Good morning, everyone. Thank you for holding. Welcome to Compass Gas e Energia's Second Quarter 2026 Earnings Conference Call. Joining us today are Mr. Antonio Simões, CEO, Mr. Marcos Fernandes, CFO, and Mr. Gustavo Torres, head of investor relations. For those who need simultaneous interpreting, this feature is available on the platform. To have access to it, click the interpretation button, the globe icon at the bottom of your screen, and select your preferred language, either Portuguese or English. For those listening in English, you also have the option to mute the original audio by clicking mute original audio. This call is being recorded and will be made available on the company's website, www.compassbr.com, where you will also find the full earnings materials. The presentation can also be downloaded from the chat icon. During the presentation, all participants will be muted. We will then move on to the Q&A session.
Questions should be submitted through the Q&A icon at the bottom of your screen. As a matter of procedure, please identify yourself when submitting your question. The statements made in this presentation regarding Compass Gas e Energia’s business outlook, projections, and growth potential are forecasts and were based on management's expectations regarding the company's future. These expectations are highly dependent on changes in the market, on the general economic performance of the country, of the sector, and of international markets, and are therefore subject to change. For more information, the full disclaimer is available in this presentation. I will now turn it over to Mr. Marcos Fernandes, CFO of Compass.
Good morning, everyone. Thank you for joining us for our second quarter 2026 earnings conference call. This is a particularly important call for Compass because it represents one of our first opportunities to engage with the market since we completed our IPO. This new cycle as a listed company increases the visibility of our platform, broadens our investor base, and reinforces our commitment to transparency, capital discipline, and sustainable value creation. We closed the second quarter with consistent execution of the strategy we presented to the market. We continue to advance in our segments.
First, we're expanding and strengthening our regulated distribution assets. Second, we are growing our marketing and services platform through Edge, where we are a pioneer in the opening of the gas market and are consolidating new growth avenues such as B2B, LNG, and biomethane. Compass combines strategic regulated assets, long-term contracts, scale, cash flow predictability, and exposure to significant growth opportunities in the Brazilian gas market.
This combination is what underpins our investment case, an integrated, resilient, and scalable platform ready to expand access to natural gas to deliver competitive solutions to our customers and to contribute to a safer, more efficient, and lower carbon intensity energy mix. Turning to our quarter highlights. In the distribution segment, we reached a volume of 14.7 million cubic meters per day. We connected 179,000 new customers and added 738 kilometers of network in the last 12 months. In the marketing and services segment, we reached the highest traded volume in Edge's history at 5.1 million cubic meters per day. Another highlight at Edge was the signing of our first off-grid mobility contract, a 10-year agreement for the supply of LNG.
This project provides for 160 trucks running on LNG by 2027, and there is room for growth in the next years. Additionally, we reached the milestone of 500 LNG loads delivered to LD Celulose in the first six months, moving 16 million cubic meters. These milestones reinforce the relevance of B2B LNG as a competitive, scalable solution aligned with the energy transition. On the financial highlights, we delivered EBITDA of BRL 1.3 billion and net income of BRL 287 million, and we capped leverage at a healthy 2.3 x our net debt to EBITDA. Turning to our consolidated performance slide. In this quarter, we saw the resilience of our platform. Our EBITDA totaled BRL 1,275 million in the second quarter of 2026, up 5% versus the second quarter of 2025. On a normalized basis, our EBITDA reached BRL 1,316 million, up 3% year-over-year.
Performance was driven mainly by a better volume mix in the residential and commercial customer classes at our distributors and by higher volumes sold by Edge, together with cargo optimization transactions. These factors partly offset weaker industrial demand in distribution, particularly in segments that are more sensitive to the economic cycle, such as chemicals, steel, and ceramics. Our net income was BRL 287 million in the quarter. The decline versus the second quarter of 2025 mainly reflects higher net financial expenses and higher depreciation associated with new projects that came into operation. Investments totaled BRL 532 million in the quarter, in line with the second quarter of 2025. Most of this capital went to gas distribution, expanding our networks and meeting our regulatory plans. In marketing and services, the reduction in investments reflects the completion of most of the phase one investments in B2B, LNG, and Onebio.
During this quarter, we generated BRL 981 million in operating cash flow and distributed BRL 406 million in dividends relating to fiscal year 2025, reaching a dividend yield of 5.2%. This reinforces our commitment to shareholder returns and value, always balanced with growth, with preserving our financial soundness, and with capital discipline. On the capital structure, we ended the quarter with a net debt of BRL 11.5 billion and a leverage of 2.3 x our net debt to EBITDA, a healthy level for our business. We maintained a comfortable debt profile, with 90% of our financing maturing in the long term, an average maturity of 5.6 years, and an average cost of 99.9% of the CDI index, the lowest level in the company's history.
