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Good morning, everyone. I'm Carolina Senna, Cemig's Investor Relations Superintendent. Welcome to Cemig's Second Quarter 2026 Earnings Video Conference Call. Please note that this video conference is being recorded, and it will be available on the company's IR website at ri.cemig.com.br, where you will also find the company's presentation. [Operator Instructions].

We now start Cemig's video conference with Alexandre Ramos Peixoto, CEO; Leonardo George de Magalhães, CFO and IR Officer; Luis Claudio Correa Villani, Chief Information Technology Officer; Demétrio Alexandre Ferreira, Chief Generation and Transmission Officer; Ernando Antunes Braga, Chief Distribution Officer; Sergio Lopes Cabral, Chief Trading Officer; Sérgio Pessoa de Paula Castro, Chief Legal Officer; Iuri Araújo de Mendonça, Cemig SIM CEO; and Ronalde Xavier Moreira Júnior, Gasmig, CFO and IR Officer.

For the initial remarks, I now turn the floor to Alexandre Ramos Peixoto, our CEO, who will start the presentation. Please, Alexandre, the floor is yours.

Thank you, Carolina. Good morning, everyone. It is a real pleasure to be here with you on my first earnings call as a CEO, ahead of our dear Cemig group. I take on this role with great confidence, confidence in the company we've built, also confidence in the quality of our people, the excellence of our professionals and above all and the great potential that lies ahead.

I would like to start with a very clear message. We have a sound company. We delivered consistent results, and we know how to execute and that consistency comes from a well-defined strategy, disciplined management and a real ability to turn plans into tangible outcomes.

And it's important to make it very clear right now, the quality of the service provided to our clients that will always be at the core of our priorities. We want to be recognized not only by our financial results, but also by the excellence of our operation and the quality of the experience we deliver to the millions of clients we serve, over 9.5 million consuming units. And that's why we will continue executing a relevant cycle of investments, especially in distribution.

We have over BRL 22 billion in our tariff review cycle, for May of 2028. And we are investing to turn the networks more robust to modern, resilient and prepared for the new demands of our clients and also for the transformations in the electric sector, highlighting the full opening of the electric power market in Brazil, which should happen in November 25, 2028.

As all of you know, the electric sector is undergoing a deep transformation. And I can tell you that we are very well positioned to be part of this future, we have quality assets, knowledge investment capacity and experienced team and very well prepared one to execute our strategy.

We have an important advantage. We are an integrated company. The combination of our businesses gives us scale, complementarity and also a privileged view of the sector's changes. That integration strengthens our ability to navigate different cycles, seize opportunities and create value in a sustainable fashion.

So the message I would like to convey to all of you in his first earnings call is of confidence and continuity of the implementation and the success strategy and a long-term view, a management with financial discipline, consistent results and responsibility in our business is, therefore, meeting our commitments and generating value to our shareholders.

Today, we have a strong company, and we are working and we'll keep on working hard so that it can be even stronger. And with that long-term vision, customer focus and discipline in execution and commitment with results that I start this new cycle. I will continue working on this new cycle of this management ahead of this company.

Having said that, I thank you very much with the opportunity to be addressing it. And I turn the floor to our dear CFO, Leonardo George de Magalhães to start the presentation of the results of the second quarter. Thank you very much.

Thank you very much Alexandre, for your message. Good morning, everyone. Thank you for being here with us in this video conference call for the second quarter's results. We will start with the highlights of this 2Q.

We have had very consistent sound results and with the operating performance of BRL 2.5 billion in the quarter, a recurring EBITDA that reflects our soundness in terms of results for the company. The company, as Alexandre has mentioned, is integrated to a number of businesses that support our cash generation and as well as our results at every quarter, bringing you consistent results.

Also, we have funding of BRL 4.6 billion also in this quarter. This was very relevant, and this was to support our investment program. In the next slide, we'll talk more about that. This is an investment program that is very relevant, especially you're distributing company that will be generating value for the next years.

For shareholder remuneration, historically, this is a company that has a good remuneration to its shareholders. And we had interest on capital of BRL 631 million. That represents BRL 0.22 per share. Growth strategy. Our CapEx is of BRL 1.8 billion. We are going to go over that figure. And also we had a tariff adjustment for Cemig distribution with 6.5% of average tariff impact to Cemig's consumers.

On this slide, we have the planned investment for the year, which is BRL 6.7 billion. And up to the first 6 months, we were able to invest BRL 3.3 billion, 49% of the total amount. And the message is that we are in line with the investments forecasted for the year.

As also, we had estimated and we are communicating to the market. We have a large investment in our distribution brand, BRL 2.6 billion in these first 6 months. an investment in generation of BRL 275 million and Cemig SIM also a significant highlight of BRL 227 million, Gerais BRL 92 million in investments, especially here in the Midwest project. And with 33.5 kilometers of network built in the quarter.

Now going over the investments of our distribution branch here the company. We see that with these investments, the company is adding a lot of value, not only thinking about the remuneration base that we expected to be included in the next tariff review in 2028, but also in the quality of service that we provide our clients, which surely has -- will be positively affected by all of these investments.

In transmission, also we have relevant investments and these are investments that are bringing in additional revenue just for additional RAP in this quarter, we have BRL 36 million thanks to investments that have been concluded and they are already bringing revenue to the company.

So in summary, the company is frequently being transparent, bringing to the market its investment program, and we are in line with investments that we have forecasted for next years. And in this quarter, it has been no different.

Now we have the consolidated results for the company. These are good results, 9.3% here recurring result for EBITDA compared to the prior year. Net income, 15.6%. Here, it was impacted by financial expenses because of the fundings that the company had to be able to provide support to its investment programs, and this was already in our strategic plan.

And here, we highlight nonrecurring effects here, the voluntary dismissal program has an impact in the beginning. But in the long term, it will bring benefits to the company because it is a process where naturally replacing our employees and employees that are with us for a longer period of time, they get incentives to leave the company a new employees come in to help in our culture and our performance.

Also, we have a free market customer arbitration. There were some questions about some contract clauses and this is being concluded now. And because of the maturity and the current stage of this process, the company considered to be necessary to have a provision of BRL 191 million or the outcome regarding this topic. This is not -- this does not have a cash effect as of now. But right now, we had to have provisions for that.

And in the prior year, we had a few adjustments, nonrecurring as well because of RBSE remeasurement and also the remeasurement of post-employment liabilities. We should highlight as well that the provision for losses for the company because of delinquency and the company adjusted its criteria. According to ANEEL and the marketing the market benchmark. And so that generated expected losses reversal of BRL 232 million with a positive effect in this quarter.

Moving on, we have here consolidated costs and expenses, which had an increase of 15.5% this quarter. This was very relevant, but it's important to highlight that we have seasonal effects. This is because of the investments that we had in this period in improving the quality of the network. And all of this is very important so that we can improve our service to clients and also to tackle possible contingencies. And now we are talking about El Niño that will be seen in the second half of 2026.

In any case, we believe that we did have seasonal effects, and we do not to have a variation or see a reduction in this variation when we complete 12 months, and we compare 2026 to 2025. But in this quarter, we did have a specific impact, that was a onetime off impact and therefore, this variation was 15.5%, but the company's costs are being controlled because we have financial discipline, and we are balancing out the improvement of the network, the investment in the processes that might help the company to serve the clients better and we are keeping costs at a very disciplined level.

Moving on, we have the debt profile. The company still has a high quality of credit. We are AAA in two rating agencies and AA+ at S&P Global. And here, we have our maturity schedule that has a very adequate profile for the upcoming years and leverage reached 2.58x in the second quarter of 2026, and we understand that considering our current investment plan, this leverage is right, and that corresponds to our expectation when we think that we have a tariff review in 2028. Therefore, our leverage has a growth up to 2027, but in 2028, it will come down because of the tariff review in our distribution company, but the company is still accessing the capital market in the frequent fashion, and it has great access to the market and also very competitive costs.

On the next slide, we have our cash generation. We generate -- we have a strong cash generation even with the adjusted EBITDA, you see that the EBITDA is reflected in the cash and the operating cash here in this half of the year, close to BRL 4 billion. So if you double it, we are generating operating cash of almost BRL 8 billion in the year, and that's very strong to provide support to this investment program. And here, we also have the third-party capital that helps the company in the distribution segment. And here, we have this 5-year cycle from 2023 to 2028.

Now we're turning to Cemig D and Cemig GT results. Cemig D has positive results, 21% up in EBITDA when compared to 2Q '25 recurring net income is in line with 8.9% down. But as we mentioned, also there was an impact of issues involving higher financial expenses because of the interest rates, which are high and also the natural debt to provide for our investment programs.

I also talked about the tariff adjustments. We had an average impact of 6.5%. And the 4.9% correction in Portion B in here, there is an increase of 2.7% in residential market. We also talked about the ECL reversal estimated last year. It has to do with current delinquency of our consumers. This is very much controlled by Cemig D.

And here, we have the energy market is down 1.6% when compared to the second quarter of 2026 to 2025, you see that the total power carried has increased a little bit, and we have 3.8% of drop in the captive market because we had large clients living Cemig network -- distribution network this year, and that did have an impact when you compare that to 2Q '25.

And when we compare the different consumption customers, consumers classes, we have residential growing 2.7%. And we also can highlight the rural class with a reduction of 11% because of the rainy season which was greater in the second half of the year. Therefore, there is lower consumption by the rural segment. And Cemig DG has a relevant impact. It now represents 25.8% of captive market of Cemig distribution.

Moving on, the company is very much disciplined in its cost. As I mentioned, our OpEx today is BRL 416 million lower than the regulatory limit in this first quarter of 2026. Operating efficiency. Also, this is very important. And we see great financial results, consistent results for Cemig D. And also, they are in line with operating efficiency, all the investments that the company is making, they have provided improvements in our quality indicators. Our DEC is 8.43 lower than the regulatory limit. So in the downward trend, FEC also 4.86 compared to 5.37 which is the regulatory indicator. That's the limit established by ANEEL. So we have good room here. And that is thanks to the investments that the company has been making in the past few years, which are bringing results in these indicators that prove that we have a good quality of service to our clients.

Regulatory losses are still low and lower than the real losses. And we have already talked about the reversals for expected credit losses in this half of year. So the quality indicators for the company are in an upward trend, a positive trend.

Now talking about Cemig GT. Also, we have great results, 10.6% vis-a-vis the prior year in EBITDA and recurring net income with a reduction of 11.4% because of the increase of financial expenses as highlights, we have increased revenue from sales to end customers, 124 megawatts average and also inflation adjustment on [ RBL ] revenue or plants that received by quota, there was a an adjustment of BRL 29 million because we have the cumulative IPCA inflation here. And all of them are related to these plants.

Now we have a breakdown for Cemig generation and transmission in terms of the business for generation. Here, we have a positive result, both in EBITDA as well as in recurring net income, EBITDA up 13.3% and recurring net income also up but here, 3 to 6%. And average GSF here was better than what we had in 2025 and that has reflected in higher revenue that we have seen in '26 compared to the prior year.

And for transmission, very positive results with added RAP and also the regulatory assets of transmission that allowed that our transmission results were 50% higher when measured by EBITDA compared to 2025 and recurring net income to 50% and BRL 190 million compared to BRL 120 million in the prior year.

Moving on, Cemig trading results or BRL 180 million negative recurring EBITDA compared to the prior year. We talked about this provision of BRL 191 million. This is a onetime off result of this stems from a specific action related to a major industrial client, which has generated an effect of provision in the second quarter. This is not a cash effect right now. Right now, it's only a provision. So this is still being discussed. And this negative effect in this first -- in the second quarter stems from positions that have been settled and higher prices of energy purchased. This was already expected by the company and also the effects that have been related to submarkets, especially regarding the South. We understand that the trading company effects that generated this impact of minus BRL 180 million have been very much concentrated in the first half of the year, and we understand that the trading company results in the second half of the year, we'll have positive results compared to the first half of the year, which we already knew. This was already planned.

We know it would have that type of effect, especially because of the company's position. But for the second half of the year, we understand that we are going to have a more favorable environment, both in hydrology and also because we have already settled positions that were needed for the year of 2026.

On the next slide, we have Gasmig results still sound results. This reduction that we see both in EBITDA as well as in recurring net income for Gasmig, it was already expected because we had migration of clients to the free market. Therefore, we have a lower margin affecting the EBITDA and net income of the company.

Also that had an impact of the reduction of the volume distributed of 17%. All of these factors combined brought this reduction in the results. Gasmig has a tariff review that should happen by the end of the year. We are very optimistic about the project and Gasmig should be bringing sound and consistent results to the group in the next quarters.

Basically, these were the main highlights of our presentation. We understand that these were consistent and sound results and the different Cemig businesses. We understand that especially in the trading company, it was a more difficult half of the year, but we have a positive outlook for the next 6 months. And we will continue executing our investment program that will generate a lot of value to Cemig in the next few years, considering the tariff review that we have ahead. I turn the floor now to Carolina so that we can start our Q&A session.

Thank you very much, Leonardo. So right now, we will start our Q&A session. [Operator Instructions] our first question is from [ Marco Aurelio ] and the question is, "considering that there was an increase in tariffs only in 2028. And with the increase of the indebtedness and the debt cost, what will be the direct impact on the profit or the net income reduction for 2027? And what will be the impact in the shareholders' remuneration?"

It's important to mention that Cemig has always been a great dividend payer in the electric sector. This is company that we can say that it has been one of the best in paying dividends in our bylaws, by our bylaws, we have a minimum mandatory dividends at 50% of net income. So this is a relevant payout.

We understand that right now, in 2026, this is the year where the company's results because of higher financial expenses will be relevant results, very positive ones, both for EBITDA as well as net income. And we believe that we will keep on bringing positive dividend yields, whether now we're in the next few years, we are going to have a tariff review in 2028, we will have a positive impact on results.

