Good morning, everyone. Thank you for waiting, and welcome to Compass Gás e Energia S.A.'s first quarter 2024 earnings release conference call. Simultaneous translation will be available during the session by clicking on the interpretation button at the bottom of the screen and selecting the language of your choice, Portuguese or English. Those listening to the conference call in English, you do have the option to mute the original audio in Portuguese by clicking on Mute Original Audio. This video conference is being recorded and will be available on the company's IR website at www.compassbr.com, where you can also find the full material for this earnings release conference. The presentation in English is also available for download through the chat icon. During the company's presentation, all participants will be on a listen-only mode. After the presentation, we will have a Q&A session.
Please send in your questions by clicking on the Q&A icon at the bottom of your screen and make sure you identify yourself. The questions will be read out loud by the operator. Please note that the information contained in this presentation regarding Compass Gás e Energia S.A. business prospects and potential for growth are forecasts based on the management's expectations regarding the future of the company. These expectations are highly dependent on market changes, the overall economic performance of the country, the industry, and international markets, and are therefore subject to change. Forward-looking statements are not a guarantee of performance. They involve risks, uncertainties, and assumptions as they refer to future events, and therefore depend on circumstances that may or may not occur.
Investors must bear in mind that overall economic conditions, market conditions, and other operating factors may affect Compass Gás e Energia S.A.'s future performance and lead to results that differ materially from those expressed in such forward-looking statements. I will now turn the floor over to Mr. Guilherme Machado.
Good morning, everyone, and thank you for joining Compass Conference Call to discuss the results of the first quarter of 2024. I am Guilherme Machado, Compass CFO, and I'm here along with Antonio Simões, Compass CEO. This is our first earnings conference call, which will take place on a recurring basis from now on, targeting a more close relationship with the market. Today, we will cover the history of Compass and our marketing position. Additionally, we will discuss the quarter highlights, operational performance, and finally, the financial performance and consolidated indebtedness. But before we start with the quarterly results, I wish to do a recap of our positioning and the main milestones at Compass. Our story began in 2012 with the acquisition of a controlling stake of Comgás by Cosan.
Since then, we have created a business model that enables us to increase our customer base and expand our gas pipeline network. Based on our knowledge and experience acquired through Comgás operations, we created Compass back in March 2020 to offer options for an increasingly free gas and power market in Brazil. In four years of history, we have already invested over BRL 190 billion in Brazil's natural gas market. Our operations are currently divided in two segments, distribution and marketing and services. In the distribution segment, we operate through two vehicles, Comgás, Brazil's largest natural gas distributor, located in São Paulo, and Commit, a subsidiary of Compass in partnership with Mitsui, which holds stakes in 11 gas distribution companies.
Commit's assets are organized in clusters located in Brazil, Northeast region, called Norgás, that we already engaged in the sale process, and a Center-South region, where we have our focus and own stake in Sulgás, whose control interest we acquired from the state of Rio Grande do Sul back in 2022, as well as Necta, Commit's direct subsidiary. In other local distribution companies, Commit has been working on synergy and alignment with its partners, exchanging experiences and implementing the best management practices. In market and services through Edge, we manage strategic assets such as the São Paulo Regasification Terminal, located in Cubatão, biomethane assets and supply contracts, LNG B2B, and gas trading. These segments offers natural gas supply alternatives, ensuring safety and flexibility, and enabling decarbonization amongst its clients, whether they are on or off-grid. Moving on to the slide of the quarterly results.
Despite the challenging scenario, we kept our discipline and reached 2.7 million customers connected at Comgás, Sulgás, and Necta, and 25,000 km of pipeline, and distributed 13.2 million cubic meters per day of natural gas. As such, we achieved an EBITDA of BRL 893 million, net income of BRL 318 million, and ended the quarter with a leverage of 1.4x net debt to EBITDA. On the operational performance, we started with the distribution segment, which consists of Comgás and Commit results. In the first quarter of 2024, we distributed, as I mentioned, 13.2 million cubic meters per day, a total volume in line with the first quarter of 2023, due to lower volumes in the residential segment impacted by higher temperature during the period, and lower CNG consumption, which remains below the comparison period in 2023.
