[Foreign language]. Good morning to all, and welcome to the Q4 2023 results earnings call for Neoenergia. If you wish to hear the interpretation, please click on the globe icon at the bottom of your screen and choose your language of preference, English or Portuguese. If you wish to hear only English, do not use the original audio in the background. This call is being recorded and will be made available on our website, ri.neoenergia.com, where the complete material of the earnings release is available. You may also download the presentation on the link in the chat, also in English. During the presentation by the board, all participants will have their microphones muted, and we will then have a Q&A session.
If you wish to ask questions, click on the Q&A icon at the bottom of your screen to join the queue. When your name is called, you will receive a request to unmute your microphone, and you will then make your question. Please ask all of your questions at once. The information contained in this presentation and any statements that may be made during the conference relating to Neoenergia's business projects, projections, and operational and financial goals are beliefs and assumptions of the company's management, as well as information currently available. Future considerations are not guarantees of performance. They involve risks, uncertainties, and assumptions, and they refer to future events, and therefore depend on circumstances that may or may not occur. Investors should understand that general economic conditions, market conditions, and other operating factors may affect Neoenergia's future performance, leading to results that differ from these forecasts.
The presentation will be led by Mr. Eduardo Capelastegui, CEO of the company, and Leonardo Gadelha, CFO of the company. I will now give the floor to Mr. Eduardo Capelastegui.
Thank you very much, operator. Good morning, everyone. I would like to thank all of you for joining our fourth quarter earnings results for 2023. I should begin by apologizing for changing the dates. I had to attend an institutional meeting with the Ministry of Energy in Belo Horizonte. I am Eduardo Capelastegui, CEO of Neoenergia. Once again, we are very proud of what we will be sharing here today with Solange Ribeiro, the Regulatory, Institutional, and Innovation VP, Leonardo Gadelha, CFO, Giancarlo Vassão, COO, Juliano Panzanato, Equity Control and Planning Officer, Fulvio Machado, the Executive Director of Networks, and Renato Rocha, our IR officer.
I will make a brief presentation going through the highlights of the period, and Leonardo will then present the remainder results. We will then proceed to the Q&A session and conclude with the closing remarks. Begin on slide three, we have the highlights of 4 Q 2023 results and the year 2023. Injected energy grew by over 10% of the quarter and 5% of the year, mainly due to higher temperatures and the resumption of economic activity. Our cash, EBITDA, reached a record value of BRL 3 billion in the quarter, presenting a 21% growth, amounting to BRL 10.6 billion, 2023, a 10% increase over the previous year. These significant increases are a reflection of a larger market, tariff revisions and tariff adjustments of our distributors, the sustained cost discipline, and the sound operating management of our assets.
Our net income in the quarter was BRL 973 million and amounted to an annual BRL 4.5 billion in 2023. Regarding our asset rotation initiatives, we concluded the asset swap with the Eletrobras Group and announced and concluded the strategic collaboration operation with GIC in the transmission business. As a result of this operation, we have already sold this year to GIC 50% of our eight of our transmission assets, which provided us with a cash flow of BRL 1.1 billion. And in Q4 2023, we received from GIC a non-binding offer for the purchase of two additional transmission lots, Itabapoana and Guanabara, which are now coming into operation and which represent more than BRL 250 million in RAP.
On the growth front and distribution, we ended 2023 with a regulatory remuneration base of BRL 36 billion. As a result of almost BRL 5 billion in recurring investments in our five concession areas. This investment of volume confirms our dedication to providing quality service and managing the robust organic growth we experience every year. It is worth mentioning that we gained over 314,000 consumer units in 2023. Still, on the growth front, we continue investing in the construction of transmission lots, won in auctions and re-bidders. Closed 2023 with BRL 650 million of RAP in operation. And we expect to close June 2024 with BRL 1 billion in operation, by December 2024, with BRL 1.2 billion of RAP, operating RAP. In 2024, therefore, we will double our closing RAP of 2023.