But even in the next years, '26 and '27, considering the current payout of the company established by the bylaws of 50% of net income, that is a very attractive remuneration to our shareholders even considering an adverse scenario to all the markets. And we understand that this dividend yield will continue being relevant and positive for our shareholders this year and also in 2027.

Next question is from [ Ricardo Balsara ]. "how is your perspective for El Niño effects in the different areas of businesses? Are you going to have CapEx prepayment in the distribution and transmission companies to avoid possible incidents?"

For this question, we will have our Chief Distribution Officer to answer Ernando.

El Niño, requires a robust planning, which we have for a maintenance plan. We have a contingency plan considering that we have the largest investment plan in history, we are executing our maintenance plan also the largest one in history, our OpEx. We have AMI meters, automation in electric systems. So for the second half of 2026, we are fully prepared for El Niño impacts.

In addition to these investments, we have the penetration of our structure in the state as a whole to face this diversity. So in summary, we will have no impact in our budget because of El Niño.

Thank you, Ernando. Now to talk about generation and transmission. I would like to ask our Chief Generation and Transmission Officer, Demétrio to take that question.

For generation and transmission, starting by generation, we have a permanent routine to manage these assets that is based in risks we need to guarantee the availability of different pieces of equipment during harder demand. So we run periodic tests for all the plants to make sure that when they are demanded, they will be working.

We do not have above the average rainfall with El Niño. So we should have more rainfall for the South, not for the Southeast region. So in our point of view, we do not need contingency plans that are just more elaborated than the ones that we already have to our large plants and reservoirs.

For storms, for the small plants that have smaller reservoirs, we are reviewing our contingency plans to guarantee access to them and also to control flooding. That's what we have for generation. We are fine about it. For transmission, we do have assets of high resilience. This is thanks to the work that we have been developing for preventive maintenance, modernization, management based on risks, this contingency plan that we have transmission is very robust. We maintain vegetation at low levels in the right of ways. We also have weather forecast that will issue alerts in case that is needed so that we can tackle all the contingencies, if needed.

We have devices all over the state. These are previously placed in the state of Minas Gerais in case of contingencies, we can return the lines at a lower period of time. So prevention is the key word here, and we are prepared for any problems that might happen in terms of contingencies, both for generation transition.

We have another question. Now regarding auctions. I will ask our CFO and IR Officer, to answer. And the question is "if we are interested in taking part in transmission auctions and then Sergio Lopes is going to talk about the auctions for batteries." Please Leonardo.

Regarding auctions, yes, the company is considering transmission auctions and the last ones that happened in the country we were following. And it's important to highlight the company's discipline in allocating capital we studied. We considered all these auctions. If we understand that the return is interesting, we take part of them. But if the return is not attractive, the company rather allocates its capital in assets where we understand that we will have more value for shareholders.

So the answer is yes. We are still keeping an eye on them. But we have discipline in capital allocation, and we will just be winners and in the areas where we are sure that we will be generating value to the company, considering that we have several businesses, and this is one of the key areas of the company.

And we can diversify our capital allocation, and right now, as I have already mentioned, we understand that the regulated businesses and investing in reinforcements, even in transmission, they have been bringing more value, and they are very important in the value generation to our shareholders.

About data centers, I will turn the floor to Sergio. He can talk more about it. But we will also be analyzing the battery auctions always taken into consideration the return to our shareholders in value generation. And this is something that is key to us.

I will talk about data centers. And of course, we are talking to some market players to understand the segment and to see how we can turn the profitable the sale of energy or the participation of Cemig in this process. We understand that there is an opportunity in the market, but it has to be analyzed cautiously, and we want to extract the best and the greatest value of this opportunity, understanding the assets and what are the benefits that they bring to the company.

So data centers are assets that we are considering but cautiously and how we can bring profit to Cemig and shareholders in this investment.

Thank you, Sergio. The next question is about the maturity of the concessions, he's asking how the process is going because the next maturity of Sá Carvalho. I'll turn the floor to Leonardo.

So the market knows that we have three concessions that will have the maturity close in 2026. Sá Carvalho and two others in 2027. And so we may say that the process is moving forward. We have already a favorable note from ANEEL. So now this is being discussed in the Ministry of Mines and Energy. And what we can tell you that we are very optimistic about the process. Of course, we have to wait for the granting power approval, but we believe that's going to have a positive result for the company in this concession renewal process.

Our next question is about the trading area, and I'll turn the floor to Sergio Lopes, it's about "the losses that we had that negative impact in the trading company's results. And how is the company prepared to overcome this loss? And what is its future outlook?"

I think we can go back to last year and this year and then talk about the future. The trading company is undergoing moment when it has to positions, there was a change. There was a moment when we had price model change and scenario changes, and we have been working in a very cautious way. Last year, we did have net income maybe in the market, we were the one of the few companies that were able to have this result. And this year, we expected a possible negative EBITDA.

And also, we had situations where we had a detachment of the south submarket. This was an unprecedented case. I think this was the first time that this is happening. We were able to purchase energy, although it is expensive, and we are selling positions, we did that anyhow. So we exchanged positions with generation. And therefore, this remained in the group itself, although we posted negative results in the trading company, it became positive in the generation company. So the positive -- and the final impact was 0. So we were able to end this year. And for 2027, 2028, we have brought down our position.

Of course, we have to have a patience and we have to be cautious to be able to settle these positions in the best time possible. We have been able to do that. And for 2028, we already expect significant results for the trading companies. So we have results of around BRL 1 billion, BRL 1.8 billion. That's what we expect to reach.

We understand that we are prepared to undergo this moment. Right now, we are applying the best practices and the best strategies to serve the market, but the whole market is having a hard time because of a structural issue. And we are having better results than our competitors, thanks to our strategy. So for the future, we believe we will have good results. This is a difficult moment now. Again, this was expected, and we are looking at the best time to close to settle positions, reduce losses and also to have gains as we had last year.

Thank you, Sergio. And for the final remarks, I turn the floor to Leonardo.

Once again, I would like to thank you all very much for being here in this call for the second quarter of 2026, I came back to the company in June. But when I was in the company from 2020 to 2024, we have always been very transparent in our strategies, which is to divest in complex and noncore assets and prioritize investments in the regulated sectors, especially our distributing company always investing in operating efficiency and this strategy is already bringing results to the company, this is a winning strategy. This is delivering value to shareholders, also to our clients, and we have the best quality indicators.

We thank our investors for their trust, and we are very optimistic about the strategy for the continuity of implementation of the strategy and the company, greater operating efficiency and discipline in capital allocation. Thank you very much.

So thank you very much for your participation in this video conference call. And the Investor Relations superintendent is available to take any further questions that you might have. Therefore, we conclude Cemig's Second Quarter 2026 Earnings Conference Call. Have a nice day. Thank you.

Good afternoon, everyone. I am Carolina Senna, Cemig's Investor Relations Superintendent. Welcome to Cemig's First Quarter 2026 Earnings Video Conference Call. Please note that this video conference is being recorded, and it will be available on the company's IR website at ri.cemig.com.br, where you will also find the company's presentation. [Operator Instructions]

Before turning to the results presentation, we would like to inform you that the appointment of Alexandre Ramos Peixoto as the new CEO of Cemig has been approved as of yesterday. Alexandre Ramos Peixoto replaces Reynaldo Passanezi, to whom the company recognizes and expresses its gratitude for the work carried out. Under his management, Cemig conducted a consistent financial recovery process, resumed investment levels and developed a strategic plan worth approximately BRL 70 billion through 2030.

During this period, the company has strengthened its infrastructure, expanded the number of substations, modernized the grid and eliminated historical bottlenecks. [indiscernible] resumed sustainable growth and achieved the highest market value in its history, increasing it from BRL 8 billion to BRL 45 billion. His departure stems from the term limit restriction provided for the state-owned enterprises law on #13,303/2016.

It is precisely to give continuity to this trajectory that Alexandre Ramos Peixoto comes in, a career employee of the company with solid experience in the Brazilian electric sector. He's an engineer by training. He holds a degree in quality engineering and management from PUC University and a degree in management and strategic planning from the University of Minas Gerais in addition to specializations of -- an MBA in related areas related to generation and planning in the sector. Throughout his career, he has worked at ANEEL, MME and EPE, and at Cemig itself, served as Regulatory and Institutional Relations Officer. Since May 2023, he has chaired the Board of Directors of CEE (sic) [ CCEE ].

So now we will start the conference. And with us, we will have: Andrea Marques de Almeida, CFO and IR Officer; Luis Claudio Correa Villani, Chief Information Technology Officer; Marco da Camino Ancona Lopez Soligo, Chief Generation and Transmission Officer; Marney Tadeu Antunes, Chief Distribution Officer; Iuri Araujo de Mendonca, Cemig SIM CEO; and Marcus Vinicius de Castro Lobato, Trading, Planning Superintendent.

For the initial remarks, we would like to bring to the floor, Andrea Marques de Almeida. She is going to be making the presentation.

Good morning, and good afternoon to all of you. It's a pleasure to be here again to bring you the results for Cemig, and we are very proud of that. We always start talking about the quarterly highlights. Cemig has the benefit of being a diversified company which is maintaining its results consistently.

These are the operating results. And this quarter, it is just like the others. Of course, we reached the results of BRL 1.79 billion in EBITDA and BRL 979 million in profit. And I usually say that we have to balance out all the plates here, and we have worked on our investment plan here of BRL 1.48 billion. We also have shareholders' remuneration, another important topic of our strategy, BRL 658 million.

And we had small acquisitions, SPH (sic) [ PCH ] Pipoca and Timoteo and Mesquita that we acquired in the quarter. And also, we talked about this at the end of the year about the post-employment agreement and all the impacts that we reported at the time. But this is an agreement that in fact is going to allow us to have effects over time. And we can already see a reduction in our expenses in the amount of BRL 80 million, and that's an important highlight as well.

Now we have a snapshot of the quarter. The total of BRL 1.48 billion is in the main areas here. And distribution is always carrying the highest representativeness of our investments with BRL 1.28 billion. For distribution, we have more energy, [ Minas 3 ] phase. We are delivering 6 new substations and 1 substation that was modernized in the [ more energy ] program. And also, 765 (sic) [ 765,000 kilometers ] of low and average voltage networks.

In transmission, we usually grow in reinforcements and improvements, and it was just like that. We have investments in the quarter, BRL 103 million, which added in terms of RAP, the annual permitted revenue, and that was [indiscernible] for our cash generation portfolio.

For generation, I think we have a lower amount. Gasmig is still moving on with its project, and the Midwest as the most relevant one, and Cemig SIM. Here, we start seeing that in our chart as a relevant investment with 7 new solar photovoltaic plants and added 19 megawatts capacity to our portfolio.

The quarter results are in line with the results of last year, considering that the highlights of the distributing company, the positive highlight here is that we effectively we had in May, the rebuilding of Parcel B, which was 7.78%. So comparing quarter to quarter, this is the main impact in the distributing company, and we also had an increase in residential consumption, which is positive.

And in terms of challenges also known already by the market, we had effect of price that starting 2025, energy prices are more volatile. And as you know, we have positions that need to be closed over time. And with the higher prices, the positions closing ended up causing negative results in the trading company and the generating company. Also, the main effect was GSF. And if we compare year against year, we had 0.92 in the first quarter of 2026. And the purchase of energy to tackle the hydrological risk allowed us to have impact in the EBITDA of BRL 49 million.

Now we go into the details of what I just mentioned. We have the level of prices. And clearly, we can see the change in the price volatility that started in the beginning of 2025. We started from January to March of '25, the prices were around BRL 59 per megawatt, and then they went up. Last year, we also had a GSF close to 1, which is no longer the reality in 2026, when we have a lower GSF and the price is much higher. So we reached levels of BRL 382 per megawatt, impacting the management of the hydrological risk. That's an impact of BRL 49 million.

Now turning into a zoom to our cost and expenses. The main item has been -- and in the other quarters also, it was the same, so it is a recurrence, it is third-party services. This quarter, maybe we had higher expenses and preventive maintenance as well as corrective maintenance. And obviously, we have the right of way clearing. And all of these services are in order to deliver a better quality of services to our clients.

So they come with all the investments that we are making on the investment branch -- sorry, distribution branches. So this is to provide better services to our clients, and we'll go over that when we discuss our DEC and other expenses. Also with this large investment program, we have decommissionings. And we had a disposal of asset which has been part of our management. We are disposing of assets that in the past had some use for Cemig, but no longer have.

Now talking about the impact already, the post-employment restructuring that we had up to December of last year. We see that if we compare that growth, including the post-employment effect, the growth has been 2.5% quarter-on-quarter. We will also be discussing how this increase can be seen in regards to the network kilometers, substations, which is also important for the distributing company.

Now we talk about our debt profile and all the work that we have been doing to match the profile of the debt with the profile of our investments. We know that we have 5 years of investments in the distributing company up to the tariff review that's going to happen in 2028. That's why we are increasing to extend our debt. And so we reached 6.6 years of average maturity. And also important is that 76%, that is, the bulk of our debt is due after the tariff review rebuilding in 2028. So that profile has been extended so that also, it matches with the recovery time of the tariffs that we'll have in the future.

The last funding that we had in the quarter was a debenture combined with a loan of [ 4,131 ]. And the last issuances, they have been made lower than the sovereign risk, and we were able to include BRL 2.6 billion to the distributing company in this quarter. We reached the leverage of 2.45x net debt over recurring EBITDA, very healthy. And this is the leverage debt, also includes the financing of the investment program, but this leverage is always going to be at very healthy levels for the whole program that, of course, will peak in 2028 when we are going to have that tariff review. And that cost also is very reasonable. It's 89% of the CDI. Of course, interest rates are high for everyone, but this is a cost that's very positive for the company.

