Earnings Call: Q4 2019

May 25, 2020

Good morning, and thank you for holding. Welcome to Equatorial Energia S. A. Conference Call for the Results of Q4 twenty nineteen. Today with us, we have Mr. Augusto Miranda, CEO and Mr. Leonardo Lucas, CIO and CFO of the company. This event is being recorded and all participants will be in listen only mode during the presentation of Equatorial Energia S. A. Later on, we'll have the Q and A session when further instructions will be provided. This event is also being transmitted on the Internet via webcast and will be accessed at www.equatorialenergia.com.br, where the respective presentation will also be made available. Slides will be available at your discretion. The recording will be available right afterwards. Participants in the webcast will be able to register via website their questions to Equatorial Energy SA, and they'll be answered after the conference by the IR department. Before moving forward, we would like to make sure that any statements that may be made during the conference with regard to prospects by Equatorial S. A, forecasts and operational targets, our beliefs and assumptions of the company's administration as well as information currently available to Equatorial Energy SA. Future considerations are not assurances of performance and involve risks, uncertainty and assumptions as they refer to future events and therefore, depend on the circumstances that may or may not occur. Investors and analysts should be aware that general conditions may affect the results of Equatorial Energia and may lead to results that substantially differ from those expressed in those future conditions. I would now like to turn over the conference to Mr. Augusta Miranda, who will begin the presentation. Mr. Miranda, please, you may proceed. Well, good morning, everyone. First of all, I'd like to thank you for staying with us at the teleconference for the results of Q4 twenty nineteen. I will start by describing the highlights of our quarter and then we will comment about recent events, our operational and financial results. And lastly, we will open our Q and A session. So moving over to Slide number three. In Q4 twenty nineteen, Equatorial's consolidated EBITDA came to R1.2 billion It totaled billion in the year of 2019, a very significant figure. This figure was impacted by distributors Equatorial PoE and Alagoas, and both of them contributed with positive results and also the adoption of IFRS 15 for transmission assets. We will discuss these impacts in further detail later. You'll also hear about some of the work we've been doing in the Alagoas company. I would also like to point out the excellent second place of Equatorial ParA in ANAL's 2019 continuity ranking. And this affects the X factor and also the decline in energy losses in three or four of our concessionaries. The exception is Maranhao. We have 70% in this and we have about a 5% loss, which is these are very low results. And this could be considered very low commercial losses during given the complexion of this concession. The consolidated volume in Q4 twenty nineteen went up 8.2%. The result was especially influenced by the lower rainfall and the economic recovery in all of our concession areas. In addition to that, Mr. Miranda, you may proceed. Okay. Thank you. First of all, I'm sorry for having lost connection. I will resume my presentation now. So returning to Slide three. In Q4, Equatorial's consolidated EBITDA came to billion and in 2019 as a whole came to PHP 4,000,000,000. This figure was impacted by the consolidation of our DISCO's Equatorial PoE and Equatorial Alagoas, both with positive results and also the adoption of IFRS 15 for transmission assets. I will discuss this in further detail along the presentation. I'd also like to point out the excellent second place of Equatorial Para in Aneel's continuity ranking in 2019. And this obviously impacts the X factor. Another highlight is the loss of energy losses in three of our four concessionaries. Marinao was the exception where we have significantly low losses considering that our technical loss is about 12%. So I'm talking about nontechnical losses. And considering the complexity of that concession, these are very low figures. Our consolidated volume in Q4 grew 8.2%, which was affected by the reduced rainfall and the economic and industrial recovery in our concession areas. Specifically, in the state of PoE, it was also due to the earnings adjustment that we made in Q4 twenty eighteen. If we disregard that adjustment, even then, POE's consolidated growth would have been 9.5% and our overall consolidated 6%. In the transmission segment, we recently announced the SPVs one and two have gone into operation with combined annual revenues of about BRL164 million. And our EBITDA, we would like to point out the more and more emblematic results of our two distributors, which attest to the quality with which we have been conducting our work in these two concessions. The advance has been very significant and very clear. And lastly, I'd like to point out that we want to share the dividend of BRL0.2 million, which comes to million. Now moving over to Slide five. In light of the current scenario of the COVID-nineteen pandemic, I would like to show you the main