Conference is being recorded, and will be made available on the company's IR website, where you also find the earnings release. It is possible to download the presentation in English using the chat icon. Participants will not be able to turn on their mics during the entire event. To ask questions, click on the Q&A icon at the bottom of your screen and type in your question, which will enter the queue. Please note that questions can be submitted during the presentation and will be read out live by the IR Officer, Cristiano Granjero, and answered by the board, by the executive board, during our Q&A session.
We emphasize that the information contained in this presentation and any statements that may be made during the video conference regarding TAESA's business prospects, projections, and operational and financial targets are the beliefs and assumptions of the company's management and on the information currently available. Forward-looking statements are not guarantees of performance since they involve risks, uncertainties, and assumptions, as they refer to future events and therefore depend on circumstances that may or may not occur. Investors should understand that general economic and market conditions, in addition to other operating factors, may affect the future performance of TAESA and lead to results that materially differ from those expressed in such forward-looking statements. We will start with a video about TAESA, then Cristiano Granjero will present the results. At TAESA, we see obstacles as an invitation to innovate.
That's how we transform challenges into opportunities that have a positive impact on society and on the energy industry. Innovating is about combining ideas with talent and purposes. It's about creating together solutions that do make a difference. This is how we created TAESA Ventures, which through open innovation aims at increasing efficiency in the sector while providing greater safety and having a positive social environment impact. In the first Enel Innovation Award, we were awarded the Best Innovative Company and received two awards for having invested in research in the northern, northeastern, and midwest regions. These are examples of what TAESA does with regard to new ideas and partnerships. We're looking to work with startups, universities to transform the energy industry.
This project is based on three key pillars: Venture Client, which is basically being the first customer of new technology; Venture Capital, that is about investing in high-impact projects that are aligned with our strategies; and Venture Building, that is about having new businesses that allow TAESA to grow sustainably. This project will focus on project implementation, data sensoring, process optimization, and robotization, reliability of the energy grid, and new businesses. These challenges are on the TAESA Ventures website, where companies can access each of them and see where they can apply. We receive their applications, and then we start conversations with them to see what their solutions they may present. We can promote a brighter future together. Good morning, everyone, and welcome to TAESA's Q3 2025 earnings release call. If you have any questions, you may submit your questions throughout the presentation using the Q&A button.
At the end of the presentation, we will open the floor for a Q&A session where we will answer your questions. We wish you a great event. On slide three, we reinforce our sustainability and innovation initiatives, highlighting several important achievements. Starting with TAESA Ventures, our innovation program launched to accelerate our strategy focus on efficiency, profitability, security, and positive social and environmental impact. This program is open to the market and has already achieved significant results. Fifteen public challenges launched, over 325 responses, and 270 proposals submitted from over 200 different companies. Among these challenges, seven are directly related to sustainability, addressing topics like safety, climate change, environment, and biodiversity. This shows that beyond our various fronts focused on efficiency and value creation, we are fostering innovative solutions aligned with our ESG commitment.
Efficiency and sustainability cannot be separated, since together they generate long-term returns for all our stakeholders. Moving on to cybersecurity, we have been investing in technology, efficiency, and scalability. We're building a modern and robust systems architecture that ensures operational efficiency and cost optimization. We've advanced and simplified standardizing processes across the company, focusing on automation and strengthening data governance. Our goal is to ensure that data collected across all teams, implementation, operations, and back office become a tool for agile and strategic decision-making. Of course, without information security, there is no data governance. Cybersecurity is what ensures the continuity of our operations, the reliability of the services provided, and the protection of the company's revenue. In this context, we recently participated in the Cyber Guarding Exercise, the largest cybersecurity defense drill in the Southern Hemisphere.
The event was held in Brasília by the Superior School of Defense, brought together 169 organizations, 750 professionals from 20 countries, including armed forces, government agencies, and the private sector. The goal was to train coordinated responses to cyber incidents and strengthen cooperation between companies and government. For TAESA, participating reinforces our alignment with industry best practices, validates our digital strategy, and increases our ability to anticipate and mitigate risks, ensuring the resilience of our critical operations. Moving on to sustainable financing, 2025 eroded the largest year in green bonds issuance. This year alone, we have issued nearly BRL 1.5 billion in green debentures, totaling over BRL 4.9 billion since 2019. This milestone strengthened our credibility in the market and our commitment to positive impact projects. In the social sphere, we continue to carry out concrete initiatives in the communities where we operate.
