Earnings call transcript: Eletrobrás Q3 2025 sees net income drop, dividend boost

Centrais Elétricas Brasileiras SA, commonly known as Eletrobrás, held its Q3 2025 earnings call, revealing a decrease in net income compared to the same period last year. Despite the decline, the company announced a significant dividend payout, totaling 8.3 billion Brazilian Reais for the fiscal year. The company’s stock price experienced a slight decline, closing at 38.46 BRL, down 0.94% from the previous trading session.

Key Takeaways

• Eletrobrás reported a decrease in net income year-over-year.
• Announced a total dividend payout of 8.3 billion BRL for 2025.
• The company completed its transition to 100% renewable energy.
• Partnered with Google Cloud for AI-driven weather forecasting.
• Stock price fell by 0.94% post-earnings.

Company Performance

Eletrobrás’s performance in Q3 2025 was marked by a reduction in net income compared to the previous year. This comes amidst the company’s strategic shift towards renewable energy, having completed divestments from thermal power plants. The company has also been active in the transmission sector, securing four lots in a recent auction.

Financial Highlights

• Dividend payout: 8.3 billion BRL for fiscal year 2025.
• Dividend per share: 4.01 BRL for preferred shares, 3.65 BRL for ordinary shares.
• Investments: Projected to reach 10 billion BRL by the end of the year.

Outlook & Guidance

Eletrobrás remains focused on strategic investments and auctions, with plans to participate in a capacity reserve auction in March 2026. The company is also exploring opportunities in battery storage, aligning with ongoing market liberalization and regulatory changes.

Executive Commentary

"We are now 100% generating clean and renewable energy," stated Ivan de Souza Monteiro, CEO, highlighting the company’s commitment to sustainability. Eduardo Haiama, CFO, emphasized a long-term strategic focus: "Our methodology does not take into account the short term. We look at the five-year horizon."

Risks and Challenges

• Regulatory changes could impact operational strategies.
• Market liquidity for energy modulation remains uncertain.
• Potential volatility in energy prices due to delayed wet seasons.
• Competitive pressures in the energy trading sector.
• Execution risks associated with new investments and divestments.

Eletrobrás’s Q3 2025 earnings call underscored the company’s ongoing transformation towards renewable energy and strategic growth, despite challenges in net income performance. The market will be watching closely as the company navigates regulatory changes and explores new opportunities in the evolving energy landscape.

Full transcript - Centrais Elétricas Brasileiras SA Eletrobras (ELET3) Q3 2025:

Unnamed Moderator, Conference Call Moderator, AXIA Energia: Good morning, ladies and gentlemen. Welcome to AXIA Energia’s third quarter 2025 earnings call. Joining us today are the following members of our executive team: Mr. Ivan de Souza Monteiro, CEO of AXIA Energia, Mr. Eduardo Haiama, Executive VP of Finance and Investor Relations, Mr. Antônio Varejón de Godoy, Executive VP of Operations and Security, Ms. Camila Araújo, VP of Governance, Risks, Compliance, and Sustainability, Mr. Elio Wolff, VP of Strategy and Business Development, Mr. Italo Freitas, Vice President of Commercialization and Energy Solutions, Mr. Juliano Dantos, VP of Innovation, R&D, Digital and IT, Mr. Marcelo de Siqueira Freitas, Executive VP of Legal Affairs, Mr. Renato Carreira, VP of People and Services, Mr. Robinson Pinheiros de Campos, VP of Expansion Engineering, and Mr. Rodrigo Limp, Executive VP of Regulation, Institutional, and Markets.

We would like to inform you that this call is being recorded and it will be made available on the company’s IR website, along with the presentation being shared today, both in Portuguese and English. For those who require simultaneous translation, click on the globe icon labeled "Interpretation" at the bottom center of the screen, then choose your preferred language. If you’re listening in English, you can mute the audio in Portuguese by clicking on "Mute Original Audio." For the Q&A session, if you’d like to ask a question, please use the Q&A icon at the bottom of your screen, stating your name, company, and then ask your question. Your name will be announced so that you can ask your question live. At this point in time, a request to unmute your mic will appear on your screen.

