Ladies and gentlemen, thank you for waiting. Welcome to Eletrobras Third Quarter Earnings Video Conference. I'd like to introduce the Eletrobras team. We have got Ivan de Souza Monteiro, our CEO; Eduardo Haiama, the VP for Financial and Investor Relations; Mr. Rodrigo Nascimento, Chief Regulatory and Institutional Relations Officer; Mr. Elio Wolff, the VP of Strategy and Business Development; Mr. Italo Freitas, VP of Trade and acting VP of Expansions; and Mr. Antonio VP of Operations and Safety. We'd like to inform you that this video conference is being recorded and will be made available on the company's IR website. You can also find the slide deck in Portuguese and English on the website. [Operator Instructions]. We'd like to clarify that any forward-looking statements made during this video conference regarding the perspectives, forecasts as well as financial and operating goals of the company are based on the management's beliefs and assumptions as well as on information currently available to the company. Forward-looking statements are no guarantee of performance. They involve risks and uncertainties and therefore, depend on circumstances that may or may not come to pass. Investors should understand the macroeconomic conditions and other operating factors may impact the results presented in these forward-looking statements. I'd now like to turn the call over to Mr. Ivan de Souza Monteiro, CEO, so that we can start the presentation. You may be begin, sir.

Hello, everyone. Good afternoon. Thank you for joining our video conference call to discuss the third quarter earnings in 2023. The Board of Directors and the Executive Board are both very confident when it comes to the future of Eletrobras, and I'll clarify why. From the beginning of our journey, we have focused on value and performance. We always seek to have efficiency, manage our portfolio, manage our investments and find opportunities in the future. We have solutions offered to our clients that are based on green energy as well. I'll talk about all of these items. We focus on operating efficiency at first, reducing RTMSO. We have had 2 voluntary resignation programs, one is already well ahead in its progress and the second has just begun, but we are certainly not putting the company at risk with these resignations. This is going to yield benefits to our consumers, and this is what Petrobras aims to achieve. That is also the regulator's intention with clear standards that need to be met by the company in comparison to the competition. And the objective is always to have lower tariffs for the consumers. These cost reductions have a number of initiatives, and our VP is going to be flashing them out in the presentation. Our CapEx and investment agenda is also accelerating. Our focus is mainly to modernize retrofits. The reliability of our assets for transmission and generation is absolutely instrumental for we -- for us to operate properly. We have earned 1 lot in the latest auction. We're preparing for the next auction in December. But you shouldn't expect to see major acquisitions outside of Brazil. It's not a priority at this point. Our priority is to focus on the high-quality existing assets and connect them to the efficiency agenda that…

Thank you, Ivan. This is Haiama. I'd like to start on Slide 5. We're going to be talking about our results. This is a way that I'd like to look at the sector. Looking at a regulatory EBITDA. Our recurring regulatory EBITDA was BRL 6.2 billion. When we look at the IFRS EBITDA, the result would be BRL 4.6 billion. Our net income -- and we have the regulatory net income at BRL 2.7 billion, and the adjusted net income as per IFRS is BRL 1.1 billion. As for CapEx, as Ivan mentioned, be it to improve operations or to do the upkeep of them or expand them, we invested BRL 1.9 billion in the quarter. That is an 88% increase year-on-year, virtually 90%, of course. Our financial health is quite robust. We have a twofold leverage in the last 12 months, and we have BRL 23 billion net for the prepayment of the commercial papers. Now Slide 7, value generation. That's something that Ivan mentioned already. We have 4 main pillars. We are simplifying our structure. We have sold Candiota. That's very important for our next zero target. We have also sold our minority stake in COPEL. We have acquired Baguari Energia from Cemig and Neoenergia, and we consolidated HPP [indiscernible] We continue to study to be able to incorporate Furnas and Eletropar. And now when it comes to costs, we have made some adjustments already. We already had 2 PDVs, the voluntary resignation programs, the first of which is basically completed and should have a saving of BRL 1.2 billion. And the second program has already started, and we aim to have a BRL 670 million reduction. Now when we think about capital allocation and structure, we have a net debt that is twofold at this point, which…

[Operator Instructions]. Our first question comes from Daniel from Safra.