Now going over operating cash generation and how it has been used over the quarter. We start on the EBITDA of BRL 1.79 billion, and we discount the noncash effect, we reach the EBITDA of BRL 1.6 billion. We have the effect of the CVA Portion A variation account, which has had a relevant impact because of the higher price. The distributing company has a cash impact that is going to be recovered next year, dividends received, the working capital with a positive effect.

And then you reach the operating cash flow of BRL 1.5 billion and how we have used it over the quarter. Income tax, social contribution, interest, leases and our investments, which is the most representative share here of [ 1.6 ]. So the cash delta was negative, and we showed that and the cash availability that we have from 1 quarter to another.

Now going into the details of these companies. As we said, Cemig D had a representative performance in EBITDA, an increase of 26.6%, reaching BRL 1.010 billion of EBITDA in the quarter, especially because of the effect I already mentioned of that adjustment of 7.78%. And also, we had an increase in the residential market. This is nice. It is representative, significant for us. As we know, residential tariffs are higher, so that has a good impact in our revenue.

Now here, we have our energy market. So we have been saying that in the past quarters, that there is a migration in the case of the transported energy from 2 clients to the basic network. We will no longer see this drop effect. After the second or third quarter, we will no longer be seeing this effect because it will be then have been integrated in the quarter, but we do see that reduction.

And we also talked about the positive effect that we had in the residential area. But we did have a period with a lot of rainfall and milder temperatures, and we see rural with a significant drop especially because of the rainfall period. And we still see the effect of GD (sic) [ DG ], distributed generation impacting [ Minas Gerais ]. And a piece of information is that DG represents 26%, and the captive market is very representative in our region.

Regarding operating efficiency for Cemig D, we have already mentioned, I believe that the main effects have already been offset. We are working on an efficient management, and we have been working on the management of right of way cleaning and everything that we need to do to provide a better service to clients, and we are under the regulatory limits, as we should.

Now for operating efficiency, our indicators for Cemig D are within the regulatory indicators for losses. Here, you have the losses indicator. For our spot price, we did have a change in criteria in 2025. We went from 24 to 35 months, and that's why we had a positive effect. And over the period, it balances out. So this was just because of a changing criteria, but we see that our delinquency is very low. We have positive indicators. And here, we are very proud to bring these results. Our DEC of 8.75, the best one in our history. And also FEC, that has a positive performance, bringing better services and better conditions to our clients.

For Cemig GT, as I mentioned, and it's important to stress, Cemig GT today, obviously, it has generation transmission. And it also has a share of the contracts coming from the trading company.

So the main facts, and we already mentioned, and I'll talk more about them. But the main one is here is the management of hydrological risk [ at G ]. But when we break it down for business for generation, in fact, here, we had that hydrological risk and energy purchase at a much higher price. And in transmission, we had a lower IPCA. And we know that our contract asset is remunerated by IPCA or inflation, and that's the impact in the transmission company.

Now turning to the trading area. Here, we see the main challenge in the quarter. And the main impact has been the closing of positions. And that was because we did not fulfill contracts that were not delivering P90 and some contracts that we are able to recover part of this amount at the end of the year because some of the positions have been sold and also because of some credit events, and I believe the whole market is seeing that. But the main effect here, yes, is really price.

Cemig SIM is adding capacity to its portfolio, and it did have a significant increase in recurring EBITDA of around 100%. That's very nice to see Cemig SIM's growth and the addition of new operations that will be bringing more energy to our portfolio.

And Gasmig this quarter also posted this effect. As clients migrate to the free market, this margin is reduced, and that is the main effect that we see in Gasmig. We will be seeing that happening over time because there is a migration of clients to the free market.

And now we end the presentation, very proudly honoring our electricians. They are the heart of Cemig. We do exist because of them. They represent us, and they were the winners of the Rodeo champion team in Costa Rica. We went there for the competition. We did compete, we were the winners and we did not have any safety failure.

And this is the main message. We want to be efficient, we want to provide the best services to our clients, but we also want to deliver service in a safe way. So a special congratulations to our champions because they move Cemig's energy.

So thank you all very much. And now we will open the floor for the Q&A session.

[Operator Instructions] Our first question is from Andre Sampaio, sell-side from Santander Bank.

I'm going to read his question. Andre's question is, I would like to understand how the discussion on the plant's renewal is going? I will turn that question to Marco da Camino Lopez.

Hello, Andre. Thank you very much for your question. And this discussion about the concessions renewal, Sa Carvalho, Emborcacao and Nova Ponte is going well. We have great contact and interaction with the Ministry of Energy and ANEEL, and we expect to renew these constructions in the next few months before they are due.

Okay. Still a question to Marco Soligo. So the question is for Marco and Marcus Vinicius. How can we reduce hydrological risk with alternative energy so that we can address these efficiencies?

Good afternoon. Thank you very much for your question. Well, to reduce hydrological risks, if we diversify our portfolio, we are able to avoid the dependency of a single generation. So our portfolio is already designed like that. We have our hydrological plants. But also, we have other wind and solar components. So we do have the GSF impact. But we believe that this is at a lower proportion rather than if we have everything concentrated on HPPs.

The other way of managing that is really to hire ahead of time, and we are paying attention to that. There was a reduction of GSF in the beginning of the year. But the second half of the year that would concern us and GSF could be at a lower level, but we already have an adequate reserve for that to avoid significant impacts over the year.

Thank you very much, Marcus Vinicius. I have two questions to our CFO and IR Officer, Andrea Almeida. The first question is, what can we expect from the next tariff review in 2028? And the second question is related to the increase of the debt vis-a-vis the investments, considering that we have 2 digit interest rates?

Well, talking about the tariff review, obviously, we are making the most affecting investments according to our plans in the distributing company. And we are sure that these investments will be well acknowledged in our tariff review. And of course, and we will know that in the future, but we take into consideration the increase of the asset base discount, the depreciation, and we will see the impact of the rebuilding of the EBITDA based on what we will see in the 5 years. Maybe we will have BRL 22 billion.

So considering these investments, we will have a rebuilding of the base. We reduce depreciation, and then we will get to a variation that's going to vary the level of the EBITDA in 2028. We are very optimistic about the recognition of this investment because we are very cautious in our investments.

Now -- and thank you for your questions. I forgot to thank you. Now moving to the other question on the leverage. Cemig finds itself at a very healthy leverage stage. And we do believe that over the investment program, leverage tends to grow so that we can carry out the investment program of BRL 44 billion in the next 5 years. Leverage tends to increase, to grow up to 2028 when it's going to come down, and of course, with the tariff review of the distributing company.

So always considering very healthy levels. And so much so that we got another AAA. So now we have 2 AAA ratings by Fitch and Moody's, proving that Cemig's credit quality is very positive.

So yes, we have high interest rates right now in the country, but we do have a return on our investments that are higher than -- and that's why we are focusing investments, especially in the regulated sectors of distribution and transmission. And yes, we do believe that these investments generate value for shareholders, and this leverage is at a level that is very comfortable for the company.

Thank you, Andrea. Our next questions are for Marcus Vinicius. First, from Ricardo Bello from Safra. He would like to understand which are the possible impacts with the change of the risk parameters of [ CFR ] in the price curve. Is that already impacting you at the trading level?

Thank you for your question. We are following up this discussion. We did have a public hearing, and the SMA is going to discuss the change of these parameters for next year. There is an initial assessment of maintaining them. But we have seen that in the public hearing, a lot of contributions arose considering a possibility to reduce the levels of [ CFR ]. Considering that we already have a more controlled situation and simulations show that it is possible to have a risk level, the right protection at a lower price, so we would not be so risk averse.

So if that changes, of course, we are going to have prices impact, and the prices could be lower. And that would be beneficial for our position because we still have open positions. We have long positions for '27, '28, which are the closure years and the ones that will be more affected in the spot price if that happens. And we are observing this movement as might be interesting for us to start closing these positions.

Thank you, Marcus. Next question is for you again from [ Rafael Cohiya ]. He would like to understand, he wants us to talk more about the strategy of the company's trading branch. And considering that for 2026, we have a challenging GSF, and what are going to be the impact in the market?

Thank you. 2026 is a challenging year for us. And we did discuss that in our Cemig Day because we did have a development of our margins in [ '26 ] that would be the lower margin of our history. And it's going to recover in the future. But in 2026, because of the history of prices in the market, we contract ahead of time. And we know that we had a decrease in the contracts and the contracts had a reduced margin. And in addition to that, we have short-term elements that could reduce results. So difference in submarket prices that are high in the beginning of the year, we expect them to drop for the rest of the year, but that's an impact, also reduction in some contracts.

So there are situations, factors that could turn this year into a more challenging one. But our vision is that in the future, these impacts will come down because of the systemic progress. And our margin, because of the prices of the market, it also is going to evolve. So the hydrological risk, once again, we had in the first quarter, a realization that was lower than the expectation.

So the challenging situation usually comes in the second quarter. We believe that's going to happen according to what we are planning in a way that in the second half of the year, that's not going to be an impact as we had in the first quarter.

Thank you, Marcus. Another question now coming from Joao Fagundes from Banco Bradesco. Can you tell us how is the seasonal profile of our plants, if it's like MREs? And what is our discussion in the risk parameters? You already talked about this, right?

Well, our seasonality is very close to MRE. We did have smallest difference in January. Maybe we suffered this effect a little bit more because it's compensated in the rest of the year, but it is very close.

And about [ CFR ], as I mentioned, there is a perception that you can see because of the contributions from the public hearing. And we see that there is room for reduction. We had 45 contributions, and 2/3 of them were force of our parameters that were not averse or less averse to risk. So we might have a review, and by having a review, we will see this beneficial effect to close the positions, as I mentioned.

Thank you, Marcus Vinicius. And we thank you all very much for your participation. The IR superintendents are available for any other questions you might have.

So we end the videoconference for the earnings of the first quarter of 2026 for Cemig. Have a nice afternoon.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

Good morning, everyone, and thank you for waiting. I'm Carolina Senna, Cemig's Investor Relations Superintendent. Welcome to Cemig's Fourth Quarter 2025 Earnings Video Conference Call. We inform you that this video conference is being recorded and will be available on the company's IR website at ri.cemig.com.br, where you also find the company's presentation. [Operator Instructions]

We now start Cemig's video conference with Reynaldo Passanezi Filho, our CEO; Andrea Marques de Almeida, CFO and IR Officer; Luis Claudio Correa Villani, Chief Information Officer; Marco da Camino Ancona Lopez Soligo, Chief Generation & Transmission Officer; Marney Tadeu Antunes, Chief Distribution Officer; Sergio Lopes Cabral, Chief Trading Officer; Sergio Pessoa de Paula Castro, Chief Legal Officer; Marcos Montes Cordeiro, Institutional Officer; Carlos Ivan Camargo de Colon, Gasmig CEO; Iuri Araujo de Mendonca, Cemig SIM CEO.

And for the initial remarks, I'll turn the floor to our CEO, Reynaldo Passanezi Filho.

Good morning, everyone. Welcome to our fourth quarter video conference call. Also talking about the results for 2025. We may turn to the highlights of the presentation. I would like to go over the main figures. They show the recurrence of very positive results of Cemig in this full transformation process, which has allowed a cash generation that is very significant to face a record investment program. And this is what we see in these two first topics.

Recurring EBITDA of BRL 7.3 billion, very consistent with the different sectors with very consistent results in all of the sectors. And this amount goes up to BRL 8.3 billion when we include the nonrecurring ones, and that is what allows us to finance this record investment program for Cemig. Over the year, we had BRL 6.6 billion, probably one of the most successful investments in Cemig's history. And this is a major transformation when we compare to the past. Some years ago, Cemig was investing less than BRL 1 billion a year. Now we are investing BRL 6.6 billion. And as all of you know, basically, we're investing in regulated sector with warranted profitability.

We have the works that are guaranteeing our profitability. Some of them already showing the results and all the other ones, which we will see in the tariff review times, but they are already here. You can see them as accumulated results because we already have almost BRL 10 billion accumulated in the distribution area, for instance, which are not yet open or posted on this value because they will show in the next tariff review. And it's exactly this combination of cash generation that is very consistent with investments that will generate revenue in regulated sectors that are very stable that allow us to have this result.

We are very happy to see our credit quality. Moody's just raised Cemig's rating to AAA in September. This is a huge transformation. We have increased and grown almost 7 notches in less than 3 years. This is a historical result. Very few companies have this type of speeder credit rating transformation. So now we have a AAA from Moody's as we already have that kind of rating from other companies. Also relevant, an important topic for this quarter was the solution of the post-employment liability regarding our retirees, we had a relevant topic regarding the liabilities of the company, which was the funding of the healthcare plan of retirees and pension holders. Cemig had a responsibility on part of that funding, we were able to come to an agreement with the union. This agreement was approved by the labor regional court, and we have a contribution here.

We will have 6 installments that will total [ BRL 1.25 billion ]. We will have 2 installments this year and then 2 installments every year for the next years until the end of the process. And that changes the contribution of Cemig in the funding of the healthcare plan, and it turns to a financial debt. But that's important because we no longer have an actuarial risk. Now we have a financial debt and that's going to support the transition of the retirees to make sure that, and that's crucial for us to guarantee that they have a healthcare plan.

And that also as part of our results. And you know that we have a policy of sharing our 50% of our net profit, so we paid in dividends and [ IOE ] of BRL 3.5 billion. So this is a public policy. It's in our bylaws, the distribution of 50% of our net profit. That shows that our dividend yield is double because 50% is being reinvested. So when we look at other companies that distribute 100%, we see how much this is a significant result. The company is a good company for dividend payments. And more than that, it reinvest 50% of that result to generate value. And we see that value generation because our capital cost is much lower than the WACC of the regulated sectors, where we are making a larger part of our investments.

And the last topic that we have here is also something very important to us. We have some concessions that were due, and we were able to extend these concessions. That's very positive. We have a very clear objective to extend all our concessions, and we were able to extend Irape, Queimado, and Pai Joaquim in an auction that we had also in 2025. And the Trindade chamber, we participated in the auction, and we were awarded these 3 concessions. I would say that these are the main highlights.

