CPL - Earnings call transcript Q1 2021

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Operator

Good morning to everyone. Welcome to the presentation of results of the first quarter CPFL Energia. My name is Carlos Cyrino. I'm the Director of Investor Relations of the group. And today, I will be conducting all the dynamics of our event. Estrella, CPFL Gustavo Mr. have we President Energia; of Today Relations; Finances other Pan, President, Investor and Director, Vice Company. and the the Executives of reinforce apologize the from I of to is due connected still connection. pandemic homes, there's if everyone we any failure therefore that reinforce hard re-establish And there's that communication be problem. we'll if working we to any presentations will Portuguese All done the with simultaneous in be translation to English. the wish to English, is on in see this presentation you website this If Instructions] [Operator @ircpfl. presentation start presentation I'd of a like will mention results, to session the and of after answers. questions we that [Operator recorded. Instructions] remind is I you that event this being to I'm presentation now going Gustavo to Estrella, results. the us give the the begin floor to for of

Gustavo Estrella

Good call going slide the where move very you of directly we to and four, highlights. have results. morning In quarter everyone. our I'm participation the Thank XXXX, much to for to some first the of

first in is more and The this our concession, growth load in the can see detail. one in we

very areas. we recovery think of have some positive signs here I concession our in

semester is growth of We XXXX a BRLXXX net leverage a and closed of in billion, a million BRLXX.X and And EBITDA. profit X.XXx million. we to of % XX.X this debt net X.X%. have relation have a of of group BRLX.XXX debt the This

investments. have We

is to this think I important highlight.

of have Company investments ambitious We an for plan the for XXXX.

of Our growth, which expectation in XXXX, for year. billion is was investment BRLX.X expressive investment already last a record

a XX.X% relation in of to million, growth have BRLXXX So we XXXX.

of similar of the the X.XX%, for had We to very the some We for Cruz took Paulista of impact a CPFL here also had reduction Santa place March. in tariff CPFL adjustment what process tariffs. with deferment

Company cash this any parcel. a flow. is loss This just [indiscernible] for had not we the So mean deferment for of and the does

in also practices area. is in this our the the commitments public sustainability and Another important of our data commitments, evolution business, our as

started and few that of been high potential the We've Central expectation CPFL in a next the with with for a Bank these years. to is important pilot the a during we've operations had Another operations we've the and in relation this the preparing [ph]Lester model FinTech of had we is Piratininga which FinTech expectation, operation, entry [ph]Alasta. business the event

number, this million XX we've market growth. reached organic important clients, noticed that continues the Another we and

million on XX Well, along agency, negotiation the here of we next reached month It's the the March, tariffs Paulista. we've XXXX. in only let's clients for the not to So have CPFL, composition of move CPFL been the with the a themselves. of all We but distributors a regulators, going clients, that discussion. here the tariff they've sector also this from benefit the and have of agents the put same had companies adjustment through all slide,

to think high we I adjustment. very alternatives when think a of avoid

we time Now the where default clients. have pandemic during Pressure of a a

success I this largest that of reductions of deferment from think of we've negotiation. effective here in cashflow this comes the So parcel lot in the see The with had is costs, can of ao company. we What impact a tariff no

reversal with read already that, going the So readjustments able of these place what or with here the the in this Expenses. to we financial energy is of no all this take are anticipating I this just we and credits for reactive contracted the the economical impact. was reduce XXXX, credits, typo And to anticipated also the next transmitters,

the on B, deferment be no in the corrected will So XXXX. and impact cashflow of parcel which

final the of of potential adjustment have we XXXX, we X.XX. effect consumer to this the and So go to

this negative area with the highlight residential of to expressive doing effects And of quarters. where an some slide. we the here class this see the less the in commercial onto right have here of is now the move X.X% side and see we If we to the the growth suffering going energy Well look still well. Let's growth by followed very in screen, of the growth per X.X%. industry. percentage X.X. that here class Also case than the like a pandemic. X.X of next I'd sales, the at with recovery, highlight previous sales And also we industrial