However, these were offset by a positive performance on the commercial segment and by the recovery of the industrial segment. Additionally, we kept our pace of connections, reaching 163,000 new customers connected in the last 12 months. Moving on to the next slide. The first quarter was very important period for Edge and was marked by major deliveries. In the first months of operation, Edge made significant progress in origination and trading with positive results. We invested in building a high-performance team to maximize value from our assets while focusing safety, flexibility, and competitiveness. On the origination front, we added to our portfolio volumes from the Pre-salt and Bolivia, contracts that reach peaks of 1.2 million cubic meters per day. In trading, on top of starting to supply Comgás in March, we completed the migration of the first industrial customer to the free market.
As a result, we record EBITDA of BRL 47.5 million in the quarter. The next slide shows the company's consolidated financial performance. We posted EBITDA of BRL 893 million in the first quarter of 2024, a reduction of 7% from the same period of 2023, mainly reflecting the change in our mix this quarter, which was more concentrated in segments such industrial, and which was partially offset by the operational start of Edge. Net income in the first quarter of 2024 totaled BRL 318 million. The variation among periods was impacted by the provision for the tax benefit in the first quarter of 2023. Moreover, we ended the quarter with BRL 445 million committed to the CapEx, down 80% from the first quarter of 2023. This refers to investments in natural gas distribution subsidiaries and substantial part for the conclusion of the Terminal de Regas in São Paulo. Moving on to debt.
We ended the period with a net debt of BRL 5.9 billion and a half leverage of 1.4x net debt to EBITDA with the debt mostly indexed to the CDI. Also, in March, we approved the dividend payment of BRL 1.5 billion related to the results of 2023. I end here my presentation, and we will move now to the Q&A session. Thank you once again for your presence in our conference call.
We will now begin the Q&A session. Please make sure you identify yourself and ask all of your questions at once and wait for the company's answer. To ask a question, please click on the Q&A icon at the bottom of your screen and send your question. Our first question is from Lucas Ferreira from JP Morgan. I will now unmute you. Please go ahead.
Can you hear me?
Yes.
Great. Well, congratulations on your first earnings release call. I hope I am here for all of them. My first question is, could you give us an update on the TRSP, the Regas terminal, in terms of volume for the first year of operation? Could you also remember the tranches that are already contracted that will be available to the open market? The second one is about Comgás. Could you give us an update on the review process?
How is that going? What are your prospects for investments with regards to Comgás and when will that process be concluded? Thank you.
Hi, Lucas. This is Guilherme. Thanks for joining us, and thank you for your questions. I will start by answering how we see the tariff review process and how that is going on. As you have probably seen, we are following the timeline, and the regulatory agency has disclosed that, and all events are on track. That is crucial. It is also a sign that we are navigating the process according to plan, which is important to make sure that it is concluded before December, which is the concession's anniversary. We have seen the publication, and that has gone through the public consultation, public hearing, which has been conducted by the agency, and now we are looking into the details of the regulatory plan. The preliminary regulatory plan has been submitted by Comgás to the agency.
As of now, we'll be having technical conversations about the main variables that will impact the next cycle. We expect that to take place between the end of this semester and the beginning of next semester in an orderly fashion. Nothing is happening to make us believe that anything will be different to that. Our interactions with the agency have been very positive, and we've been keeping up with that, and we will be concluding on time. I'll turn it over to Antonio so he can answer your question about the terminal.
Good morning, Lucas. Thanks for the question and thank you for joining us. That's a very broad question. You talked about Edge's ramp up, right? I'll start because I think many people will be interested in that, so I'll give you a more encompassing answer. I'll also talk about the terminal, okay?