We are very happy once again to have these results, they do show Cemig's strength and resilience and the way we prepare ourselves to the future, not only the resilience of the results, but especially building the future, and I stress this. We already have BRL 10 billion in investments for distribution after 2023. And we are moving on in this process. This is a record process for investments and distribution. And we have our distribution officer by me here because these are cautious investments. In fact, they are supporting Minas Gerais development. We have new loads coming in. There is an improvement in the quality of service. So we feel fine about quality of these investments and its remuneration, and by the time we have our tariff review.

So these are my initial remarks. We will be open for your questions later. But now I will turn the floor to Andrea. And once again, I would like to thank you all for being here with us in this video conference.

Good morning, everyone. It's a pleasure to be here, bringing to you the results of another year that ends sustainable results and results that make us very proud to be delivering. We are delivering not only figures, but also what we are delivering to society, to our clients, our stakeholders, these are very nice results. So moving on after what Reynaldo already mentioned, in terms of the main highlights. Here, we have a snapshot of the BRL 6.6 billion of investments that were made in 2025. Of course, our flagship here is distribution, as Reynaldo mentioned, and within this whole framework of investments that we're making, we had 23 new substations over 12,000 kilometers in low and medium voltage networks, and that, of course, will bring the energy to our clients and the capacity of the state to grow after that.

And for generation, also mentioned by Reynaldo, we had a GSF auction, which involved around BRL 199 million, and we had a delta and this amount that reaches BRL 411 million that was invested in expansion and maintenance. In transmission, our main investment is in reinforcements and improvements. And last year, we invested BRL 410 million, that's a very relevant amount, I believe, Minas Gerais is at the heart of Brazil. So it has a huge opportunity in this area. Therefore, we also show that we were able to add an allowed annual revenue in 2025.

For Gasmig, we had the Midwest project, BRL 217 million being invested in the project; and Cemig SIM, we had BRL 361 million with 19 new solar plants and 68-megawatt installed capacity. And I also think it's very important to show you the development and distribution. We show how much CapEx regarding our regulatory depreciation has grown. So it's good to see this number 4. This is a very relevant figure. It's a highlight, Cemig as well.

Now going over consolidated results year-on-year. comparing to 2024, we had a recurring EBITDA of BRL 7.3 billion, as Reynaldo mentioned, and a full EBITDA of BRL 8.3 billion. And the main difference between the 2 is really the effect of the adjustment in the post-employment liabilities. And the variations in these years, the main effect here that represent this drop in 4% were mainly GSF, because we had to address the hydrological risk and the generating company. We purchased energy at higher spot prices. We are seeing a scenario of higher prices and we also had in the trading company, the main effect year-on-year, which was the difference in prices among submarkets, that was negative BRL 234 million.

Now turning to the recurring net profit of [ 4.2 ] and the nonrecurring of [ 4.9 ], once again, that is the main difference here of the adjustment of post-employee and also the impact of the net profit in addition to the ones that we already mentioned. Also, we are taking that to finance our investments, therefore that generates higher financial expenses. So we have higher leverage with higher financial expenses in the year when that compares to the prior year. So looking at the nonrecurring effects, you see that we had effects last year that were very relevant. We already talked about those over the year. And the main effect now for '25 was a very positive one, and we will go over it in details.

So as Reynaldo mentioned, this was an intense negotiation, but it allowed us to bring a sustainable healthcare plan to our pension holders, especially thinking about the ones that have lower income. And that is important for the company because it allows us to have a financial balance. If we look at the expenses that we posted in the results in 2024 and 2025 regarding the post-employment whether for pension plan or healthcare plan the amounts were very relevant.

So now starting in 2026, we expect to no longer have this impact of BRL 300 million that we had last year regarding the healthcare plan. This is the impact that we expect to see from now on in addition to the impact that we had in the year, which was BRL 1.19 billion in the EBITDA and in the net profit around BRL 800 million, also with a positive effect in our net profit. As Reynaldo mentioned, we now have to contribute to this new healthcare plan, a compensation that's an obligation of BRL 1.28 billion to be paid in 6 installments.

Now turning to our OpEx focused on Cemig D. We see 2 larger effects that are from headcount and outsourced services. For headcount, we are going to go into the details further on, but we have been adding new personnel in bases that we consider important for Cemig Agro to be closer to our rural clients who are agribusiness clients, so that we can deliver better services to them. So we do have this responsibility, and we have to improve the service. This was very important. And the item of outsourced services, we have all the work that the distributing company does of cleaning of power line pathways and pruning trees and these are services that will allow us to have a better quality delivery to our clients. So this is -- these are the main impacts here.

Now turning to the right of the chart. We know that we have a robust investment plan, which has added kilometers of network and substations to provide this capacity to our clients. Now comparing this performance of OpEx against the assets that we are adding to our portfolio, you can see that these percentages are much lower. Therefore, we should say that when we increase the assets base, we have to have a service associated to that to keep delivering the deserved quality to our clients.

In terms of operational efficiency of Cemig D, we are abiding by all indicators. So another year that we deliver indicators as expected by the regulating agents, whether it is in total losses, credit losses that are expected that have reduced year-on-year. Also those represent in 2025, 0.63% of the revenue from energy supply, that's a very low figure, very good result. For collection, also a strong work by Cemig trying to bring in this collection to the digital channels, which are the most efficient ones in terms of cost and also they are easier for our clients, and we have been able to increase collection by these channels over time. In addition to that, our ARFA indicator, the receivables collection index shows that our delinquency is very low, and it's now at 99.51%.

This is some of the results of all the services that we mentioned that we are looking for. We had higher OpEx, but it's there to deliver a better quality to our clients. And then we can bring to you the best DEC of history, the best average outage duration per consumer unit that's 8.97, that's a reduction of 29 minutes compared to the prior year. And the perceived DEC, it was even a higher reduction of 1 hour and 50 minutes. That's very important for us at Cemig and we are very proud of it.

So how are we financing our investment program? In addition to the operating cash generation in the company, we also have outsourced our third-party financing, and we are working to increase the average tenure of this debt so that it can be extended. We have 5 years between the investment and revenue and the tariff review for the distribution company. So it's a long period of time, of course, we only see that posted back and the tariff review. So we have to comply with it, and we are able to reach 6.9 years of average tenure by the last issuances that we had in the market, which were of 9.3 million of debentures. All of them priced under the sovereign risk, which is something else that makes us very proud.

We are able and despite of high interest rates and all of us know that we can price our operations lower than the sovereign risk. And of course, with the investment plan and with the leverage to support this plan, we reached leverage level of 2.3, as Reynaldo mentioned, part of the revenue will only be posted or recognized in 2028. By the time we have the tariff review, part of the investment that already happened.

Now looking at our debt index. We had 87% of the CDI of the average cost and we have a distribution of our debt between IPCA and CDI of 59% and 41%. Now balancing out all of the issues here, and this is the company's responsibility. Of course, we are also delivering great shareholder return. And we got to a dividend yield of 14.9%, BRL 3.5 billion, [ BRL 835 million ], our profit reserve to be unrealized from past periods, we announced part of this amount in still last year, and we paid those in 2025. And part of that will come now to be paid to our shareholders in the next shareholders meeting. And also Cemig has delivered a total shareholder return of 17.5% to our investors, also a level very compatible with our market peers.

Now let's focus on the deliveries of the quarter. Recurring EBITDA of BRL 1.8 billion and equivalent EBITDA with nonrecurring items of BRL 2.9 billion. And we already mentioned the healthcare plan is the main effect. We issued in the quarter BRL 4.3 billion in debentures, this was a quarter in which we were able to bring together all the units to the same agreement for the healthcare plan. We had an elimination of ownership crossover at Cemig companies where we had a smaller stakes. So now we have 100% of our own equity interest at [ Cemig's Inc ] and we added 37 megawatts peak in the quarter. And also, we had an impact in generation. We had an increase in energy purchase due to hydrological risk. We had to manage that because the hydrological risk was lower than the prior year. Therefore, we had to purchase energy at higher prices.

Now talking about the results I already mentioned the recurring EBITDA variation in the quarter of 6.5% was mainly due to GSF effect that measures one quarter against the other 0.8 against 0.67. And also, you see that the adjustment of the post-employee liabilities. Now -- sorry, about distribution that had a positive impact. We had a Parcel B in May that added a higher contribution margin in the distribution company. And to the negative side, a reduction of 1.4% in the market, we already talked about that because some of the clients migrated to the base now recurring net profit similar effects. And once again, we have some of the effects of the higher financial expenses on net profit and also higher depreciation because of investments that we are making over time.

Now here, we show GSF as I mentioned. This is the difference between the difference of 2025 GSF compared to 2024 GSF. Effectively, we worked at lower GSF rates and we had to purchase to manage this hydrological risk at much higher prices. These are the prices that we have seen over 2025 ending December at BRL 265 per megawatt. Once again, here and consolidated operating costs and expenses, we had a similar effect that we already mentioned. In the year for personnel, we added to what we call our Cemig Agro program, 228 new electricians. These are people that will be there. They will be able to take actions quicker in places where needed and places that are further away, we are in a large state with lots of towns is scattered in the state. So we need to have people close to clients to be able to cater them effectively and efficiently.

For outsourced services, we do have intensified the preventive maintenance. We believe this is the better one than the corrective maintenance, of course. So we are working on cleaning of power line pathways and pruning and because of this expense cost also, we have effects that we already see such as in the financial compensations. We were able to reduce quarter-on-quarter 22%, and this is -- it does not stop there, this is an intense work we are doing and the financial compensation is something that we still need to work on in the future.

Now, bringing to you how our EBITDA turns into cash and the cash pays the bills, right? So we start at the EBITDA of BRL 8.3 billion. We have the noncash effect, the post-employment obviously, so we get to an EBITDA of BRL 7.2 billion. We had the CVA effect, the value of variation account prices that are higher than expected. We know that CVA we can recover next year, but it is impacting the cash, our cash in the current year. We have dividends received from companies of the group, such as Taesa. And also we had an impact of the working capital of around BRL 1 billion, reaching an operating cash flow of BRL 5.7 billion.

And then the other effects, taxes, interest, investments, net financing from issuance BRL 9.3 billion issued and with the repayment of the debt, BRL 6.5 billion. Cash before IOE and dividend payments, BRL 4.3 billion. And with the payment of IOE and dividends, we have the cash generated of BRL 270 million, which -- and then we have the cash availability for 2024 and 2025 in the chart to our right.

I think we talked a lot already, so I'll go quickly here. At Cemig D, as I mentioned, we had effect of Parcel B, an improvement in the contribution margin in the quarter, BRL 138 million. And also, we had a reduction of 1.4% in the market, including DG. And in the net profit, of course, this investment program requires a higher debt to be financed and then we have financial expenses that are higher. Here, we have a snapshot of the market. Whether this is the transported energy market that we mentioned that we have lost some clients to the basic network or total energy. This is the performance.

And when we add the drop of the market with the DG come to a reduction of 1.4%. And that's basically it. For Cemig GT, once again, we have the effect from the management of hydrological risk of BRL 81 million reduction here. That's the main effect quarter-on-quarter. For Gasmig, the EBITDA is in line and the net profit was affected by the increase of interest on equity with a higher limit of long-term interest rates. And of course, we are using this limit to have a higher net profit. And we already mentioned the program, the Midwest gas pipeline project and the opening of this Midwest gas pipeline marks the arrival of pipe gas in the cities, such as Betim, Itauna, Divinopolis. This was a very important event in the quarter as well.

Well, here, we have our awards for sustainability. Cemig is very proud of those results because we always have a lot of awards. For the Dow Jones Sustainability Index, this was the 25th consecutive year that we got this award, and maybe the only a company that has been at Dow Jones for such a long time. Also, the Sustainability Yearbook 2025, we are there as well. CDP we are in the A list and to reach the A list, we met 10 of the 16 criteria. Most of these criteria analyze our real plans to come to Net Zero for 2040. We also have a 5.4 million renewable energy certificates issued in 2025.

We are also in B3 sustainability index for B3. In sustainalytics, we have the risk of our economic value arising from ESG factor, and we had a score of low risk. This range goes from 10 to 20. And here, we have other awards, the market recognition by Cemig's work, 2 recognitions from companies that like best company in the year, one coming from Veja Negocios, another one of Best Company in the sector. CFO and CEO were also recognized by Elite InfoMoney 2025 Magazine. We were the fifth most innovative company in the electric sector, that's something that is really valuable to us. And it's very important award. We are very happy about this award.

Our financial team, we are very proud of our financial team because it got an award for best financial team in the infrastructure and energy sector in Brazil by FILASA. And also, we had the ANEFAC Transparency Trophy. And a second ANEFAC ESG Award Transformative Stage.

So I end the presentation here. And now I open the session for the Q&A session. I turn the floor to Carolina, who will help us there.

[Operator Instructions] Our first question is from [ Banco Safra, Ricardo Bello ].

The question was about the trading result in the fourth quarter, which was positive in BRL 97 million. Can you revert or reduce the short positions that you had? And what is the gain? What is the current perspective of your energy balance?

Good morning. This is [ Ricardo Bello ].

Thank you for your question. I think the results show that. We were very cautious when we closed the positions this year. We are still working on it. 2026, the positions are already closed, and we are now aiming to close 2027 as well. We are analyzing that very cautiously. This was a result of something that we just showed in this quarter, our balance sheet. But by 2027, still has an open position that we are closing also another position in 2028. Starting in 2029, we no longer have any open positions when we see future prices going up. This is a good opportunity for us to sell this energy starting in 2029 as we were planning to do.

Our next question is from Luiz Eduardo. What is the ideal level of leverage for the company? And what is the annual percentage of interest and the debt?