piece in here the chart the we below, the main left can have You on our business all see positive we of here general, of segments class. in of slide industrial see on performance a that

residential is So industry and is It's residences that the when of recovery separate effect but we the outlay to very calendar, that we X.X%. of even energy, general here, see economy the glass, in we revenue, see et believe a specific the impacts we can general, of area, macro an have in of cetera, higher due business is see we fact and all the a recovery a This here segments. in positive. I temperature very the this and distributed important recovery

of fourth And are good of I So had And messages, energy, we will lot of quarter. we positive. overcome think period, very the is these a pandemic recovery a year we the uncertainty. of in consumption of that aligned still relation market. it's to the a the have growth good with this news and what we course area hope this will of in And

no with a very positive year. is doubt, beginning the it So of

to move next slide. Let's the

talk Let's delinquency. about

delinquency ever since a of XXXX is first the good here, beginning X.X%, have attention the think focus and historic than the I than this the another for lower and X.XX%, better average. of we bit quarter results company

clients, that think delinquency. lot of but we increase we delinquent, you of a have in there company quarter an I is specially the the the pressuring this the have the is which a again, here second pressure. prepared deliver for an, are reacting felt months billing, able of cetera, good And is concern residential with see actions, XXXX, the a market delinquency, and we, different et of trend we to well

of As a uncertainty, I of lot a of said, lot a it's year volatility.

delinquency. always to such April, increasing attention there's have of of types And in that we we at trend movements. So pay noticed a the

increase so that levels over of control this the is can of term. here hi of trend XXX,XXX short delinquency these cuts we that cuts And month. two, So have the increase power per we main we'll expectation

had are challenges these stable we've In losses, losses. energy control some terms of these to These are losses.

think the it's a that level. some We've in difficulty to had bringing good stable is I not the, news these increasing.

the terms compared instruments have, and tension lot also, is a is concerns recovered we all positive in to of we this the about the company in generation. here objects but that X% of something but had a also a of is XXXX, XX%, this So of specially growth is of that with effect this energy,

first we XXXX. see here a of quarter can think the of in the PLD I drop

quarter. gone through unfavorable especially XX end of and quarter we've was And it's, trend the sure, the in from I for last years. fourth XXXX, second is in. For different, draw the the to times buried energy April the January of second the

starts this PLD. to So the pressure

a we with the high a of have this the perspective trend expectation the the same that increase a period or PLD a expectation next for going to in So GSF, month. has this is next direction month. and of The less drier in more GSF

worse different it's we the have scenarios in have And is the the where the come one in growth large with to from we of which rain of talks are about wind of basically about have country two impacts. of a better XXXX, the here Well, in wind? it South number hydrology. highlights Southeast of the flow. Basically the what a XX.X% This country, in generation. different We bit the the PCA's, negative a regime, we've

this comes first And year, a of our availability The farms. availability X.X. with better is, in wind in one generation. of ever the And last the had of the brought performance from especially them we've increasing growth trend since has

when we year XX%. wind in We positive was and had already last reached growth. performance also year have now And a Last very XX%. low bad, was have an was performance a expressive we've of

not has quarter, to beyond Mr. for very the in let's also only brings now to perspective be the number This for to the I'm floor Pan Well, positive next XX, the been wind this and trend for So first the give the results him general, slide. quarter. a going first comment but to move it close to is generation,

Yuehui Pan

now slide, XX%. EBITDA This this Gustavo. XX.X%. with Thank an to billion, segment largest assets of finance quarter again, has million the of in was high of point increase point a result of XX%, you, has the an The had one distribution almost the been morning the this Good in The BRLX increase everyone. due two first XX%. IPCA concession, which act BRLXXX to quarter. had and the was IPCA an increase year the was variation year, Last good