steps the group has taken to protect the lives of our collaborators and clients. And at the same time, we have to maintain the quality of our services, which are essential for keeping so many other essential services functioning. Our in office collaborators are now all working from home. And our field workers, which could be in standby, are either on paid leave or working shorter hours in terms of social action. We have supported field hospitals and donated medical equipment, food and hygiene supplies, considering that the areas in which we operate are significantly underprivileged. We have done everything that we can to support those communities. From a liquidity standpoint, the group ended the year with BRL6 billion and with a BRL6 billion consolidated cash balance. So we ended the year with this very significant cash balance. We've allocated all of our assets to bonds and significantly reduced the risk profile, also adhering to BNDES' standstill for PoE, Algos and Maranhao. And we also have the CapEx funding already approved also by the BNDES. Now I would like to thank everyone once again for participating. And I'd like to turn the floor over to Leonardo Lucas. Leonardo, you have the floor. Thank you, Mr. Miranda. Good morning, everyone. We hope everyone is well and staying safe during this dramatic scenario that we're living. Now in Slide six, we will show you the main figures regarding the unscheduled rate adjustment in Alagoas. At the April, Anil approved the final figures in this process during which our assets were fully reevaluated coming to BRL1.35 billion, a substantial a very substantial growth from the million dollars that had been approved in the company's rate revision in 2013. As a result, the company's regulatory EBITDA grew substantially, totaling million dollars which is practically 3x the figure that we had incorporated to our previous rate. This is important and it will allow us to initiate our second stage of turnaround at that part of the company. Now moving over to Slide seven, we show you the lines that are already operative. As we stated in the beginning, we have recently started operations at our SPVs one and two, which means that the group now has an overall operating allowance revenue, including Intesa's revenue of BRL450 million per year. Even with the pandemic related restrictions, we're being able to move along with our construction schedule without much impact. Therefore, we are still positive that we will be able to end 2020 with all our SPVs operating fully. Now over to Slide nine. The volume of energy billed by all our groups distributed in consolidated terms increased 8.2% during the quarter. The 6.7% growth shown in Maranhao is a consequence of the economic upturn in the state, combined with a especially drier December compared to the previous year. Para increased 3.4%, driven by a rise in residential consumption and in retail sales in the region. POE showed growth by 24.7% during the quarter, particularly affected by the 120 gigawatt adjustment in our earnings in Q4 twenty eighteen. But even adjusting for that, growth during the quarter would have been 9.5%, also affected by the reduced rainfall over one year earlier. Elagouas grew 6.9% in the quarter, mirroring the reduced power losses and better weather conditions. In Slide 10, we show you the increase in injected energy across our concessions during this quarter. In consolidated terms, our injected energy grew by 4.3 in Q4. Maranhao and PoE reported the highest growth rates among our concessions with 7.55.6%, respectively. Both of them have been positively affected by the better weather conditions during that quarter. In the case of Maranhao, there were also increments in industrial activity during that period. Lastly, we like to point out in that quarter that all our discos showed an increase in low income claims by consumers, which was a result of the campaigns the group has conducted so that eligible consumers will have access to that tariff discount. Overall, we've added 356,000 new consumers registered as low income clients over the amount our distributors had in late twenty eighteen. Now over to Slide 11, we show you the evolution in the number of consumers classified as low income clients by our distributors in 2020. Between January and April, another 84,000 consumers were classified as low income clients by our concessions, which allowed nearly 2,000,000 families to enjoy the benefit for which they qualify. Mr. Lucas, you may proceed. So moving on, in Slide 11. Here, we show how the number of consumers classified as low income clients are classified as such in our distributors throughout 2020. Between January and April, as I said earlier, another 84,000 low income consumers were classified as such by our concessions, which allowed for nearly 2,000,000 families to enjoy the benefit for which they classify. And I think it's important to point out, and as you may already know, early in April, the government issued provisional decree nine fifty, which already increases the discount for these consumers to 100% during the months of April, May and June of this year, which reduces to zero the delinquency rate for this class of consumers during these three months. In Slide 12, we included information about how our