If you prefer not to open your mic, please let us know in the Q&A field alongside your question so that the operator can read it out loud. Before we proceed, we would like to clarify that any statements that may be made during this conference call as to the company’s business outlook, projections, operation, and financial goals are based on beliefs and assumptions of Eletrobrás’s executive management, as well as information currently available. Forward-looking statements are not guarantees of performance, as they involve risks and uncertainties and therefore depend on circumstances that may or may not occur. Investors should understand that general economic conditions and other operational factors may affect the results expressed in such forward-looking statements. I’ll now turn the call over to Mr. Ivan de Souza Monteiro, CEO of Eletrobrás. Please go ahead, Mr. Monteiro. Good morning, everyone. Welcome to our earnings call for the third quarter.

Ever since the beginning, we aimed at building an efficient company, transparent company with predictable results aimed at serving its customers. The highlights for the quarter are an indication of this goal: record compensation for shareholders, additional BRL 4.3 billion, adding up to those BRL 5 billion we had announced previously. This was only made possible through the de-risking process ever since the capitalization process. We have greater generation margin along the lines of building a company focused on customers. Teams in place with robust processes in place that will allow us both financially and commercially to capture the benefits of this higher margin. Continuous management of our portfolio. And we are divesting in EMAE and Eletronuclear after the Candiota Thermal Power Plant and again in the gas thermal plants, adding up to the sale of our stake in Santa Cruz, Eletronuclear.

Is an indication of divesting our presence in nuclear power plants that started out with an agreement with the government. We were not obligated to keep on investing in Angra III. The acquisition of Tijuana adds up to several asset disentanglement operations we have been putting in place in the past two years. We are proud of this growth in investments, record highs between BRL 2.5 billion-BRL 3 billion. We are reaching a record. Reaching BRL 10 billion this year, focused on operational efficiency and an active participation of auctions. Just like we have seen in the latest auction, we were awarded four lots. I would like to thank you very much for attending, and I will turn it over to our CFO. Good morning. On to slide seven, please. Let me point out the financial highlights. First, with the revenue, there was a decrease, both regulatory as the capital.

Three highlights. Number one, in transmission, there was an increase in revenue. After the tariff review of 2024-2025, there was a major impact. We no longer have that as of this quarter. In generation, just like Ivan mentioned, this has also impacted revenue in generation, as well as that one-off effect by extending the Tucuruí contracts last year. As to the EBITDA impact, these impacts are smaller. On the regulatory side, there was a small or a slight decrease of our EBITDA. That was the divestment of the thermal power plants. They were offset by our PMSO reduction, and also because of the increase of the revenue from transmission. Onto slide eight, net income. Now, let’s address that from the company point of view. The reported net income was a lot smaller than Q3 of last year, driven by the provision we had for the nuclear contract.

In the previous year, given the tariffs review, that posted a positive impact in transmission revenue. When we look at the numbers adjusted by these effects, we would have had a 68% decrease due to the effect of the sale of other assets that would impact the total number. Onto slide 10. Energy trading. This is our portfolio as is today. We are operating in every region. This is the available energy and energy that has been traded in each of these markets, either through quotas or through the captive market, through ACL. This will impact the energy we have available for the free market. Onto slide 11. That is the energy balance. We have boosted the hiring for 2026 and 2027. Let me point out that we are increasing, just like Ivan put it at the beginning, the increase in the number of customers. We are.

Transforming the company to put even more focus on the end users. Onto slide 12. That is the contribution of our results. For the second quarter in a row, we have been having good results in commercialization, just like we said in Q1. We had low results here. Weak results would impact the results for the following year. In Q4, what you can see on the chart on your right, this is the amount of available energy to be traded in the free contracting environment. We expect to have yet another strong quarter. Onto slide 14. Capital allocation. The highlight is the signing of selling Eletronuclear. We will be receiving BRL 535 million for our stake. There is more. We will be releasing the guarantees that we had to take over and transfer that to Eletronuclear, and the guarantees will be granted by JNF and our debentures.

That we were committed to invest there to invest in Angra I, that would amount to BRL 2.4 billion. Onto slide 15 now. On top of Eletronuclear, we also signed our stake. We signed the sale of our stake in our EMAE. Completion of the last thermal power plant we had, which was in Santa Cruz. We also acquired 51% stake in Três Irmãos. Tijuana Energia for BRL 247 million. Onto slide 16. This is the role the auction plays out. We were awarded the week before. You can see the highlight on the table. That is the amount of the investment of BRL 1.6 billion. Another BRL 140 million of RAP. Ever since we were privatized, when we add up all the investments already realized and yet to be realized, we have BRL 17.4 billion worth of investments.

