Good morning ladies and gentlemen, and welcome to Companhia Paranaense de Energia, Copel's Video Conference to discuss the Earnings of the Fourth Quarter of 2024. This video conference is being recorded and will be available on the company's website, ri.copel.com. The presentation is also available for download. Please be advised that all participants will only be watching the video conference during the presentation and then we will begin the Q&A session when further instructions will be provided. Before proceeding, I would like to note that the forward-looking statements are based on the beliefs and assumptions of Copel's management and on information currently available to the company. These statements may involve risks and uncertainties as they relate to future events and therefore depend on circumstances that may or may not occur. Investors, analysts and journalists should consider that events related to the macroeconomic environment, industry and other factors could lead results to differ materially from those expressed in such forward-looking statements. This video conference will be presented by Mr. Daniel Slaviero, CEO of Copel; Mr. Felipe Gutterres, CFO of Copel, as well as directors of the subsidiaries will be available for the Q&A. I would like to turn the floor to CEO -- the CEO of Copel, who will start the presentation. Please, Daniel, you may proceed.

Good morning. I thank you all for attending our video conference and it is with great pleasure that we present another quarter with sound results. 2024 was the first full year in which Copel operated with its new legal nature, a corporation without a defined controller. Among the many deliveries we had during the year, I would like to highlight one of the most important ones, the formation of a new C level. At the beginning of January, the team received Fernando Mano, who took over the leadership of Copel Geracao e Transmissao. Mano this is your first earnings conference call with us. Welcome to Copel and I am confident that your experience and knowledge of the industry will be of great value for the company's new moment. Now, talking about the highlights of the quarter, I begin with our financial results. In the year-to-date, we had a fourth quarter with an adjusted EBITDA of BRL1.3 billion and net income of almost BRL600 million. In the year, we closed with adjusted EBITDA of BRL5.1 billion and net income of BRL2.8 billion, almost BRL3 billion. In this quarter, these robust results were partially offset by the performance of wind parks as a result of curtailment, ANEEL availability and the unavailability of some wind turbines at Brisa and Cutia. This is a temporary event that will be equated in the coming periods and we have been working quickly and assertively to correct this, this installment that is manageable. We remain focused on the excellence of the operation of our assets and the delivery of sustainable results. With that said, the main highlight was Copel Distribuicao, which contributed significantly to the company's results. With efficiency and EBITDA of almost 46% compared to the regulatory level. I'd like to point the robust dividends proposed…

Good morning. Thank you, Daniel. I'd like to once again begin by stressing an essential point of our thesis that was extremely important for our results. We are an integrated company with a diverse portfolio with long term concessions. Once again we had a challenging quarter at Copel GeT and Copel Com affected by the effect of the curtailment, wind and unavailability of wind assets, modulation and detachment of energy prices in submarkets. At times like this our business models reinforced their importance because we were able to reduce risks and ensure robust results even in an adverse scenario. This quarter we delivered adjusted EBITDA of BRL1.3 billion, BRL715 million coming from Copel Dis and BRL613 from GeT. This result was 12% lower than the BRL1.4 billion of fourth quarter of 2023 due mainly to the smaller mix of sales at GeT, the deviation of generation of BRL93 million, 49% above the fourth quarter of 2023 caused by the wind volume below certification, curtailment of 13.1% in fourth quarter of 2024 compared to 8.3% in fourth quarter of 2023 and the unavailability of the generating park resulting from maintenance and installations as well as a higher volume of energy coming from MMGD of BRL180 million. And to conclude the additional litigation provisions of BRL63 million, especially due to civil lawsuits. On the other hand, our business in grid stood out with an increase of BRL23.6 in EBITDA at Copel Dis offsetting a lot of the results mentioned before. In the next slides I'll give you more color about the results of each business unit starting with distribution. Copel Distribuicao generated EBITDA of BRL715 million in fourth quarter of 2024, the highest resulting result -- recurring results in the history of our distribution company, 23.6% higher than the same period of…

We will now begin the questions-and-answer session. [Operator instructions] Our first question, Bruno Amorim, Goldman Sachs. Please, Bruno, go ahead.