injected energy has trended over the course of 2020. By the end of the first quarter, as we had already reported to the market, our concessions grew 3.6%, driven largely by the states of Maranhao and Alagoas. After the more restrictive measures to contain the pandemic, in the month of April, the trend already began to shift, decreasing in consolidated terms by 3.1%. Among our concessions, we believe the share of residential consumers, which exceeds the national average, helps to explain the relatively smaller decrease. In Para and Maranhao, which have our largest loads, we have seen decreases between 02%. POE and Alagoas especially on the other hand have seen slightly larger decreases. In the case of Alagoas, we believe the explanation is that the state's business activity relies a lot more heavily on tourism, an industry that's certainly hurting and seeing a sharp drop during the pandemic. In Slide 13, we see how our built energy has progressed considering both the captive and free markets of our concessions. Here, we note that between April 2020 and April 2019, the curve trends higher than that of injected energy that we saw in the previous slide. In consolidated terms, our concessions have seen 0.2% growth in billed energy in the month of April. In Slide 14, we see the overall losses recorded by our distributors. In para, we saw another decline by 0.2 percentage points in overall losses, a result of a more integrated anti loss plan. In POE, the percentage of losses of the past twelve months show the most substantial decrease seeing as the adjustment in earnings that we had made in Q4 'eighteen is no longer part of the calculation. But even if that adjustment had not been made, we would still have presented a substantial decrease in that percentage over the quarter. In El Goa's interim, we've seen positive results after the new anti loss teams began to act, having been trained and structured a more consistent plan. In Slides fifteen and sixteen, we see that quality indicators for Perra and Maranhao are still very much below the regulatory target, so much so that in Aneel's continuity ranking in 2019, Perra placed second and Mariel, eighth among all great discos. In PoE, the rise seen over the past few quarters is a consequence of the adjustment in the calculation for HOL A indicators that was done after we arrived. This is probably the last quarter that was impacted by that change. And although was a similar adjustment to the calculation was made even retroactively leading to changes in indicators that had already been released in previous quarters. This impact was a lot more representative in the company's DEC. Now moving over to Slide 18, we see how manageable expenses in our distributors have performed. In POE, we can already see that our fact is also below the regulatory target. Just as the deck, the effect of ALGOSA is already being affected. However, we can already see substantial increase in that indicator over the quarter. Now here in Slide 18, we show you, as I said, our manageable expenses and how they've trended in our distributors. Our operating expenses, or PMSO, came to million dollars This standard may occasionally be restructured. The most emblematic are PoE and LEGOs. And again, we've seen substantial decreases in OpEx between 44,000,000 and $50,000,000 It's always important to underscore that during the beginning of a turnaround process, it's normal to see such changes, and it may take some time for these measures being implemented to show the expected results. In Para, we may see a decrease by 2% given the organizational redesign. And in Maranhao, where growth came to 5%, That was especially due to the restructuring. In closing, all four distributors are operating below the regulatory target. Now over to Slide 19. Marniow showed a 1% decrease in the quarterly EBITDA. This was because of the larger PMSO, as I mentioned before, and also due to the higher PDA for the quarter. This was also because of the adjustment in 2019, and the effect was only fully perceived in Q4 twenty nineteen. Now POE and Alagoas were positively affected during the quarter by the dramatic decline in manageable expenses, the larger volume and improved provisions for doubtful accounts and also in contingencies deemed recurrent. Now over to Slide 20, we show you the Equatorial's consolidated EBITDA. In Q4 twenty nineteen, our adjusted EBITDA came to R1.2 billion dollars virtually twice as that seen one year earlier. This result was largely because of distribution and especially due to the positive EBITDAs from our two new DISCOs as well as Paras distributor. However, the transmission segment also contributed very positively, which by IFRS standards already accounts for revenue even before going live. Now we would also like to point out the group's annual consolidated EBITDA. In 2019, we came to R4 billion dollars of EBITDA adjusted for nonrecurring effects, which is virtually twice as that of 2018. Now over to Slide '21, we have the company's amortization and leveraging schedule. Equatorial's leverage, considering assets that are 100% consolidated, is 2.8x this quarter after having consolidated the figures for PoE and Alagoas and the overall investment that has already been made to build its transmission