I don't think we have a target number, but we know that our leverage is going to increase over this investment cycle. We are fine at 2.3 now. We believe that it will grow over the cycle up to 2028 when we have the tariff review of D. So -- and the contract covenants that we have that are read limit the ratio to 3.5, I believe that within this range, we will be very well placed when Moody's evaluates Cemig and gives us a AAA. It is evaluating us by -- through the cycle. So in fact, they know about the investment program. They know about the increase in leverage. And so we are in a very good place. We believe that we are going to be within the expected AAA rating. And of course, increasing over 2.3 over the cycle and reducing again this leverage in 2028 when we, in fact, receive the impact of the tariff D in the tariff review and the process that we are doing throughout this period in terms of average rate for interest.

And we mentioned here, we have 13% of nominal cost, and that corresponds to 87% of the CDI. So this is an average cost that is very good for utilities company. And once again, remember, that we have been pricing all our debts that are debentures in the local market lower than the sovereign risk.

Andrea, just adding to your answer, I think it's important to mention how much this debt is generating value to the company because we have an average that is financed at 87% of the CDI with an investment which is more than 90% regulated. And you know what is the amount of the debt and the calculation of the respective WACCs. We see that this debt is much lower than what we see in the WACC calculation, therefore, it is generating value to the company.

Our next question is about if there are any plans to pay bonus to shareholders in 2026? I'll turn the floor to Andrea.

Thank you for your question. Actually, that happens when our profit reserve goes higher than the capital stock. So we'll analyze this over the year to see if it's going to happen. But of course, you can follow Cemig's figures, and as soon as we have anything new on that topic, we will let you know.

Thank you all very much for your questions. And since there are no other questions, we thank you very much for participating in this call. And we would like to say that the Investor Relations superintendence is available to provide you additional comments, should you need them. Thank you all very much, and have a nice day.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

Good afternoon, everyone. I am Carolina Sena, Cemig's IR Superintendent. Welcome to Cemig's Third Quarter 2025 Earnings Video Conference Call. This video conference is being recorded, and it will be available on the company's IR website at ri.cemig.com.br, where you also find the full package on our earnings call. [Operator Instructions]

We will now start Cemig's video conference call with Reynaldo Passanezi Filho, CEO; Andrea Marques de Almeida, CFO and IR Officer; Luis Cláudio Correa Villani, Chief Information Officer; Sergio Lopes Cabral, Chief Commercialization Officer; Sérgio Pessoa de Paula Castro, Chief Legal Officer; Carlos Camargo de Colón, Gasmig's CEO; Iuri Araújo de Mendonça, Cemig SIM's CEO.

For their initial remarks, I turn the floor over to our CEO, Reynaldo Passanezi Filho.

Good afternoon, everyone. Welcome to our earnings call for the third quarter. It's always an opportunity and a pleasure to be able to bring to you our results and our efforts in another quarter. This is a quarter in which we have more difficult news. Of course, I would like to highlight some important topics that show the strength and the resilience of Cemig's earnings.

About specific news on the quarter, we had distribution results that were affected by large clients that left the network. They migrated to the basic network about trading. We tried to decrease some positions. Also, that involves the submarket prices that have affected the results. What's important, and you know that when we look at our net position, it is very favorable in the scenario that we have for pricing today. The same thing happened with generation because of the difference in the GSF and the need to offset that with the spot price.

This is what I would like to highlight. And despite of these topics, we moved on with a recurring EBITDA, proving the company's resilience, and we have confirmed the AAA rating by Moody's. We have 2 agencies now guaranteeing us a AAA rating, showing our resilience capacity to any type of scenario. We also had an award by a magazine called Veja

Negócios, as the best energy company in Brazil in the top 30 award.

And we also had the approval of our health care plan for retired employees. So we finalized a collective agreement with the union and that allows us to look for a positive structural solution that will preserve a positive transition to all of us. Therefore, they can keep their health care plan and also we'll be able to guarantee the company's sustainability.

And the final topic, and Andrea is going to go over the details, which is our investment program. We are, once again, making the largest investment program in the company. For this quarter, we have BRL 4.7 billion, a significant increase when compared to last year. I believe we have a very positive message here, and we are maintaining our investment plan. And that means very positive results for the tariff review situation when that comes. So here, we have BRL 3.6 billion in distribution by itself. If we multiply that by the WACC, we know that the results bring additional revenue of a little over BRL 500 million just for that 9 months.

So these are very cautious investments in regulated areas that when they get mature and the agency recognizes that we are going to have very positive results for the company. This is what allows us to have resilience today, and this is what allows us to have very positive results in the future, whether by these investments or by a very favorable position in the trading business in the near future.

These are my initial remarks. Obviously, we are here to take your questions after the company's presentation. I'll turn the floor to Andrea, but I would like to stress the strength of this company and that we are very confident that we are going to move on with this investment plan and maintain the company's debt levels and the covenants and therefore, to keep on investing, keep on generating value. And this is going to get more mature according to the regulations and tariff regulations as expected. Thank you very much.

Good afternoon, everyone. It's also a pleasure to be here with all of you today, going over our third quarter earnings.

Now moving on, talking about our investments, as Reynaldo mentioned, we invested in the 9 months of 2025, BRL 4.7 billion. And this is how they break down BRL 3.6 billion in distribution, focused obviously in substations. This is a milestone and we have some pictures to show you the substations that we had in the quarter, but also 5,349 kilometers of low and medium voltage networks, which are very important to bring good service to Minas Gerais.

For generation, we also mentioned our participation in the GSF credit auction with BRL 199 million. That's very nice. It guaranteed the extension of our concession in some of our plants. But also we had investments of BRL 149 million in expansion and maintenance.

For transmission, we have our Verona project, around BRL 30 million, and we are still investing in reinforcements and improvements, and we are going to mention some of those and how the allowed annual revenue is performing in transmission.

For Gasmig, the centralized project is the most representative one, around BRL 180 million being invested in the project. And for Cemig SIM, the delivery of new photovoltaic plants and 31 megawatts of installed capacity.

Moving forward, we have the pictures of the 5 new substations, the ones this quarter, Andrelândia, Coronel Xavier Chaves, João Pinheiro, São Tiago, Fronteira. These are our highlights of new substations for distribution.

Now turning to transmission. We see where in our operation we had improvements: Taquaril, Três Marias, São Simão, Itajubá, Volta Grande, Lafaiete. And we were able to add over the year, BRL 32 million of allowed annual revenue in our transmission business. And of course, this brings great results as well.

Moving over to the figures. As Reynaldo mentioned, we have BRL 1.5 billion of EBITDA, and we see a drop in our EBITDA in around 16.3% when we analyze the recurring EBITDA, and I will talk about the recurring numbers, and then I'll talk about the nonrecurring events of last year, which were significant. We can talk about them as well.

In generation, we already mentioned we had the effects of a lower GSF. We had to buy energy to cover for the GSF. So we had an impact of BRL 54 million. In the trading business, there was an impact here. And we already had the reduction in margin in the trading comparing '24 to '25. And we ended positions. We closed positions and of course, came from our exposure and other positions that were also open. So the closing of these positions and the purchasing of energy and the prices -- the spot prices that we have seen ended up having this impact of BRL 136 million for distribution.

In '24, we had a change in the methodology, which was a reversal of our ADA and that reverted how we provisioned our ADA. We didn't have that in 2025. Therefore, there is a negative delta effect in distribution. And you will see that the market also has reduced it. And as Reynaldo mentioned, some clients left and went to the basic network. Therefore, this impacted distribution.

Now turning to our net profit, the major investment that we are making has a greater depreciation impact than the funding, the increase of the interest rates, and of course, the increase of leverage of the debt also affects our net profit, the recurring net profit, and we realized that there was this drop of around 30.2%. For nonrecurring effects of last year, just let me remind you, they were very relevant. We had BRL 1.6 billion of the disposal of Aliança last year. Of course, this is not happening this year, and the tariff review for the transmission business of BRL 1.5 billion. These did not show in 2025. That's why we have also this relevant delta here.

Let's move on. Here, zooming in, in GSF, when we compare GSF of 2024, we see the performance of July and September. GSF for 2024 going from 0.8 to up to 0.7. So we did have to purchase to deal with the hydrological risk and also the level of the energy price that we see this year. Of course, higher levels than what we have seen last year. Just September of last year, we had higher prices than this year, as you can check in the charts. So this is the impact.

Now operating costs and expenses. We are growing below the inflation rate. And outsourced services, which is what draws our attention, we have an increase in areas where distribution has to invest more efforts to guarantee the improvement of services, whether maintaining, installations or in technology, and we still are working on the improvement with smart meters. We have to invest in that. And we have to fund technology. We have to prune trees and also clear the pathway. So that's where we have a higher increase in other expenses. Also, we had the sale of a plot.

For personnel, we see a performance -- a good performance here. But here, we have in-sourcing of employees. We are bringing in our own teams so that we can cater to our clients faster in specific regions. And we really want to be more efficient in our service in regions. And we know that Minas Gerais is a largest state. So we want to be quicker serving further away areas. So we have an increase here in personnel in our headcount.

Moving on, in line with our capital structure, we, yes, need the debt to fund our investments, but our leverage is at very safe levels. We are at 1.76 or net debt over recurring EBITDA. That's why we have our best rating in history. As Reynaldo mentioned, two AAAs and one AA+, and we are structuring our debt in a way to increase the average tenure. We reached 5.7 with the average term -- as average term. And the cost performance, we see the fact of the high cost of the interest rates, which affect all of us in the market and as well as Cemig, of course.

Now for our cash flow. This is how we have been financing our activity, our investments. We start with cash. This is for 9 months, okay? So we start with cash of 2024 at BRL 2.3 billion. We have cash from operations of BRL 3.4 billion. We have the debentures issuance in May of BRL 5.1 billion, the debentures payments, of course, obviously. These are prior debentures of BRL 2.4 billion. Dividends and IOC, BRL 1.7 billion. Our activities for investments of BRL 4.5 billion. Earmarked funds here, BRL 187 million. We have to have this amount aside. So we come to our final cash of BRL 2.3 billion.

For Cemig D, everything is more or less explained already. But effectively, we show a drop in EBITDA of 4.7%, especially because of the market reduction, whether it is by economic activity, once it's not that positive and also the temperature that was mild and the market dropped. Once again, the client that has migrated in the second quarter to the basic network. And of course, now in the third quarter, we see the full impact of this migration.

In addition to that, we have the reversal of the constitution that I said of the ADA, as I mentioned before. And of course, in the net profit for Cemig D, we see the effect of our fundings and also the interest rates affecting that result.

Talking a little bit now about the energy market. We had a drop of 4.4%, and we see the full effect in all the different markets and our distributing company coming from the rural, commercial, industrial, all the effects coming from all the markets. And in fact, here, we see this drop being caused by this client that has migrated for the basic network.

Our operating indicators show that our collection is still very strong, focusing in the digital channels and Pix, our payment method is the cheapest. And now we are going to have the auto Pix as well. And we will be able to have campaigns so that people choose this payment mode, which helps us all and also reduces our costs. And this is growing as a good option of payment.

And now our ARFA, the receivables collection index is at good, stable levels, and our regulatory OpEx and EBITDA show that we are within the regulatory standards. In terms of regulatory losses, we are also within the standards. There was a change in the criteria which already happened. We are now are integrating the effects of micro and mini generations that are distributed. So we are continuing to work. We have always keep working on losses. We have to install the armored meeting panels. We have to install the smart meters. And all the actions that we have to keep on taking so that this indicator is within the regulatory limits.

For Cemig GT, once again, we talked about it. GSF was the main impact. We had to purchase energy to tackle the hydrological risk and the recurring net profit. Here, you can see the results as well. And Cemig GT was the one that had the main nonrecurring effects from 2024. So the major impacts are there represented last year. Therefore, we had a higher EBITDA in 2024 effects that are not replicated in 2025.

And Gasmig, that also had impact for EBITDA reduction because there was a drop of 6% in the market and also the clients that migrated to the free market. This, once again, effect on Gasmig.

And on this page, we have Cemig's recognitions. Reynaldo already mentioned, and that we are very proud to be recognized as the best energy company in Brazil by Veja Negócios. And there are other recognitions. We are also recognized as the best financial team in the infrastructure and energy sector by FILASA. We also got the transparency award from ANEFAC. We have always room to improve, but it's already great to be recognized by the 19th time by ANEFAC. And there is a new one, the ESG award. Cemig has thousands of awards in sustainability. And we are very proud, and it's always great to have another one. So ESG from ANEFAC in this category, Transformative Internship category.

Therefore, I end my presentation, and I turn the floor back to Carol to ask -- to open the Q&A session and take your questions.

[Operator Instructions] Our first question is from Victor Sousa, Genial Investimentos.

Hello, can you hear us?

Yes, we can hear you, Victor. Go ahead.

My question is about Technical Note 53 that changes how you post losses in the distribution sector. I would like to understand if there is a possibility of republishing the level of losses that Cemig had. Now looking backwards here, I would like to understand if this change can end up generating any accounting retroactive effect regarding the application of this technical note if your concerned amount receivables, provisions and other adjustments, or is this just a prospective impact, just an accounting impact?

And another question still on this note. How would have been the level of losses for distribution if this technical note did not exist? So in the same comparison base, what would have been the performance of Cemig losses? Would they have increased, decreased, or they would have been the same? I think this is important to understand for the process of assessing the distributing companies.

Thank you, Vitor, for your question. Denis Mollica, our Strategy, Innovation and Sustainability Officer. Please, Dennis.

Thank you for your question, Vitor. About the method used for calculation of losses. The method, even having it being reviewed, it does not -- it's not applied to past calculations. Even if we were to simulate that in the prior losses and the older losses, we would still be within the limits. So for practical accounting effects, adjustments have done from now on. And as it was said already, we are still within the regulatory losses, both before and after this technical note. So we have major actions to manage and to fight our losses, and they are within the limits with no effects that might affect accounting at all. And of course, yes, we also have here a positive effect on the tariff once we have the recognition of the impacts of the DG in the method of calculating losses.