This reflects the liability management work carried out in the past few years, and it gives us the flexibility to keep investing without putting pressure on leverage.
Turning now to distribution, this segment remains Compass' main foundation. We have the largest natural gas distribution platform in Brazil, with seven distributors positioned across the Mid-South regions, the country's main consumer markets. This regulated portfolio provides earnings predictability, low relative volatility, and the capacity for continuous investment in infrastructure. In the second quarter of 2026, our distributed volume was 14.7 million cubic meters per day, a marginal decline of 0.8% versus the second quarter of 2025. This performance reflects a better mix in the residential and commercial classes, driven by growth in the customer base and by gains in segments such as food services and hospitality. These effects were offset by lower industrial demand and by pressure in light-duty mobility, given the competitiveness of CNG against liquid fuels and the growing adoption of hybrid and electric vehicles.
We ended the quarter with 3.2 million customers, up 6% versus the second quarter of 2025. We continue to expand our customer base, investing BRL 510 million in the period. We achieved a 6% reduction in our OPEX per customer indicator in real terms. This growth reinforces the platform's commercial and operational efficiency, as well as Compass' ability to expand access to natural gas with diligence. Finally, the distribution segment EBITDA was BRL 1.2 billion, an increase of 6% versus the second quarter of 2025, reflecting the better volume mix across our distributors portfolio. Turning to our marketing and services slide, Edge continues to consolidate itself as our main competitive growth platform, extending Compass' reach beyond distribution and offering flexible, reliable solutions to customers both connected and not connected to the grid.
In this quarter, the volume traded by Edge in the domestic market was 461 million cubic meters, up 27% versus the second quarter of 2025. Our footprint went from seven to 11 states, and our client portfolio more than doubled, reaching 61 contracts. These figures show Edge's ability to capture the opportunities created by the opening of the Brazilian gas market, combining sourcing, infrastructure, logistics, and customer relationships. During this period, we invested BRL 22 million. This reduction reflects the completion of most of the phase one investments in B2B, LNG, and Onebio. Our normalized EBITDA was BRL 182 million, an increase of 14% versus the second quarter of 2025, reflecting higher free market volumes and new cargo optimization transactions carried out in the second quarter of 2026. This concludes our opening remarks. We'll now have a Q&A session.
Thank you. Let's now start the Q&A session. Please make sure to ask all of your questions at once. Please remember that to ask questions, you should click the Q&A button at the bottom of the bar. Please identify yourself when asking a question. Our first question is by Ms. Monique Greco from Itaú BBA. Please go ahead.
Good morning. Good morning, Antonio, Marcos, and Gustavo. Thank you for taking my question. I have two questions, actually. Edge traded 5.1 million cubic meters. What do you see as the journey of this volume towards the end of the year? What would be the end volume at the end of the year according to your forecasts? My second question is, what do you think about the resolutions of ANP regarding LNG terminals and the gas release that is up for consultation? How do you think these measures are going to have an impact on your business model? Thank you.
Good morning, Monique. Thank you. Good morning, everyone. I'd like to take this opportunity to say good morning to everyone who's connected with us. Let's talk about Edge's volume. We've been talking about this growth since last year. I believe we're following a logic of migrations from the captive market to the free market. That's what we expected for this year. If we go back in time a little, we even made faster progress than what we expected. We're starting this year with two-thirds of the market, either under migration or about to be migrated, and we're continuing this process. So we expect to keep growing volumes for Edge. We want to keep a fair share, a market share that is similar to what we have right now. We also want to enjoy liquidity opportunities that this market has to offer.
As we make progress, we enjoy more of these opportunities. I believe that we are still going to see these migrations. We first had a big move. We had bigger clients, then smaller clients, and we still have a set of clients that are going to be migrated in the future. We have a market share in this market at around 20%-25%, and we expect to keep the same levels and to continue our migration process. It is also important to mention that this migration is happening at the timeline of our clients. Sometimes we have new contracts with our clients. What matters here is that they are seeing value in that migration. This value is not only about price; it is also about after-sales relationships. It is about a proactive conversation on how to manage pricing risks.
It is about options and flexibility, and this is well-received by the market. We expect to keep seeing this process. That is number one. Number two, I can give you an overview. Many things are happening, but overall, what we see is that the regulations agenda that we have for this year really brings us many points that are being discussed. They had been working on this agenda for many years by the Ministry of Mines and Energy and by ANP, and this was expected by the players in this industry. Most of it is not a surprise. It is a part of a regulations agenda. It is a part of the set of regulations that are happening because of the New Gas Law from 2021. We were expecting it.