assets. This is the third quarter in a row where leveraging has decreased. And it's important to point out that the calculation for leveraging is different from that for the company's covenants, which consider the IFRS EBITDA reported over the past twelve months and leads to the group's leveraging being even lower in the index that's shown in the chart. The group ended the quarter with R6 billion dollars in cash balance, which is enough to pay virtually the three first years of debt maturities. We believe that our capital structure and liquidity structure is comfortable to accommodate POE and Alagoza's cash requirements as well as the structure for CapEx investments in our transmission projects, considering the DAP profile the long term DAP profile we have built. Now in Slide 22, as you may observe, investments in the transmission segment have intensified in 2019, reaching R2.9 billion dollars in the year as a whole, given that all eight lots were still in greenfield stage. Note that 100% of the investment that we have projected for our transmission lots are already secured with government run banks such as the BNDES, BASF and Banco do Nordeste. Of the PHP4.1 billion funding that we have secured, 79% has already been cashed. Now before moving over on to our Q and A session, I would like to turn the conference over to Mr. Miranda. Well, as you've seen, this was a significant and robust result. I believe this was a very positive year in organizational terms and also in terms of Equatorial's consolidations. We see that results for Marneo and Parra are very, very substantial. And we should also point out the less rate adjustment in para. It confirmed the great potential that, that concession has, and all results point in that direction. And when we mentioned the two discos that we controlled, they're working the projects are very going at a very fast pace. And before when before it had negative results, we're now seeing positive and very positive results. And transmission our transmission assets, as we said, are coming in as early as we had expected. So we're very pleased with that. So now let's move on to our Q and A session to answer whatever questions you may have. Thank you. We will now begin our Q and A session. And session. Our first question is from Andre Sampaio from Santander. Mr. Sampaio, you may proceed. Good morning, everyone. I actually like to ask two questions. The first one is about your expectations over NAO's reaction to the decree that was recently issued? And the second question is about sanitation. You recently commented about that, and we'd like to know whether you're still looking into that market as a possibility, even considering that later this year, we're likely to see a process in Elagos that could mean some synergy with what you guys work on. Thank you, Mr. Sampayo. Thank you for participating. And now with Enel's decree, we have been discussing with other companies in our group. And you see that so far, they have highlighted some aspects, and we're still discussing the whether that investment was enough. And we are also discussing the economic situation. And what's positive about that is that we still have a reported we know that Luisa is the reporter in that case. And last week, she has already held two meetings. Now at 10:30, another meeting is in is going on and we have some people from our team representing us and we expect to have maturity. We are a very important link in that chain. We are meeting with the energy ministry. We will now meet with the Minister of the Economy himself. So you should know that we are making our moves and we're doing what we can. I think this is a very important case for Brazil, and I think Enel will be very sensitive in considering all of those aspects. So I have a very positive prospects for that case. About your second question regarding sanitation, because Anil, because Equatorial is growing and growing significantly, we are not have to think of new acquisitions. And within that, I may tell you that we are looking into that and we are considering it. And if that if we think that that makes sense, we will go forward in that direction. That's great. If I can may only add about regulation, do you understand that the timing of the discussion on economic aspects tends to still take a long time? Or do you think that once the financial aspect is resolved early in the year, we will already see news in the economic department? Well, one thing we have been discussing since the very beginning with Anil, and we discussed very intensely about that, we asked was this. They said that settling all our financial issues was essential to settle the economic aspect. And what they asked was that we do that. And that's what happened. Our financial side has now progressed a lot. And Anela has already determined and they are already opening a public hearing to discuss. So what I think is Anela is very sensitive to the need to move this discussion forward even because of how important the sector is. And now with the crisis, it's even clearer how important our sector is. Whenever there's a crisis, we see how important this sector is. So that's why I think it's an opportunity for both the government and the agency to not falter. They have been very fast on their feet, and