I've got two. The first has to do with the power balance. We see that there are agreements being entered to from 2023 to 2027, 150 mega in agreements, can you just give us more color on these agreements as or the terms of the contracts, the prices for the agreements, that would be great. And my second question has to do with costs. We saw that was a significant reduction in PM. So -- and I'd like to understand what your expectations are for the future. What do you expect for the coming quarters and would you expect in terms of recurring costs? If you could just add some more color on these points.

All right. So I'll answer the first question and then our VP of Trade is going to support me in the second question. And then Ivan is going to be answering the second question, too. Some questions were posed once we published the release in the results. One of the comments was, hey, in the second quarter, you had an average price that was such and now this average price has dropped, but the volume is very similar. What's happened, right? Nothing major happened. So let me answer this question already. I know this is not exactly what you asked, but it's important for everyone and also for the -- for your question, too. In 2015, some of the generation concessions were renewed and amongst other clients were kept with a set price. And these clients had a relatively high tariff, but not because Eletrobras was paid a high tariff. But because part of this price difference was used for some funds, some sector funds such as the Southeast or the Northeast funds. And what's left as net cash for Eletrobras, that is a low tariff. So 200 is the gross number. And what we have is will have met for Eletrobras is below BRL 100. And some clients ask to stop using this model now and considering the volume that we're going to have for 2024 onwards is going to be available, we started finding new contracts, and that's what we did, but we did at market prices. But it's not too far from what we were being paid when you look at the net value, the net value paid to Eletrobras. But when you look at the average price, which is what you saw in that balance. I mean you had the gross number in the power balance. And then you have the impression that is dipped, but it hasn't. So it hasn't been a major change. And now I'd like to turn it over to Italo because -- I mean, you mentioned 150 million mega, And with the efforts that we needed to make to contract to site energy and show that our commercial team is up and running. Italo, please?

Yes, that's right. It has to do with Law 13182, and then it's not 150 mega, right? With the changes we had with these major clients, I mean we are restructuring our operations with the commercial team, and we're bringing people from the market -- we're hiring people who know their stuff when it comes to selling energy, selling power, and we're really preparing a environmental to deal with the future. And we sold 368, which is what we expected to have for this quarter. So we have -- I mean, that's what we sold and the cover that we had lost in the uncontracted items. And then there's new megas here too. And Daniel, as for the improving efficiency, you can expect this to continue. We're still far from the efficiency levels we aim to have. When we look at the competition, we see that even when we look at what the regulators expect from us. So all of the initiatives are going to continue to develop. Next week, we're going to have a meeting to talk about the budget for 2024. And this is a line item that we're going to be pursuing continuously seeking to improve our efficiency with everything that you already know that we have been doing. But as we gain more knowledge, we gather more information and as we have new solutions, especially in technology using the cutting-edge tools that are available to manage our assets and to also reduce the higher levels between holding company and subsidiary companies also reorganizing the SPEs and also with the knowledge crossing from 1 SP to another right lessons learned and -- but we'll be focusing on continuous substantial reductions.

Next question from Gustavo [indiscernible] from UBS.

Piggy-backing we look at the PPA contracts, do you see flexibility in the free market contracts? And how flexible are they?

You for your question, Gustavo. Italo, can you please answer that question?

This is Italo. We have a very diverse group of clients now, each of whom has their own characteristics. Some call for more flexibility. They are not many. But flexibility is about 5% to 6% in some contracts. But it's not that many clients who are asking for this flexibility. And when they ask for flexibility, of course, we charge for that flexibility somehow because being flexible is a service.

Gilmar de Lima from Santander.

As for the reduction in the balance. We see that the compulsory loan had an impact. And we saw a good discount in the compulsory loan. There was a BRL 2.4 billion and there was a BRL 3.5 billion payment. So these proportions, are they to be expected in the coming quarters as well. Can we expect the provisions to have the -- have similar reductions. And for the liabilities in the contingency, we saw an increase in that, in the contingent ability in comparison to the past. Is there any new process that's playing a role there? We had BRL 44.8 billion in the second quarter. And this quarter, it was around 48 -- BRL 47.3 billion. Is that just an adjustment? Is there any new process that is having an impact?