Just to recap, the main points are, the terminal is a strategic asset. It's a very relevant asset for us to have a more open market. The access to the molecule in the external market, not just for the state of São Paulo, but for Edge. Being able to offer that to other places as well will provide an opportunity to do a couple of things. First, same thing that happened to Comgás, long-term contracts, but also an opportunity to optimize from then on because the terminal will provide more flexibility. We have now concluded the works. That's what happened in the fourth quarter. We had FSRU arriving at the end of February, and we started commissioning both hot and cold and start supply. That's key to us.
The physical delivery of the terminal is key to us in this first semester and to begin moving the molecules around there. On the commercial side, with that operation, we'll have the confirmation of the thesis that, number one, clients will begin to show their interest on this product at the terminal and other sources as well. We'll also have the opportunity to receive offers from other suppliers so that we can strike a balance by using this flexibility that will be provided by the terminal. The beginning of the contract. These are molecules that didn't come from the terminal. They came from a contract we signed. They came from Bolivia, but through another trading company. We'll also have offers from pre-salt producers who will contact us as potential acquirers of that product from now on.
We believe that will be confirmed over the next quarters following the strategy that we've always talked about. It will be a gateway to originating product and to be able to offer different kinds of combinations to clients. We'll have flexibility, competitiveness, and a molecule with the decarbonization component. We're very excited about how we've started off. There are clients moving to the free market as of this first quarter.
Great. Thank you for the answers.
The next question is from Thiago Duarte from BTG Pactual.
Hi, everyone. Good morning. Thanks for this opportunity. Hi, Antonio. Hi, Guilherme. Hi, everyone. I have a couple of questions.
The first one, I know it might be a bit too soon, and the situation is quite dynamic, but I think it's reasonable to believe that there may be some risk affecting Sulgás owing to the extreme climate events we've been seeing in the south of the country. You've mentioned limited impacts on the company's balance sheet, but if you could talk a little bit about that in terms of impacts on volume, I think that would be important for us to consider the business in the short term. My second question, actually, it's probably a follow-up on the previous question about how Edge is doing, the volume ramp-up now using the marketing and services strategy and origination.
Since you haven't really mentioned the guidance for the year in your release, I'd like to hear from you how comfortable you feel, and if it's implied a healthy progress in Edge's results so that you can reach that EBITDA range in the guidance. Does that make sense? Thank you.
Thanks, Thiago. Good morning. Let me start with Rio Grande do Sul, and then I'll turn it over to Guilherme so he can talk a bit more about Edge's results. Well, as for Rio Grande do Sul, as we mentioned in the release, we're at the beginning of this journey, and the first point is to help people because this is an emergency and we need to focus on that. Our team has done a lot of things since the crisis first started.
Initiatives such as offering support equipment, making donations like many other companies are doing, but also providing one-to-one support to our employees. Like any other company that has operations in that region, it does affect people. The first thing to do is to focus on people because it is an emergency. Also the operation. Well, given the magnitude of what's happening down there, and I won't take up any of your time talking about it because you all know, the impact on our operation has been low. There were some issues at the beginning of the floodings, but we dealt with them very quickly. We had four or five points of control that were a bit riskier for the operation, but we have been monitoring them. There haven't been any serious incidents so far.
There have been some interruptions and, to your point, there has been some downtime in some businesses because of calamities, because there has been a shortage of inputs. I think it's too soon to talk about impacts on volume. So far, the impact on our operation this month has been relatively low. Again, I'd like to reiterate, given the magnitude of what's going on, there has been low impact on our clients with lack of supply, and also comparing to other industries, other services. The impact hasn't been that serious so far. As soon as we have dealt with the more urgent situations, then we'll have a better idea of the impact on our main clients. So it is too soon to talk about that for the time being. The other important thing is that Sulgás will be playing a key role with the government.