I hope they are even more so moving forward. Thank you. Thank you for your answers. Our next question is from Gabriel Francisco from XP Investimentos. Mr. Santos, you may proceed. Good morning, everyone. I have only a simple question. What do your delinquency situation looks like in your concessions, not only right now, but how has it developed since the COVID-nineteen crisis began? That's my question. Thank you very much. Very well. Mr. Lukas, would you like to answer? Okay, Mr. Miranda. Good morning, Gabriel. We have just closed the results for Q3, and we've been monitoring very closely every impact caused by COVID-nineteen in our company. I think it's important to talk a little bit about what we are doing that. First of all, we had a very well rounded memo so that we could discuss how would we would go through this period and also so that we could challenge the company to come up with solutions, what could be done to offset those negative effects. And the effect of that was very positive. In parallel, I'd like to talk about another question, which is the industry specific aspect. So right now, we have a whole set of measures that we may use to mitigate that effect. Naturally, we have been pointing out the volume issue, and we've also monitored the revenue issue considering a more recent moving average for the past thirty days. What we've seen is that our revenue with regard to the past thirty days in our concessions, that comes to nine between 930% delinquency, and that's for the past thirty days. So if we look at that moving average, it has shown slightly higher value figures than that. And I'm talking about between 1338% in our concession areas. But lately, we are seeing also between 915%. It should also be pointed out with regard to the rise in the subsidized value that in April, our low income customers gain a 100% discount on their electrical bills. We think that this we would receive an additional million in subsidy, which will also help mitigate the effect caused by delinquency. We could also mention a few measures that we have taken, Augusto. Well, Gabriel, thank you so much for participating, for asking the question. And as was said, from the beginning, we designed a number of scenarios, and we are reviewing them on a day by day basis. And considering the how the government and Anil have acted, one thing that we have been doing, which are actually two, we need to look at our CapEx and also increase our revenue. So a number of steps that we're taking, campaigns on the radio and on TV, the expansion of our low income base of customers. We have added a significant number of consumers to that base. And we're also looking into campaigns for online payments. So a number of steps we're taking, Even though Neil issued a decree that decree, we see that the government is being being very moved and releasing awareness raising campaigns. And we see that everyone's working to also supply hospitals and these are things that we feel have an appeal. So online payments and a number of actions to encourage and to incentive the rise in revenues, and that's also something we are investing in. If I may, let me just add two more pieces of information. It's important to point out the rise by 24% in online payment accounts and also the rise of 108% in talks with our virtual assistant, Clara, which shows that our these channels are being very useful in this time of social distancing and to support our relationship with consumers and improving our chances of rising revenues. Well, one more thing. With regard to low income consumers, the government is even extending some of their limits with which they could help us cover those discounts. Also, state governments and local governments, which will also help us expand that base of low income consumers even during normal times. Thank you so much. I was not expecting such a comprehensive reply. Just something I'd like to add, the figures you mentioned with regard to the moving averages, is that the consolidated figure or considering the share of lower income because the consolidated result could be even better or worse than that, just so that I have an idea. Well, the figure for the past thirty days I mentioned is obviously partially affected because there's also the lag to the when the bill expires, but that's not also something we're not looking at. Okay. Thank you. Our next question is from Carolina Carreno from Credit Suisse. Good morning, everyone. Thank you for the call. I have two questions. First of all, still on the issue of low income consumers. Could you confirm the 24% increase in searches for that register? Would that be an additional channel that you have already identified and implemented? Because looking at the Q4 results, you added 84,000 new clients. So I believe that those additional 84 were before that event. So I believe that between April and May, that would be a little greater. Just to give us an idea how much that base has expended since then? And my second question, if you could just go back a little bit with regard to Anil's regulation. Of course, there may be a lot that you will not be able to inform us on, but do you believe that if necessary, we were hearing in the press that the limit to those loans is PHP15 billion. Should you need an amount