to that the El the the due increase highlight had over of to CCFL limited with XX to the decided understanding out the plan, market we've to of in mentioned BRLXX agency consumers director totaled mainly the was in an the still tariff on was increase and we've generation In Santa a the a of be other And pension relation the the of of and due reimbursement In referring we important still BRLXXX of decide to technical This We the has of it's an Santa continuing also to going of ICA was and had is with that about salvo topic. tax. about effect of readjustments. which the gain theme hearing, convening the main revert carried energy goes, that reversion ongoing million BRLXX to and important but BRLXX referrals effects total, ANEEL farms Another million. the of the XX.X%. AMS in which million peace when now company the years. is VRR the BRLX a the increase the is with The this is to game on gain BRLXXX should million timeframe con credits, XXXX, tariff million, generation CPF, Cruz, higher which the PMSO was positioning to effect higher area public Cruz. all million evicted EBITDA, had just

update to of effect prices, contract the million. the positive Another was BRLXX

tax On of the the a last trading increase the segment the first the year. of to high iPaaS million BRLX due higher others BRLXX contract, profit, due the compensated we negative than end the efficiency, in assets seasonality slide million million more BRLXXX to energy. the contracts CPL million due of of high net IGP-M of are show the impacts This had highly X.X%, million be UBP next of some a had million an to period, adequate, the period, BRLXXX PCH depreciate we due prices effects. to BRLXX in BRLXX BRLX result, quarters, in to the of other million. in in had financial lower and The the in the once million which station during among trading in should of the results GSF, of the the BRLXX we to and to other change more was a gain service of quarter allocation segment, BRLXX negative million performance service we year CPL last an had relation increase MTM, which its services next a of decrease improved Now, hand, in

explained the reduction of cost are depreciation impact which of we the by payment had leaky million, BRLXX expenses the the On in by the in a reduction a the the gain million. and positive cost with higher hand, delays due BRLXX BRLXX has net had million and of to had and varied other decrease bills of debt. the of a reduction tax energy a The due debt of with BRLXX million PM the to of average fines increases

Let's slide. move to next the

have slide debts company. where on the we XX, we're of Now the

XX% index interest the rates, is nominal EBITDA, and is the the higher IPCA debt, historical was we helped a net the by BRLX.X and you we profile by its on in exposure debt of real inflation, of the the minimum have was X.X billion The of cost of the at increase rate amortization over EBITDA X.XX period, total of chart Xx. years. net end is real billion was a billion. cash It's BRLX.X mainly times variation And CDI an leak debt the the but period short is to is see the of first average over first which is to of measured the on gross In term, negative composition quarter a the X%. the to to with amortizations first during the in cost quarter a debt the the close X.XX that BRLXX.X by the beside the the that leverage coverage chart,

vision this period per during relation and had total - projects. transmission. Now Soul out to segment for same XX, an this destined and the Gameleira on XX.X% generation destined and move the transmission period, million CapEx and go modernization distribution, we BRLXXX Number in have of X million we slide. the staff We've has in last and year, here let's should projects for Soul who continue million million and projects maintenance the trading the already an a carried we VU mentioned we to of increase the segment, have BRLXX investment BRLXX been BRLXX invested to of amount, the , MARACANÃ BRLXXX And and of for a [ph] to services million. X had

I had And now what back say. you Mr. the to that's Thank floor Gustavo very much. I to So give Estrella.

Gustavo Estrella

Thank you, detail a what go about and Well, to we've sustainability bit too, doing. into been Pan. Mr. I want the more little

units has commitment is large XX,XXX is the the our we're chain, in, part linked renovated the of this here So relevance to I have activity for think had only South. totally part of is transformers San Paolo. of a We state about for This in we increasing reverse is started in quarter. our fourth sustainability we initiative is that the that business plan, of bought This the already in the sustainability renovating which first this units. distribution, first ESG. almost that activity the This just number of

jobs expand of So and all all benefits all activities these idea with we recycle reverse And, thing. the environment, to is these and X being a we for generation activities. huge is have We'd the same have and company tons a with the and chain began of know to idea the do in also new expectations. in the over

of there the and commitment here but business this what fourth of the more, are have our the refurbishments commitments, to some are core And of plan we of in sustainability for the business. that very plans are XX each part terms clear are once reverse one chain. CPFL. linked fifth fish, with examples is here then So these a These

we were main these information, that believe and the open I questions So answers. now for are and

