Earnings call transcript: Eletrobras reports Q2 2025 net loss, stock dips

Centrais Elétricas Brasileiras SA (Eletrobras), Brazil’s $18.6 billion market cap utility giant, reported its second-quarter 2025 earnings on August 7, revealing a net loss of BRL 1.3 billion. Despite the loss, the company achieved an adjusted net income of BRL 1.4 billion, marking a 40% increase from the previous year. The company’s stock, trading under the symbol ELET3, experienced a decline of 0.94% following the earnings announcement. The stock closed at 38.46 BRL, down from its previous close, amidst a backdrop of regulatory adjustments and strategic investments. InvestingPro analysis suggests the stock is currently undervalued, with strong fundamentals supporting its investment case.

Key Takeaways

• Eletrobras reported a net loss of BRL 1.3 billion but saw a 40% increase in adjusted net income.
• The company paid out BRL 4 billion in dividends during the quarter.
• Eletrobras completed significant projects, including the Ponchile Negra wind farm and the Manaus Povista connection.
• Stock price dropped by 0.94% following the earnings release.
• The company plans to invest BRL 4.5 billion in 2025, focusing on M&A and auction opportunities.

Company Performance

Eletrobras’s performance in Q2 2025 reflected a mixed bag of results. While the company reported a net loss, its adjusted net income showed a considerable year-over-year improvement, highlighting its efforts in cost reduction and operational efficiency. The completion of key projects such as the Ponchile Negra wind farm underscores its commitment to expanding renewable energy capabilities. However, the impact of regulatory adjustments on EBITDA and energy price volatility remains a concern for the company.

Financial Highlights

• Revenue: BRL 10.2 billion
• Net Loss: BRL 1.3 billion
• Adjusted Net Income: BRL 1.4 billion, up 40% YoY
• Dividends: BRL 4 billion paid out

Market Reaction

Following the earnings announcement, Eletrobras’s stock saw a decline of 0.94%, closing at 38.46 BRL. This movement reflects investor concerns over the reported net loss and ongoing regulatory challenges. The stock’s performance is currently near its 52-week low, indicating potential market apprehension.

Outlook & Guidance

Eletrobras is targeting optimal leverage between 3-3.5x for its generation segment and plans to continue its investment growth with an estimated BRL 4.5 billion in 2025. The company remains focused on mergers and acquisitions and auction opportunities to drive future growth. Additionally, Eletrobras aims to enhance predictability of its results and is committed to modernizing its technology infrastructure.

Executive Commentary

CEO Ivan Monteru expressed confidence in the company’s trajectory, stating, "We are demonstrating with the support of the Board that we are concluding the turnaround stage." Juliano Dantas, VP of Innovation, highlighted Eletrobras’s innovative strides: "We’re now among the top 10 most innovative companies in Brazil." Elio Wolfe, VP of Strategy and Business Development, emphasized growth ambitions: "Our goal is to continue growing."

Risks and Challenges

• Regulatory Adjustments: Ongoing changes could impact financial performance.
• Energy Price Volatility: Fluctuating prices may affect trading strategies and profitability.
• Market Competition: Increasing competition in Brazil’s energy sector could pressure margins.
• Hydroelectric Dependence: Seasonal patterns and climate change pose risks to hydroelectric generation.
• Investment Execution: Successfully executing planned investments and M&A activities is crucial for growth.

Q&A

During the earnings call, analysts inquired about Eletrobras’s energy trading strategy and market positioning, seeking clarity on how the company plans to navigate current market conditions. Questions also focused on dividend payout methodologies and the integration of new technologies to enhance operational efficiency. Executives addressed these concerns, reinforcing their commitment to strategic growth and innovation.

Full transcript - Centrais Elétricas Brasileiras SA Eletrobras (ELET3) Q2 2025:

Conference Moderator, Eletrobras: Good morning, ladies and gentlemen, and welcome to Eletrobras’ earnings call for the 2025. We have with us Mr. Ivan de Sousa Monteru, CEO of Electrobras Mr. Eduardo Hayama, VP of Finance and Investor Relations Mr. Antonio Varejo de Godoy, VP of Operations and Security Ms.

Camilla Arawuzu, VP of Governance, Risks, Compliance and Sustainability Mr. Elio Wolfe, VP of Strategy and Business Development Mr. Italo Freitas, VP of Trade and Energy Solutions Mr. Giuliano Dantas, VP of Innovation, R and D, Digital and IT Mr. Marcelo de Siquera Freitas, VP of legal Mr.