Another front that deserves to be highlighted in growth, the growth dimension, was the delivery of the Complexo Eólico Oiti, with 566 MW, and the Complexo Solar Luzia, with 145 MW, which complete a cycle of investments in renewable energy, allowing Neoenergia to have 1.6 GW of wind and solar energy in its portfolio in operation. Very well sold at guaranteeing good returns to our shareholders. Finally, I would also highlight the significant appreciation we had in our shares throughout 2023, with over a 47% growth, and indicates a clear recognition by the market of the decisions that have been adopted by the Neoenergia throughout 2023. On slide number four, we can see the status of our growth projects.
Regarding the December 2018 auction lots, we recently had Lot Itabapoana come into operation with a BRL 90 million RAP. As previously mentioned, we have already received a non-binding offer from GIC to purchase 50% of this lot. We continue to advance towards the completion of the Guanabara lot, which will release a BRL 150 million RAP. One third of this lot will come into operation in the first half of this year, 2024, and the remainder at the beginning of the third quarter of 2024. In the case of Guanabara, we have also received an NBO from GIC to purchase 50% of this lot. In Lagoa dos Patos, we already have 100% of the RAP in operation, which represents almost BRL 100 million.
In this lot, Alto Paraíba, as previously mentioned, is paralyzed because the layout of the tender did not obtain a prior license from an environmental agency in 2023, meaning it could not be built as it was auctioned. We are already in contact with ANEEL, the regulator, to find a solution for this section where we have not, we are not incurring CapEx. Vale do Taquari, the last of the four lots, won in 2018, we already have BRL 22 million of RAP in operation, and we'll have other releases throughout 2024, completing 100% of the RAP in the first quarter of 2025.
In the Morro do Chapéu lot, from the December 2020 auction, we have already released BRL 33 million in the RAP, and the remaining BRL 159 million will come into operation throughout 2024, strictly in line with its business plan, the business plan that was approved in the auction. In the Estreito lot, which we won in the December 2021 auction, the construction is advancing and delivery is planned for the first half, 2024, with BRL 40 million in your RAP, and also in accordance with the business plan. Regarding the lots won in June 2022 auction, the Alto Paraíba lot, the largest of the two, we have already obtained the environmental license without binding conditions by Ibama. We await a state license from Minas Gerais by the end of the month to begin the constructions according to our business plan.
The second lot, Paraíso, has already advanced its construction works and is expected to be delivered in the first half of 2024, with BRL 38 million in RAP, anticipating our business plan. Therefore, as you can see, all of our lots are progressing at a good pace and, according to plan, with the expectation, as mentioned, of doubling the operating RAP in 2024, going from BRL 650 million of the operating RAP by the end of 2023, to BRL 1.2 billion in the operating RAP by the end - by December 2024. And in slide five, as we always do at the end of each year. Since 2017, the year Elektro was incorporated into Neoenergia, and when Iberdrola became the controller of the company, Neoenergia, we have presented a performance that deserves to be highlighted.
Our growth margin from 2017 to 2023 grew significantly, reaching 121%, which represents an average growth of around 14%. As a reflex of the organic growth of our distributors and, more recently, our expansion in transmission and renewables. In regards to operating efficiency, there is no doubt about our commitment to cost discipline and our daily search for efficiency. Throughout this period, we've presented an average growth of only 4%, absorbing an accumulated IPCA of 42% and an accumulated IGPM of almost 70%. Besides, the OpEx increase derived from new projects in operation in transmission and renewables, and because of this focus on efficiency, the ratio or operating expenses to growth margin ratio has already declined in this period, going from 44% in 2017 to 22% by the end of 2023.
We are convinced that over the next years, we will continue to deliver a positive evolution in terms of operating efficiency. Our EBITDA has grown 222.37% since 2017, with an average growth of 22% per year, while our net income has grown a significant 743%, above BRL 500 million of net income, right above the BRL 4 billion in 2023. This growth shows once again the enormous value creation over the period, making Neoenergia one of the key players in the sector. Now, I will hand the floor over to our CFO, Leonardo Gadelha, who will provide more details on our results for the fourth quarter and the year 2023. Leonardo, please.
Thank you, Eduardo. As pointed out, we are very pleased with the results for 2023.