Obviously, we're very close to the granting authorities. We're very close, and we can offer support in rebuilding not only Compass, but all other Cosan Group companies. We do have some relevant channels, and we will be providing support at the right time. So further down the line, we should be sharing more information with you about the actual impact on volume. It will be a consequence of what happens to our clients. I'll turn it over to Guilherme so he can talk about Edge's results.
Hi, Thiago. Good morning. Thanks for joining us on this first call. About Edge, well, the main thing to mention, there are a few points to mention, but this has also to do with what Lucas asked earlier. The terminal is a key asset of Edge's strategy. Not only the terminal.
Edge has a very clear and well-defined strategy to manage contracts and to manage a gas supply portfolio so that we can meet our clients' commercial agenda, which will become a lot more intense as of now that we have set up our operation. From 2023 to 2024, it's now got a name. It's got a face. We have our management team that has been appointed under Demétrio's leadership. He's been doing an amazing job at this beginning of Operation Edge's commercial agenda. It already includes some supply contracts. We have over 100 purchase contracts. Our commercial agenda already includes some clients. We're working with them. We have signed contracts in our commercial agenda. This rollout will take place over the year.
The beginning of our operation, we're talking about close to BRL 50 million, is above what we had established in our plan, and the terminal wasn't even in operation then. We were able to move volumes from other sources. We've been able to migrate our first free client by signing a contract with Edge. We're very confident about the rollout of this strategy for the year. So at the beginning of the operation, we've already moved considerable volume, and there's still a relevant ramp-up to take place over the next quarter. In broad terms, we're very happy. We got off to a great start, and we'll be monitoring things and sharing information with you looking forward.
Excellent. Let me try and rephrase it slightly. When you released the guidance, considering the first quarter and Edge's results for the first quarter, based on what you say, results are better than what you had expected when you set the guidance for the year.
Yes, precisely, Thiago. That will take place as we move more volume and as things are translated into results. There will be challenges because this operation is a pioneer operation. It's unique, but now we have a much more positive way to offer flexibility, diversification, and competitiveness in a market where there's a lot of room for growth, and we're very confident about this strategy.
Excellent. Thank you.
The next question is from Gabriel Barra from Citi.
Thank you for taking my questions, and congratulations on your first earnings release call. First off, I'd like to ask about Norgás' divestment.
I think we were all expecting that for a while, and you had indicated that that was taking place. I'd like to understand the timeline of the transaction. We've heard a lot about that during conference calls, but if you could give us a little bit more color about that, and especially considering capital allocation, your current capital structure is very well balanced. You're not that leveraged. Where would that amount go to, considering Compass? Would you use it to pay out dividends or to wait for potential auctions that may happen in the short to the midterm? If you could give us a bit more color on capital allocation, that would be great. My second question is about Edge. You've talked quite a bit about that, but I'd like to understand a bit more about competition.
Compass has always positioned itself as an innovative player in gas trading in Brazil, offering a product that didn't use to exist, offering more flexibility to consumers, having more contracts, and even Petrobras is now trying to be a bit more competitive in this trading market. Could you maybe talk a bit about how competition is doing when it comes to trading? How will Petrobras get in the way of trading competition? That would be very helpful. Thank you.
Hi, Barra. Thank you for your questions. This is Guilherme, and I'll start with your first one about Norgás. We have been monitoring the process, and we have been sharing information through Compass, and Cosan had also been talking about the transaction. As we said, this is an SPA that was signed way back when. The sale of this portfolio had been signed way back when.
It was exercise of preference by shareholders, which led us to closing this deal, and we believe it will happen according to plan. At the beginning of the second semester, we'll be closing the deal with the payment. We heard about the energy transactions and infra. On our side, we don't expect any changes when it comes to how it will be closed. It should happen according to plan. We will be available to help with closing it in a collaborative fashion. In broad terms, this was already part of our plan for the year, part of our capital structure. These funds will be coming in according to our plan for the year. As you mentioned, we will always look to having a solid and healthy structure in terms of leveraging, liquidity.