Renato Carrera, VP of people and services Mr. Robson Pinheiro de Campos, VP of Expansion Engineering and Mr. Rodrigo Limp, VP of Regulation, Institutional and Markets. We would like to inform you that this event is being recorded and will be available on the company’s Investor Relations website along with the presentation shown here, both in Portuguese and English. If you require simultaneous translation, the interpretation icon is available at the bottom center of your screen.

You can select your preferred language. And if you’re listening in English, you can mute the original Portuguese language audio by clicking on mute original audio. For the Q and A session, if you wish to ask a question, please type your name and company through the Q and A button at the bottom of your screen. As per our format, your name will be announced for you to ask your question Before proceeding, we would like to clarify that any statements made during this conference call concerning the company’s business outlook, projections and operational or financial goals are simply the management’s beliefs and assumptions based on information that is currently available to the company. Forward looking statements are not guarantees of performance as they involve risks and uncertainties and depend on circumstances that may or may not occur.

Investors should be aware that general economic conditions and other operating factors may affect the actual results and may be different from those expressed. I will now turn the floor over to Mr. Ivan Monteiro, CEO, who will begin the presentation. Go ahead, sir. Good morning, everyone.

Thank you for being here. This is a quarter that consolidates several initiatives that the company adopted since it was privatized. I would like to list four main things. The first is the simplification of the company’s shareholder structure and cost reduction was a major example that came from this initiative. Liability management was also an example as we have been able to reduce the company’s compulsory debts from BRL 2,000,000,000 to excuse me, from BRL 20,000,000,000 to now under BRL 12,000,000,000.

Another highlight is the conclusion of connected works. We have the Ponchile Negra wind farm concluded in the first quarter and 1390 Manaus Povista, which is a connection that we will deliver later on this year. We’re also continuing investments and making record disbursements of nearly billion. And the consistent improvement in the commercialization area is also a highlight for the quarter. All of these initiatives aim at increasing the predictability of our results, which allowed us to announce the billion dividend payout yesterday.

We will continue with this initiative to give more predictability, increase investments, reduce costs and manage our liabilities. And with that, the company aims to improve its process and its trading to become a company directed to serving clients. We are demonstrating with the support of the Board that we are concluding the turnaround stage and building a budget for 2026, which will help us to overcome this stage completely. I will now hand it over to our CFO, and thank you for being here. Thank you, Ivan.

Good morning, everyone. Looking at today’s schedule on Slide three, I will be talking about the main highlights for the quarter, and then we will discuss the financial performance of the company this quarter. We’ll discuss our energy trading strategy and finally, our capital allocation strategy. On Slide five, you see the main highlights for this quarter. Starting with shareholder remuneration BRL 4,000,000,000 in dividends.

This was due to the reduction in risk, as Ivan said, that we were able to execute this quarter. And this is also connected to our long term vision for energy. Our second highlight was the contribution from generation to our margins, which went up 21% versus Q1 and 16% versus Q2 twenty twenty four. And this mitigated a drop in transmission revenue. The third point was this billion reduction in compulsory loans, which is now below BRL12 billion, investments which grew 116% versus the 2025 and we’re focusing on investments in reinforcements and improvements.

And we concluded the first post privatization transmission auction, which is the Caladinho project. We also concluded financial and economic rebalancing for Transnorte Energia. As Ivan mentioned, we concluded the last transmission line this year. Finally, in terms of capital allocation, we concluded asset uncrossing with Copel and we acquired Electronet’s participation. Continuing with our financial performance on Slide seven.

We had a reduction in our AP and this was partially offset by our revenue from generation, as I had mentioned before, our margin from generation. On the EBITDA line, which impacts our generation margin, this helps to offset this reduction. But looking at our regulatory EBITDA, we remind you that we have to consider participations, SPEs, other companies and the variation was nearly EUR800 million in equity income, which led to this reduction in EBITDA year on year. Slide eight discusses our income. So we had a reported loss of 1,300,000,000.0, and this is basically due to the regulatory remeasurement of our transmission contracts, the RBSC financial component.

Adjusting for this effect and other adjustments to our adjusted IFRS, including Elefronorte, our net income would have reached 1,400,000,000.0, which is around 40% higher than last year. Slide nine, as you’ve said, shows our cost reduction journey that is continuing with our PMSO of billion, a reduction from Q1 and Q2 ’twenty four. And there was also a reduction in the number of employees, but we contracted a significant number during this time. So it’s a cost reduction with improvements in efficiency for the entire group. Slide 11 discusses our energy trading strategy.