As for the compulsory loan negotiations, we're getting better discounts than we had planned for in our budget, which is a result of our good negotiations. Paula Padra used to work for Investor Relations. And now she's 100% focused on the compulsory loan negotiations. And that has yielded good results, Paula's extremely knowledgeable about this. And when you become a privately held company, you can recognize the specific needs different customers have. So this freedom we had from the management of the company. And these results yield the results that we have -- you have seen, and we're going to continue to pursue further reductions in this line item in 2024. This is a priority for us. And Ivan is going to answer your second question.

When I look at the remote and possible lawsuits, you're talking about the civil ones, right, and tax ones. I won't be able to say that off the top of my head exactly with the different lines. Not a problem. I just wanted to see if there was any specific item. No, no, there was nothing major. I mean, nothing specific. Maybe it's just an adjustment of the final balance, and that was posted now in the third quarter around the liability, but no new lines, I would say. All right?

Next question from JPMorgan by Henrique Peretti.

Sorry, I had an issue here with my mic. My first question has to do with the compulsory loan. It dropped to BRL 3 billion in the third quarter. So what is expected when it comes to a reduction in the fourth quarter. There's a 14% reduction that we have already had in the third quarter. So what is the expectation for the fourth? And the second question has to do with the power balance. So when you showed the chart around what has been uncontracted. When I look at 2027, there is an average of 3 gigawatts for hedge, right? And that's about 18% of the power available. So the GSF that you are forecasting for the long term, is it being planned for already?

Thank you, Henrique. Around the first question, I mentioned that during the presentation and until the second quarter, whenever we had an agreement, even if they were uncancelable agreements, right? We would only take away from provisions when the adjustment was registered by the contract was in -- so the liability was clear. In this quarter, we noticed that we needed to change this practice. We needed to look at the agreements that we had signed as unchangeable and just waiting for the registration. We need to pose to pose them to liabilities to. So when we look at this BRL 3 billion reduction from the second to the third quarter, BRL 1.8 billion of those BRL 3 billion were written as part of the compulsory loan and agreements. So in the fourth quarter, if there's no negotiation or any agreement, this is what's going to be posted because I say, hey, there's this many billion in provisions and then there was a settlement. The an agreement has been reached, something had been settled already. So but now it's best to set it as liability and no longer have it as a contingent liability. I'm not sure if it was clear -- and I don't think it was.

So you changed the classification, but it's still sitting in liability, but in a different line item, right? So it's as if it was 9 but 1.8 is still compulsary, is that it?

Yes, that's right. Okay. So it's no longer a contingency because you already have the settlement, but it has to be recorded in the balance sheet anyway, so as a liability. Yes, that is correct. And I'll ask Italo to help me address your second question. By definition, we try to be conservative in the way we sell our energy, but we need to be flexible as well. 18%, 15% or 10% in the future. Well, we are going to reduce that hedge or the spread so that we are not completely exposed to the spot prices. But I'll turn it over to our expert here to address your question.

Well, that is correct. We use a proxy of 5 years, an average of 5 years. And in our proxy, of course, the figures change year after year, but we keep a close eye on that, together with the markets and the portfolio teams to see what the reaction of the market is so that we can take appropriate action and sell that power when there is a good opportunity for us to reduce GSF and when there's a good market opportunity. As we explained earlier, in the presentation with the charts that showed an increase in prices because there was a higher CMO due to fluctuations in the system and other issues, for example, issues with generation, that cause, we should bear in mind a higher capacity and production in the hydro power plants, and that causes GSF to go down. So this is our projection, it is an estimation for the next 5 years on average. But our teams are paying close attention on what's going on so that we can seize the best opportunities out there in relation to the use of the capacity of the hydro power plant.

The next question comes from Mr. João Pimentel with BTG. João Pimentel: I have two questions, actually. The first one is about a point made by Italo and Haiama and the contracts under Law 13182. You said that some of those customers have already terminated the contracts are negotiated with Eletrobras. And in the presentation, in the first quarter, you said that the total volume related to Sobradinho and Intobiara was 1.241 gigawatts. How much of that is still left to be terminated and renegotiated? My question is, the cleanup of the 1.24 gigawatts has already happened in the quarter, or is there some of that left for the coming quarters? And the second question is about Furnas. I would like to know how the studies about the integration of Furnas are going and if that process can be completed this year.