We have recently donated fire prevention and firefighting equipment to the municipality of Manuel Amídio and Piauí near the ATE2 line in an area affected by intense wildfire between June and November. The donation supports the local brigade of 11 members who operate across an area of over 1,600 sq km. We've also delivered an electricity training compound in Garrinhose, near our NTE project, with 68 participants trained by TAESA's own structures, which combines social inclusion, professional training, and local development. Through the Teresa Tosta Institute, we continued with initiatives launched in 2024, including renovations and donations of computers and furniture. In 2025, we expanded support with additional donations of laptops, clothing, toys, and educational talks on sustainability. Today, the institute serves many children and adolescents, supporting numerous families in the region. This efficiency, these initiatives help us achieve our goals.
On slide four, we present the key achievements of this quarter. We have the 18th debenture issuance, which was quite efficient, and the approval resolution that adjusted the RAPs that was up about 9% in operational RAP for the new cycle. We highlight both in the previous cycle, and they are now impacting this year's Q3. The startup of the TSN reinforcement, one of our large-scale reinforcement projects that was under construction, the launch of TAESA Ventures, which was highlighted during our investor day held on September 30, and the Cyber Guarding Exercise that we have talked about.
We also want to go through some important awards that we received, like the ANEFACI Transparency Trophy 2025, the Innovation Award by Valor Top 8 in the Brazilian electric sector in 2025, Valor 1,000 Top 10 Largest Company in the Electric Sector 2025, ANEEL Innovation Award, Most Innovative Transmission Company, Mid-Size Investments in the North and Northeast Regions, ONS 2025 Award for AC Transmission. Last year, we received the second place in the GRE Biodiversity Awards 2025 with the project promotion and strengthening of agroforest systems in the Misiones and Alto Uruguay regions, the Misiones. More recently, as part of our liability management efforts, we completed the exchange offer for one of our debenture issuances, the 10th, which carried a higher cost, CDI plus 1.7%, covering it to a market price debt instrument at CDI plus 0.6%, corresponding to TAESA's 19th debenture issuance.
We also have seen the completion of the first edition of the Lean Six Sigma Yellow Belt in training. Moving to slide five, we present the key highlights. What we have always been highlighting in our calls has been reflected into stable leverage, stable financial results, and disciplined cost control, even under macroeconomic pressure and higher investments in the year. Operation and financial management reflecting stability in leverage, financial results, and cost control. Regulatory net revenues were up 9.8%, driven by the new RAP cycle. The variable portion was up 7%. Regulatory EBITDA was up in 2025, driven by the 12.6% increase in EBITDA in Q3. Recurring nine-month OPEX was up 4.2%, below inflation. Variable portion was quite solid, 0.28% of RAP and the cumulative VIE, keeping a high availability index of 99.93%.
We've seen CAPEX acceleration, totaling BRL 1.3 billion for the year, up about 90% versus the same period of 2024. Like I've said, we had the completion of TSN reinforcements with an authorized RAP of BRL 11.3 million. Regulatory net income for the quarter was up 5.2% and a year-to-date growth of 2.5%. We've also announced and approved earnings distribution of BRL 323.3 million, which is equivalent to 100% of the regulatory net income for Q3. On slide six, we present the regulatory net revenue. Quarter-on-quarter revenue was up 9.8%, totaling BRL 650.5 million. In the nine-month comparison, revenue totaled nearly BRL 1.9 billion, up 7% year over year. The main drivers behind this variance between Q3 2025 versus 2024 were the RAP adjustment for the 2025-2026 cycle, effective as of July this year, which is indexed to both IGP-M and IPCA.
Category two concessions, which account for about 60% of total operational RAP, we had a 7.1% adjustment, while category three concessions, representing the remaining 40%, were adjusted by 5.3%. In addition, we had the startup of the Novatrans reinforcements and the PT Guerri project. We added RAP of BRL 41.6 million and BRL 23.4 million, respectively. It is worth noting that the RAP associated with these reinforcements may be adjusted after the next periodic review, tech tariff review in a few years. We also recorded a significant improvement in the variable portion, driven by the optimization of outage events and the reversal of prior year VP, totaling BRL 4 million. Excluding this reversal, the VP-RAP ratio for the quarter stood at just 0.38%. On slide seven, we show the performance of our regulatory EBITDA. Regulatory EBITDA totaled BRL 548 million, up 12.6% versus the same period last year.