First, we have to remind you where our generation resources are present. We are present across Brazil. In the Southeast, for example, during the second quarter, we had seven gigawatts of physical guarantees in the Southeast. And adding six mega in purchases, we would be at around 800 in quotas. And here we’re highlighting our ACR sales.

We are doing this because purchases and quotas are not managed by us. The quotas will reduce to zero by 2027. And so we are receiving a fixed revenue from this. In order to understand our trading strategy and how it’s changing, we have to look at all of these assured capacities plus purchases and subtract quotas from that. And that shows how much we are really generating per megawatt hour that we have available for trading.

Slide 12 shows this effect. So last year, with the energy we have available for trading, we had made 1,100,000,000.0 in contribution margins. And in the second quarter, this went up to BRL 1,600,000,000.0, but it had been BRL 1,000,000,000 in the first quarter. In addition to that, on the right hand side graph, we are showing how the resources we have are evolving throughout the year. It’s important to remind you that nearly 99% of our generating area is made up of hydroelectric power plants and this energy production has a seasonal pattern.

So in the first quarter, we were at 12 gigawatts to be traded, generating EUR 1,000,000,000 in contribution margin, but for the second quarter, it was at nine And we still generated 1.1 excuse billion me, 1,600,000,000.0. For the third quarter, because of the seasonal pattern that we have, This is the dry season in Brazil. So it will go down and then go up again in the fourth quarter. On Slide 13, we see some of our strategy that we had mentioned in the first quarter. Our vision is that after November and December 2024, there was a high expectation that the rainy season from April, excuse me, from December to April will be close to historical average and that would make prices collapse.

At the time, we were concerned about conserving the first quarter as I showed in the previous slide where we have the most resources available. But if the expected rainfall did not come from the second quarter onwards, we would have a much more positive scenario for prices. And this is what happened. You can see here our price from January 2, and we drew a line on March 13, which was when we published our results for the 2024. You can see that prices continued to move.

For 2026 and ’20 the forecasted prices for 2026 and 2027 are a little bit more volatile, but we believe that this will be more constructive. Slide 14 shows our energy balance as it currently stands. There is a slight evolution in resources for 2025. We’re no longer trading this band and this gives us a constructive vision for our prices, as I mentioned before. Now looking at capital allocation on Slide 16.

So here we have our methodology guidelines to declare our first dividends in December and then complemented on March 13 with the fourth quarter results. We got many questions about how this is being analyzed, so we decided to include these guidelines in more details in this presentation. So this is our methodology. First, we’re always looking at the long term horizon. We’re looking at a five year horizon.

And for these five years, we are assessing how our capital structure will be at the end of the fifth year. We’re also analyzing our leverage with this capital structure. So first, we have to consider financial net debt, so bank debts, market debts and so on. And over that, we add the inventory in compulsory loans. We are reducing these liabilities with payments and this is all being considered in our cash flow.

And finally, we also include our regulatory obligations from the privatization, CDE and basins. On the EBITDA side, this is just to note that besides EBITDA, regular EBITDA, we’re including our proportional equity income into this calculation For leverage, how we try to define the optimal leverage range for a company like Eletrobras in generation, we consider it to be between three and three point five times. That would be comfortable, of course, depending on price. And in transmission between three point seven five and four point two five times. So we have a weighted average according to the size of our businesses as predicted for the fifth year, and that will give us the optimal target leverage.

After we do that, we compare our net debt and our optimal leverage projected for the fifth year and see if there’s enough space to pay for that. And that’s exactly what we did. Slide 17 shows this calculation and of course it takes into account everything I’m going to mention in Slide 17 and I’m referring here to risk. Since 2022, when we have privatization taking place and there was a strong acceleration, especially in the last six months, our risk improved significantly. Compulsory loans started in 2023 at billion and now we are below BRL12 billion.

The investment in Transnorte Energia was complex, over BRL3 billion, and it’s being concluded this year. We are repositioning the transmission revenue, and we are extending the concession terms. Cost restructuring is ongoing. We had a simplification when we compared to with the furnace merger. So the corporate structure was streamlined.

We also had an uncertainty for our shareholders about what disbursements we would have. There was a partial completion of the sale of thermal power plants, a completion of the RBSC financial review, and also a release of some credits that were withheld at CCEE due to the GSF auction. That was a release of nearly 100,000,000. So this all brings us to reduced risks, gains that we had over time with these transactions, better short term outlooks for an energy company. We are reviewing our methodology.

