Energisa S.A. (BVMF:ENGI11)
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Sep 23, 2026, 5:05 PM GMT-3
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Investor Update

Dec 21, 2018

Speaker 1

Good morning, ladies and gentlemen. I would like to thank you for your time. We'll talk about yesterday's auction. We have the whole group here, Mr. Ricardo Botelho, President; Cláudio Brandão, Director of Corporate Finance; Geraldo Mota, VP of Generation and Transmission, Mariana and Bruno. I'll use some visual resources, and we'll have the time for Q&A after the presentation. I would like to mention the purpose of our participation in this auction. We are always trying to abide by some requirements to find synergy with our distributors, with lots that we have purchased or may purchase in the future. We do not consider the impact of the synergies with the distributors in that first moment. We had yesterday, lots four and 15, with a concession, lot 15 in Rondônia. Lot 15 we tried for, we weren't successful.

We're successful in lot number four, 772 km, one route through Tocantins and another through the state of Bahia. We want to work on the potential of the transportation and photovoltaic energy in this state, and that is in the state of Tocantins. That is how and where the operation is, and it will improve the system of distribution of the company of energy generation of Tocantins that has achieved its limit. There we have a second point undergoing construction. It is a third point, and that's why Energisa is one of the most interested parties as a stakeholder due to the gains in terms of energy distribution and generation in the state of Tocantins. We haven't considered those effectively initially in our base model. We analyzed the technical and land conditions. It's a lot, very simple to develop due to its extension, which is 772 km.

Slide number four, and we'll make some comments on that, and we'll talk about the reality. We have our return on investment rates that are equivalent to previous auctions. We were very competitive and very prudent. We had nine competitors in on this occasion, and we were very close to the second runner-up, BRL 1,160 were additional to avoid that problem. CapEx was 15%-18%, considering here the network benefits. EGP emission, it's a nationwide present company, capital, mostly national. We analyzed the technical capacity and the robustness of the company in all aspects. It's in transmission projects in order of 250 at this point. In terms of the delivery date, we have the optimization with a certain margin of safety and security here. We have 14 months as a deadline, and we could go even further. That sounded reasonable.

Environmentally, we have to think in terms of the authorities, and that work was considered. We have the projects that are in portfolio, that are already undergoing development, and that will be in one year's time already in execution. The EPC holder lot foresee bonuses for the hired and purchased lots. There is the other side that requires organization in terms of avoiding delays. It's located in two states that allows for this benefit, and we have the possibility to have presumed profit, the model. We are going to work infrastructure, and we have the clustering in support of Energisa, the Energisa bank. We have previous projects that were similar, and yesterday, before the auction, we had the building of the emission of debentures for the transmitting companies, BRL 250 million in seven to 10 years, 15% a year. The least effort was the basis for this.

In this debt market, we are operating with rates that we expected better than expected back in April, when we started talking this option. In terms of the leveraging of the group in this project, we are going to be around three-folds the net debt. Slide number five now entered for commenting on data related to generation of energy, which is one step further. We have scalability. We have more assets that, as is estimated by Capital, BRL 1.8 billion, and we are expecting BRL 1.5 billion by November. 4,984 in terms of units of generation. Under the management of Energisa Soluções, it is responsible for the transmission projects for all levels. This unit is present in 15 Brazilian states, and it already serves great company groups. Energisa Soluções.

It already serves the state of Tocantins, managing 45 concession companies in the state, and in Tocantins, it has managed BRL 900 million CapEx, 506 kilometers of transmission lines, seven substations. Further, we have the optimization of O&M, because it comes from knowing the region rather well. We have slide number seven. We have more information, further information on the existing projects. Energisa Goiás, 41% of advancement, and Pará, 38%. Energisa Pará I, September and October 2018, that is when it started. Goiás. It started just after one year after the signature execution of the concession project and contract. Energisa Pará I had a similar situation. Our licensing was supposed to happen in up to 24 months, and we were able to get it within three months. Energisa Pará II, lot purchased in June 2018. The concession contract was signed in September this year.