Operator

Thank your for Pam, presentation. Gustavo. Thank you, you,

the questions [Operator will open Instructions] live. questions questions order we'll we in So here questions. come and their and now some will made these the and reinforcing that Well, answers be have

is The Suisse. participation. you your from Credit first Good Hafael. from question Thank for Hafael morning, Naga

You can question. your ask

Hafael Naga

presentation. the as like return you to to Carlos. and for these transmission about you, Thank I'd Would you the Thank how of the looking are see, like comparison know leveraging capital company. allocation the at what are them of the activities projects besides be right and for and negative which are what competitive other expectations have the now negotiation one this steps would and of more transmission results? the group, to

Gustavo Estrella

will We've question. than these, opportunities Okay. allocation seen Thank Well last is some seen of said, we of you it And here. capital, assets are for the tenders. perspective lower I your the these with have transmission. had series we've we And on think year, you in a but be market. what as expectations

for interest interest real will rates, or can perspective of rates than the about that this can term invest by it So lot wanting And to that's what And concessions even seeing. probably years. A remember in scenario expect in is players to interest pressuring. which of transmission, an important competition, only rate with think this reflecting look cases, a maturation Then what we've to low have low of lot competition. with have been at general, high through be this. both it's the year observe of in I XX perspective scenario we a in this being rates. of through lot XX, we're longer long-term assets living an another of two. is that We're of but And people, of Brazil we interest at in talking whether sense bidding investments, last we processes,

brought of short-term we return, a has in of this been the us perspective course, this doing. growth low continue, it be modality investment. rates see of this for challenge our keep investments market the we've low a evaluated of up interest we perspective market methodology of to environment, but of what return also long-term we asset competition that's important And is that so with this long-term, should and have, lot of So also the type

have news what or don't signaling seeing market. we any we've to the been any Now from

these any CVM shareholders. maintained. according is will have say regulations and respect norms practices has what decisions any for of the procedures be be And CPFs had always we of think new the movement, and market. the of I are respect we all movement, always to will the if the market the and that that This the

same been in this So has is the that happening process a basis.

Hafael Naga

that does mean? What

Gustavo Estrella

follow more. I one

fairness so can not communicate. but don't market at You this I, once have the, will any this will signaling operation. we I be will we're that government's we also operation If happening transparency, had we have to follow news, the any so more, it all. that going all the have with different, rules, be

Operator

from move second to for Now your Thank let's Marcelo you Itaú. the Sá participation.

question. You can your ask

Marcelo Sá

Thank you. I have two questions.

the be the understood first would of that I distributors calculus we've you base general, the everyone high of the[indiscernible], one we exclusion decisions the in follow comment went think from to implications of of the STF the for court court decision, to case of about in back. way the what

recognize point, this the decision credit. went this to this if going high you'd XXXX, So decision with to have which of court this is to you it before guaranteed will that I recognize, quantify credit you courts. was to be and that credit think how And are another important you the access in

over paid that. I a, is and there's is think value was this what determined, about effectively which the

us with to you. this compare you this numbers on that in the Is what just paid, have in value decision? court of put for based Thank an bead that magnitude, high idea I like could dimension think you, the change the you've gains. of So this I the or would to effectively

Gustavo Estrella

basically is imagine. we our expectation. think I with It's decision this Well, aligned what Morning. Good

the the important said, process you of as and aspect to to decided the calculate, credit. calculate ICMS how calculate haven't still the most been So, definition that is how

on that and So value invoices paid. the this the is is not effectively

in to So that consideration. it's to important take

Some processes decision. won't and they will in process it a already this will converge different change, have but to these crystallized next processes, so guide the final quickly decision a

is So decision high as be the towards next have you will this the And calculated values. that these where the exactly was calculated will imagined. ones a courts converging we of we way is you

have that credit been the So effectively that This processes been already, calculated paid. have in these value you've based that calculated. taken already on already was

recognition value that and would would additional of value not was It and any being effectively this be have this determined what but value of wouldn't invoice the has on be discussed the be is already they what's judged. credit. will so not the wouldn't on And then changed. nothing Yes, the done process based change change, You paid. yet was they,