With an increase of BRL 2.4 billion in the transmission revenue stream, yet again indicating our competitiveness in this industry. Onto slide 17 now. When we combine everything that has happened ever since the last earnings call, in which we announced a BRL 4 billion dividend payment, signing of Eletronuclear sale, selling EMAE, and the acquisition of Tijuana and our participation in the transmission auction, and this announcement of a dividend payout of BRL 4.3 billion, everything is part of our capital allocation strategy. This is how it plays out on slide 18. Consistent deliveries, everything we have done to simplify the structure and bring risks down. It is an indication of the price resilience we are projecting for 2026, advances in energy trading. Of course, we are improving our long-term pricing model.

That is more comforting in a sense when you look at the financial status of the company in the mid and long runs. By doing so, we’ve approved additional dividend payout of BRL 4.3 billion to be paid out in December. This year, adding up to BRL 8.3 billion in the fiscal year of 2025. By doing so, dividends, including what have been already paid out, will be reaching BRL 4.01 for both P&A and P&B shares and BRL 3.65 for the ordinary or common stock and golden share. Finally, on slide 19, let me address the ESG agenda. I would like to point out our partnership with Google Cloud to develop our weather forecasting system by using AI. We’ll be expanding our capacity to predict extreme events and strengthen operational and energy resilience. We are taking good care of the water resources.

We have just started works to protect the source of the São Francisco River, BRL 51 million investment in the Canastra Mountain Chain, reinforcing water conservation and environmental safety in one of the most iconic areas of our country. I would be remiss if I failed to mention that we sold our last thermal power plant back in October. The company is now 100% generating clean and renewable energy. We stand out, and we are leading the energy transition to accelerating the net zero 2030 goal. That concludes my part of the presentation. Thank you. Agora a sessão de perguntas. We’ll now have the Q&A session for investors and analysts. If you’d like to ask a question, please state your name and company and press the Q&A button at the bottom of the screen. Please ask all your questions at once and wait for the company’s answer.

To submit a question in writing, simply use the Q&A icon and include your name and company. Please hold while we gather the questions. Thank you. Nossa primeira pergunta vem do senhor André Sampaio, do Santander. Mr. André Sampaio from Santander asks the first question. Boa tarde, pessoal. Good afternoon. I have two questions, actually. The first one is related to the price resilience for 2026. Can you elaborate the reasons behind that comfort that you feel? What could be the roadblocks? My second question is for prices next year. The second question is more from a strategic point of view. With the Eletronuclear consortium, you have been reducing risks, thermal power plants. De fato, é o grosso dos pontos estratégicos.

I believe you have addressed most of those problems you had in the turnaround process since the privatization. Can you elaborate on what the next steps should be? There’s the trading portion we’re all familiar with. Alguma potencial. Is there anything else? Como parte desse? Are you considering going back to the new market as a second step in that de-risk process or de-risking process? Thank you. Thank you, André. As to the resilience. I’ll turn it over to Rodrigo Limp. Thank you for your question. Good morning. Despite greater volatility in shorter months, we’ve been monitoring that throughout the year. However, for 2026, prices are usually around BRL 240, a little over that. As to the rainfall, we have a wet season that has started already, but somewhat delayed. Now in November, we’ve received some rain in important basins. Based on the price.

model we have today is closer to the operator. Operators that are risk-averse. Changing or the change of our matrix, a more flexible matrix, and especially during peak times, that will bring average prices more resilient. Maybe one or two weeks on the short-term prices may come down. Those variations tend not to be as relevant for 2026. Thank you, Lin. As to your second question, André, that process started from the capitalization. Day one, after that capitalization, we had to deal with legacy contracts from the period in which it was a government-owned company. We had to wait for them to expire and then bring in new contracts. The best example, you mentioned it, was the compulsory loans. The legal department did fantastic work. We adopted a more active approach. We discussed that with the board, and we’re looking for solutions.