that's higher than that, do you think we could still see something as what we saw in 2014 when a number of loan trusts were created, whether necessary? Or do you think that, that would not be the case, that you would be a united front and those billion would be the overall amount to provide liquidity to the industry? You. Ms. Kurnir, I will start by talking about the new regulation and then I will talk about the low income campaign. I think this is still being discussed. We remember that in 2014, we had two or three trusts and we are seeing to hiring someone even for transparency because people are not aware of how extensive this crisis is yet. So even to cover the financial aspect, how that loan would be enough or not. So we are in talks with those agencies. And tomorrow, we will probably know exactly what those figures are. You mentioned the $7,000,000,000 there are also you mentioned $15,000,000,000 there are also $7,000,000,000 Nel also talked about the assets issue. Then there is the collateral issue. And according to the need, Anil will establish a cap over that loan. So that's something we will only learn tomorrow. Of course, now we have to wait and we hope that tomorrow, the agency clarifies all of that to us. And obviously, if the loan was a bit more substantial, we would be in a better place. You see that the group Ecree also filed with them. I would say, miss Carinero, that we are in talks with the ministry and the agency. I do not have a very clear response for you right now. What I'd like to say is this, we are conducting a number of campaigns even outside of that. If you look at our register with the ministry, our figures for Maranhao are very good. We have made very great progress. And also in Alagoas, we have enhanced significantly in our figures. And we have held campaigns even with govern state governors so that they we see we show them that there's money from outside the state coming into the state. And in because of those steps with the governments, they have helped us to expand that base of lower income. Now, Mr. Lucas, if you could talk about that. Well, with regard to the low income consumers, we have seen a lot of them paying via email. If we look at the month of April, the base of low income consumers has increased by 470,000. We've added 470,000 new low income consumers until April 2020. The figure of 24% that I mentioned was the increase we saw in that adoption of our mail email bills. And within that program to reach low income consumers, it's also important to point out that over this three month period, the exemption from the goods and services tax, the ICMS. So the discount and that over up to 50 kilowatts an hour. And we would say that in the states where we operate, that measure in the past three months was very helpful. And some months some states even extended that period over those three months. So that has an impact in our revenues for those accounts. And as Mr. Miranda said, we are trying to strengthen our ties with state governments so that we can make progress in our register of low income consumers. Thank you. Thank you very much. Our next question is from Marcelo Sa from Itau. I have two questions. The first one is I'd like to understand what would you do if the CMP expired. I see all of these decrees based on the presidential provisional decree. What happens if when those ends? We see that there are a number of amendments to that, and we are very concerned about what could happen if Congress does not pass the decree afterwards. And the second one is in regard to regulatory assets. It was clear to us with that provisional decree that this will be considered involuntary and Diskos will be able to offset the impact of over contracts. We talked with a few companies and some of them mentioned that Anil could eventually acknowledge as a regulatory asset the decline in volume or even delinquency, which would increase the impact in Q3. Do you see any impact from regulatory assets or delinquency affecting your Q2 results? Thank you, Mr. Sa. Well, what I would say is that we, meaning our distributors, that's what we have been striving for. With regard to over hiring, the ministry has been talking about that. And over and above that, we understood that the other issues were under Aneel's jurisdiction. So obviously, we see that there is some imbalance, and we understand that the decree is not enough. I mean, it's not about a crisis within Marina or within Bahia. This is a global crisis. And this already has an impact in delinquency and in losses. And that's the situation. What I would tell you is that we are striving for Anil to acknowledge the regulatory target. Perhaps you already know, we've had a meeting and they're picking up suggestions from all the entire industry. And we are making these suggestions, what would this regulatory asset would be, what the rules would be. So as I said, tomorrow, we they will open a public hearing, and we hope that everything will become clear because this is essential. Now you mentioned the provisional presidential decree. Well, we have 6,000,000,000 in cash. So if by one reason or another that expires, we are prepared. But I don't think this will that Congress will fail to pass it. This affects the entire chain and the government is