Good morning, ladies and gentlemen. Welcome to Eletrobras' Q3 2024 Earnings Conference. Joining us today are CEO, Mr. Ivan Monteiro; Finance and Investor Relations VP, Mr. Eduardo Haiama; Operations and Security VP, Mr. Antônio Varejão de Godoy; Governance, Risks, Compliance and Sustainability VP, Ms. Camila Araújo; Strategy and Business Development VP, Mr. Élio Wolff; Sales VP, Mr. Italo Freitas; Innovation, R&D, Digital and IT VP, Mr. Juliano Dantas; Legal VP, Marcelo de Siqueira Freitas; Supplies and Services VP and Interim People, Management, and Culture VP, Mr. Renato Carreira; Expansion Engineering VP, Mr. Robson Pinheiro de Campos; and Regulation, Institution, and Market VP, Mr. Rodrigo Limp. This event is being recorded and will be available for replay at the Company's Investor Relations website, where the slide deck for this presentation in both Portuguese and English can also be downloaded. If you need simultaneous translation, the feature is available under the globe-shaped icon labelled interpretation located at the bottom side of your Zoom window. For the question-and-answer session, if you have a question, please state your name and the name of your company using the Q&A button at the bottom side of your Zoom window. As standard practice, your name will be announced, so you can ask your question live and a request to activate your microphone will pop up on your screen. Alternatively, you may also submit your question in writing, also using the Q&A feature, and your question will be read out loud by the operator. Before moving on, we'd like to state that any statement made during this conference in connection with business prospects, projections, operational and financial targets are based on Eletrobras' management's beliefs and assumptions as well as information currently available to the Company. Forward-looking statements are no guarantee of performance, seeing as they involve risks and uncertainties and, therefore, rely on circumstances that may or may not materialize. Investors must understand that general economic conditions and other operating factors may affect the results expressed in said statements. Now, let me turn over to Mr. Ivan Monteiro, the CEO of Eletrobras, who will begin the presentation. Mr. Ivan, please proceed.

Thank you. Good morning. I'd like to thank everyone for joining us for the Q3 2024 conference. And I'd like to begin by talking about our budget for 2025. For the Executive Board, this will be the end of the more significant adjustment in Eletrobras' budget. And we will continue to see the incessant search for better operational efficiency. For the first time in Eletrobras' 60-year history, we'll have the freedom to manage its costs in full after the discussions that occurred in the agreement. This was imposed by regulators and is an effort to improve Eletrobras' participation in the auctions that we are already participating in, as well as improving its competitiveness versus our competition in the search for new clients. We also like to reinforce our commitments to reach a PMSO in 2024 below BRL7 million, below the BRL7 million in 2025 and close to BRL5.5 million in 2025, from a company that had no focus on the customer to one that supplies real solutions to them. We are already operating under this focus. The funds raised over the years of 2023 and 2024 diversifying our funds -- fund sources, some of them unprecedented, consolidates a strong cash position, allowing us to build alternatives for future capital allocation, in particular, to support the substantial growth of our CapEx. The management of our compulsory loan in the last few quarters, focusing on the definitive resolution of a set of legacy items seeking to definitively mitigate non-recurring events in future quarters. We now operate as a fully integrated company under a central management with four subsidiaries, with diversified strategies, with no diversification of strategies earlier, and a structure that was deeply bureaucratic and with a full hierarchy. We are now using the best technology available, artificial intelligence, machine learning, and everything else that's available to us, for fully efficient management of all our equipment. Partnership to acquire knowledge, to acquire new technology, institutes and companies will shape Eletrobras into the future. I will now turn over to our CFO, Haiama, who will detail our results in the Q3 of 2024.

Thank you, Ivan. Good morning, everyone. So, moving on to Slide 4. As Ivan said several times, I just wanted to reinforce that the Collective Bargaining Agreement that we signed has allowed us to enter a new program and will allow to -- us to stream -- continue to streamline our structure. Last quarter, we had already incorporated Furnas, and this is the first one where results are being positively impacted by the merger. Also, during this quarter, we have signed tentatively, however, but we have already signed the exchange of the counterpart in the thermal power plants which are now serve contracts. They're no longer reserve contracts. We concluded in a secondary operation -- the operations with [CTEEP] and financial operations as we said earlier. We've virtually continued all our funding with nothing left for the next few years, and we'll continue to carry the legacy that we have for the future in our compulsory loans as well. In Slide 6, moving over to the streamlining of our structure, our recurring operation -- operational expense is still in the level of 1.7% or BRL1.7 million, up 7% over the second quarter and 1% versus last year. We also have BRL7 million that was for the insurance over our contract that was renegotiated of BRL74 million. This was an ACR contract. And next quarter, this is a cost that will no longer impact our results. Another important thing, when we compare Q3 with Q2 in terms of costs, because of the Furnas merger, several costs were deferred, especially from Q2 to Q3. So, perhaps the best thing, the best way to look at our costs this quarter is to look at an average of these two quarters, if you think about the normalization. Lower on the chart, we see our…

Thank you. We will now begin the question-and-answer session for investors and analysts. [Operator Instructions]. Our first question comes from Carolina Carneiro with Safra. Please, you may proceed.

