the holding. As a result of incorporation of new activities to the shared services center, such as invoicing and the activities of IT system development.
On the other hand, we had a decrease in labor expenses, labor penalties, especially in Mato Grosso do Sul. The service line reduction was impacted mainly by expenses with M&A and the holding Energisa S.A., and also by the reduction in Energisa, which is explained by the inclusion of technical teams. Now we're going to move on to slide number nine and talk a little bit about the pro forma consolidated EBITDA. Without taking into account Ceron and EIC, it was BRL 15 million in the second quarter and BRL 1,873 million in the first half, with increases of 40.2% and 30.4%, respectively. If we do not take into account the EBITDA increases, there was an increment of 43.9% in the quarter and 32.8% in the quarter.
I would also like to highlight that except for the non-recurring effects detailed in the attachment of this presentation, the EBITDA for the quarter would have grown 51.4% in the quarter as a result, mainly of the increase of BRL 289.8 million in Parcela B of the distributors in the first half. This would be corresponding to 42.7% improvement. Also, in slide 10, we compare the regulatory EBITDA and the reported actual EBITDA in the last 12 months. The highlight here would be the approximation of Grupo Rede, which currently is 37% above the regulatory target. Now we're moving on to slide number 11, and we'll talk about the net profit in the quarter. You can see that there was a growth of 46.5%.
Within the non-recurring effects, also mentioned in the attachment of this presentation, we had the mark-to-market with an impact of BRL 194 million without any effect for the company's cash. If we exclude these extraordinary effects, the pro forma net profit in the second quarter would have been BRL 316.4 million, which is 213.8% above what was recorded for the second quarter in 2018. For the year, the consolidated net profit totaled BRL 464.7 million, with an increment of 89.1% when compared to the first half of 2018, or BRL 219 million higher. If we do not take into account the EBITDA effects and the mark-to-market of our net profit in the quarter would have been 192% higher than the first half of 2018. In other words, BRL 671 million.
We will talk about debts. The net debt includes the debts acquired with Ceron and Eletroacre, totaling BRL 11.9 billion, which includes the sum of BRL 736 million regarding the mark-to-market of the debentures of Energisa S.A., and also the debt balance associated to these bonds of approximately BRL 620 million. We believe that there will be a conversion or some effects of these bonds, which would lead to a reduction of 0.3 times the indicator in the Net Debt to EBITDA. This covenant indicator was stable in 2.7 times. As mentioned in the past quarter, this indicator takes into account approximately BRL 1.2 billion resulting from the combination of businesses for the purchase of Ceron and Eletroacre, which were taken into account for the fourth quarter of 2018.
If we do not take into account these amounts, the indicator would have been 3.6, which is pretty comfortable according to what was negotiated for this year, which would be in the order of 4.5 and five times. On the next slide, we're going to talk about investments. We have closed the quarter with BRL 759 million, and the first half with BRL 1.304 million. In the transmission segment, we invested approximately BRL 70 million in the quarter and BRL 120 million in the first half. In this next slide, we're going to talk about the transmission projects. The ones that were included in April 2017. In this case, we have Energisa Goiás and Energisa Pará One, which started operating in September and October of 2018, respectively. Both projects have progressed to 71% for Energisa Goiás and 48% for Energisa Pará.
The negotiations with the owners have been almost concluded. Regarding Energisa Pará II, which is the lot purchased in June 2018, the construction started last month. Actually, the month before last, in June 2019. The physical advancement of this block is at 10%. Energisa Tocantins Transmissora, which was purchased last year, we have filed a basic project in July 2019, and part of the studies to obtain a prior license were also obtained in the same month, the environmental license. Together, these four blocks add an RAP of approximately BRL 188 million, with an estimated CapEx of BRL 1.5 billion. I would like to conclude, and I am available to answer eventual questions and answers.
Thank you. We are now going to start the Q&A session. In case you have any questions, please dial star one. If at any point your question has been answered, you may remove your question from the queue by pressing the pound key. Answers would be provided in the order they are asked. If you're not going to ask any questions anymore, please remove your question from the queue so that we can have better sound quality. Maria Carolina Carneiro from Credit Suisse would like to ask a question.
Well, thank you for the call. I have two questions. The first one is, you included the pro forma PMSO for Acre. I would like you to share with us how the integration is going for Acre regarding the indemnification of labor and all of the liabilities so that we can have an idea what the management costs would be for these new utilities.
The second question is that you shared very interesting numbers on the number of clients, which are qualified as low-income clients and have been registered. I would like to know exactly what is the potential of this registry, because there are more clients that may be reclassified for the next quarters in Rondônia and Acre, or if this process of identifying clients has already been concluded. Thank you very much.