We did not want to postpone anything or resort to the legal system. We wanted to address the problem, and we were very fortunate. This number is under BRL 12 billion, and we are heading in the same direction. This is something that we can manage. It is well known, and we are in a downward trend. What we can expect down the road: the company will be completely focused on growing its business. We will be paying close attention to the next auctions, just like we did in the transmission auction. You can expect active participation of Eletrobrás in the coming auctions. I hope I have answered your question. As to governance, of course, that will be discussed with the board of directors. Obrigado, pessoal. Thank you. Nossa próxima pergunta vem do senhor Bruno Amorim. Mr. Bruno Amorim from Goldman Sachs asks the next question. Go ahead, sir.

Oi, bom dia a todos. Parabéns pelos... Good morning. Congratulations on the results, and thank you for taking my question. I have two questions, actually, as to capital allocation. My question is: is the company focus will be on looking for dividends to compensate shareholders through reinforcements and improvements, or is there anything else that the company is considering for capital allocation for the near future? The second question is actually a request. I would like to know what the methodology was adopted for the dividends payout. The way I understand it, your methodology tries to use net debt and EBITDA. As you gain confidence, you’re getting close to that goal, you pay out dividends. My question is: to what extent does that leverage include as a factor to reduce net debt? Why am I asking this question?

One of the reasons you gave us to pay out this dividend was the sale of some assets. I want to understand the rationale behind it. When you announce a dividend, are you considering the assets that are available for sale will be sold, or as they are sold, you can trigger more dividends to pay out? Obrigado. Thank you for your question. Not necessarily. We do not take into account assets that have not been traded yet. That is not the rationale of the methodology. As to capital allocation, you are right. As the company starts, we have always had the impression we are lagging behind. Now we are more familiar with the risks that are inherent to the company and preparing the company to live with that risk more proactively, with more alternatives, financially operational solutions. Bottom line is that once we know that.

What the cash flow will be in the future. You have more room to allocate capital. I would like to give the floor to Elio. I want to hear his thoughts as to those M&A operations and our auction participation. And then Haiama can pitch in to talk about the methodology a little bit more. Good morning. Thank you for your question. Yes, in the recent past, in terms of investment allocation and capital allocation, rather, for investment, we’ve been focusing on transmission. That’s true. Our number one focus is reinforcements and improvements. The second point is transmission auctions. They’ve been very profitable. We’ve been involved more and more often. The next one will be in March next year. The agenda will be including other topics. We have the capacity auction again in March 2026.

We consider being there with some hydroelectric power plants in the second half of the year, the auction for batteries. Our focus is to provide options for investments as we see an opportunity to allocate capital for this option, either through an auction or elsewhere. We’ve been increasing in that direction. We want to simplify, but the agenda remains robust in 2025, 2026. There are some assets that can be used elsewhere. We’ll be pursuing those goals to generate even more value. Bruno, let me explain how we make those simulations. To understand how much capital we do have to allocate throughout time. M&A operations, for example, that haven’t been finalized, or they’re only in paper, we’re still considering it. These things are not included. We have to be conservative, be it when we spend or when you believe you’re going to have that receivables.

It works in both ends, just like the energy price. Looking ahead on a midterm horizon, you include contracts that are actually signed, but everything that has not been signed, we will adopt conservative prices because that is how the methodology was put together so that the company can be robust all the time to face the volatility we see in the marketplace. This is written in stone to us. We include several factors, just like we mentioned in the presentation, ever since the signing of the sale of Eletronuclear resilient prices. For 2026. As well as the acquisition of our stake in EJOA, we can have better control of the cash flow of a company in which we have a stake. Everything is put together so that we can feel comfortable to run a company like ours in that kind of environment. Thank you. Thank you.

Have a good day. Nossa próxima pergunta vem de Maria Carolina. Maria Carolina Carneiro from Banco Safra asks the next question. Go ahead, ma’am. Senhora Maria, o seu microfone já está liberado. Nós não te escutamos. Your mic has been open. We cannot hear you, ma’am. Alguém me ouve agora? Can you hear me now? Agora sim, pode prosseguir. Yes, we can. Go ahead, please. Thank you. Thank you for the call. Let me go back to the question about capital allocation. You mentioned your participation on the auction on Friday. Can you give us more color as to the strategy. Of the. Auctions? It’s not that common in Brazil. When we compare to other assets you’ve been developing. Is there any synergy? Is there a possibility of anticipating some of these lots? We would like to better understand how attractive this lot is. What’s your take on this opportunity?