Considering that the first half performance was also positive, up 7.2% year over year, the nine-month cumulative VIE for EBITDA was up 90%, totaling nearly BRL 1.6 billion. The cumulative margin of 84.5% is higher than the 82.9% margin recorded in Q3 2024. Thus, breaking down this nine-month regulatory EBITDA performance, we see that this 9% growth or plus BRL 130 million is explained by an increase of BRL 109 million in transmission revenue and BRL 26.9 million in the variable portion. OPEX was up by BRL 9 million on a reported basis, mainly driven by non-recurring events that happened last year. When we exclude these non-recurring events, placing both periods on comparable bases, recurrent OPEX was up 4.2% over the nine-month period, below the inflation rate of 5.2%.
It is worth highlighting that the main OPEX lines, personnel and third-party services, together recorded year-to-date recurring growth of only 1.2%, which shows how the company is strongly focused on controlling costs. On slide nine, we see the company's operational performance. The Availability Index improved versus last year, remaining very close to 100%. Meanwhile, the Variable Portion over the RAP in the nine-month period showed a sizable improvement compared to the same period due to some factors: a lower volume of outages, reflecting greater operational stability. In 2024, we experienced higher impact events: Danuba, Novatrans, and Santana. In addition, as we've mentioned, we recorded a reversal of BRL 4 million in provisions related to prior year events. When excluding this BRL 4 million reversal, the nine-month VP over our RAP ratio is below 0.5%, which shows a strong operational performance.
It is important to highlight some initiatives of the company to support that: optimization of outages in the maintenance plan, ensuring higher availability; a shift in the philosophy of schedules to perform maintenance without downtime allowances; minimizing these outages and focusing on preventive and corrective actions that prevent any automatic shutdowns from happening; process changes and synergies to improve response time for both unplanned and scheduled events; optimization of maintenance CAPEX with a focus on revolving identifying critical issues; and finally, the intelligent combination of data and indicators for on- and off-decision making using predictive analysis and real-time monitoring to reduce risks and costs. We see on slide 10 our regulatory net income, which totaled BRL 323.3 million in Q3 2025, up 5.2% year-on-year. Meanwhile, our nine-month net income totaled BRL 811 million, up 2.5% versus the same period last year.
In addition to the drivers already mentioned, we highlight the impacts in other lines of the income statement. Equity income declined mainly due to the first debenture issuances of IMRS and Power Grid. Depreciation and amortization increased due to the startup of the Novatrans reinforcements and asset unitization. Net financial expenses increased by BRL 16.4 million mainly due to the macroeconomic deterioration and higher net debt. It is worth noting that this financial result has been stabilizing compared with recent quarters as a result of our efficiency-focused financial management. Lastly, we saw a positive performance in income tax and social contribution, mainly due to the tax benefit from the higher JCP declaration this year. We present also our IFRS earnings. I always like to remind you that this income is accounting-based and therefore does not represent TAESA's cash generation.
The underlying concept is the concession agreement, which accounting rules follow CPC 47. IFRS was up; net income was up 2.4% in the nine-month period, totaling BRL 1.2 billion. In Q3, IFRS net income was BRL 340.6 million, down 16.8% versus Q3 2024. The main drivers, when we compare the nine-month period of 2025 versus 2024, were an increase of BRL 153.4 million in infrastructure implementation margin due to higher investments in the Tongara project, the second phase of SAIR, and the San Pedro reinforcements. A BRL 56.2 million improvement in income tax and social contribution, driven by the higher distribution we had declared according to what we said, and one-off write-off of deferred tax liability. A BRL 26.9 million improvement in the variable portion, driven by lower outage levels, the high-impact events in Janaúba, Novatrans, and Santana, and the reversals of prior PB provisions.
These effects were partially offset by higher net financial expenses, totaling BRL 83 million, also discussed in the regulatory results. BRL 51.7 million decline in equity income resulting from the contraction of IGP-M, which negatively impacted monetary restatement revenue from affiliates, in addition to interest expenses from the IMRS and Power Grid issuances. An additional BRL 9.8 million drop in monetary restatement revenue from subsidiaries, also driven by the lower IGP-M, which moved from 0.75% to 0.43%. On slide 12, we have the progress of our projects under construction. We see great progress since they are all in construction phases. I would like to highlight the following projects: TSN reinforcement, like we said, started operations in September. For SAIR, we had the retrofit of the transmission line of Santo Ângelo ITA C1C2, 1% of the RAP. On NAE, we have seen progress with CAPEX acceleration in the quarter.
San Pedro reinforcements, we've seen evolution as part of the commissioning. And then we have the ATE reinforcement with progress well made, one of the three transformers already delivered. Like we've said, we accelerated our investments in the third quarter, deploying about BRL 600 million, very near to the BRL 700 million invested in the first six months of the year. We have BRL 1.3 billion in the nine-month period, approaching our expectation of BRL 1.6-1.8 billion for the year, covering the four greenfield projects and the remaining large-scale refinance. We remain aligned with the expected CAPEX for the curve for the upcoming years. As a standard disclaimer, this CAPEX curve reflects our best expectations today but may revise in the future. On slide 13, we cover TAESA's current level of debt.