Well, first of all, we need to clarify a point here. The contract for Chesf and Furnas related to the renovation in 2015, what is coming to Eletrobras as free cash is less than BRL 100 per megawatt hour. We are going to charge more than that, of course, because part of that amount goes to our fund, and it is in our restricted cash. So that is very important. So in terms of cash generation, at the end of the day, even if the benchmark prices without considering our spread, it would be better for us to negotiate in the free markets than keeping that price. That point is very important. When it comes to volumes, Italo, would you like to address that question? Or should we not disclose that information?

No, I think I can answer the question. What matters here that I want to highlight is that part of that uncontracted energy or capacity, that energy is still with us. We negotiated with them, those are major clients that use a high volume of energy, but part of that energy was negotiated with them. They're going to terminate the contract, but I can sell that energy to them. And obviously, the clients have their own power strategy. Some are using their own generation and they are using corporate PPAs. But what you should bear in mind is that part of that energy is still with us. And the law allows them to terminate the contract throughout the term of the contract. Of course, they need to observe certain deadlines but the idea here is for our teams, whenever there's a request to terminate a contract, we try to negotiate with clients to keep them in our portfolio. João Pimentel: All right. I understand that for sure. I believe that -- this is a neutral effect for you. But I would like to know when we are going to start seeing a clean balance sheet for you or with the energy balance because you price energy in the gross price. And although you have a net revenue, but the price between the terminated contracts and the new contracts the price seems to be very similar. But since we are not going to working with Law 13182 anymore, I would like to know when we are going to see a balance that is more similar to the reality? Well, I think you're going to see that in the coming quarters. But the major cleanup has already been done, right?

Yes. That's right.

João, this is Ivan. We cannot say right now that we are going to be able to fix this year, but this is a priority on for us. This is one of our biggest priorities here.

The next question comes from Mr. Marcelo Sá with Itaú BBA. Marcelo Sá: First, I would like to know more about the payment of Furnas and the payment of interest on shareholders' equity. I'd like to know why you didn't do that before and you are doing it now? Is there any specific reason -- and the second question is about the suspension of [indiscernible] offer. I would like to know what happened exactly. And if that can cause an impact on the sale of other assets, too.

Thank you, Marcelo. Well, the interest on shareholders' equity is a consequence of everything that's happening in our company. The company is focusing sharply on the generation of value. There are companies that pay a lot of dividends and some companies could improve their capital structure, and that's why we are restructuring the whole thing. And that's why when Ivan said that the point here is not about reducing the number of SPEs. The main point here is about optimizing the structure and improving the capital structure as a whole and also how money flows. I cannot talk about the past and why that didn't happen in the past, but I can tell you what's going on from now onwards. And we are going to take good care of each penny in the company and where it's going and why it's going there.

And the second point, before that, Marcelo, this is Ivan. Well, we can only talk about what we disclose to the market. Of course, as we advance in our settlements in the compulsory loans, we are going to free up more room and more guarantees. But that does not really interfere with what we announced in terms of selling our assets. We have a project to sell thermal power plants, and that project is going on really well, and there is no interference between the 2 things. We are increasing the number of assets that were provided in the lawsuits as collateral. And now we are freeing up those assets. We can sell them and keep in our portfolio only the assets that generate value. Marcelo Sá: Well, if you allow me, I have a third question. There's a clause in some of the debentures that you issued about the disposal of assets and that you could have a waiver or you would need a waiver from the creditors. Could that have any impact on this?

Well, in the past, and by the way, that's not going to happen anymore. Many subsidiaries would issue debentures. And it's true that clause was in many of those debentures and covenants that were not compatible with the company's reality, but that does not interfere with our decisions of selling the assets or not. We believe that the process of settling the lawsuits about the compulsary loans, that will allow us to free up the guarantees and collaterals, and that will allow us to have more freedom to have the deals in the size and in the format that is more compatible to our operations right now. But yes, that is true. There was a covenant in some debentures that restricted the sale of some assets.

Now I would like to turn it back to Mr. Ivan de Souza Monteiro for his closing remarks. Mr. Ivan, please go ahead.

Thank you very much for participating in our conference call. If you have any questions at all, please feel free to contact us. Please contact Karla, our Investor Relations Head, and we are going to be able to help you. Thank you very much.

This concludes Eletrobras conference call today. Thank you very much for participating. Have a good day.