You’ve just mentioned that you may be part of the capacity reserve auction. Can you elaborate on that ordinance that will regulate this? Can you help us understand what assets can be regarded as competitive, if you can, please? Thank you. Thank you, Carol. One of the great advantages of predictability of our cash flow in the future is, of course, to be able to participate in those auctions to capture all the synergies of existing assets and the assets that will be built if we are awarded that bid, or a better relationship with our top customers or suppliers. We can provide greater predictability as to what we will need and when. Suppliers, of course, can schedule their production accordingly. Let’s now address the strategy of the previous auction and the position of the company for future auctions, and our opinion about the ordinance or the RFP.

Thank you for your question, Carol. The approach for transmission auctions is similar. We assess all opportunities. We are very careful to make sure we are generating value to the group. This is key, and it was not all that different this time around, in this auction. Not only in those lots that we were not awarded, we were still competitive. We were awarded 6, 6A, 7A, and 7B. They are somewhat different, as you said. They have more equipment. Less construction will be needed. They are very competitive as a product. Let me try to give you more color. We look at the auction with a very positive outlook. The positive result brings us a more than two-digit return. We like to strike for mid to low teens, around 15% in a nutshell. Now, in March 2026, we have similar products.

We’ll be learning from the previous auctions to come up with the best possible strategy. For the capacity auction, on the other hand, we do not give any detail of the ones we are going to be taking part in. We have a very comprehensive portfolio, almost 6 gigawatts capacity. It’s not what will qualify the auction, but 6 gigawatts can be implemented. That’s our goal. Part of it will be implemented in March. That’s our goal for that auction. This is how far I can mention. Now on to products. The 31 product is a very good alternative, an additional option to sell excess capacity for our hydroelectric power plant. Yes, piggyback on Elio’s comment, that public consultation would include just one product. Now we have the 2031 product, yet another opportunity to get a kickstart on our projects. The granting power has realized that.

HPPs have become very important to provide flexibility to the system overall. Thank you. Thank you. Thank you, Carol. Nossa próxima pergunta vem do senhor Antônio Junqueira. Mr. Antônio Junqueira from BTG is up next. Fala, pessoal, bom dia. Good morning, folks. É, vocês estão me ouvindo, né? Imagino. You can hear me, I believe. Pergunta é sobre mais sobre regulação, mesmo sobre a companhia. My question is about regulation, not about the company. O edital do leilão de reserva de capacidade. We’ve ordinance for the capacity auction. Do jeito que estão, né? Considerando. And a new provision measure. É, no MP 1304. Qual? Considering the draft as is. What are the possible impacts you foresee. In the next three to five years? Marginal expansion costs. Are the right incentives in place? Se vocês fossem os formuladores.

If you were to come up with public policies, what changes would you make? Especially in the 1234 ordinance. Thank you for your question. I’ll hand it over to Livi. Pergunta de fato que a gente poderia ficar aqui bom tempo. Good morning. Quando eu vou tentar ser objetivo. Antonio. Aqui na. That answer could last hours, but I’ll try to be as brief as possible. In sum, that provisional measure, our take on it is very positive. It will address the needs and is heading in the right direction. The industry has many substantial distortions that impacted expansion, and it ended up generating several problems we’re faced with now. Energy reductions, among others. That draft bill approved in Congress tries to address some problems with a positive approach. Something that is very important, trying to reduce subsidies, limiting high production models.

High production has a way different concept. Consumers wanted to resort to that self-production model to try to have more predictability. Today, the model is used not to pay taxes. There are some positive limitations. There is something that the industry has to do to organize expansion, and that is price policies. In that sense, that provisional measure provides important guidelines. They are not only self-applicable. There has to be a methodology. There has to be regulation. It is heading towards that price policy that is more aligned with the actual needs of the system, such as the expansion of annual will be. Regulating, flexibility, availability concepts. Conceptually speaking, they are positive. Of course, they will demand some fine-tuning. There was something else that we had been discussing for quite some time in the industry. It was mature enough, which was the complete opening of the market.