[Operator Instructions] Our next question is from Luiza Candiota from Banco Itaú.

It is about your trading strategy. Analyzing the changes in the energy balance in this quarter compared to the prior one. I would like to go over the details of the rationale regarding the short exposure when we look at '25, '26 and '28. What could be explaining this change that we see?

Thank you, Luiza. I'll turn the floor to our Chief Trading Officer, Sergio Lopes.

First, thank you for your question. We have been doing a great effort to close our positions. Of course, we have some marginal sales that we are executing with clients that are strategic, but our position is not to open more positions. We want to close, as Andrea has mentioned. For this quarter, we could close positions in these past months. And also, we have the impact of gold that ended up making us go to the market to buy energy, but we are not opening positions. We are rather than that closing them.

There are no further questions. We thank you all very much for your participation. And the superintendents of IR is available to take any other questions you might have. Therefore, we end Cemig's third call -- video conference call. Have a nice afternoon, and thank you very much.

[Audio Gap]

Secretary of Development of the State of Minas Gerais, CEOs and all the other officers, good afternoon. I am Sara Kirchhof, and I will be with you this afternoon for the business meeting. With the CEMIG's top management, we will have strategic discussions, networking and a lot of [indiscernible], the Minas Gerais way. Of course, we start now CEMIG Day, the 30th investor meeting. I would like to ask you please to have your phones on silent mode. And also, we have WiFi available here in this room. Thank you all very much for being here with us, whether you are here in person or audience via Zoom platform. Now to start our agenda, I would like to invite you to watch CEMIG's institutional video.

[Presentation]

When your energy meets ours, life is transformed. That's why CEMIG is working on its greatest investment and history. You may dream, produce and grow, our energy is by your side. It is a pleasure to welcome all of you here today. Our agenda will bring the market the company's main events and key initiatives. At the end of each presentation, we will have the microphone available for questions. If you wish to ask a question, we will have receptionists around the room, and they may bring you the microphone. Also, we would like to say that at the end of today's programming, we will have 1 hour for a Q&A session. Now to open this event, we have the pleasure to bring to the floor CEMIG's Chairman of the Board of Directors, Marcio Luiz Simoes Utsch.

Good afternoon, everyone. Welcome to CEMIG Day, but actually CEMIG's evening, right, because it's starting after lunch. I hope you were not feeling asleep. I'm sure someone will fall asleep. There's no way out. But anyway, I will address you briefly. I have no presentation. I only have some time allowed to talk, but I would like to tell you a little bit about what we have done at CEMIG and how this reflects into CEMIG's future. I can tell you that I love what I do. I am really in love about my work with CEMIG, and it is a great pleasure to me to be able to understand that in a public company, you have a little bit of everything.

You have career employees; you have wonderful public employees and public servants and also people coming from private sector. Also, we have public servants that are kind of hiding as we also have private employees that are kind of hiding. We have to be encouraging them all the time. So I try to think about my life as an arch. The arch is a half a circle. It's the half a circle that I know from the day that I was born until the day that I die, nobody knows what happens before we are born and nobody knows what happens after we die. I don't know anyone that came back to tell us. And no one has ever told us what happened before we were born. I think that goes for everyone.

That's why it is a cycle. It's an arch. It has a defined specific time, and we don't know when it's going to end, although we know that it's going to end. This is for individuals. We have to understand the past, what we have lived and what we are building for the future, how we can add new bricks to the ones that we already have to keep improving and really to program a good landing at the end of this arch. That's going to happen around 80. I am 66. I think I have 14, 15 ahead of time. So let's see what's going to happen after that. But this is life's arch, but this is for individuals. But we also have this arch for the legal entities, for the companies.

But if for individuals who have an unknown but finite duration, for legal companies, we have companies with 100, 200, 300 years of age. And this is what I love about CEMIG. We can develop an arch at CEMIG using all the history since when it was created. We have our past President, JK note when -- he sent a note to create CEMIG. This was the initial part of CEMIG. And I am sure that we can turn CEMIG into an even long-lasting company, a better company, an excellent place to work, an excellent place to live, not only to work because you -- well, not only that you have to die working, you also have to have fun and you have to live, it has to be a nice place to work. It has to be a nice place to live.

So that life moves on. And why am I telling you this? Because when I look back and I see when I started at CEMIG in 2019. And I had a project. Junqueira is here. He started with me at the Board, and we were invited by the governor. He was putting together a new administration. So yes, we had a number of projects, a number of things that needed to be done. All of them have been done, unfortunately not. But a lot of them were done, more of these things were done than the ones that didn't.

So one of the promises that we had in his first campaign and first election in the second term as well was to have a state leaner, faster, quicker, the accounts of the state should be balanced and with investments and so on. And part of this involved CEMIG, still involves CEMIG, which is privatization. This is something very important for us. We do believe that this is not a decision that is on us, but who decides if it's going to privatize and not is the owner that's represented by the state administration, represented by our Secretary here. But this is something that we have to look at, and we have not done it yet. I hope we do have time to fulfill this promise that the governor made.

But anyway, it's important to see that CEMIG is more productive. CEMIG had a valuation of BRL 8.5 million at the time when this governor was elected. CEMIG today, I have not looked at it, but it's around BRL 35 billion, BRL 36 billion. The dividends that we paid is around BRL 15 billion that we have already paid, up to last year was BRL 12.7 billion, approximately BRL 15 billion in dividends this year. So this is a company that is showing in its numbers, a thriving company with ability to grow, but what could hinder this growth?

Then it's easy to talk about the past because everything that I talked about is public, you can check how much the company was worth, how many employees we had, what was the market value there and then that we did have a wall of that with the Eurobonds and millions of dollars. And so we thought that CEMIG was going to go bankrupt when we reached that wall, but it didn't. We were able to overcome that -- well, it was a very high wall, but we were able to overcome it. So if you are the only person in the world, you don't know if it's high, tall or ugly or not. So if you only know how things are, if you compare yourself to somebody else, right? So it's only a matter of comparison.

The comparison allows us to have a reference. So the comparison of this -- of CEMIG was a comparison that would lead us to believe that it was not possible to overcome it, but we did. So what have we done then for that? We have done something that might seem -- something that speakers say, and I'm not a speaker, but we put people in the center, people first and second people as well. And third, also in case you have any questions, go back to the first one. So people. So that's what it has to be. Today, we have a number of people from CEMIG. Most of them are here on the first lines, and they are brilliant. They are referenced in what they do.

They are very proud to work with you and say, look, we are together, we are managing CEMIG. We are very proud to work with them. I'm really passionate about because I do it with a lot of pleasure. This is crucial for me because look at what lies ahead. In 2027, the market will not be regulated. So will CEMIG be the preferred company? When you can choose at your home, who you're going to pay the bill -- the electric bill to. So in the past, you could only purchase a phone line from companies, specific companies. And now you can choose. So nobody chooses the worst. Nobody wants to be Alexander the small. They want to be Alexander the great.

So if you want to be bigger, if you want to be greater, you want to build this company so that the arch of this legal company is really huge and bring us this inspiration to think that we will be the preferred company by clients when they have to do a choice and when they can choose. So today, if you want to have electricity at your place, you have to say yes or no, you cannot choose another company in the capital market. When they can choose, would you like to have electricity at home, so I can choose who I'm purchasing electricity from. So we have to think about that. So people need to think about our company.

They need to have this good memory, good remembrance and a memory of effectiveness and ability. So the first tool is people. Second tool that we have, technology. CEMIG has given -- has taken a leap in technology. We have taken quantum leaps in technology. We have software as management, software as knowledge, cost economy in the operating area, automatic reclosers, substations connected via gas, which is much more modern than the other ones -- older ones and other changes that have been performed in our commercial model.

So with the use of technology and accumulated knowledge, we really were able to take technology leaps that are quantum, and they really make a big difference. We also have to tell what we are. We have to have an efficient marketing so that people can see, look, this company thrives because if I talk about the past and if I don't tell what I do, no one will know what I do. So it's very important that we have a registered brand. The name that has to come to mind, like different names that we know of products. So eggs, you have to say a specific egg brand that you know you like. So this has to be in people's minds.

And this is important also for us to have quality, quality and service, the service that people don't say, the worst thing in the world is to try to cancel a health care plan. So you never are able to cancel it or try to cancel an internet provider, you don't cancel it, you give up, but for CEMIG, I want to cancel it or cancel it right away. It's not good for us, but the guy is going to be happy. Maybe they come back. You want to connect, it's quick. They want to disconnect, it's quick. So we have to provide services that make the population feel safe in talking to us and exposing their problems so that this really can make it happen and really work.

We have also something else that is very important. And it's our financial management. We have a very good and robust balance sheet, a balance sheet that allows CEMIG to make innovations, invest in expansions and network improvements, especially in assets that will then convert into the tariff because this is quality at the end of the day. If you don't invest, and things don't die. No one goes to a funeral of rock, but the rock is there. So we have to have attention to investments because they bring us a competitive advantage and also our ability to look at things and reinvent them. Also in CEMIG, we have other important things for our business, generation.

Now separating generation, transmission and distribution. Generation and transmission, we have a very relevant investments to remunerate transmission results. At generation, we have technology, and we have clean generations, not that we have dirty generations because electricity is clean. This is water. If you have a plant, the water is going through that plant. So we just use the water. So it's clean generation. But we look at CEMIG and we start analyzing why this company could go wrong. There is no way we have Gasmig inside. It's another source of energy, CEMIG is seeing another source of resources. So what could happen? So we have a wonderful staff. We have efficiency.

We have technology. We have distribution. We have already invested a lot in this period of time. At the end, it's going to be BRL 42 million. Is that right? BRL 42 million. BRL 36 million, BRL 36 billion actually in investments. So it's a lot of money to make the company grow and work. So all of our areas have improvements and trainings. We have made an important improvement in bidding process to buy equipment and to -- it's not like give me three estimates and I'll buy the lowest one. No, we have to have a public bidding because this is a public company, but it's a smarter way of doing it. It's smarter than what we used to do in the past because before we did have problems with it.

So these are areas that are extremely relevant and significant. But we have to understand it and Reynaldo is here, he's, our CEO. He's our head of the whole team. And our CEO knows that there are a lot of things to be done. A lot of people have been here, but there is another important part of the path to be taken. We are going to generate more results, more growth. We are going to pay more dividends. The company is going to grow. We are going to improve our multiples, and we will make this company grow. But this is still to be done. So there was an old guy that went to the doctor, and he was kind of older than me.

And he said, "Doctor, I'm wonderful. I'm doing great. I am -- I run 20 kilometers every day, very healthy. I swim; I play soccer. I see my friends. I eat barbecue, and I'm dating a lady of 20 years. And she's pregnant, 20 years. I didn't have any kids." so the doctor said, "Well, funny, I have a brother that loves hunting, he only thinks about hunting, hunting. And that's all he thinks about, one day, he got home so crazy that he wanted to hunt, he got an umbrella, and he went to the forest to hunt. And then he went to the forest, and he used his -- and then he shot the Lion with his umbrella" and he said, "Wait -- oh, wait, what has happened? Did he shoot the Lion? "Yes, yes. So pay attention that there is someone shooting at your Lion."

So CEMIG is a hunter that uses a real gun, not an umbrella. So anyways, just to have in mind that this future, the thriving that we are aiming for CEMIG, that has to be built because if it had already been built, it would be the past. So we have to build it. And everything that is in the future is subject to the market, to growth, to financial matters, to macroeconomic conditions and microeconomic conditions to the macroeconomic environment of the country, micro environment of the country. So a number of circumstances that have to be plotted in your accounts, in your numbers.

We are going to have that much cash. We are going to have this profitability. All that you do, you do this, and you have that in your spreadsheet, but you have to add the intangible. We have a spectacular team, a wonderful very skilled team supported by the government. The secretary is here. We don't have to fight against anyone. We have to pull and to be pushed by the government. We do what has to be done and all of that has a big weight on this spreadsheet. It's not a company that's always fighting. This is a company that is ready to make things happen. It's supported by the controlling shareholder, which is the government.

And we are very glad to be with them because they're really pushing us forward. They make us look forward and they encourage us to be better. And I don't know how you can add that into your spreadsheet. But believe me, we have a great combination, a sophisticated combination of experience and practice and people that are here for a long time, people that are coming in that also know and this whole combination is the best flavor of this Brazilian dish. So my time is up. Just in time. Thank you all very much. Good afternoon.

Thank you very much, Marcio, for being here with us. Now moving forward, I would like to bring to the stage to give us a general overview about CEMIG and its delivery since 2018, company's CEO, Reynaldo Passanezi Filho.

Good afternoon, everyone. Welcome. Welcome to our 30th investors meeting. I always say that it's not very easy to come to the floor after Marcio. He always mentions that enthusiasm, and we are very proud of that. And what we have prepared here has to do with what Marcio just said, which is this whole transformation process of CEMIG. And CEMIG's ability, and this is what we want to show you, CEMIG's ability today to face the challenges. The electric sector is changing. We understand that. We know what was the electric sector in the past. I'm sure it's not going to be the electric sector of the future, but we have the ability to face these new paths that we'll have ahead.

So before I turn to my presentation, I would like to highlight the main topics in terms of the strengths of CEMIG and the ones that I would like to highlight. First, financial soundness. We just were awarded a new rating classification, AAA by Moody's. So we are AAA by Fitch, by Moody's. So it's over 6 notches of changes since 2018. So we had 3.5 EBITDA net debt ratio. So we did not have 100% of protection. And now we are AAA. So this means a financial soundness and ability of cash generation that is unique. Also, the largest investment program in CEMIG's history. This is huge, BRL 59 billion since 2019 up to 2029, an average of almost BRL 6 billion a year.