Good morning and congratulations on the delivery during this year. I have a question about capital allocation. I know you announced publicly that you're running studies to publish at some time what you understand to be the optimum capital structure for the company. So could you talk a little bit about how you think about this, irrespective of what this optimum level will be, how do you think about optimizing the structure in the short term versus leaving some space in the balance sheet for future allocation, especially in the context of a relevant increase in EBITDA for the next two years in the distribution operations. So more to understand today what your mindset is about, the view in terms of capital allocation over the next two, three years? Whether you think there's opportunities in the short term or whether it makes sense to leverage a little bit more, get a little bit closer to optimum and leave some flexibility for the future. Thank you.

Good morning, Bruno. I think it's an excellent point, with all the interactions in the market. This is a question that has been raised a lot. So I'll give you some context and then I'll ask Felipe who's leading this work to add to my comments. So today our covenant is 3.5. That was a reflection of the structure of the company's legal entity as being a state held company. But now as a corporation with the AAA and the level of maturity we have, we're operating with covenants above that between 4, 4.5. So I think Felipe is leading this study first to find what should be the best covenant limit. And second, we also want to do that if possible, with the discussion of Mercado and the market was informed today about Eletrobras agreement with the federal government and we see that as very positive, not only because it strengthens the corporation model with a limit of 10% of capital votes, but also unlocks a lot of value for the biggest company in the energy sector. But going back to our point, I think we're going to seek with this work to reach a capital structure. Over time it's not going to be all at once because we're in a very restrictive interest environment in the country. And finally, there always will be space for you to make good investments. The company's priority is to make good investments, good capital allocation. So there's nothing in the very short term or on the short term that is not the focus on that capacity auction and all the other agendas we're looking at on the tariff cycle, the improvement of assets and the trading strategy that is bolder and mindful of the volatility opportunities. Good allocation is always good and good -- is always a priority. But if there isn't, we believe that direct dividends either buy share buyback, as always is a path not to allow the company to be deleveraged. As you mentioned and starting on 2026, with the renewal of the tariff cycle and the improvement in the energy prices and the cost reductions, you saw more than 30% only in the P line due to the severance -- voluntary severance program's impacts. The company already has very well established contracted growth. So we don't intend at all to let the company get deleveraged much beyond the current level at around 2.5. And for that we can always work on this leveraging in terms of buyback and dividends. So also considering that the payout of the fiscal year of 2024 is there at around 86%. So Felipe, I got into other subjects, but if you can talk a little bit about times and movements in the main lines of this study of the optimum capital structure.

First is to assure that the company is not going to work in sub-optimum ways in our capital structure. So this is the first point. The other point is that our concept being discussed, it's much more in terms of convergence once we define the optimum structure rather than always working with a limitation, a limiter, and always working at this optimum point. So just to give you our mind side there's convergence, but some flexibility slightly below or above as long as it's defined, times a movement we close or conclude the studies and we'll present them to the market with the results of the first quarter where our idea is also to present the simplified dividend or enhanced dividend policy. Our current dividend policy is very flexible, but we understand that there are opportunities to simplify this policy and make it more straightforward. Always noting that what we presented at Copel Day, our manifest for capital allocation is to always look at return at the center, but always considering minimum cash to give us flexibility to face our obligations in terms of investments that are already accounted for. Even the flexibility for us to also make the most of opportunities. The focus always in the preservation of our AAA rating that we have and obviously looking at making any capital allocation in opportunities that bring a clear return above our minimum acceptable rate.

Excellent. Can I ask a second question, a follow up? Just actually changing -- switching gears a little bit, talking about the energy price scenario. The curves moved upwards. Some of the vortices of the energy price curves close to BRL200. So the question is, how have you been working on this environment? You've been seeing reasonable liquidity to be able to contract at those prices. Whatever you can add would be helpful? It seems that there is an upside for the non-contracted part.