So despite having posted 4,000,000,000 in dividends for 2024 recently, being able to pay out an additional $4,000,000,000 in dividends is very significant. Slide 19 highlights the significant growth we had in investments this quarter, a growth of 116% versus the first quarter, especially in reinforcements and improvements. And finally, on our ESG agenda, out of the main investments that we have in the company currently, we’re nearly at the end of the Transnorte Energia line. So we’re interconnecting the last isolated state in Brazil, which is Voraima. This had been stopped for ten years.

It had a CapEx of $3,300,000,000 and it will be within term and within the forecasted cost. And we repositioned our revenue. Our RAP was increased from three ninety five million to $561,000,000, and we expanded our term from seventeen to twenty seven years. This creates 3,500 direct and indirect jobs and we’re interconnecting Raraima. So that will reduce thermal generation.

And that is nearly 2,000,000,000 in costs in CCC and CTE. We’re also reducing carbon emissions by doing this. It’s a potential reduction of 612,000 tons of CO2. So that concludes my presentation. We can continue with the Q and A.

Thank you. We will now begin the questions and answer session for investors and analysts. If you would like to ask a question, state your name and the company you represent through the Q and A button. Please ask all your questions at once. If you would like to send your question in writing, you can submit it through the Q and A button.

Please hold while we poll for questions. The first question will be asked by Felipe Andrade from Itau BBA. Go ahead, sir. Good morning, everyone. Thank you for taking my question.

I’d like to ask you to give us some more details on your trading strategy for the second quarter. In your release, you mentioned this, but I’d like to understand how each subsidiary participating in building the ACL margins for the short term market. If you can tell us a little bit more about that. And I’d also like to know what is the recurring CapEx that you’re expecting in improvements for the next quarter? Thank you.

You, Felipe. I’m going to let Italo answer your first question and then Elio will answer your other question. Thank you. So about our trading strategy. Obviously, we’re working in trading energy for each submarket.

So we have distributed teams in each of the regions and their focus is on finding clients that will add value to the company. The sales strategy for final customers and for traders is based on a portfolio analysis that’s made by our portfolio department, where they see the highest added value for the company’s revenue. So we can split this into two parts. My area looks at the market and sees what demands are being created, and we also have the supply area, which is Ipise area. And he’s going to tell us about how he forecasts supply of energy through with Electrobus.

Thank you for that question. One of the points we mentioned in the first quarter’s call is that in our strategy looking at the entire year, we had a higher volume of sales in the first quarter. We had strong rainfall patterns in December, in November and January and our strategy was to leave less energy contracted for the following quarters. And of course, resources are a little bit less available because of the seasonal pattern. So if this had been lower, we would have been pleased with lower sales level.

In March, we saw a huge rise in Southeast with the North and Northeast being left behind by about R260 dollars So for March specifically, the biggest volume in sales led to a result that was not as satisfactory for March. But since we consider the strategy for the entire year, our vision for the entire scenario, whether it was for low or high prices, had more uncontracted having more uncontracted energy would have been favorable for the rest of the year because that would have reduced that gap. We mentioned during the last call that we were already seeing a reduction from June onwards. And this is exactly what happened. In the Northeast, we still see a relevant gap of about BRL 30 to BRL 35 in some days of the third quarter, but the North is already close to it.

So actual sales for the second half of the year is offset by the energy available in the North and Northeast. So we are already seeing some results for the second quarter and the strategy was the same for the rest of the year. With regards to margins, this is seen on a global basis by grouping all of the different companies. Hi, Felipe. Thank you for your questions.

So first, I would just like to highlight the importance of the investments that we’re making. We’ve been mentioning this in the last few years. We are investing in our own assets. So it’s extremely pertinent and appropriate for the group and it is providing the right level of returns for our shareholders. And more than that, it’s creating resilience for our transmission assets.

This is an essential investment. As for volume, we have been growing constantly since 2022 when the company was close to EUR 1,000,000,000. We’re now at in 2023, we were at nearly EUR 3,000,000,000. In 2024, it was at EUR 3,300,000,000.0. Investments in reinforcements and improvements.

And clearly for 2025, we’re seeing some additional growth. We’re above EUR 4,000,000,000. I think it’s at EUR 4,500,000,000.0 or thereabouts to be executed throughout 2025. Our ambition is to truly continue growing. We have to see what the goals will be for 2026 and 2027.