And we will see in the presentation that in 2018, we were investing less than BRL 1 billion. So think about going from less than BRL 1 billion and going to over BRL 6 billion in investments. This is a huge transformation, and this is generating value. And you're not seeing everything yet. As Marcio said, this is going to show at every 5 years in the tariff reviews. And we were able to do that with financial soundness, which is not usual, right, to have -- grow 5x or 6x investments and to improve 6 notches our net debt EBITDA ratio for that. It's an amazing figure. So this is what I wanted to highlight. First is financial soundness, which I believe is very important.

Second, the execution of this investment plan, which is already generating value, but it's not reflecting in the figures yet. And just like Marcio said, it's important that you know that our real EBITDA is higher than the number that we are bringing to you because it's being still sold and it's going to show really in the tariff reviews. And third, this is preparing ourselves to think about the future, and this is what we are going to tell you and to show you what we think about the future and how we want to be prepared.

Nobody exactly knows how future is going to be, but what matters is how we are going to prepare ourselves for the path that will open with the expected changes in the electric sector and doing that with people, and once again, Marcio said it very well. We have this mix, this combination, which is amazing. We have a technical team that is unique, and we have a lot of people that we brought from outside, and we recycled the team in the company, and we created value with this diversity.

So I would say that for me, these are the key messages. But let me start now mentioning a few topics here. And once again, I'll talk about Marcio. Marcio, never forget something that you said. A strategy there's something great in the strategy, which is the power of saying no, Marcio said that once, and I never forgot. So this is great. This strategy means that it's very easy for me to say no, it starts saying, wise investment in Minas Gerais. That means that if someone brings me investment in Rio Grande do Sul, I will say, no [indiscernible], no.

So I believe this is very important. In the past, we have invested all over Brazil. And today, it's just no. Today, we want to make wise investments and wise because we had a lot of pent-up demand. And when we invest, it's a needed investment because we know that we are catering the market and load for the state's growth. So we invest in the state of Minas Gerais, so that we can better -- to provide a better service to our customers and to maximize results. So -- since this is a needed investment, it's an investment that needs the service for clients. It helps the state development. And at the same time, it maximizes the results because it is a regulated investment, which will bring us profitability.

And that is done, thanks to an efficient and sustainable management, obviously focused in generating results and aiming to meet all the efficient standards, always looking for as much efficiency as possible in using our resources. Here, we have a comparison. I love this because it shows the transformation, which is how we were and what was the transformation process in the company. I will read the slides then. So from 2009 up to 2018, CEMIG never met any of the regulatory standards, whether they were operating expenses or technical and commercial losses.

So during this period of time, you see that it did not meet those standards in over BRL 9 billion, that is expenses over the regulatory expenses, expenses and also losses. And that means that we do not have cash for investments because we had to use cash to cover these expenses also. This is a figure that surprises us a lot of times. It's how much CEMIG decided to invest out of Minas Gerais usually in minority stakeholders. So we have these figures here, we adjusted to inflation. So we invested over BRL 45 billion in Renova, Santo Antonio, Light, Belo Monte, Axxiom, Ativas. And the net amount here was a destruction of economic value of over BRL 16 billion.

This is over. We no longer invest out of Minas Gerais, and we no longer do any minority shareholding investment. When we invest, it's 100% at CEMIG in our competitive advantages. Of course, then in a large investment outside of Minas Gerais, we -- our own market, our backyard was unassisted. Therefore, during this period of time, if we look at investments in distribution and transmission, they were lower than depreciation rate. So this today allows us to invest much more. We are recovering this period when we were non-assisted. So -- and we lost some of concessions here. Sao Simao, Jaguara, Miranda, and Volta Grande plants, almost 50% of CEMIG's total generating capacity.

It was crucial for the company's revenue. We lost that, and now we have to recover it. And now when you look at that, CEMIG's stake in the generation market came down because we lost these concessions. So now what were we able to achieve? We were able to have the company in compliance with all the regulatory standards. This is what allows us to trust in the company in the future. We are meeting all the regulatory standards. We are within the regulatory PMSO in CAIMI as well and also within the losses. We divested from all of these businesses that were using up our cash. Some of them also went bankrupt and had bankruptcy protection.

So we were able to recover these resources because we sold those assets and because -- and of course, we didn't have to invest in these assets anymore because they had problem, and we wouldn't have to invest capital to solve problems in those assets in order for them to continue going on. So I'm very happy also to work at CEMIG, and Marcio, but I'm very proud to work on this investment plan. We have already invested BRL 23 billion. I'll repeat. We leapt BRL 950 million now to BRL 6 billion.

This is an amazing, huge transformation, and it is pro customer. And at the same time, this is a transformation that generates value. So we have already invested BRL 23 billion in a plan of BRL 59. And I think it would be worth mentioning, this plan is already contracted. Over 75% of this plan is already contracted. Marcio mentioned that as well, a huge transformation in the supply area. The figure, remember, we are a state-owned company. So sometimes it takes a long time for the bidding process.

So this is an advantage. This one is contracted. What we are going to be showing here are real deliveries. And what we can tell you that for the future, it's almost everything contracted, like 75% is contracted. And obviously, we have a financial ability to face the concessions maturities. In case we need that, we have here Sá Carvalho, Nova Ponte, and Emborcação, we have the financial means to keep these assets, which are very significant for the company.

Very well. This is kind of the same thing. I don't want to go beyond the time allotted to me. But here, we have some things that changed a lot, which are important. We used to have substation transformers with loading exceeding nominal capacity. This no longer exists. Today, we have the ability to change the transformers. So we have high technology, high reliability solutions. We're using green transformers and a very important innovation. The substation comes ready to install and the ability to install it is much greater. So we delivered 138 substations in that format. We facilitated the construction process of the substations because they come almost plug and play.

We don't have wooden power line towers anymore. They are all metal built. They're being replaced, and we have very little preventive maintenance. In 2018, CEMIG pruned about 295,000 trees. This year, year-to-date until July, 700,000 prunings have already been completed. It is a big transformation, and this is OpEx. I'd like to mention this because we are in a tariff coverage in the regulatory requirements, but we are investing. We are having OpEx. And of course, we had an unmet demand, the pent-up demand due to lack of investments, and this is real. Sometimes people ask for access. And we just said, no, we cannot meet your needs. And this was a big transformation.

And I guess that the Secretary is going to speak about this, how we effectively can say that we are development inducers in the state of Minas Gerais because we provide infrastructure for the state, for the state to prosper. So now we meet pent-up demand. We used to have 10,000 construction work delayed. And now we have 200 top 500 works that are kind of delayed. We used to have 10,000 of those. So I guess that this shows this kind of transformation, which is a financial transformation, but also an operational transformation. I'd like to remind you that this is exactly what the controlling shareholder requested from us.

When I was elected, OR when I was appointed, I was with the Governor and the Governor asked me to do two things at CEMIG, #1, that CEMIG would become again an inducer of development in the state. And second, that CEMIG would provide the best service possible to the Minas population. This is what we're delivering, the largest investment plan in our history and the quality of service, which is much superior. And why? Because we have a turnaround of the company. And now we are in the regulatory parameters that were required and making investments.

And now we're using all of our capital allocation to invest 100% in the state of Minas Gerais, and these are some of the results. This is just to give you some images. We can go over this very quickly. But I guess it becomes very clear what we mean by preventive maintenance. The absence of pruning, what this causes in these transformers here, they're being called because we just didn't have the money to exchange them. They were overloaded. We have to cool them down. And well, people have a way of saying this, about this process. It's called like a little shower, but it's not big. And this is a totally new substation, which is totally shielded.

And of course, we don't have those wooden power lines anymore, the wooden power line towers. And this is our investment plan, BRL 59.1 billion, BRL 36.9 billion in distribution, BRL 5.7 billion in transmission, BRL 5.9 billion generation, BRL 2.5 billion natural gas, BRL 3.8 billion distributed generation, BRL 4.3 billion in innovation and digital transformation. What do I think is behind this -- behind the strategy? Well, behind the strategy, we have a focus of having CEMIG be an inducer of development in the state of Minas Gerais providing infrastructure in the grid. People are talking about an energy transition and people mean a grid, 75% of the investments made are in the grid, regulated investment.

We have profitability, which is assured as long as the investment is prudent, but we are very confident that the investment will be considered prudent. And it's all about how we see our role. Our role is to let the private sector grow with generation and having a grid for renewable power to feed capital-intensive industries that require renewable energy. That is our role. We have to be right in the middle of that. Our strategic direction is very clear. In terms of management, we have to be as efficient as possible. And in terms of capital allocation, we need to provide a grid for the private sector for both sides, for those that want to consume energy and for those that want to produce power.

And we are going to be the link connecting distribution, transmission, generation, natural gas, of course, not forgetting distributed generation. And generation is a very important topic. We resumed investing in generation, and Marco is going to speak about this. But there is a restriction. Sometimes this is asked, we're going to invest in generation, if we have an oversupply of power, then we have an associated PPA. If we don't have an associated PPA, our strategic plans are no. That is the constraint. We're going to do it. We're going to invest if we can presell this energy. And here, I am going to list some of our achievements. Actually, let me come to this, and then I'll speak about the achievements.

Perhaps this is one of the charts that really summarize our transformation, how much we grew EBITDA, net income, share price appreciation, investments. We have the chart from 2018 until our latest balance sheet, June 2025, the last 6 months. And how much each one of these indicators grew? And how -- what was our share compared to other listed public companies. In EBITDA, we had BRL 3.781 billion to BRL 10.700 billion -- BRL 10 billion, 700 million EBITDA. We had EBITDA in the effect of BRL 5.8 billion to BRL 8.6 billion. In net income, we had BRL 1.7 billion, increasing to BRL 6.5 billion. And of the net income of the companies listed in the stock exchange, you can double check that.

I hope you're right. We increased from 5.8% share to 14.9%. And the part I like the most, investments. We had BRL 954 million increasing to BRL 6 billion, BRL 6 billion. This means that we had less than 4% of the total investments made by electricity utilities listed in the stock exchange, increasing to 9%. All of these, to me, are very clear examples of the transformation and the market acknowledges that our shares appreciated way above the stock exchange index, the power sector indices. I don't know if this includes the proceeds or not, we grew 485% our preferred shares and 639% growth of our common shares. So it means that if you decided to invest in us in 2018, we are very happy.

We improved our leverage from 3.2 down to 1.5 net debt over EBITDA. We increased our dividend from BRL 867 million to BRL 5.4 billion. And this is a frequently asked question, dividends proceed 50% of the net income of the company. This is what's in our bylaws, and this is what we pay out. And there's a big difference. We pay up the -- if we have capital gain, for example, as we had in the sale of Aliança, 50% of that will be distributed. There are no regulatory adjustments as many other power companies actually have, 50% of net income. And also the number of individual shareholders that we have, which increased from 143,000 to 561,000.

And looking at the percentage of capital, I haven't got this number in the top of my head, but it more than doubled in terms of the percent of the capital of CEMIG per individual investor. So this is the kind of the transformation that we are talking about. This is what allows me to be very optimistic about the future. This transformation that we implemented, our financial soundness and what this brings to people. It brings security. People can be confident that they can do it. Successful stories bring about more successful stories. I'd like to remind you of our achievements.

BRL 844 million of our regulatory coverage requirement, average outage duration within the regulatory requirements, what we call DEC, regulatory DEC. DEC purchased from -- or excluded from extreme events and also perceived average outage duration per consumer. I want to know what the consumers are thinking. And our perceived DEC in this last 1.5 years dropped from 18.7 to 15.8, more than 2 hours, almost 3 hours, almost 3 hours. So reducing DEC, the average outage duration by 3 hours, it's a lot. And you don't see this if you just look at the regulatory DEC. You see the perceived DEC dropped a lot more than regulatory DEC because our speed to serve when there are exceptional events increased a lot.

For example, customer service. all exceptional events when we digitize things, we have an ability to respond, which is much greater than in the past. So I don't need a call center with human operators. It's totally digital, and I can meet the needs in case of an extreme event. Elimination of unmet demand and all of that connecting DG, distributed generation. Everything I'm talking about with an increase of DG of 5 GW. So we have pent-up demand and distributed generation at the same time. And we were able to meet this need. So we have record investment deliveries, 138 substations. We have delivered 138 out of more than 400 and [ Renee ] will be speaking about triphasic grid.

We have delivered 257 megawatts of photovoltaic plants and more than 9,000 kilometers of triphasic grid. And we have the Central-West Gas Pipeline that is being constructed. And this will be 108 kilometers long. And -- I'm sorry, we cannot hear out of the mic. And this will be officially opened on October 3, the best rating in our history by AAA by Moody's and Fitch. Investments with what we call quantum transformation. And we have to be very brief because bringing about a transformation of an aircraft while ship flying, that is difficult. We have legacy systems, and we have the new systems coexisting.

And we know how difficult it was to overcome the culture that it was too risky to bring about a transformation. But we are going to have [indiscernible] for distributed resources and also the deployment of the new SAP S/4HANA that will amazingly increase the quality of information so that we can have a lot more market intelligence to operate the systems. Consolidation of our leading position in the free market, we are now # 59. We ranked 59 in the ranking of the most valuable brands in Brazil. Divestment in nonstrategic assets, and we didn't invest BRL 5.6 billion, which is a lot of money. And here, there was a risk. I know my time is up, but Marcio tells you some stories. I'll tell you about this.

I remember that when I took over, Belini came to me with some notes, and he had listed the problems. And he said, Renova, Light, and that was all he talked about. And I remember, he said, 75% of my time, I spend on these assets. How much time do we dedicate to these nonstrategic assets? Well, we had a VP of shareholdings, and this VP was extinguished. We don't have it anymore. Our shareholdings are managed directly by CEMIG GT, Taesa, [indiscernible] but there was one extremely complicated topic for a state-owned company, which was if there were a court-supervised reorganization, we would be decharacterized, which meant that the debt of these companies could come to CEMIG, that was a big threat.