We're going to share the answer, Carol, if you can wait a minute. Carol, Ricardo will answer you. Thank you, Carol.
In response to your question about the pro forma PMSO and the measures regarding Acre and Rondônia, what we have nowadays, and we have different marks for the future, but regarding the indemnizations from the beginning of the year, we had 30% of the laborers and companies joining these plans, and they are going to leave the company by December. We also internalized inspection and activities with the quality improvement plans. We have different implementations in place. All of these measures are ongoing. We're probably going to have a better picture for the whole year. It will be better at the end of the year and early next year when we will be able to see all of the effects in terms of EBITDA. To evaluate performance, the best time would be around the first quarter of next year.
There's a natural curve of implementation, and also when all of the personnel leave the company. I hope I have answered your question on low-income re-registration.
Good afternoon, Carolina. How are you doing? This is a dynamic process, as illustrated, and we're always comparing the list of re-registration. Based on our planning, if we take into account the new registries and the ones that have been canceled, by the end of the year, we will have 80,000 or 90,000 that may be registered. This is an estimate for the purpose of planning, but our expectation is that we will be able to double it.
Thank you very much. It's clear now.
The next question is from Andre Sampaio from the Santander Bank.
Good afternoon. I would like to ask two questions. The first one has to do with the tariffs, and I would like you to give us a little bit more details of how the asset basis is going. I would also like you to talk a little bit about the negotiations between Tocantins and ANEEL.
In response to your question, Andre, and Alexandre Nogueira. Good afternoon, Andre. Good afternoon, everyone. Regarding your first question for Acre and Rondônia. In June, we concluded the inventory and the assets that were included, and we're now in the process of preparing the reports, which will be delivered on August 29th. There are no problems regarding this process. About your second question on the Tocantins renewal, the process is ongoing. Elisa was chosen at ANEEL. The process is ongoing, and there are some steps to be developed this year, but there are no risks.
I would like to ask one additional question. Do you understand that the renewal will be just like it was for the other assets?
Yes, exactly.
The next question is from Luiza Cawell from Banco Safra. Good afternoon.
Thank you for the call. I'd like to know about the payment of the BRL 500 million, and even so, you had a negative CVA adjustment. In May 2019, there was a reduction of 7.4%. Was that done to compensate anything?
Alexandre Nogueira will answer your question.
Luiza, good afternoon. Regarding Ceron, we had a positive increase. In March, along with the review of other companies because of our CVA adjustments, we also included part of the readjustment of 7.4%. Of course, that this will be readjusted in the next readjustment. It was just a delayed readjustment? Yeah. Part of the adjustment was not approved, and there was a reduction because of CVA.
Whatever was deducted will be taken into account next December.
What will happen in the next reduction in terms of Ceron and Acre?
It will depend on what will be approved, and it's directly related to that.
You don't have an estimate yet?
No, we do not have an estimate available yet.
Okay. Thank you very much.
I'd like to remind you that to ask questions, you should press star one. Thank you. I would now like to turn over to Mr. Ricardo for his final remarks. Mr. Ricardo, please move on with your final remarks.
Good afternoon. I would like to share with you another year of good results for Energisa. July three of the 11 categories with over 1,500,000, we were finalists in eight and won four.
Of the four categories that were analyzed for companies with up to 500 consumers, we won two awards. Energisa Nova Friburgo was considered and won the award of Best Distributor in Brazil once again for the category of up to 500,000 consumers. The other companies awarded in the group were Energisa Paraíba, Tocantins, and Energisa Sul-Sudeste. I would also like to give you some more information about the integration plan for Ceron and Eletroacre. As explained by Alexandre, we have achieved results on the inventory of the assets of all of the companies, including a large mobilization. We were able to carry out 100% of our inventory and will provide, by the end of the month, a full report to ANEEL.
Everything has been taken into account, registered, and will be included in the most modern platform available for this segment, which will enable us to be able to reduce drastically the number of hours. In September, we will conclude the inspection by NIL, and in December, we will have a restructuring. As we mentioned, the intervention plan is ongoing. Regarding transmission, we are very happy with the advancement of the construction, as mentioned by Mauricio, and we also anticipate the entry and operation if we keep the same construction rate. We have some lots which will be made available in December, and due to strategic reasons, we do not know exactly where and how. We wish you all a good afternoon and a nice weekend. Thank you for your attention.
Thank you. The teleconference is now concluded. Please hang up now.