I believe that this addresses these topics, especially sustainability of distributors. Paying attention to consumers, though they will not migrate, it will be opening up by providing more flexibility, competitiveness, not only to come up with an account for the captive consumers. The timeline, we believe, is appropriate to meet the needs of the system. There are a few items that will be more controversial that were included in that provisional measure. I mean distributed generation. There was the proposal to charge that distributed production, and during a plenary session in Congress that was removed from the draft bill. That distributed is not used with the price pegged to it, unlike decentralized projects. Today, after the approvals of those discounts that have been approved, you have that price indication so that we can have the green light for some projects. We believe.

There should be some modeling in place that can provide more rationality behind the expansion. One of the most discussed topics in the industry is the reimbursement of curtailment that will impact many generators today. For both wind and solar generators, a solution was tried, was attempted, at least. The government will have the prerogative to increase two-thirds of the provisional measure, one-third for the commission, and one. They are not conflicting in nature, those two texts, those two drafts, but there are some contradictions. This is a very important topic. The executive branch will come up with a solution to strike the proper balance, trying to approach what should be considered risks for the generator and what is not, that could be carried over or transferred over to consumers. The Congress tried to.

Wear those lenses so that we do not want to allocate costs to consumers that could be better managed by the generators themselves. Em relação à GD. Você acha que o freio da GD, ele. Do you believe that the break will happen only when we run into a serious problem? When you have that. Can we do that without the regulation? The text of the provisional measure chose not to charge for projects that are for distributed generation. You have to take into account investments. And you also have the CDE discussion that will, one way or another, impose limits for distributed generation. They want to strike a balance in the expansion. That was the goal. Nossa próxima pergunta vem do senhor Gustavo Faria, do Bank of. Mr. Gustavo Faria from Bank of America asks the next question. Your mic has been unmuted, sir. Pessoal, obrigado pela oportunidade aqui.

Thank you for taking my question. I have two. One is more operational, the other one is more straightforward. My operational question is about the modulation gain from hydroelectric power plants. Qual é o trading de energia para esse produto? What is the trading market for that modulation hedging for other sources? Some traders say they have little liquidity for future markets as to the modulation, and the benefit is only for the past prices. My question is about what’s your take on the liquidity? Do you believe there will be a spread for hydric? Can you give us some color as to what the price would be for future contracts, not only on the spot market? And my second question is about the recurrence of dividends payments. You’ve announced in Q2, Q3. My question is about the frequency of the coming quarters. Can we expect quarterly dividends payout?

Mais interessante ter uma visão de período mais fechado e de alguns trimestres. I think it would be better for the market to, if we could have that. Understanding. I’ll hand it over to Italo; he’ll talk about the modulation. Thank you, Ivan. Limp, I think, can field their questions as to the current status of the modulation system, and then. I can address. The trading issue and the product we have in the market today. Modulation. Just a while ago, maybe a year or two ago. It was not something noticeable. We’ve included a slide today to explain that so that we can actually. Quantify. Each one of these sources. Hydroelectrics, for example, it’s the source that can supply those. Times in which prices are higher. It will have that modulation benefit in the last quarter. It was about BRL 14-15. We expect it will grow.

Not substantially. It will grow as the price reflects the need of the system, or up until the expansion. Will prevent again the need for those very clear-cut ramps in place. Again, it’s a benefit that is captured by sources, those that are regulated and those that are not. End up being exposed. As to the liquidity of the modulation product and trading, I’ll get back. Thank you, Limp, for that explanation. This is an energy-only market, as they call it. It only impacts energy. Within that energy, we have a modular characteristic in our system, in the case of hydroelectric power plants. We don’t see any discussion of an actual modulation product in the market, especially if you were to modulate wind or solar, for example. Again, it’s not a product with liquidity, a product that you can put on a shelf and actually sell it.

In the future, there may be that option or the possibility of having such a product. Some rules, some issues will have to be addressed in the regulation so that we can actually have a modulation as a product in a market like that of Brazil. Haiama will talk about the frequency of dividends payments. Thank you, Gustavo. Recurrence, every quarter we’ll be updating the methodology. That’s the recurrence we can guarantee. Based on the events, these events can be what we’ve seen this past quarter: selling Eletronuclear, selling MEI, the acquisition of Tijua, the transmission auctions, and so on and so forth, and the price outlook for 2026. If, by chance, significant sales occur, we’ll be signing mid-term, long-term contracts that will be included in that calculation. That’s the only thing I can say to you now. Paying dividends every quarter?