Of course, there’s a process that we have to go through with our regulators, but we see a lot of potential at investments. We see that this is important and relevant. So our goal is to continue growing. So it’s 4.5 this year and for the future we continue we believe it will continue to be higher. In the first quarter, it was a bit below in execution, but it was we already recovered significantly in the second quarter and we’ll do even more in the next quarters.

Perfect. Thank you. The next question will be asked by Andres Ampayo from Santander. Go ahead, sir. Good morning.

First, I’d like to ask a follow-up question on reinforcements and improvements. You mentioned that you still needed an internal effort to accelerate investments. And I’d like to understand if this internal process has already been concluded. And I’d also like to confirm something. We’ve seen a difference in IFRS and regulatory.

I’d just like to confirm if there’s anything else that we should pay attention to for our models. Thank you. Thank you. So there are two points here. Maybe Robson can talk a little bit about this.

The engineering team, of course, is implementing this expansion. In summary, regarding the approval process and how we identify and pre execute this. This is very aligned in the company. We have a robust process. First, to identify what assets we think are important for our regulators to considers for our investments.

And then in assessing these investments and planning for them, you can’t only identify them. Right? We have to include it in our budget. The previous stages are very well laid out in the company. Of course, it’s a continuous operation.

We always try to improve things. And when it comes to executing these improvements, I think the numbers speak for themselves. Our second quarter was much stronger than the first and I have to reiterate that question of Caladinho. We are delivering on time and within budget. It’s small, but it’s the first transmission line that we are delivering and it was within budget and within the terms.

Andrea, this adjustment is basically based on elimination, looking at revenue and cost between companies. Nothing noteworthy. All right. Thank you. Thank you, Andre.

The next question will be asked by Bruno Amarin from Goldman Sachs. Go ahead, sir. Good morning, everyone. Thank you for taking my question. I have two.

First, I’d like to ask a follow-up question on reinforcements and improvements. If you can tell us to whatever extent you can about what returns you expect for the investments made in this area with NTNB and CELIC rates at the current levels, what returns do you expect? And what are the odds of having an outperformance with the regulatory? I’d also like to ask you to talk about liquidity in the energy market to the extent that you can. You’ve shown that prices for 2026 were at very attractive levels.

And my question is if the decision of not selling more has been made by the company or if there are restrictions on liquidity at these price levels? Thank you. You. Hayama will answer one of the questions and Limp will answer your question on trading. Thank you, Bruno.

On reinforcements and improvements, as with any regulated investment, it will change over time. Our vision is that over time, there can always be divergence is between the real interest rates, but looking at a twenty year history where regulations have been robust, this has always been constructive. So if there are any differences over time, regulators are concerned with that and this is adjusted quickly. So we have a robust methodology. We are constantly analyzing these parameters.

And with time, we see that they tend to converge. I don’t like to compare prefixed and post fixed rates to see if this is being good. Well, if it’s a thirty year investment, it’s important to look at, the regulations that we have so that we can deliver what is expected. Thank you for your question, Bruno. When it comes to liquidity, there is some liquidity because we’re analyzing if the market will be open and this liquidity will happen organically, right?

When it comes to the market, we do see that liquidity will be slightly better. And of course, the company’s strategy of allocating energy will depend on what we did and all the studies that in this area has been doing. So in summary, there will be some organic liquidity and the wholesale market. Of course, we see an improvement there for many reasons. I’ll let Rodrigo answer this issue about the portfolio, your question about the portfolio.

Thank you for your question, Bruno. So we talked about liquidity and how the market is doing. For 2026, we see some significant liquidity. It’s actually slightly lower than last year. Looking at a one, maybe our prices can affect our liquidity, but we have significant liquidity, especially in the Southeast.

And this is related to the strategy that was discussed before. So we are trading for 2026 and 2027, but we’re always keeping a technical analysis to see if there’s a risk of a gap year. Of course, is more concentrated in the Southeast. So we’re trying to strengthen our sales in the North and Northeast. We’ve had some operations in the Northeast and these are sales that contribute to reducing risks and to helping us make use of the increase in energy prices.

Thank you. As a reminder, if you’d like to ask a question, please state your name and company name through the Q and A button. If you want to send your question in writing, please submit it through the Q and A button as well. The next question will be asked by Daniel Trevitsky from Safra. Go ahead, sir.

Hi, everyone. Thank you for taking my question. I’d like to ask about your vision for the future of the company. You explained many of the risks that were mitigated. You mentioned several of these elements.