We can see the stabilization of our leverage level, even amid a deteriorated macro environment and a significant amount of CAPEX deployed this year, showing how diligent we've been from an operational and financial standpoint. At the end of Q3 2024, TAESA's proportional net debt stood at about BRL 12 billion and a leverage at 1.41 times. The average real cost of our debt is 5.6%, with an average tenor of 5.2 years, higher than the 4.7 years we had been presenting, also showing the results of our management. Our indexation mix is 58% linked to IPCA, 39% to CDI, and 2% to IGP-M. The company's national scale corporate rating, monitored by Moody's and Fitch, remains at the highest level, AAA, with a stable outlook from both agencies.
On slide 14, to wrap up our presentation, we have the announcement that we made yesterday of an additional distribution of shareholder compensation based on the quarter's regulatory results. The board of directors approved the distribution of BRL 323.3 million in interest on equity and interim dividends with the record date set for November 14. This corresponds to BRL 0.94 per unit, which, added to the other distributions declared based on 2023 results, totals BRL 2.35 per unit, or BRL 811 million. The total amount declared so far corresponds to 100% of regulatory net income and 67% of IFRS net income. This is what we had for you. Now we will start our Q&A session with our executive board. We will have an audio conference, not a video conference. Thank you, everyone. Good morning, everyone. Thank you so much for being here.
We have about 350 participants with us today. I have here Reinaldo Pecchi, our CEO; Katia Pereira, our Chief Investment Relations Officer; Luis Alves, our Chief Technical Officer; Jao Andrade, our Implementation Officer; and Mauricio, our Chief Business Officer. We have received a few questions from you, and now I am going to turn over to Pecchi for his initial remarks. Thank you so much, Cristiano. Thank you, everyone. It is always good to report our results. We like to talk about our strategy, except this time we are having an audio conference since we are not all in the same place, but we will have a video conference on Q4. I wanted to highlight a few important achievements we have had.
When we talk about positive financial indicators like increased revenue, efficient expense control, an increased variable portion, increased net income, BRL 1.3 billion in investment, we see reinforcements coming online, we see operational cash flow, and then the distribution of BRL 323 million in dividends, but also the possibility to participate in auctions. We have participated. We have not won. We have not been successful in this last one due to some specific factors, but we participated. The market is always asking us if we are going to, and we have what it takes to participate, but we were not successful. We have also been really successful in the 18th and 19th debenture issues, continued focusing on gain efficiencies, and on this quarter, we've been awarded for different causes.
Cristiano has already given all the details, but I wanted to point out this award by ONS that is about our management of operations so the company can successfully provide its service while prioritizing a high-quality service. This is one of the things I wanted to highlight and also take this opportunity to thank everyone who made these results possible. Now we are here to answer whatever questions you may have. Okay, I'll start here with the questions. The first question we have is Ronald, he is an independent investor. Good morning. With the strong cash generation and a historically high payout, how will TAESA balance the maintenance of dividends and the need for future investments? Thank you, Cristiano, Ronald. I think that it's important to say that yes, we are strongly focused on gaining efficiency.
When we say that, we translate that from EBITDA to cash generation. In 2024, when we've changed dividend distribution to be based on regulatory income, it is our methodology. It has to do with our financial planning and how we're going to plan for future growth opportunities. We have participated in this last auction. I think that in addition to that, we have financial discipline in place, which is really expected of all our shareholders. Katia, we have another question here that is also an individual investor, independent. He asks us if we have thought about the issuance of shares to raise funds. Thank you, Roger. Today, no, we have not been discussing the issuance of shares to raise funds. No, this is not something that is in our pipeline. Now we have Maria Carolina Carneiro, a sell-side analyst of Safra.
Mauricio, she asks, can you discuss the last transmission auction? What's your take on the competition and return? What about 2026? Is there a chance you'll participate? What about the battery? Some transmission companies said it could be an opportunity for the industry. Thank you, Cristiano. Thank you, everyone who's here. Carolina's question was about the auction and the growth outlook we have. This auction of 2025, we had over 20 investors, and we had a global discount of about 48%. Like Pecchi mentioned, we participated. We had a business plan for five lots. We were unfortunately not successful, but what is important to say is that our business plan followed what Katia mentioned. Our strategy is to grow following a financial discipline mindset and generating cash.