I have two questions. The first one is about your costs. We can see the development in year-over-year terms, but there's still some volatility, if we compare, for example, the PSO this quarter with that of last quarter, and because you've talked about the layoff program. Can you give us some color? We saw the changes between Q2 and Q3, and maybe what we could expect in terms of the trend for that in the next few quarters? And my second question is about the energy market. Looking at your Energy Balance, we know there's a strategy for maybe not be 100% exposed in terms of what you've sold in energy, but a few companies in the industry have reported several Energy Balance reports with significant sales between 2026 and 2028. So, could we see prices as high as BRL170 to BRL178 the kilowatt hour? And you also mentioned that in this quarter in your balance sheet. So, could you please talk a little bit about whether there were moves in terms of sales for longer periods beyond 2025 and whether this level of prices that we saw for other companies is consistent with what you're seeing in your future contracts?

Well, I think we made it clear with regard to PMSO, the downward trend that we believe to be consistent. We have numerous examples of the strategy that we're adopting here at the Company, and you should continue to believe in that strategy. But the figure that we just reported below BRL7 million for this year and below BRL6 million next year and about BRL5.5 million in 2026, that should be the level that will be in the budget pieces that we will be submitting via our board. These are unrelenting commitments for the Company. We believe these to be absolutely achievable. Now, as to our operation in energy sales, I'd like to turn over to our Vice President.

Well, in the near term, we were really able to leverage that fluctuation in prices that we saw in the last Q4 -- in the last -- last quarter. We have expanding our client portfolio to over 700 clients, and in the long term, obviously, volatility should be smaller, but it's important to state that Brazil is undergoing deep changes in the energy industry, and there are substantial challenges relative to the intermittent variables as people know them. These variables are more challenging to incorporate in the medium to long term, and this pushes prices up. So, you do not have the same number of projects that we've had in the last 10 years being planned for the next five years or six years. Now, why is that? That's because this type of generation, which is intermittent, as the name itself says, has been considered because of that modulation, but it involves other challenges. And even because of the very poor impact on those variables, as well as the costs with implementation, CapEx, and OpEx, which have hurt this type of energy contract. So, this pushes prices by and large, which means they have an upper bias.

Our next question comes from Bruno Amorim with Goldman Sachs.

I'd just like you to talk a little bit about your prospects for investments in reinforcements and improvements. If you could please confirm the figure expected for 2024 year-round and if that's consistent with what you expect for the following years, and also if you could talk a little bit about the regulatory process to approve these investments, how's that been developing and what do you expect for the future? And in connection with that, what's your take on the trend with equipment prices? I understand that you have a very important advantage because you are the largest player in the country. So, you're, obviously, competitive and I understand that you also benefit from that when purchasing equipment. I just wanted to understand what you're seeing in terms of equipment costs because of the depreciation of the exchange rate. We are seeing other players reporting strong margins. So, I just wanted to understand what your prospects are when it comes to your profitability in that sense.

Bruno, I'll have to activate three different VPs starting with Elio and then Limp, who will talk about regulations and we'll end with Renato, who will talk about the prices.

First of all, with regard to volume, in the last few years, we've seen a trend moving closer to BRL2 billion to BRL2.5 billion. This year, we should go over BRL3 billion, which is obviously a sign of our evolution. And for the next few years, we see the potential to execute even more. And it's not just about getting the volume, but having it be well done. And we want it to be commensurate with our ability to execute it. Now to your second point in the issue of the approval of our improvements, we have a very interesting backlog with possibilities that we're working with alongside engineering, working primarily on the issue of safety. We have to preserve our assets and that, obviously, involves appropriate compensation. So, what we believe is that the regulator has been seeking to encourage us to invest more and to catalog more investment, so that we can do more, grow the system, and improve our operations. So, we see a lot of room to grow still in the next few years.

I just wanted to add to what Elio just said. In transmission, there's very consolidated legislation in terms of reinforcement improvements, both large-scale and small-scale. A lot of them coming from the agents once the needs are identified, obviously, following all the feasibility analyses, which include tariff revisions. This quarter, we've just concluded the tariff revision for the 2018, 2023 cycle. We've recognized the investments and we're already working for the 2028 revision cycle, kick-starting the regulatory base management, so that we can improve our process to recognize our investments, considering the regulatory rates determined by the regulatory agency. Thank you.

Renato, please?

So demand remains high in the market. Yes, there is an upward trend in costs, both because of raw material, which is still going up, but also the increased demand for material and the lack of productive capacity from our producers or manufacturers. Even though there's a lot of investment, investment is not taking place at such a fast pace. So, they cannot build more plants and implement or increase the supply. We also have the economy of scale because of the demands for the entire group. And we are adopting long-term contracts to buy these pieces of equipment in combination with engineering and supplies and identifying what types of equipment for generation and transmission we can already purchase for the long term. Sometimes conducting spot purchases so that we can better manage these assets that put pressure on our CapEx and be able to ensure our profitability from other projects as well.