We have topographic studies and the operation analysis have been started and are undergoing. We have the studies undergoing. We started the project after 30 days of the signature of the concession contract. We have the fiscal benefit of the network into the project and showing results by 30 days after the project. I think this is my part of the presentation. We open for Q&A.

Operator

Now we start the Q&A session. If there are any questions, please press asterisk nine. If at any point your question has been answered, you may remove your position from the line by pressing asterisk nine. Questions will be dealt with in the order that they come in. Please take your phone off the hook upon asking the question. Therefore, there will be better quality in the sound of the transmission. Please hold on while we collect the questions. We remind you that for asking questions, all you have to do is to press asterisk nine. We have a first question from Gabriel from Bradesco Asset. Please proceed.

Speaker 3

Good morning, ladies and gentlemen. I had a question in terms of financing of the project. The lot has a small share in Bahia State. Therefore, are you eligible for BNDES financing? If yes, the financing will take into consideration investment in the state of Bahia or not?

Maurício Perez Botelho
CFO and Investor Relations Director, Energisa

I will pass on to Mr. Cláudio Brandão that will handle your question. Claudio Brandão.

Cláudio Brandão
Director of Corporate Finances, Energisa

Good morning. This project has some flexibility in terms of financing. Energisa has access to the capital market. As we did yesterday in the event mentioned by Mr. Maurício, we have access to financing by the Northeastern of Brazil Bank, SMO as well. We have access to financing of that, we can present more details upon the hiring and contract. It's important to bear in mind that we have many options.

Operator

Our next question comes from Ms. Carolina Carneiro for Credit Suisse.

Carolina Carneiro
Analyst, Credit Suisse

Good morning, ladies and gentlemen. Thank you for this conference call. EPC provider, you mentioned the Energisa Transmissão. Please remind us who are the other EPC providers that you were working with in the other transmission lines so that we understand why you have chosen this EPC provider. In terms of the schedule, you mentioned 14 months of anticipation down to 13 months. I would like to know how is the construction of the other lots that you are working with in terms of the plans scheduled for those. If you see possibility of anticipation in the ongoing projects.

Speaker 1

I'll pass the floor to Mr. Gabriel. He'll handle your question.

Gabriel Mussi Moraes
Director of Transmission and Generation Expansion, Energisa

Good morning, Carolina. EPC providers-wise, we have a good relationship, and we have a good network. We have many projects. We have good options available in the market, but for a matter of price and risk allocation, we made a choice for the mentioned one and for the one that will help us with this one. In terms of deadlines for the other projects, we have an estimate of an anticipation of by one year, and the advancement in terms of risk has been very promising. Pará has good levels of management in terms of the risk factors. We have been working at a very good rate during flat times, and now during the dry season, we are going to make even further advances.

Operator

In order to ask questions, press asterisk nine. Once again, I remind you, ladies and gentlemen, that for asking questions, you need to press asterisk nine. Thank you. I'd like to pass the floor to Mr. Ricardo Botelho for his final remarks, please. Mr. Ricardo, you may proceed.

Ricardo Botelho
CEO, Energisa

Good morning, ladies and gentlemen. We have taken a step further in terms of our transmission portfolio, we are strengthening that with each group, each additional project gives us the benefit of scalability. In April 2017, we purchased these two lots, we are certain of our decisions. We have a state-of-the-art team that is surprising us with the projects already undergoing progress, the rhythm is more paced than the others. We are consolidating the platform model of business that allows for a synergy among the assets. It sounds intangible right now, in the future, we will have that proven as possible, our clients will be certainly way more satisfied. Once again, I'd like to thank the trust of our shareholders, wishing you a merry Christmas and a happy New Year. Thank you.

Operator

Thank you. The teleconference by Energisa is now adjourned. Please disconnect your lines now.