We have our investment commitments, which we will be meeting through the company's generation and also using the funds that had already been included in our budget. This has happened naturally and according to our plans. We don't foresee any changes to what we had already set forth in our plan. Now let's hear about Edge.
Thank you, Gabriel, for your question, and about Petrobras. First point you mentioned was competition. Competition is always welcome. There will be other players along the way. You mentioned that we're pioneers, right? Being a pioneer also makes players do exactly what they're doing. As for Petrobras, more specifically, and the announcements, it's too soon to know because they're still providing details that will probably happen through an addition. We don't really have all the details to understand what kind of an impact that will have on Edge's strategy.
I think it won't make any difference to the distribution companies. It may even be positive because the molecule will be more competitive and may attract additional volumes. And obviously to trading will become more competitive. Petrobras is a dominant player, so they have to make sure they follow the rules, they follow market rules. They can't propose anything that will breach any of that. So we're waiting. There's been a lot of news about Petrobras since yesterday, whether that will hold and what the actual impact of it all will be. But, we believe it will either be positive or neutral for us. No worries on this side. Thank you.
That's very clear. Thank you.
The next question is from Matheus Enfeldt from UBS.
Good morning, Antonio and Guilherme. Thanks for taking my question, and congratulations on your first earnings release call.
It's key to have this close contact. My question is about Edge and this quarter's results when compared to results in previous quarters. What is your optionality or the company's option to negotiate LNG loads? Wasn't there anything to be negotiated this quarter? Will we be seeing that looking forward, maybe after the terminal is up and running? So I'd like to hear more about the first quarter and the company's ability to negotiate optionalities on the supply contract. My second question is about governance. The controlling company has been very vocal in the past about maybe listing or Compass going for an IPO. I don't know if this earnings release call is preparing the market for this potential listing. So internally, obviously, the market is very favorable at the moment, but do you think you're ready to do that?
Are there any structure, governance, internal organization issues that you still need to look into, or do you think the company's ready? Just as a follow-up to previous questions, do you have any idea about timeline in terms of regulatory decisions that have been announced? Any expectation in terms of licenses to operate the regas terminal? Also, do you think the Subida da Serra will be resolved by the regulatory agencies? That's it. Thank you.
Okay, Matheus. Thanks for joining us on this call. We agree with you. The closer we are to the market and the more we communicate, the better it will be, and the easier it will be for everyone to understand Compass' strategy. We will be doing this on a regular basis from now on. So I'll take the first question, and then I'll turn it over to Antonio.
He can take your last question. As for Edge's results, well, they will always be a combination of the balance of these contracts that we'll have coming from Edge's management teams' everyday work. So what does that mean? Over the next few months, when we'll be sharing information with you on a quarterly basis, we will have regular supply contracts coming from our sources, and these are diverse sources. They may come from our contract with TotalEnergies, but our team is already working on diversifying things. Some contracts have been signed with gas coming from Bolivia, from the pre-salt, and that is precisely what Edge wants to do, to create this supply diversification and provide flexibility and opportunity to its clients. The potential arbitration windows in this market, this is a very dynamic market, internationally speaking. It's also Edge's remit.
It will be doing it responsibly, making sure that everything it does has a positive balance to the overall strategy, and always looking out for opportunities periodically. Everything you see in terms of Edge's results is a combination of all that. What I can tell you is that in this quarter, there has been a possibility to redirect load of LNG in Europe. That is a combination of everything you've seen. Everything we've posted this quarter in terms of Edge's results is a combination of these operations. Let's not forget that the terminal isn't even ready yet. All of these things have happened regardless of the terminal being up and running. When you compare that to the second half of last year, our results were posted in a very short period of time, six months.
We should be ramping up those results and to have the full year for such operations. It's part of our strategy to hold these calls to educate the market on exactly what the strategy is and how it will unfold. Regular supply, plus the possibility to have some arbitrations.