So to calculated done be it will to according what they've has this to next the according be criteria. and ones

Marcelo Sá

that people the this is invoice, study, not say And that the effectively value change, of this determined fiscal BRLXXX because what question it's if So increase lower is value what ends would the on billion. my people not in some think, the perhaps value the total happen and than be good being at side future? up in the but on paid going to

Gustavo Estrella

been crystallize. change been Yes, has and what you can't crystallize, ended already

in any was is was, talking country, decided You're about whole but by Supreme case, courts. this what the yesterday the what

Marcelo Sá

that by made been ongoing this much increased actions company? concluded. that the XX, any have have could the estimate of impact you Does You there XX%? haven't actions, any this Is estimate how

Gustavo Estrella

No, have vision. clear vision. clear we We be According. don't calculated. have a don't a It'll

higher we depending be the value high but precise coming Now courts, it this. a would on a have from understanding more

paid. bit value a be the it the value than higher slow. So be would effectively would Then

Marcelo Sá

it you. Thank real. Okay. That makes clear. It's

is question the last about electoral brass. my of think privatization process I

a that see will be to and something This obliged it regulatory share large market when the participate the sector? was and be If that bidding was the becomes is in sector this was there the future. concerns the now report free report, this as of could something a possibility know avoid. that you in risk after this published market, articulating this modified, have you a So you regular a mentions process. in I think don't this how how's circulated large of it is itself to

Gustavo Estrella

Thank you for your question.

We literal player parcel the believe the a makes sold concentration once the generation. one the followed sense been We and it of large And at of a of the there. country. brass. the have have privatization issue of looking generation They hands we only country's have for of

concentration So this that at been the something is with to see care what is. we've this looking of impact

about, For this sure, relation the to talking have topic you're to at very in look carefully. that we

is, not is been a following Thank this a point very mentioned, regulatory as So but you risk, along it that time. that we've is you. carefully

Marcelo Sá

folks. very Thank much That's it. you

Operator

Good William. the Thank question the to William ahead on now morning, with we we're participation, please you for to you going Santander go move question. have question for your Marcella your Thank from next from Bank.

Andre

it's Hi, Cindy. No, Andre.

Sorry on are to with EPASA. I I'm zoom another two the topics of have. going connected two which questions questions, ask with I came I'm These name. very much

to electro they're advanced second first Conscience process I'd law the to hundred evolve know about revert and consumers. expectation your the of how this in The would like the to working this is question a I already Brazzers. And percent to due at legal government. This taxes. the process in is can it that to is what the have relation privatization be the Peace question has on

is this, and Another to potential? vision contract. renovation have how that's the interesting you talking if for be possibility, could about We'd compulsory much any in question. like would about to my which relation this point, this you see be we hear, growing Basically how

Gustavo Estrella

will values morning Conscience, years understand that not XX over to This the the about them be giving Yeah. Peace the back consumers. we

the even me dispute it's decision public now seems It this the by and that a and to court. to the be transferred hearing it from has, is It's not this would law. So ANEEL, be to [indiscernible] amount as a there'll could about go an to all interpretation this the have a would taken amount right consequences natural tariffs. that

there differ legal from and could be some this idea we will, actions. we or, would basically So

that understand answered think That's I amounts happen. is be distributors. So there's If obviously we something should can for these obviously it. question. how any dispute, your the this that we hope I

Andre

to here the can disputing consumer, like company to question. the if the is law Congress in Gustavo, follow fact I'd a or relation that My approves says up this continue this question not?

Gustavo Estrella

transfer consumer. that to be that This from retractive a the Well, re going would you're now not to says this on a law law.