We've closed the year with an operating performance that was very strong in the quarter, as we will see. Going forward, I will begin by analyzing the results on slide six, where we see the consolidated results, the evolution of gross cash margin in the quarter. But now, considering the impact of IFRS 15 and VNR was 12% compared to 4Q 2022, reaching BRL 4.1 billion. And this growth was driven by a strong demand, a larger customer base, tariff revisions, and adjustments, compensating, offsetting the lower margin in Pernambuco for the year. The increase was 8%. This quarter, we presented excellent cost discipline, with a decline, excluding non-recurring items, of 2% in operating expenses. In the year, we had a 3% growth compared to 2022.
That's below inflation in the period, absorbing growth in the number of clients and new projects. On the next slide, we see on slide eight, the cash EBITDA reached BRL 3 billion in the quarter, representing a growth of 21%, impacted by the higher growth margin and control of expenses. That, as I explained in the previous slide, in 2023, the growth was 10%, reaching a cash EBITDA of BRL 10.6 billion, therefore surpassing the forecast we had in our business plan. Neoenergia's net income in the quarter was BRL 973 million, 4% above for Q 2022 and amounted to BRL 4.476 billion in the year. It's worth remembering that in 2022, this result was positively affected by the incorporation of the premium from the acquisition of CEB, of around BRL 700 million.
Moving on to slide nine, we have our CapEx. In the quarter, we achieved a total BRL 2.4 billion, in line with the previous quarters. The highlights were BRL 1 billion in distribution and another BRL 1 billion in the advancement of our transmission works. Through the year, CapEx reached BRL 8.9 billion, therefore a significant volume in line with the business plan. On slide eleven, our network business, our operating performance, we can see the variation of injected energy in our five distributors, as already announced, showed a very strong growth. The quarter, driven mainly by the higher temperatures and the recovery of the economy, with highlights led by Neoenergia Brasília. Consolidated growth was 10.1% and 5% in the year.
On slide 12, we see the evolution of distributed energy in our distributors, and as also shared with the market, the number total of consumers amounted to 16.5-- reached 16.5 billion, an increase of 314,000 customers in 2023. This quarter, distributors had a 7.9% growth, and the year 3.9% instead. Bearing in mind, Coelba and Elektro, underwent tariff revisions in 2023, and have their markets adjusted once again with the DG migrations. I will now, to slide 13, talk about losses and performance. We had a controlled loss rate in all of our distributors, and Coelba losses were impacted at the end of the year by non-billed energy, 254 GWh.
Also, driven, as mentioned earlier, by higher temperatures, and we can also see in this chart, without considering this one-off effect of non-billed energy, we have met the regulatory limit. We can say that we have four of our five distributors within the regulatory limit complying, and this was the effect we had in the quarter. For the first quarter now, we expect to once again comply. As far as default, in slide 14, we see in the fourth quarter, PECLD, which presented an increase in the first quarters of 2023, went back to the normal levels, reaching BRL 139 million per quarter, as we had already signaled, indicated. We had reported advances in collection with our distributors. In this particular quarter, we were under a negative impact of the mismatch of one month between the collected amounts and the higher demand affecting this denominator.
On the next slide, moving to the quality indicators, DEC and FEC, and our distributors are maintaining high performance, all of them complying with the regulatory limits. And as for the network results on slide 16, we observed that in the fourth quarter, we had a 12% evolution in the gross margin cash, driven by the market, the adjustments and reviews, and a growing customer base. And this investment was 11%. Operating expenses, as seen in the consolidated results, had a 1% growth only, taking out the non-recurring effects. And we had a reversion in the health plan of Coelba and also the litigation in Brasília. Therefore, our performance remains strong in operating expenses, and the expense growth in the year was 3% below inflation, absorbing the customer base growth.
On slide 17, the EBITDA cash in networks grew 21% in the fourth quarter, amounting to BRL 2.265 billion, driven by higher margins and well-controlled expenses. In the year, the EBITDA cash growth was 15% in networks, reaching BRL 9 billion. Now on slide 19, we have a summary of results in the renewables and liberalized segments. The Q4 EBITDA renewables, ruling out the operations with the Eletrobras, was BRL 366 million, which represents a 21% growth. The annual EBITDA growth in renewables was 15%, amounting to BRL 1.325 billion. In the liberalized segment, to the right-hand side, the EBITDA in the fourth quarter was BRL 143 million, a decline of 12% compared to 4Q 2022.