Moving on to your second question about market opportunities and some potential company liquidity movements. We'll always check if market conditions are right for that. We have three pillars that we look at. Whether there's availability in the market, that's something we're not seeing at the moment. Secondly, investor education.
In order to understand what valuation is on relative terms, in terms of our perception and the market perception, and investor education is key for that, so they can understand how the company is being assessed within the controlling company's portfolio, Cosan's portfolio, and that performance assessment will progress over time. Lastly, as a part of these three pillars, we have the use of proceeds rationale. We do have some options we'll be looking into. The company's governance is ready, which doesn't mean that we will necessarily go in that direction. We will be looking at when the time is right, which is not now. The company is fully funded for its projects for this year as well as next year. This is something we've been looking into periodically. Also, so we can understand the business's relative value. We do believe we have huge potential for growth.
We are a combination of yield and growth. There's a lot still to happen even in terms of concluding our project. We'll be moving forward, and we will be sharing our outlooks with you. I'll turn it over to Guilherme so he can talk to you about the terminal.
Thank you, Matheus. Well, you asked for a timeline, right? I think it's always hard to provide a timeline in these circumstances, and they're very different topics, especially in terms of processes. Let's start with the TRSP, the regas terminal. The main thing here is to get to this point, it's always good to remember the whole licensing process we had to go through. We have 33 licenses from city, state, and federal agencies, and four licenses in that time window were offered by ANP, in fact.
We are operating with a tacit license for now, and very soon we should be formalizing this with the agency. I say soon because it should take place over the next few weeks. We are having frequent talks with them to make sure that it does happen. About Subida da Serra, that is still on hold. The last stage in that process was, I think, September, October, when there was a proposal for an agreement that was discussed between Compass, Comgás, ARSESP, the state government and the agency. It went through a public consultation, and the market came up with a lot of contributions. ANP is still looking into it. Nothing has been announced so far, but we're confident that ANP, ARSESP, and the state of São Paulo will come to an agreement on this topic.
After all, we have been discussing this for nearly three years, and it's much more about finding harmony among the agencies than about Comgás or Compass. Obviously, it will affect us, but ANP should conclude this soon.
Great. Thank you.
The next question is from Vicente Falanga from Bradesco BBI.
Good morning, Guilherme, and everyone at Compass. Congratulations on beginning your earnings release calls process. My first question is about Edge's contract with the Mato Grosso contract to sell gas from Bolivia. How's that going? How's that molecule going? If you can provide us some details about that intermittence. How does that Bolivia gas will be traded via TGN maybe, or is that too soon? About M&As, are there any opportunities for consolidation in the industry? There are other LNG terminals going into operation. Where would it make sense to have an M&A, in your opinion?
Origination, trading? Thank you.
Hi, Vicente. Thank you for joining us on this call. Well, that is Edge's strategy. I am going to repeat myself because that's what it's about. We signed that MT Gás contract, and the idea is to sign others and to take positions that we'll offer to our clients. What I can say is that this is a contract that has allowed us to meet Comgás' needs within our agreement between Edge and Comgás. This gas came from Bolivia and from the pre-salt, and it's been delivered to Comgás this quarter. We should be signing other contracts over the next few months. Since this is part of our strategy, we can give you a bit more color gradually. It is part of the strategy as a whole to optimize that.
We will reserve ourselves the right to manage some of the volumes more internally, and we will communicate the results. The intelligence behind that optimization is part of our strategy.
Let me just add to that, Guilherme. Vicente, the important part of this contract isn't so much the volume or whether it comes from Bolivia. When we address the potential buyer, we don't need, and we will not share the source because that is Edge's role, to manage some origination contracts with the terminal, given the flexibility provided by the terminal to be able to offer the end user a product that will be a combination of that flexibility and that meets their needs. The fact that we have signed this contract proves the thesis that we are an alternative for this product, which came up in a very timely fashion.