[Operator Instructions]. Our next question comes from Marcelo with Itau. Marcelo Sá: I have a question about your Collective Bargaining Agreement. 65% of your associates in --adopted. And I remember there was something at Furnas and [Chester], I don't know if approvals have already come or if -- whether it came only from Furnas. And I also wanted to understand what the non-acceptance of that agreement implies, because associates outside of that agreement will also miss out on a few of the benefits that Petrobras offers. So, it might be detrimental to them to not be part of the agreement, and also whether the company could maybe fire those at any point. I just wanted to have that very clear.

Marcelo, let me turn over to Renato who will take your question.

Well, about your first question, about two thirds of our associates who agreed, including Chester which was a group that signed later, we have the CT rules for 74% of those jobs. You're right. There's part of Furnas and the Holding that's still outside of that agreement. But they understood that the previous Collective Agreement has already expired. So, that basis outside the agreement, they are under the CLT agreement. So, they are entitled to the benefits under the CLT agreement. We are offered a very advantageous agreement to those, those employees. But that group decided not to participate in the agreement. But right now, it's still business as usual. We are replacing employees and using the assets along those lines. Part of that being under the CT agreement and part of that under the CLT. Marcelo Sá: I just wanted to understand that the collective agreement represented an increase of about 4% in real terms. Is that what you offered and why did the group from Furnas didn't agree? Could you talk a little bit about what the pushback was and why they didn't enter the agreement?

Well, the adjustment and the benefits we offered with the CT agreement includes the adjustment for inflation only for the operational based. What was agreed for anything that's above BRL6,000 of compensation, you do not need to adjust for inflation, either your salary or the other benefits. And that goes to what I almost said. Now, according to the situation, a lot of people felt close to the agreement in their -- in its current state. But the door is still open to talk to those people and make the necessary adjustments. But for the time being, they do not seem to be willing to adopt or to enter our agreement. And we also do not -- have no plans of changing the agreement that we have on the table.

Our next question comes from Gilmar Lima with Santander.

I have two questions. First of all, I just wanted to go back to Carol's point about -- Carol's point about PMSO. You mentioned BRL5.5 million by 2026. Now, looking at the figure you were reporting back in 2023, correcting for inflation, inflation, it seems similar with the previous period. So, I just wanted to understand whether you've looked at that prior figure and then consider that that would be the achievable, or could you maybe look at an even prior one and give us maybe a figure that's different from those BRL5.5 million in 2026. My other question is about your sales strategy, in fact, about the marketing market at all. We have been hearing about growing risk of delinquency, and I just wanted to hear whether you see that risk spreading across the market. And could that affect your negotiations, especially with regard to the energy prices that we've seen in the last few days? Could you please talk a little bit about that?

About our PMSO trend, we always encourage you to look at changes quarter-by-quarter. Nonrecurring events might take place in many cases, which is why it's important to look at the trend. So, provide that -- the information about that trend is what's important. I just wanted to remind you that the figure that we provided in 2023 is a nominal figure and it has to be adjusted for inflation and other effects, which is nowadays not only a privilege to part of the world. Many parts of the world have experienced peaks in inflation. So I also like to tell you that our commitment to going back is not based on merits or history, but based on new initiatives that we're introducing every day to have simpler and more efficient processes. So, this is a trend that will be discussed along the next few years. And my impression is the figure that we can deliver seems better, but we did not want to commit to that right now. But our feeling is that it could be better. Now, about sales and marketing, I'll turn over to our Vice President, in charge of that.

Over the last few weeks or a couple of months, we have seen some volatility in the market and a few companies go through more critical situations when it comes to their, their prices, when that's the case. We have seen and are seeing that. And that's characteristic of a market with this type of volatility. It also offers the opportunity for this market to grow even more. Now, we do not expect any impact going into the future from this issue in particular, looking at our prices, but rather a combination of several different factors. We are not exposed to these companies which are struggling at this point. And the very few that we are working with, we have renegotiated our rates with an actual interesting haircut. Petrobras works with a very healthy counterpart range, which is very consolidated in the market. And what we're seeing is that this might be the beginning of the market growing more mature, the energy market growing more mature here in Brazil.

I just wanted to quickly add and talk about the importance of safety here in the market, which is an issue that's spearheaded by NL and [CCP]. Of course, there's a lot of work to do, but we have had significant -- we've made significant headway, especially with the work that CC has done monitoring the market. In times of greater volatility, obviously, make players more trepidatious. But this also has to do with the regulation that has evolved in the market, which is very important, especially when you look at the new horizon for the free market with new measures, such as the 50 -- Regulation Number 50 that was issued this year.

This concludes our question-and-answer session. We'd like to turn over to Mr. Ivan Monteiro for the Company's final remarks.

Well, once again, we'd like to thank everyone for joining us, and also say that our finance and IR teams are available for any further questions.

This concludes Eletrobras' Q3 2024 earnings conference. Thank you, everyone, for joining, and have a great day.