This is explained by the lower costs in Termopernambuco in the year 2022, as a result of the non-gas supply that was a one-off. Our customers business also had an EBITDA of BRL 7 million in the quarter. In this liberalized segment, EBITDA was BRL 609 million. And now on slide 21, we will look at our capital structure. Our year 2023 ended with a BRL 39.1 billion debt, slightly above the previous quarter, which is explained by the CapEx execution pace. Our net debt to EBITDA ratio closed at 3.70 times, according to levels that were presented in the previous quarters. Forecast for 2024 is for this to be maintained at 3 times, resulting from the CapEx and distribution and conclusion of transmission work.
The debt structure has a comfortable structure and plan, well distributed over the next years, as we can see, attaining an average deadline of five years. Our diversified debts in terms of sources and indexes that are have competitive cost, cost. 2023 started out with challenges, especially the credit market crisis that lasted for the first half. Still, in 2023, we dispersed BRL 11.5 billion in total reais in new funding for ensuring the CapEx for the business. For 2024, our funding plan is at the same levels of 2023, and we can confirm that in February now, we have addressed half of the plan, which will benefit an increase, promote an increase in the credit market and macroeconomic conditions. I will now turn the floor back to the operator, so we can begin our Q&A.
We will now open the Q&A session. Bear in mind that if you wish to ask a question, you should click on the Q&A icon at the bottom of your screen to join the queue. We would ask you to open your microphone. You will receive a request. Please turn on your microphone to ask your question, and ask all of your questions at once. Our first question is from Julia Zaniolo, analyst from Santander. Julia, can you please open your microphone and proceed? You may proceed, Julia.
Good morning, everyone. Thank you for the call. I have a few questions. One in relation to your expectations to the new sale of assets to GIC in transmissions. If you have updates on the discussion of the renewal of constructions and the timing, and the delays in decision-making, if that has increased the risk, risks on your side. Thank you.
Thank you, Julia. To answer your first question, as I've mentioned in my presentation, we received last December the non-binding offer of GIC for two assets, Itabapoana and Guanabara, two assets that are now getting into operation. Itabapoana already almost, and Guanabara over this next half. And we expect to do the closing of these operations likely by the beginning of the second half. There's a diligence process, the final due diligence. And it's important to say that, well, interest has been shown, and we, as shared, the binding offers. This model is similar in the eight lots that we sold last year. And well, yes, this will continue to operate as expected, just as the other lots. As I mentioned, many lots are beginning their operations now in 2024, Estreito, Paraíso, et cetera.
We will once again present this interest to GIC, and the process will move forward as it is now with the other lot, first lots. So yes, it will be a busy 2024 because, as I said, many lots are beginning their operation. Therefore, this relationship is a sound relationship, and the same applies to the new auction in part. Well, we're analyzing also the participation with GIC. This agreement with them is being fulfilled and executed 100%, as initially conceived. As for the concession renewal question, we all know this is a complex process, and it's important to mention that we are advancing. GIC have provided an opinion, acknowledging also for their opinion to the Ministry of Energy, and over the next weeks, the Ministry will probably also issue a decree.
Everything is being carried out transparently with, of course, the deadlines and conditions. We are optimistic. We believe the process will continue throughout the year and be concluded in 2024.
Excellent. Thank you.
We're now moving to the second question, Daniel Travitzky, analyst from Banco Safra. You may open your microphone, Daniel. You may proceed, Daniel.
Hello, everyone, and thank you for the opportunity. I would begin by just adding something to Julia's question. And beyond this discussion on concession renewals, we have also in this expectation from the Ministry to also pass other resolutions, the decree, in fact, to address tariffs and the vector systems. I would just like to better understand what this communication has consisted of between the Ministry and Energia. Have you been called for meetings, discussions?
Are there any consultations with the Ministry, the Ministry asking what the company's position is? And the second question relates to future opportunities. So going forward, is the company going to focus on transmission? Is the company considering other projects, renewables, at this point in time? Is it being considered as to have a clear understanding of the plans for 2024 going forward? Thank you.
Thank you very much, Daniel. How to the answer as to concessions renewal. Well, the relationship of the businesses, the companies with the Ministry are horrible. Yes, this is, of course, the government power, and, and government authority, and we are doing all we can to contribute to with the Ministry by sharing ideas. We are actually very We are at ease in regards to the regulatory aspects and the contracts. It's not the first time.