We have been following up on it, and what we have always stressed is that we need to have this technical conversation, so consultations and hearings really matter when building this kind of legislation. We need to fulfill contracts. If we follow the same path, we are going to have long-lasting solutions. Overall, these measures aim at offering more transparency, better competitiveness, a better competition in this market, and we have been discussing many of them. This is my general comment. We are actively participating in all of these conversations, just like other players in this industry. We are helping, we are contributing, because we want to have a regulation that is both safe and long-lasting as well. We do not want it to be challenged every once in a while. This is my general remark. Regarding access, I think it is important to shine some more light on this.
Again, we expected this conversation to happen. Of course, this is something very new in the gas industry, but there is lots of previous cases involving this. It is no innovation. We need to focus on the details for the next steps because each terminal has its specificities, its specific traits. Some of these conversations are going to go into more detail through the code of conduct and the code of access. It is important to understand that we have been fulfilling the principles that are foundational here for this proposition. We have owner preference, and we also have negotiated access. I think these were the most important things. Of course, we do not want to create uncertainty for investors, both current and future investors. This was a big point of concern for this industry.
Except for this, we just need to wait for more details so that we can actually, as I was saying, see clear, long-lasting resolutions for this. I think sometimes we're going to use this kind of solution more frequently for some certain cases, and some other things won't be heavily used in the future. Thank you.
Our next question is from Vicente Falanga, Bradesco BBI.
Hi, good morning. This is Gustavo. I work with Vicente. You have been discussing gas, but could you please talk about whether this could bring opportunities to Compass, especially in the access to molecules for Edge mainly. For Edge, could you please discuss which contracts we could expect to see executed in the short term? What do you think about volumes for the second semester, second half of the year?
Regarding the gas release, Gustavo, I think some of the previous answer is applicable here. The consultation has been approved. They are making progress with it, so we have to wait a bit. We can't have any specific remarks here. But definitely this is going to move the industry. This is going to bring liquidity in, and we expect to see opportunities for every player in this industry. I think it is too early to make more specific comments.
What was your second question about?
The volume that we expect for Edge in the next quarters.
What we can tell you is that if we look at the first and second quarters, we had double-digit growth. Of course, as Antonio said, this has to do with the migration of the free market.
Edge has been very vocal and is very close to clients with flexibility and competitiveness for every single contract. For every customer that migrates, they look for Edge, and we've been working closely with them in every industry, whether they are small, medium-sized, or large-sized. Just for you to have an idea, something important here is that the volume at Comgás has been migrated at about 75% into the free market, and Edge is working closely with them. Edge used to have a footprint of seven states, and we have 11 states now. This has to do with volume. What's happening is basically what we've been saying from the get-go. We have 61 contracts. If you look at the evolution year after year, this is very quick evolution for our case and for Edge. We do believe we're going to have the same pace for the next quarters.
Great. Thank you.
Our next question is from Arthur Pereira, JP Morgan.
Good morning. I have three questions. I would like to start with two regarding distribution. I would love to understand what you think about volume, especially for Comgás, which was a little bit weaker this quarter, and I know you just mentioned the industrial migration into the free market. Number two, I would like to clarify something about the results of Sulgás. We usually do the calculation for the inventory of intangibles, and there's BRL 110 million, and I would love to understand the impact of your results on the recognition of the regulatory assets at Sulgás.
Finally, costs. When we look at costs for the quarter, we see commercial expenditures, and there's BRL 65 million for that and BRL 12 million regarding offerings or supply. BRL 65 million looks high compared to the first quarter and the second quarter of last year. Were there any one-off effects in this sense?
Good morning, Arthur. Let me talk about volumes, and then Marcos can talk about Sulgás and expenditures. Regarding volumes, there is something important here to understand. There is a portfolio effect. Comgás had a slight decrease in the volume for the quarter, which is not something that has never happened before. There is always a difference between quarters. Sometimes you have different effects, you have different seasonalities, you have different interruptions, it depends on the type of the industry. Only looking at a quarter will not bring you an answer. What we were able to notice was an offset effect between the portfolio companies. There is also the migration in different plant profiles.
For instance, with the petrochemical industry, we saw production moving towards the south, especially because of the type of plants that we have there and the type of market that is interested in chemicals. If you look at Comgás, there was a 3%-3.5% decrease for the industrial sector, but then we had a 10% increase for another one. Then Sulgás and then 13%-15% for Compagas. Overall, we have a slight decrease for the industrial sector. If we think about the long term, this is something that has been happening. Sometimes the industry goes 0.5 up or 0.5 down, and this is something normal that we see happening year-over-year. What we try to do is to grow better profitability markets like residential, commercial, mobility, and this also happened during this quarter.