And looking towards the future, what will be the company’s focus? Are we looking at the reduction of and other risks or are we focusing in risk reduction and capital allocation? That’s my first question. And I’d also like to ask about your recent announcement of dividends. Shall we see this as a change in the dividend payout practice that you’ll now do more frequent dividend payouts or are we continuing with the same previous strategy?

Thank you. Thank you. So our vision for the future is to consolidate all of these initiatives and our dividend strategy follows on the same line. We are now through the classic turnaround phase and we’re looking at the company in the medium and long terms. M and As will basically be about finding new opportunities for growth.

The auctions for this year and for next year are also opportunities for growth. We will grow for some time and then we’ll reach a more stable investment pace for the company. This capital allocation is allowing us to give more predictable dividends for our shareholders. So we expect to consolidate these initiatives, make our results more predictable and we hope to through that make frequent payments. Of course, there’s a number of initiatives behind that involving AI and other things.

In the beginning, we had a holding with four subsidiaries, including Furnas, and we’re now having one single back office for that. But one specific part of it is relationship with suppliers. We’re managing the company as one company and that gives us a better partnership with our suppliers. But I’d like to ask Juliano to talk about his vision for the future, specifically on using new technologies. Thank you, Ivan.

The company has been modernizing and improving very quickly. So we’re now among the top 10 most innovative companies in Brazil and this will be published in the next few days. This is due to how we are modernizing the company’s infrastructure and this includes AI, our monitoring centers and how we’ve integrated these technologies in the company from commercialization, engineering and our corporate businesses. We aim at expanding this process, doing the basics very well and we also hope to apply these technologies to generate more value for our business. Thank you.

Next question will be asked by Florent Pimentel from Citi. Go ahead, sir. Good morning, everyone. Thank you. I have two questions on my side.

First, I’d like to understand something. In Q1, you mentioned that you had a longer position for the second half of the year so that you could benefit from the higher energy prices, which is what we have been seeing in price curves. Considering that we’re facing a challenging scenario in GSF and the hedge in the energy balance seems to be insufficient to mitigate this impact, I’d just like to understand how much of the gains that you would potentially have have been affected given that GSF is challenging? That’s my first question. The second question is about this decision to sell your portfolio.

Given the restrictions you have on liquidity and so on, was the comp is the company’s option based on sales for the short term market? Or do you think you will have space to monetize things with contracts? I’m asking this not only for liquidity, but due to the market risks. We’re going to continue seeing them for the next few months and I think this affected you significantly in the first quarter. So do you expect to hold back on trading and have liquidations of PLD in your own market?

Thank you for that question. Ayama will answer your questions. Thank you. So what we mentioned in that slide that showed a seasonal pattern for CSF throughout the year. Of course, when you have more energy, and this is usually in the first quarter, our position is that if we truly had good rainfall and prices went down, that this could be used to mitigate the rest of the year.

So that’s why the concentrated sales in the first quarter. From the second quarter onwards, we did the opposite. So it seemed that the risk was asymmetrical to the price being used and that was the next graph we showed, which was the price curve for the second half of the year, which was around 100 and some to 300 or $3.60. And now is at 300. With that being said, when we said that we were sold in the first quarter and bought from the second quarter onwards, Of course, we were running many simulations to see how GSF would behave so that this energy would be available for the poor scenarios, not for any scenario.

That energy balance we showed was for the year. It was not the next exposures that we could have later. It was for the year. So that also involves a period in which we had been more contracted. And this was done purposefully.

So with that being said, given that GSF is lower in the third quarter, you have to expect that although prices are high financially, it will be spectacular, it will be very good, but not to the same magnitude as if we have the volumes in the first quarter. But the strategy we were using had already been foreseeing all of these scenarios, GSF and price. And to answer your question on the trading strategy, our focus is expanding our client space, whether they are large clients where we have direct connections or smaller clients that can be reached through partnerships. And of course, this is our focus. If we cannot do something at the price that would be better, then we move on to liquidation.

But I’ll ask Italo to complement that. Thank you. Joao, as Ivan said, we had a very detailed study of our clients based on size, market and so on. And we mapped the best tools you could use to access these clients like Yvon said partnerships, speaking to major clients, open markets channels. So our strategy for this is well defined.

As we see better options of allocating energy, we are using these tools that we’ve prepared and are currently available to allocate energy to whatever provides the most value for the company. You. This concludes the question and answer session. We will now hand it over to Mr. Yifeng Muteru for his closing remarks.

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