We have had also relations in regards to the concessions in the past, and now we are looking at the conditions as to how things will happen. We are all pay close attention to the aspects. These will be, of course, aspects that we will be looking at closely and consider that the first renewal will be in 2025.... And the process is progressing well. As mentioned, the relationship between the private company and the ministry is a sound one. It is constructive, of collaboration, of good dialogue, and looking to reach an agreement that is good for the company, because we are long-term investments.
We have to have our forecast and predictability, of course, and the ministry on its side is looking at, of course, the continued growth of the electric sector, looking at the quality for both the private and public sectors, have interest in making things happen, and we firmly believe that we will continue collaborating. The second question is related to prospects and growth for 2024. As mentioned, oftentimes our main focus continues on distribution, organic growth, and the recurring investments of around BRL 5 billion per year. Annually, our areas have a high demand, a growing demand in Bahia, and we have our growth is of one distributor per year, 300,000 new customers, BRL 5 million in remuneration base every year. On the other hand, a strong focus on building the transmission lot.
In 2024, we will have a very busy year, many activities to. We'll double the RAP as mentioned, our RAP will double, and we will have many projects being concluded. Operations, of course, within our collaboration with GIC. And these will be the things we'll be focusing on. We will also be in the auction for transmission. I want to make it clear, give a clear message that our objectives to participate will be exactly the same as we had in June's auction last year. We do not need to take risks or have lots with low revenues. We have a high recurring in transmission, distribution, and we'll be focusing on these as we gain more value. This has to be very clear. In June last year, we presented.
Well, in December, we did not go to auction, focusing on continued recurring, and now we're considering studying a few lots and looking at what is happening in Bahia and close to other lots that are in operation already, where we have synergy. It's important to mention that considering this criteria, that is, adding value, looking at realistic assumptions and building a portfolio that will have the appropriate returns.
Excellent. Thank you, everyone.
Thank you, Daniel.
The Q&A session is now closed, and we will hand the floor back to Mr. Eduardo Capelastegui for the final considerations.
Once again, thank you, operator. I would like to leave a final message reinforcing our commitment to all Neoenergia stakeholders as we have reached the end of one more year delivering solid results.
At Neoenergia, we all continue maintaining our focus on efficiency, creating value, and maximizing results in an uninterrupted manner. One of the best ways to represent this is the significant growth of our cash EBITDA, which, since the IPO, has grown almost 140%, exceeding expectations at the time, despite events such as the pandemic and all sorts of crises that have challenged us over the past 3-4 years. We closed the year 2023 with major deliveries in our asset rotation plan, a plan that was announced at the end of 2022 and successfully executed throughout 2023. We are certain that we generated value for Neoenergia with these operations, both with Eletrobras and also with the strategic partnership with GIC. In 2024, we will continue advancing this plan to value Neoenergia's assets and also continue strengthening our balance sheet.
In terms of growth, for 2024, we will continue having organic investments of our distributors as our main growth avenue. With the same commitment, we will maintain the focus on the delivery of transmission lots under construction, and we'll have the same discipline, the same capital allocation demonstrated in the 2023 auctions. This was a question that Daniel asked. Once again, I would like to indicate how we will move forward in terms of growth in 2024. We never neglect the operating excellence, which characterizes and represents us in all of our businesses. We have been prominent operators and will remain so. Anchored in a sustainable business model, guided by security and the best ESG practices.
The appreciation of over 47% of our shares in 2023 is maybe one of the best indicators that we are on the right track and aligned with the market, market's expectations. To conclude, my final consideration, I want to thank our shareholders for trusting in us. In 2023, we proved once again that we have the right team, is engaged and committed to delivering the desired results. And again, I want to finish, as usual, by thanking all Neoenergia employees, who have quarter after quarter, fulfilled their role, overcoming challenges, delivering quality energy, and maximizing our results. Thank you all very much, and have a good day.
The earnings release call for the fourth quarter 2023 of Neoenergia is now closed. Investor Relations Department will be at your disposal to answer further questions.
Thank you to all of our participants, and we wish you a good day.