That will depend on the model itself. The discipline is what we’re going to keep on abiding by, so that we can have a company with a financial health that will allow us to execute only what we believe will generate value at the right time. We have to make that very clear before we make any decision. That’s it. That was very clear. Thank you. Nossa próxima pergunta vem de Isabela Pacheco, do Bank of America. Isabela Pacheco from Bank of America. There are two questions. What’s the leverage ratio you can reach by the end of 2026? The second, what’s the minimum cash position that is comfortable to you? Are there any policies associated to that? Thank you, Isabela. Hi, Isabela. Let me make sure I understand your question. You’re looking at 2026 as if it were a hindrance to announce new dividends, new capital allocation.

Our methodology does not take into account the short term. We look at the five-year horizon, and we are confident in doing so. Because our company generates a lot of cash. If you’re not allocating, our leverage will plummet. Having said that, when we look at 2026, our leverage won’t be that different to the one we’re having in 2025. And why? On top of the investments we’re making this year, some will disappear, just like TNE, Cochileira. For next year, we’ll be investing in that auction we were awarded back in 2024. Investment peak in 2026 will be ending that cycle in 2027. The global investment won’t change all that much. If the level we have in July remains the same, we expect very similar dynamics. As of 2027, as capital allocation that we have today comes down, we’ll be beginning to substantially deleveraging the company.

That’s why we do not take the short term into account. As far as liquidity goes, we have made movements to reduce risks on one hand. Of course, the liquidity we had to have. Earlier this year and in the previous year, this need is no longer all that important given these events that have happened in recent times. Of course, we cannot bring the cash to zero. It’s a very large corporation. Even considering the fixed income market growing exponentially. We do not have a number. As the minimum cash we have, we are BRL 20-odd billion. I would never go below BRL 10 billion. Maybe. Maybe BRL 20-30 billion for. Maybe. BRL 20-30 billion would be necessary taking into account everything we’ve done so far. Nossa próxima pergunta vem de Raul Candevich, do XP. Raul Candevich from XP asks the following question. The mic has been unmuted, sir.

Go ahead. Pessoal, bom dia. Good morning. Thank you for the call. I have three questions. The number one is about the Tijuá acquisition. You are considering being part of the capacity reserve. This could be one of the value levers that you might resort to. I would like to know if there are others. A deleveraged asset that may be some value generation, maybe recap, but are there other levers in Joa. That is my first question. The second question is about dividends. Given the BRL 1.087 and the BRL 4.3 billion announcement for this quarter, is it the level you expect till year’s end? If you approve, if there is approval of the BRL 1.087, is there any possibility of an additional dividends payout before the year’s end? My third question is about storage. You talked about it already.

I believe that provisional measure provides a more comprehensive discussion, and it is under the radar of ANEEL as to how that technology is to be implemented through regulatory routes. My question is, what is the company’s take? Because there are many different types of applications in the system, right? I would like to understand what is the company’s strategic position. Is it through auctions only? Are there any alternatives focusing more on transmission? I would like to better understand what the company is thinking about it. It is an opportunity and a risk. Structurally speaking, if we expand on the limitation of the modulation gains. Thank you, Raul. The first and the third question will be addressed by Elio, and dividends will be addressed by Haiama. Thank you for your question. I think you have explained it. You put it very well. Tijua, the acquisition has been a very appropriate and advantageous decision.

50% of a plant. It’s a quota-based plant. When you look back in 2024, BRL 136 million. They are debt-free. In itself, it’s a beneficial acquisition for Eletrobrás. There is more. You would have to resort to arbitration. We put an end to that arbitration. You end that discussion. The main driver in that sense is the possibility to expand. You have three additional machines. There is room there. Construction has been concluded. Again, it’s an advantageous decision. For the auction in March, we will not be able to take part in that, given the auction regulations. It’s a 100% quota-based plant. We believe that expansion makes sense to the country, to the company. We expect to put that in practice in the future. As to the batteries, your third question. We have a very substantial battery pipeline. We’ve been considering several alternatives in that sense.