Excellent Bruno, that's precisely it, and what we've been doing and Felipe is here and he works with Rodolph with Copel Comercializa, but it's -- to make the most of this moment the fourth quarter, the volumes of energy traded for 2026 already exceeds the BRL180. That was one year before the level that few people could see, could foresee. For this quarter now, we've already been able -- the moments when the price was above BRL200 and we made some sales, and this will appear in the results of the fourth quarter on the next conference call. So I think that's an advantage. There is still moderate levels, nothing that expressive, but we're not seeing any serious issues or any critical liquidity issues, the whole markets after those events with some of the traders restricted some of the credits, which, in our view, is very good. And it doesn't make any sense to have it and sell and then have that kind of problem. And Copel is a big generator is very cautious and attentive to all of that. But we are being able to make the most of those opportunities and volatility to be able to allocate a little bit of our energy that is not contracted and generated value not only to 2026, but also as Felipe said, Felipe Gutterres, with a view for 2026, 2027, 2028 and at some point, even a little bit a smaller amount, but a little bit for 2029 for those clients who have a longer view. Felipe be any additional detail, any comment?

It's just important to note as well, in line to the definition of the strategy that we have that has been positive for us is our agility and execution as well as our discipline. Daniel mentioned it well for the average cost at a higher price.

Great, thank you.

Next question. Guilherme Lima, Santander. Please, Guillermo, go ahead.

Good morning. Thank you. I'd just like to confirm -- I'm sorry if you already mentioned it, and I missed it. But just the timing for concluding the optimum capital structure study and the new dividend policy. If there is a timing for that. And for the capacity auction, if you can talk about the ordinance that the invitation to bid that was published and we saw some points already defining the capacity factor for plants located in the South and Southeast. If you can talk a little bit about what you see in terms of positive points and competitive edge for Copel? Thank you.

Guilherme, first the timing, as Felipe mentioned, the idea is to present the optimum structure view and the time that it will take -- what time we're thinking about the execution will be along with the simplification. It's important to mention that our dividend policy is already very good. It already allows us and gives us a lot of flexibility, but we're going to simplify and maybe not have as many steps to bring more benefits to the company in our view. Always keeping in mind that our policy privileges, bonus and investment, so the available cash flow. So Guilherme, our idea is to present all of that in May, along with our first quarter earnings conference call. So that's the first part of your question. The second part of your question about the capacity auction. They're already making progress on EL this week as well approved for consultation, some items and some terms, but what we're seeing is the minister also made comments during the week that almost 7 gigawatt of project, but just to simplify the ones that will be -- how many will be ready and how many with the guarantees and the deposits to be approved for the auction, but it is going to be big. Some people are saying there's no concrete numbers, but they're talking about more than 10 giga for this auction. Most obviously, considering the amount of products, it will be for focused on thermal power plants, but we believe that the hydro product will have an interesting size that we've been able to estimate. We don't know what -- how big it's going to be 2.5, 3, what it will be, but we believe it will be a reasonable size because it is without discussion, the most affordable sorts and the only renewable source for that auction. So in benefit of the price. And for the consumers, I am convinced that the hydro product will be the cheapest from all of the products that will be auctioned in July 2026 -- 2027, but we're working here to have two plants there, Foz do Areia, with 840 mega and Segredo with another1.2 gigs and firing computing for --- competing for good allocation. So we have -- these projects, each one of these projects has its own features and competitiveness, but we're very confident that the hydro product for the first time will show an additional attribute in terms of power that is completely required by the operation -- for the operation.

Excellent, thank you.

Next question. Maria Carolina Carneiro, Safra. Please go ahead.

Thank you for the call and for the opportunity. If you could talk a little bit. I'd like to see -- to hear an overview of what you believe are there in terms of regulatory discussions to try and help address curtailment, of course, your portfolio is a lot more hydropower, but this quarter as well as in other quarters, we still saw a lot of stress and negative impact of this phenomenon for the company. So if you can share with us -- how this topic is progressing in terms of regulation and maybe could reduce this for the companies. And the second point, you had another interesting divestments in case of Baixo Iguacu. If you could remind us, within your asset portfolio, if you have another asset or another opportunity that you are identifying -- or you are looking at both to continue in this optimization process of your asset balance sheet or working on the better capital allocation, as you mentioned at the beginning of the call? Thank you.