So if ANEEL decision, this different. doesn't will legal law there's seem that that goes exists legal to It back dispute a right, a is a already then right, be to reasonable past. in the

an already old it's So rule.

we the is, reason this So have the that is understand to to that prior right this. we

a new and to transform that So something be this we think remove to have, this make transfer questionable. law, the right would I

we, if for think it's exists. law a a because we question I right this that So even could it's way, sure, already

Andre

for thank your Well, Gustavo. answer. you. Thank you

Operator

from Andre Gomes It's Regulatory.

Andre Gomes

Gustavo about this? the Just it he's establishing this, this Perhaps a I talking law, adding peace also be which Estrella, would, Senate social to to is he's think referring decision. conference utilizing reduction

Gustavo Estrella

Yeah, up still that it's There's to in number ANEEL law that the but a remember Well, of I it's can't and recent ends the remember. a the it in return five years. a the discussion by law referring it ongoing, passed I Congress? law. can't

associated to Peace would the value is return which there years. the folio of in this that will Conscience establishes article, determine project, this Act it five be the XX-X-X-X. that And the resources law the executive So in

be power. by go the but executive that think still to So chamber, has it would It the evaluated. values I I think be regulated still will these to

discussion to still is think what executive there define. So going about a power their I is

not. think it's to if I ANEEL's it's or still So discuss percent a hundred responsibility

that moving but the issues resources think be reasons there will and of to the laws. have when this. and analyze readjustments still also to goes on I project are it back things discussion still a fast, we you now believe evaluate I the

evaluate carefully, So you at we will we Andre. we this Thank have to to have and check. will, but look

Yuehui Pan

privatization to Hello. a about you pro point morning about point simple that is info Good of you this And was published the for the it's preliminary lateral for that report not brass. we're a morning. thank sure topic. and It this question mentioned. a going the that There is study, your

that the types to wind, type performance contract, of of remember have PCH, We sources, this a has different extensive Info of and project.

paying that taken out we're will to this, consideration. carried with into discussion be technical attention aspects will it So be a but

I think that's about what say it. I had to

Andre Gomes

you, for perfect. [indiscernible] Thank

Operator

end there's group you, Thank have the if his give for questions, the Gustavo question any more and going to final we're any Estrella the to I'm we this has don't other relations this back considerations. available clarify question session, is for to Andrea, going that later, answer so investor question. floor Well, to

Gustavo Estrella

can that and for our that to Thank quarter of and a Well, Cyrino. thank the normal. your with everything go very way much participation. you a and believe hope to you I expectation first of we, the of in are back market positive we very that this economy, recovery able overcome pandemic so

of the involvement produce the positive and in shows And the industry see beginning ready we year, I stock of to composition. light. this a this think again. market positive which there's a very it's And

perspective a recovery. of there's So

year, the business. our preserve with of early a can still and to to the trying always been with it's We've think maximum. operations concerned health safety collaborators and as challenging I the a celebrate. XXXX. the We It's focus, our same

dealt the directions think long-term, indicators investment but goes I with, perspective long-term. the of be looking gives the and handling the of business to to has crisis we're looking the it's our future a us the that way and that

economy the the but very in the month. sector, So movements I that to believe started to during we've be attentive next any to have we well,

So all and I you participation a thank you I once for more, wish your wonderful day.

Operator

care, a small. you of Thank you the afternoon, XXXX, wishing you one all We're now good ending an you Thank of see excellent your next the first time. much, very for and everyone. safe of keep presentation quarter results weekend. participation, Take

Carlos Cyrino	Director, IR
Gustavo Estrella	CEO, Senior Executive VP
Yuehui Pan	CFO & IR Officer
Hafael Naga	Crédit Suisse
Marcelo Sá	Itaú
Andre	Santander Bank
Andre Gomes	Regulatory
Flavia Sounis	Goldman Sachs Group
Giuliano Ajeje	UBS

CPFL Energy (CPL) 15 May 212021 Q1 Earnings call transcript