Whenever we consider opportunities, we really try to balance things out: good return, good execution conditions, and also the possibility to mitigate risks. We were really positive that this discount of the offers was quite consistent with our financial discipline and the expected return. When we talk about competition, of course, you will have some investors that are going to be more competitive in some lots with a more aggressive business plan. We have many, many variables in every business plan. It is a quite recent auction, so we were not able to analyze all of the components that may have been used by other investors that explain this difference in discount versus what we offered. It is worth mentioning that we consider new growth opportunities. For next year, there are probably two auctions that will be held.
The first in March 2026, and a second auction that is expected to be a bit later on. We've heard, we've been reading stories that there may be some new lots in 2026 or 2027. I would say that we are looking into really promising outlooks when we think about our growth. We have been focusing on our reinforcements and improvements and also the possible auctions. With regard to storage, we had discussed that in our last meeting, that when we talk about storage, it is part of the future of the industry. It has to do with the quality of the energy provided if we make progress in that sense. We do not have the rules of the game well-defined, but we are trying to follow it closely so that our business plan will be compliant with these requirements. Thank you so much, Mauricio.
Now we have a question, another question from Roger, talking about these concessions and those that are about to expire in the pipeline. Basically, there will be some loss due to these concessions that are about to expire. What our take is on that? Are we going to renovate some concessions or new auctions, greenfield? I'm going to turn over to Pecchi. We have been discussing that over these last meetings we have had with our investors. We expect our concessions to come to an end at specific times. As you can see, whenever we report our information and we make this information public, we always have the deadlines of each concession. We have been working together with the ministry and ANEEL to show that it is important for a decision to be made.
When we have a concession period that is coming to an end, we need to see that when they expire, if there will be a possibility to renovate them, if we consider important aspects of the operation. When we have a concession agreement that you win, you know that for a period of time you receive this revenue, and then at the end of this period, there will be a drop in revenue due to also a capital remuneration. So you've monetized that. You also have other investments that will compose this revenue in addition to different portions. I don't have anything new to share here. I would only add to that point that we've been working closely together with ANEEL for us to have different possibilities to analyze the options to see what would be best for the company and for this industry.
This should happen over these next months as we've been discussing. We follow this regulatory agenda, whatever is already in the pipeline, and we've been following that close together with the local authorities. We should see some definitions over these next months. In 2027, we will have to state our interest in continuing the concessions. I'm not saying we're going to wait till 2027, but this will be definitely defined in 2027. I'm quite an optimistic person. I do believe that from a financial and economic standpoint, they will analyze the quality of the operation. We, TAESA, we deliver excellence in everything we do. I think this will be considered, and we will let the market know based on information available. Thank you, Peckel. There's a question here about dividends. What the Senate approved, how the company.
Basically, the question is about the impact of taxation on dividends and how the company has been working with that. Thank you so much. If I could answer that, we do have a challenge today that is trying to balance out this dividend versus our planning when we consider growth. At this moment, we do not have the opportunity to do anything different. We already distribute 100% of our net regulatory income. We do that to ensure we continue growing and investing in other projects. There is nothing that will change in that sense. To add to your point, I think we could talk about another question here. You have a dividend policy that is not only about 75%. How do you consider the leverage level of the company if you consider the growth ahead? Like what we have just presented, our leverage rate is 4.1 times.
We say that we are in a deleveraged strategy that will probably take place as of 2026 due to the reinforcements and improvements that we're finalizing. We can combine 100% of our net regulatory income and combine that with our deleveraging strategy. If you consider 2026 onward, we should see a drop in this leverage ratio of 4.1. I do believe that we can do both. We can continue investing in what is already part of our portfolio. We can participate in other auctions and also continue distributing 100% of our regulatory net income. Thank you so much. There is a question that is quite important that is the performance of our variable portion and the availability index. We have talked about that, and they've asked us how we've addressed this issue. I think, Luis, you could answer this one.
When it comes to the variable portion, we have reorganized our internal team when it comes to the logistics of our field teams. In addition, we have also focused on the spare parts that we had and also on the stock management. The first thing that we focus on is preventive and productive maintenance using drones, thermal vision, in addition to the monitoring. When we talk about sensoring and monitoring, this will allow us to continue following the health of our equipment. We monitor over 80% of all our equipment, which allows us to preventively identify any potential issues so that I can have scheduled maintenance. That has definitely helped us gain efficiency and increase the Availability Index of our assets and also increase our variable portion. I think that we have answered most of these questions.
Since we have no new questions, I'd like to thank everyone for joining our call, and we will wait for you for our Q4 final video conference.