Hi Carol, Good morning. I'll start from the end of your question, which is about Baixo Iguacu. So if we look, if you remember, at the time of the follow-on, what we said was we want to optimize and simplify our structure, and decarbonization of our matrix. So we started with Banco Compagas than the small hydro centrals that we mentioned in the opening remarks, in the sense of focusing on the larger assets. And then we started the granularity. So that was the asset swap with Eletrobras that I also mentioned that was very positive consolidating the Mata de Santa Genebra. We know the assets well, all have synergies with our current operations. Within these lines of simplification, there are a few assets where we have minority stakes and our plan, we're paying attention to all of that, but they're smaller and less relevant for the size of transaction. As for Baixo Iguacu, it was a movement, I'd say a window of opportunity that came up, and I think it reinforces what we had said that our company, our minds are focused on capital allocation of where we can generate the best returns for the company. So we saw that opportunity, and the competitive process that was led by our partner, and we optimize that in the way that we saw as best for the company, showing the quality and the work of the new management along with our current team, as I mentioned, that was led by Diogo Mac Cord along with our team here, our partners done excellent work. So with that said, Carol, in terms of optimization and simplification, the majority has already happened. So there may be very specific things here and there of swaps and some transmission companies where Copel has 24.5 but less…

No, I think you mentioned it well. We are very well protected when we look at our portfolio for generation and transmission, that's a smaller impact. But of course, we continue through the associations and the agents and the support of the Ministry and ANEEL seeking a solution that won't come in the short term, but seeking a solution for the curtailment issue.

Excellent, thank you.

The next question is in writing from Francisco Navarrete, Bradesco BBI.

Good morning. I would like to ask about the performance of wind assets. This quarter was slightly below compared to the other quarters. Could you give us more details of why and how this could be recovered?

Excellent, I think Navarrete, we mentioned -- it's an excellent point. Thank you for your question. In addition to the curtailment and the wind harvest that in 2024 was not very favorable, we have very one-off temporary issues. So Mano, if you can bring more details and see how we are addressing it and the small dimension that it has in our portfolio and the companies wind power plants.

So as Daniel mentioned, we had a curtailment, and we continue with a considerable 13% curtailment this quarter compared to 8% in the fourth quarter of 2023. So curtailment remains a point, an issue and some specific parts. We had resources below expected, especially parts where we had good commercial conditions. So that remains a factor that have a second effect, as mentioned. And thirdly, we have one-off issues that are controlled and part of the day-to-day of the plants, we have corrective maintenance and preventive maintenance, especially in the beginning of the year that have been addressed, are being addressed. We have very strong tools for predictive analysis, and we're consolidating these tools. And we've been working on the specific points we identified along with the OEM suppliers. So things that are being addressed that we shouldn't see an impact, a relevant impact. And adding to this, Navarrete is that in addition to everything that was mentioned, that was very specific in Brisa and Cutia and temporary transient. So in the coming periods, this has been addressed is that it was in the quarter more affected in these terms, especially due to the ADA. So -- specifically this quarter, there was an impact, a little bit worse due to this detachment of the spot price rather.

Next question in writing, Reinaldo Verissimo, Investor.

Congratulations on the results. Does Copel intend to participate in the next transmission auctions in addition to the generation auctions, is there any possibility that Copel will go beyond the state of its origin?

Hello, Reinaldo. Excellent points. First, looking at 2025, the transmission auction in October in our analysis doesn't have any asset that could make sense for us. So we do not intend to participate. The transmission segment overall is a segment that we have to look at very cautiously because we've seen historically lower and lower results. So that's a point of attention. But what we focused as you mentioned in your question, is precisely the capacity auction. And in terms of the borders of Parana, I think Copel for quite some time transcends its activity. Copel's operating in 10 states now with Colider, it is going to be nine states, but we didn't have that limitation in the past. So [indiscernible] Copel is the second biggest generator there with almost 1.2 gigs of energy. So -- but we are very well known by Copel Distribuicao and the concession in state of Parana. So there wasn't, and especially not now, the distribution segment is a segment that we believe is very attractive. It's a segment where we've been developing over time, a lot of expertise in operation and serving our customers and reforming the grid vis-a-vis the climate events. And it's also a segment where that we believe is very stable, but it's a segment that doesn't have any product on the shelf. There is no asset available. But what I'm saying is that, what we've already developed over time and with the arrival of [indiscernible] and the new team and the changes that he's been making there, I believe we're developing a management model that definitely, if there is a good opportunity, could be expanded beyond the borders of our state.