truly concerned about the, electrical industry. I'm expecting it to be approved as soon as possible, but I would like to stress that these 6,000,000 really makes us really peaceful about everything. Well, just about something that Augusta said, we're we cannot control the political process. This is not only our interest, it's the in the industry in the interest of the entire industry. And as he mentioned, we are very prepared to face any delays that the process may suffer. We have met in May with all our collaborators and the ministry. So we are very prepared. That's great. Thank you. Thank you very much. Our next question is from Liliana Young from HSBC. Hi, good morning. Thank you for the opportunity. I have three things to say. My first question is the way the decree is written today and from what you can see with regard to the slowdown in demand and the rise in delinquency, in which scenario do you think you could be able to request an RTE? Or do you not see that occurring in the current situation as far as you can see? And the second is a really quick one. If you could classify the explain Elagos' EBITDA, which you see as recurrent and also in Page 41, just to make it clear what's the extraordinary is for Alagos, that would help a lot. And a third question, what's the revenue for low income consumers now that some of those a lot of those consumers have migrated to that classification? Ms. Yang, thank you very much for your questions. I will answer your first two questions, and then Mr. Lucas will talk about the last one. With regard to an occasional RTE, what we think is that for hedge, it will take a few cases. And for example, there was a case in Bahia or Pernambuco and claim an imbalance, then that would be a greater problem. But I think that our situation is more focused on what we're living right now, this exceptional period in time that we are now seeing ourselves in. So obviously, if you go in and ask for an RTE, that's okay. But there are a different set of rules at play. So before, you would go into Anil's website and you could calculate that. But now, we hope that the rule is clear and that it reflects the problem that's not just of one or other company, but it's a widespread problem. So we expect to be able to build that solution that can be replicated for every company in accordance with the situation that's been caused by the COVID nineteen pandemic. So this is compounding other problems. And I don't think that the problems caused by COVID nineteen, obviously, Anil must solve. But if you see those in relation to other things, I think that Anil's solution could be used to solve them. In order, you could talk about her last question. So with regard to the revenue from low income consumers, I mentioned that we had an increase of about R80 million dollars until April. Our revenue for April is of about R120,000 dollars consolidated terms for all of our four distributors. Now the main non recurrent effect that we had was the effect of $114,000,000 in RCL assets that had not been recorded and were only recorded in this quarter. We could also meet later to talk about that in further detail. But it was a nonrecurring record, an asset from LGR in the sum of $114,000,000 Thank you. That's great. So now the Q and A session is closed. I would like to turn the conference over to Mr. Augusta Miranda for his final remarks. Please, you may proceed. Well, once again, thank you, everyone, for participating and for such high level questions. Our IR department has also brought more people closer because we want to be closer to your market. I would like to underscore that we have been working very hard and more so than in regular times so that we can resume our activities as soon as possible. We know that some of our activities are seeing losses. We cannot, for example, approach a client. But, for example, a region such as that of Belen, we are seeing 30 a rate of 30%, which is very exceptional. And that allows me to monitor it somewhat as long as I'm working from home. And as soon as our regular activities resume, we will be working more closely in that regard. With regard to our revenue campaigns, I think we have a lesson to learn from all of it. And I think this crisis is showing us an opportunity. So I think we have to think about what we will do after this crisis is passed. I think life will be different. And some of the instruments we are testing, we will be using. Our targets targeting system will be revised. And I believe a lot of things will be left that are positive from this crisis. And I believe we will try to make the most of them. Once again, thank you so much. Our IR department is open to all of you. I don't know, Mr. Lukas, if you have anything else to add, but I'd like to thank everyone once again. And we're very happy to be showing you a robust consolidated result. And we are soon we're quickly delivering very great results. So thank you, everyone. Well, Augusto, I would just like to thank for everyone's interest. I hope everyone is okay. And I'd like to stress that we are working hard to go through this period in the best way we can, seeking all the best opportunities. Equatorial Energia S. A. Conference is now closed. Thank you. Thank everyone for your participation and have a great day.