This goes to show that the wheel is still turning. We connected almost another 200,000 customers, and we keep making investments. We are still going to make them throughout this year. This is what I wanted to say about industrial volumes. Some of the antidote to this is already being employed so that over the years we are still able to grow.
Hi, good morning, Arthur. Let me discuss the moves at Sulgás. This is basically a financial asset, and it is important to recap our history with financial assets. We had the tariff review in 2024 at Sulgás, and there were two points at the time that we had to work on with the agency. This had to do with changes that they were discussing regarding not having tariffs for taxes and also changes in volume.
Everything that was tax-related was under consensus last year in the second half of the year, and we are accounting for that, and it is included in our tariffs. We kept discussing volumes. We would pay 80% of volume, and they wanted 100%. We kept discussing this with them, and in the last earnings conference call of last year, we talked about the consensus for this. Right now we have a financial asset, something that we account for in our results. It is a recurring effect because this is going to happen every single year. The impact on income this year had to do with acknowledging this asset for 2025. Now we are going to be discussing this for the tariff review related to 2026. We are going to see what the relative values are going to be for this year.
Regarding the BRL 65 million you mentioned and the other expenditures of BRL 12 million, these are basically expenditures that are related, for instance, to the IPO. These are basically related to the IPO. Some of it went, for accounting reasons, into other expenditures. Some of it is SG&A. But it is basically paying for the IPO. We have all the offices, we have long-term incentives, and of course, we understand that this is a one-off expenditure. This is not something that we are always going to see in subsequent years.
Great. May I just follow up on Sulgás? You mentioned that you have recurring results here. This is always going to have an impact on income. But you are probably going to receive this financial asset at the end of the concession as an extension, right?
Yes. Right now it is a non-cash effect, but it is always important to remember that we are operating long-term concessions, and we want to be operating them for the longest term. In the case of Sulgás, it goes to [2034]. It is a non-cash recurring effect, and it is going to be a cash effect at the end of the concession, depending on our conversations with the state.
Great. Thank you.
Our next question is from Guilherme Lima, Santander. Guilherme, please unmute.
Hello, good morning. I have two questions. My first question is about results. Could you please talk about other revenue and expenditures Commit ? We see BRL 71 million. I just want to better understand this in this quarter and understand the level of recurrence. And I want to confirm that this update of the financial asset has not had an impact on this line. Because if I am getting it right, it goes into actual revenue. Finally, could we please get an update on that conversation with ARSESP regarding PIS and COFINS credits, regarding returns in the tariff, and the size of the liability? Do you have any update on this conversation? When should we expect this to be completed? Thank you.
Good morning, Guilherme. Let me start with your second question, and Marcos will be addressing the costs. When it comes to this conversation, the news in this quarter is that Comgás appealed, and they were able to suspend the beginning period of these returns because they were challenging the merits of it and the way that these credits would be returned. This is pending at the moment. They are still to discuss it. We will have to wait and see what is going to happen. I do not have any updates on this suit. This is actually pending, and they need to discuss the merits of it.
Allow me to address your first question. BRL 70 million. We had a reversal of a contingency for Compagas. This is a process that was extinguished. Our legal team works on liabilities, and there was a liability during the acquisition. We brought it in, but we were able to reverse it and extinguish it. For the other points at Commit, they have also been making strong efforts, and this also applies to Compagas, to have a conversation with several industries regarding credits that we were due. We have been working strongly on that, and this is recurring effort in our business, having these conversations.
We were able to have BRL 15 million-BRL 20 million in debt, and we're trying to go back to operations with some industries that are not as active. We're trying to understand these numbers, and a part of our business is to be active in this. Sometimes we go in, sometimes we leave, but we're working closely with these industries to reactivate them. This is some of the work that we've been doing very robustly to increase volumes. These are the main points of impact. Of course, in our running business, we have another smaller impact, but the biggest two are the two that I just mentioned.
Excellent. Thank you.
This is the end of our Q&A session. I will now hand it over to Mr. Marcos Fernandes for his closing remarks.
Thank you very much for being here. We concluded this quarter with consistent execution based on the strategy that was presented in our IPO. We're making progress with our distribution and consolidation with Edge and with our market investment case. We remain focused on the safety of our operations with operational excellence and efficiency for our assets. We're going to remain working on capital discipline as well. We want to grow responsibly and preserve our robustness at Compass so that we can generate lots of value in the future. Thank you once again for being here, and I hope to see you again in our next earnings release conference. Thank you.
This concludes the second quarter of 2026 earnings conference call for Compass. Please remember that our investor relations department is available to answer any remaining questions. Please use the QR code on the slide to leave a review for our conference. Thank you very much, and have a good day.