That is the main point about this contract with Mato Grosso. I would imagine that in the past, that volume would have one single destination, maybe two. Either Mato Grosso would be selling that product directly to a client with a lot of restrictions and technical difficulties to do it, or it might have to offer it to Petrobras. I think the main thing about this contract, and over the next few quarters, other things will take place, and we will provide you with more color. But the point about this specific contract is that it's a starting point for Edge to physically move gas, and it happened in this quarter. As Guilherme said, that was part of Edge's contract with Comgás.
There have also been conversations with clients to deliver volumes to clients who are migrating to the free market because they see this proposal as very appealing, regardless of whether it comes from the terminal or from Bolivia or from any other source that may come up along the way. As Guilherme said, we have signed some contracts to migrate clients to the free market. It's not just a pitch. That is the idea.
Okay.
You asked a second question about consolidation. We'll be doing that through our vehicles in distribution. We have the preference rights through Commit. Whatever we see happening in the distribution companies where we have a stake and that are geographically positioned in the center south, because that's the portfolio we're interested in.
We're keeping an eye on processes that might take place, whether they be sales, privatizations within our portfolio of interest. Again, we will be proactive. As for Edge, we have already got some very strategic assets. But also through Edge, we'll be looking at potential opportunities considering our fiduciary duty. If there are opportunities in the market, we will assess them as long as they make sense, taking our strategic positioning into account, our capital structure, and to roll out Compass' overall plan. We'll be positioning ourselves through our vehicles to engage in transactions that make sense to our strategy.
Great. Thank you.
The next question is from Bruno Montanari from Morgan Stanley.
Good morning. Thank you for taking my questions, and congratulations on your first conference call. If we consider your guidance for 2024, what would be the drivers to put you in a higher position? What would be the main contributions to your results? Would it be Commit? Would it be the improvement of results in the distribution companies? Is it Edge's volume? Considering the guidance window, will the Subida da Serra impact have an impact on the year? Thank you.
Hi, Bruno. Thanks for attending the call. We're disclosing results for the first quarter. Considering what we have outlined for the year, we're totally within our guidance to achieve those results. That will come through a combination of the performance of the distribution segment, which does have its challenges, but based on everything we've already said to all of you, we're on track to deliver results.
Comgás continues to make investments to expand its network, to connect clients, and we will continue to roll out Comgás' playbook across the other distribution companies. Antonio has already mentioned the impact on our Sulgás operations as a consequence of everything that is going on in Rio Grande do Sul. So far, the impact has been limited considering Commit's portfolio. As for Edge, this was a quarter to set up our operation, and even so, we have posted some very relevant results, regardless of the fact that the terminal is not up and running this quarter yet.
Considering everything we have planned for the year, we do not see any threats to our guidance. In fact, things are looking very positive, and we are very confident about what we have released. We are monitoring the rollout of our strategy. There will be challenges in the year, but we have a clear strategy to deliver results.
Everything that took place this quarter is in line with our plans for the year. We are halfway through May now and getting ready to disclose more information to you in the second quarter.
Okay. Thank you.
Next question is from Bruna Amorim from Itaú BBA.
Good morning, everyone. Can you hear me okay?
Yes.
Great. Thanks for the opportunity to ask you questions, and congratulations on your first conference call. It is great to have a closer contact with the market. I have a couple of questions. The first one is about Necta. We have not heard a lot about Necta today, and you did mention that Commits' strategy is to use Comgás' expertise to improve the KPI across your other distribution companies, especially in Sulgás, where you hold the controlling stake. Sulgás is a more specific case, but could you provide us an update on Necta? Have you been improving efficiency? Also, how is the commercial side? How have the KPIs been progressing? My second question is a follow-up question. You have talked a lot about Edge, but I would like to hear about the portfolio composition and sourcing.