The way the Brazilian system has been conceived, you cannot capture the value of that intraday. We believe it should be very interesting, very attractive. As a solution, batteries are important to the system. They’ll come. We see that happen in many other markets in a more mature stage. It is only at a very early stage in Brazil. The short-term opportunity, of course, is the battery auction. The regulations or the rules have not been published yet. At the same time, we would like to see opportunities to maximize value through the intraday operation. It has not been created yet. That would be great for the market, not only through actions, but rather an effective market solution for batteries. Thank you, Elio. The last payment did not take into account that taxation. I would like to turn it over to Haiama. Thank you, Raul.

As to dividends, of course, we have been monitoring whether there will be taxation on dividends or not. What I can say to you is that any decision the company makes will take into account, we’ll look at our methodology. If there’s room, if it makes sense, if we believe that economically to our shareholders it makes sense to pay additional dividends before year’s end. The methodology for capital allocation will determine whether there is that payment or not. That was very clear. Thank you. Nossa próxima pergunta vem de Rafael Dias, do Banco do Brasil. Rafael Dias from Banco do Brasil asks the next question. What’s the expected EBITDA margin and maintenance CapEx for the lots that you have just been awarded in the latest auction? Is it the same for traditional assets, transmissions, substations? Do you expect any efficiency on the ANEEL CapEx for these assets? Thank you.

Turning it over to Elio. That was a very objective question. As far as margins are concerned, they’re higher. A higher ROI. It’s clear that the competitiveness we brought to this product. Just like we’ve said in the past, it’s a trustworthy relationship. The commitment of our suppliers, they’ll provide us with that. Capacity to invest. We’ve implemented that CapEx optimization. When compared to that original CapEx from ANEEL. The numbers I’ve seen around as to the appreciation, what that discount would be, they’re somewhat conservative as to what we got. We see that possibility to optimize. We’ll keep on looking for partnerships with suppliers so that we can have even more competitiveness in the auctions. Thank you. Nossa próxima pergunta vem de Débora Borges, do Banco Safra. Good morning. Thank you for the call. I have two questions. The first one is about Eletronuclear. It needs urgent investments.

Da AXIA Energia, fará algum aporte na mesma? Are you going to make any investments there? The second question is about price dynamics. We still see prices below average. Can you talk on that? Price dynamic? How can the company address that issue? Thank you. Thank you, Débora. We are still partners of Eletronuclear, and we keep tracking that management, and we are aware of the company needs. I cannot tell you right now as to whether we’re going to be making additional investments or not. As to price dynamics, you have to be careful when you compare ourselves to the competition. We are 100% hydroelectric, and part of it is contracted. Our competitors have midterm, long-term contracts, contracts that have been signed way before, and they may have included some higher prices in there.

When you look at the hydroelectric product, I believe our prices are higher. There are many products out there with wind, solar, when everyone was still developing those sources. At the end of the day, they will have to purchase energy, and we do not have to incur in those purchases. Our trading margin generation will be probably higher and on a growing trend because of the price dynamics, the way we see it. It is trending upwards. Nossa próxima pergunta vem do Gustavo Pimenta, do BTG Pactual. A TPI em Tijuá está alienada a outros credores da companhia. The TPI stake in Tijuá. Conclusão da. Is. E a segunda pergunta é, connected to other creditors. What are the conclusion, what are the. Pelos credores da TPI. Necessary requirements for the conclusion of the transaction? Elio will feel that question. Of course, Gustavo. Any divestment will depend on approval.

It’s only natural. That’s the way it is. It’s a condition to finalize that sale. It has to go through the regulatory agencies, to ANEEL. We are pending those approvals. We don’t expect any roadblocks along the way. As far as the timing, everything is going on according to plan. Maybe in two to three months, we’ll be able to finalize that deal. It’s a natural timeframe. A sessão de perguntas e respostas. This concludes the Q&A session. I’d like to turn the conference over to Mr. Ivan de Souza Monteiro for his closing remarks. Thank you all for attending. If you have additional questions, our IR team is available to answer any questions. Thank you. Have a great day. This concludes Eletrobrás’s earnings call. Thank you. Have a great day.

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