Our next question in writing. Mr. Antonio Rizzo, [indiscernible].

Thank you for the opportunity. If possible, could you talk a little bit more about the trend of price of energy in 2025, 2026 covering a little bit about the level of the reservoirs transmission lines, minimizing specific issues of energy peaks, et cetera?

So Antonio, this is such a broad question that it would merit its own conference call. I'll answer part of it, but please feel free Felipe and Mano to add because it's a great question. So what do we see? The report high levels -- so we have a good level of rainfall in the beginning of January. Temperatures are milder. We have the reservoirs here at levels that are higher than 2024 even. And still, we are seeing prices varying at a higher level and peaks of even 2015 --- 215, 220 for the coming year, a period where normally the prices would be relatively low. And this has repercussions referred to what, first, there's a hybrid new wave that's new model that is a lot more sensitive to the rainfall and it gets a lot closer to what happens in operations in the real world. So it is very healthy in our view, a very adequate for prices. So we believe that this is something that must continue for us to have that the sign of prices being a lot closer than what we see in practice. And even with all of that with the level of the reservoirs in January, and I tried to dispatch more than [indiscernible] with thermal power plant. So that shows that at peak moments, there is a very relevant need of power that's both hydro or thermal power. That's one point. And then there's the distributed generation size. That's something that's unavoidable. The agencies have to look at that more cautiously because it's the only source that's growing, and it's growing basically based on subsidies that are still permeating. And fortunately, that was [indiscernible] on the offshore that was only going to correct the portions. And there's a final element that you mentioned that are the transmission lines. In September, October, that was more critical. I think there was a big line there for the outflow. And if that comes in, it normalizes somewhat. So long story short from all that I think that the scenario for this industry so that to have reliable operations, you need to have a price signal that's closer to the real operation of the system. And that will lead to periods or moments of higher prices, be it intraday due to the -- our price or longer periods. I went up on for a little bit longer. But Felipe, anything to add to this, any point?

Just to add that this should continue over the year, and this need for power that we see.

Mano, any additional comments?

No, I think you addressed it very well.

And Antonio, I think that on this point here and this price level, we spent two years with the price at the basis are very close to it. So 2024 is close to that on average price at Copel with a P-mix above BRL200 migrated to a P-mix close to BRL175 million. So I'm saying overall because there's still the regulated market. So with this recovery, we are certainly going to see Copel in 2026, 2027 with a very virtuous growth with the recovery of prices, the new tariff base that has been discussed broadly and the level of efficiency that we'll have with the structure operating as a private company, a privately held company. In addition to the operating excellence of our assets that was a strong focus, we are going to have a company certainly in a path to change level that was going to open opportunities for new investments and growth or for better and more significant payments of dividends.

The questions-and-answers session is concluded. I turn the floor to Mr. Daniel Slaviero for his closing remarks.

As was said here during this presentation, I would like to thank you all very much for your presence and attendance the day before carnival festivities begin. But that shows that the number of people participating in questions. The interest that Copel has been seen from the Brazilian market. So remembering that today, we're more than 380,000 shareholders. And we got here in 2019 close to 40,000 shareholders. So that shows the growth and visibility of the company. Another point is, a quarter with a lot of deliveries, consistency and the delivery. And as I mentioned, in the beginning, one of the main deliveries and levers was people, talent, talent retention is the crucial talent we already had in the company and mostly the attraction of new talents. So in January here, concluding in February, we approved this week at the Board a new structure for short term targets, we had already approved the targets on the long-term package in May of last year. April of last year in the General Shareholders' Meeting. So that has a strong alignment in the company that intends to generate value consistently with a culture of ownership and the best management practices. So all of this together in this context, make us here at Copel, me, my partners here at the company, all of our employees are very confident and excited with a lot of enthusiasm for the coming months, quarters and years at Copel. Have a great carnival. Thank you very much.

Copel's earnings conference call is concluded. We thank you all for attending. Have a great day.