Could you comment on how you see these other sources, so Bolivia, Pre-salt, and the other one, as a whole? How do you see that progressing in terms of Edge's portfolio mix looking forward, and how will that influence what will happen to Edge looking forward? If you could give me an overview, that would be great. Thank you.
Thank you, Bruna. I will start with Edge, and then Guilherme can talk to you about Necta. About Edge, well, as I said previously, it is still too soon to talk about percentages or how that is going to play out. Our main asset is the terminal, and you are all familiar with the numbers. The terminal can supply up to 14 million cubic meters a day. We have a contract with Comgás for 3 million cubic meters, which could go up to 4 million cubic meters and a bit.
We also intend to move forward with small scale B2B LNG. We've been talking a lot about that because it's got huge potential. Also, obviously, to be able to offer that through a transportation system to other states. So that's our main play. But what's beginning to happen, and that's why it's hard to have an estimate, we will become a potential address for other sources. So we will be very active in product origination from Bolivia, as well as talking to potential pre-salt sources and trying to optimize the system as a whole with other players who have terminals and have Petrobras. The portfolio will be a combination of all that, and it will depend also on what's available and how the market progresses a little bit next year.
Possibly very soon, distribution companies will have public calls to make up their own portfolio, so they will position themselves. We've talked about changes at Petrobras, whether that will lead to new products in the market. So I think this whole dynamics will be part of Edge's business as usual. As Guilherme said, we have a great team, and we are increasingly more confident in the thesis that through people and assets, we do have a differential that will allow us to compete and offer an appealing product to clients and also during the migration. Now, about Necta, and Guilherme can jump in.
We don't disclose specific indicators, but what I can tell you is that we are on this journey. I think Sulgás already has a trajectory, and we are using Comgás' playbook, best practices.
We've made some physical changes as well at Necta, and I think the complicating element at Necta, just as in Comgás, was that there were issues in the industry. Here in São Paulo, the industry went through some issues, and it did have an impact on volume coming from the industrial sector mainly. But in terms of moving forward with best practices, we've already had great results, whether they be in terms of safety and security of our operations, efficiency. We have also been using synergies whenever possible among the groups, among the teams, sharing best practices. So that's happening naturally. Indicators are progressing, but obviously in the results as a whole will always depend on industrial volume.
There was an increase in the number of connections as well. So we've come a long way on a number of fronts, but we still have a way to go, and we'll be sharing that with you in time.
I would add, Bruna, that at Edge, since this is our first conference call, it's important to mention that Edge's positioning is very unique. It cannot be replicated. It's a key asset that provides us with access to the international market based on a contract that we already have. It's a long-term contract we have signed with TotalEnergies, with the ability to supply practically the whole terminal, and that will allow us to sign contracts to meet clients' needs very competitively, and our contract with Comgás is an example of that.
It has landed that volume very significantly, and the priority in Edge's strategy is to maximize value to the base we have across these assets. Edge is already rolling out its commercial strategy through stronger trading, originating supply contracts, and signing the first contracts with clients on the demand side. We are very happy with how we have started Edge's operation and the rollout that we should be seeing looking forward this year.
That is great. Thank you.
This concludes the Q&A session, and now I will turn it over to Mr. Guilherme Machado for his closing remarks.
Well, it has been a pleasure to be here with you today. We will be holding this conference call on a regular basis every quarter, so we will be closer to you. Obviously, that does not mean we cannot interact with each other outside the calls.
Our strategy is a combination of two things: communicating Compass's strategy, our positioning, and educating the market on everything we have been doing so that gradually we can make things more clear to you. The second point is delivering results. That is a combination that will allow us for you to understand our strategy better and to confirm and reaffirm everything we have been sharing with you over the past four years of Edge. It has been great to have this conversation with you, and we will see you on the next call for the second quarter. Have a great day.
Compass Gás e Energia S.A.'s first quarter 2024 earnings release conference call is now concluded. For further questions, please contact the investor relations department. Thank you very much for joining us, and have a great day.