So I know that -- I believe that this is an essential part of our current success. The fact that we were able to get away from this kind of risk, the risk of the decharacterization of a legal company. Two of these companies after we exited them filed for court supervised reorganization. So here, we have a number of awards that we got, but I ran out of time. So I'm not going to talk about that. It talks about this. It talks about this as well. And well, this is a fundamental theme for us, our net zero commitment. I really like this part on the right, how much we emit compared to the rest of the world. Our emissions are 2.8 kilos per megawatt hour, average of Brazil is 59. The average for the world is 445.

So our emissions are totally neglectable in Scope 1. And we also offset that. So I guess that this clearly underscores our commitment with sustainability, which is proven in our Dow Jones Sustainability World Index. We are 25% in the Dow Jones Sustainability Index, always with growing rates, 78%, 84% and 87% in the last one. We will lead this in the categories of transparency, renewable generation and human rights. In renewable generation, we in-house think it's obvious. We in Brazil think it's obvious, but go around the world, let's say I have a company which is 100% renewable. People will look at you and say, what? Well, CEMIG is 100% renewable.

The only thermal power plant we had is not that we sold it. We just closed it because if we just sold it, it would continue to have emissions. So we are really used to this, but when we travel abroad, these are achievements that we do have to highlight for the world. And speaking about CEMIG, SIN, and Gasmig, which I believe are important themes for us to talk about because sometimes we speak a lot about CEMIG distribution, distributed generation, but these are the numbers of CEMIG SIM. CEMIG SIM is a startup, but it is growing at an amazing pace. It made BRL 5 million in 2019, BRL 120 million in 2023 to BRL 187 million in 2024.

And this is an exponential growth, which is expected for the future, explosive growth or exponential growth. The same goes for installed capacity and the same goes for CapEx and of course, in consolidated EBITDA. And here, we have a mix. And this is an important update for you. We want to grow with our own capacity and grow by leasing plants. So we allow ourselves to use the strength of our brand. CEMIG has a spectacular capacity to grow, not just because of what we can build or buy in terms of solar power plants, but also because of what we can lease. There's a big market out there, and we have the ability to sell.

We have the commercialization risk, but we have a big potential of growth through leases. A good part of the leasing with options to buy the asset in the future. So this gives us some space for brownfield for M&A deals after we have tested to what extent those power plants are good. Gasmig, when we look at the numbers, they are spectacular. In 2018, BRL 347; in 2024, BRL 891 million and net income increasing from BRL 255 million to BRL 515 million. So -- which is officially opening the gas pipeline of the Midwest with a good potential to expand to other regions to the south of the state as well as to the Minas Triangle.

So I guess that this is kind of what I wanted to speak to you about because it is about financial soundness, transformation and this record investment plan. All of that gives us confidence that we can face the future. And I will repeat this, when we look at the electrical sector of the past, it's not the electrical sector of the future. So we are taking the steps and we're experimenting to create the future. It's not that we know exactly what the future will be like. It's not like we have a clear direction, but we clearly have a number of pilot projects so that we'll know if there's something impacting us, we'll have the necessary experience to respond and respond accordingly.

So let's mention some distribution, digitization, network expansion and meeting unmet demand. And the current execution is DSO model considering the amount of distributed generation in the state of Minas Gerais, 5 GW. But I also like to look at three phases. The first is what I mentioned, the turnaround of the company, a company that is a cash cow. The second is what I call an expansion phase, which is serving the market, serving the pent-up demand. That's the bulk of the investment because it is this kind of investment in substations, in triphasic networks that are required to serve the industries and the agro business. And we had a big demand that was unmet.

And we witness this to the number of complaints that we used to get. I'm not going to say that complaints were down to 0, but they have been reduced substantially. So I have a number of stories to tell you, but I just don't have time to tell them. But sometimes, a guy comes to us, and I remember one guy that told me that CEMIG was late that CEMIG had acquired a part of land 15 years before, Marney is here. And Marney was in that meeting, and he can corroborate the story. And as I said, you bought this probably 15 years ago, and I haven't done anything, and I said Well 10 years ago, we were not here. We acquired a lot of land to build a substation. We were never able to do it. But look, it's written here.

At this date, it will be open. It will be inaugurated. And that makes a difference because when we speak with an investor, we have a deadline. Sometimes it's not the deadline that the investor was expecting, but it is a date that we have agreed on that is contracted and that we will deliver. So we had a turnaround and then went through the expansion, do some works to serve the market and our biggest challenge is to improve the quality of service. Our consumers actually perceiving that our service has improved, and we have to invest a lot more. With OpEx, we are creating CEMIG Agro, 76 new bases to shorten the distances.

We have a new ADMS that will improve the quality of management and of the operation because we'll know beforehand what's happening with the remote meters, smart meters so that we can send service in a more assertive way. So we are in a fine-tuning space so that users can perceive an improvement in the quality of service provided. And we have to be prepared. We have to prepare for the DSO model transmission. We continue to invest in reinforcements and improvements, gas distribution.

We want to resume expansion of gas pipelines in Minas Gerais to the Minas Triangle and also with biomethane, which is a fundamental topic, particularly in the Minas Triangle, where we have a big advantage. And green hydrogen, so we can make the green hydrogen to gas, have a blend and serve the industry. We are a big supplier of the steel and metallurgic industries in the state of Minas Gerais. Generation, a lot about capacity reserve auctions, batteries, reversible power plants. We want to recover the fundamental role of the HPVs, which became kind of overlooked in recent years, but this topic about storing energy, which has an immense potential, distributed generation.

We have some very positive pilot projects. I have two here about batteries that we should highlight because I think that batteries is a big point now. Whenever we speak about energy transition, we speak about the grid, and we speak about storing energy. I think that I spoke enough about the grid. And about energy storage, our main focus here are not in the major batteries. Our two main focuses are on DG to have more solar power plants with batteries so that we can have service at night. And we want to test the limits because we know that the grid is limited. How can we test the limits. And this is what we are studying in DG.

In addition to the solar power plants, we want to have another one, battery powered so that we can have nighttime injection. And I'm addressing the themes of difficulty in growing the grid and also the first microGD hybridization network. When we think about Minas, that's our territory, our concession area, 774 municipalities in our concession area. And there are many locations where there's only one power source and building another one would be too expensive. So we're including a solar power plant, and a battery powered one.

So we are inaugurating one, a solar power plant with a battery that can serve the status of that municipality for 48 hours. I think this is going to be a big transformation. And if that works, there's a big likelihood that we will replicate this in many other municipalities. And of course, we have to prepare to the free market under our leadership in energy trading in the free market, the regulated market, customizing products, allowing us to manage the demand. And with the possibility of regulatory changes, this will be very positive. I'll skip this or else I'll speak forever.

This is kind of our innovation hubs. And again, take on messages we are experimenting to prepare for the future, not like we have all the answers, but what we want is to be prepared so that when we need to take a straight forward, we'll know what we are doing. And this is something we didn't manage to do with solar power plants. We were late in the process because we just didn't have the know-how. But here, we are testing batteries, we are testing integrated micro networks, we are testing AI, artificial intelligence, have the new Inova Cemig Lab. We're investing in R&D. We're investing in innovation.

It's not just investing in R&D. This is our own money that we're investing to help start-ups so that we can deliver more efficiency and more accuracy in service to the market, more excellent asset management to support our operation. We have more than 50 projects ongoing. The smart meters, 500,000. The current cycle is 1.5 million. But of course, our plan is to have 100% of the network with that kind of smart meter data lake. But I'll leave this for Villani to mention. Green hydrogen, we delivered a road map for the state, which was a very positive theme.

We talked about the project for Gasmig, and I will end with this slide. This is something that we like to show because this is a change in strategy. Our strategy in innovation has always been to use at house R&D funds. And now we use those for large projects, but for experimental projects, we now have Inova Cemig Lab. We spend around BRL 20 million a year, our own money, company's money to bet on start-ups, to bet on knowledge that is going to improve results, 45 challenges launched, 540 proposals received. We got awards, right? What did we get again, [indiscernible]. I cannot mention the town here, but what were we awarded again from [indiscernible].

So we have BRL 70 million per year in potential annual benefits for CEMIG. This is what I wanted to highlight. And I stress that when we look at the whole picture, we feel confident about the future. We have the whole picture that we wanted to bring to you, and we have all the seeds for the future that will prepare us for the challenges that will come up. We don't know exactly which ones they will be. But we know that we have to be prepared after we complete 7 years to have more 7 years and to be a long-lasting company. Thank you very much.

Please Mr. Reynaldo stays on the floor, if we have any questions. We have 5 minutes for question only. If not, we will move on with our agenda. Thank you. Thank you, CEO, Reynaldo Passanezi Filho for your presentation and for bringing relevant information about CEMIG's achievements and accomplishments throughout these years, thanks to a lot of hard work and education, of course. Now we turn the floor to the Secretary of Economic Development of Minas Gerais, Mila Corrêa.

Good afternoon, everyone. It is a pleasure and a privilege to be here in Sao Paulo today in another CEMIG day addition. I would like to start by greeting everyone at CEMIG on behalf of CEO, Reynaldo, Cristiana, Simone, our Internal Minister, the Chairman of the Board, Luiz, Andrea, Sergio -- Sergio Cabral, a joke about him, [indiscernible] and everyone else that are here with us.

Now the minister is here, I apologize. I made a mistake. I would like to thank you for this opportunity. Also Roberta, Institutional Relations and the President of Gasmig, Bernardo, Also, he was for the same soccer team than I do. I apologize. So Mr. CEO, I would like to take this opportunity to bring a few words from our Governor, Romeu Zema and Mateus, our Vice Governor as well to show you a little bit of the context because CEMIG has these figures, and they are extraordinary. And we do have a context since 2019, where we are developing an economic system, and we are building government guidelines for the state-owned companies owned by Minas Gerais, and that allowed us to have this successful partnership as we have already seen.

So I would like to share with you a little bit of this story. I will start by the end. Let me see. I had asked to make a change on my slides. Let me check. I don't think this is working. This is what I wanted to share with you. Simone was from [indiscernible] she knows. And today, I am the Secretary of Economic Development, but I was the General Director of the Metro Agency today is connected to things. I also was the Deputy Secretary of the government. And so I am a witness since 2019 of a hardworking development because of the context that this current management got in this company at the time.

So Reynaldo and Marcio have said it very well. Our management really aims the technical aspect and also a very robust data and statistics as you have already shown.And because I have been in different positions and they joke with me because I have been all around. But thanks to my experience, I am a witness of how serious this administration is and also the results that you have seen. Because of the Governor's room on his wall, there is a board with the signature of all the secretary saying, "Our mission is to improve the quality of life of people of Minas Gerais," period. This is our mission in Minas Gerais administration. This is the mission that has been given to all of the state-owned companies.

And why I wanted to start with this slide? In 2019, we had a management format of an administration that was starting in an initial cycle, in the second cycle already with a number of difficulties overcame. I don't know if you know, but in the prior management, we had a huge deficit. We had lost over 300,000 work positions -- work posts. And I will show you that in this cycle. Not only we did not lose, but we also created 1 million formal jobs in the current management.

We had debit, which is the state government was discounting from the payroll from over 300,000 employees that serve as public servant, and they would not transfer these funds. So 300,000 public servants ended up having their names are blocked because they were not being paid that debt. So at Cemig's case, this is -- we had a number of investments that were done out of the state of Minas Gerais. In 2019, being the Director of the Metro Agency that was supervising 50 municipalities, I had three problems that were unanimous problems among all the mayors. They complained about Cemig, COPASA and 0.5 years in that agency. And these were the main complaints and the main claims.

And there are serious problems. We did not have the Minas 3-phase program. We did not have the substations to attract investments to the metro area, energy peaks, for instance, Florestal, which is a relevant area, loss of milk production because of these energy peaks. Wells -- artesian wells that COPASA would drill and Cemig connect. So my daily activity was like that. And to add to it, we had the pandemic. 853 municipalities of Minas Gerais, and Minas Gerais has an extraordinary challenge compared to the other states. We have a political administrative division, which is the most complex in Brazil, 853. Sao Paulo state has 600 and something. Cemig cater to 774 municipality.

These are extraordinary figures. That means that we have an additional difficulty in management because we have to be there at the end of 853 towns in the state, which is the size of France. Actually, Minas Gerais is larger than France. So when I got to this agency and spent all these years there, the main complaint was about Cemig. And I told Cemig CEO when I left the agency in 2023, there were no complaints anymore. This was amazing. It was an extraordinary transformation, a work that started with Belini, then our CEO; and Márcio Luiz, Head of the Board since the beginning. So it was a full reformatting of Cemig of the company's investments, a company that is a reason of proud by the people of Minas Gerais because it was created by Juscelino Kubitschek because it has 70 years of history, because there is a team of public servants that is amazing. Also this leadership team that is here today that have technical skills to be ahead of the guidelines that the government established at the time. So we see the whole progress.

And then in 2022, in the second cycle of Zema's administration and Governor Mateus takes on at the time. So a second administrative reform has been made. And what did that reform prioritized? The development of an economic system that was robust with synergy to drive a second round of management, the economic development of Minas Gerais because Governor Romeu Zema is an entrepreneur. He comes from the productive sector, and he brought to his administration all the pains from the productive sector. I was talking to Marcio, he's also an entrepreneur. We are discussing about the bottlenecks of the productive sector in any state of the country, environmental licensing, different tax regime, energy supply, roads and railroads infrastructure.

And Minas Gerais has an additional challenge, the largest road system in the country, the second largest railroad network in the country. How do you maintain that size of a road system with a broken state? And you were also following that up by the media that Minas Gerais is working hard to comply and to adhere to Propag. And once again, a commitment show a sign of severity of seriousness by this administration. The adherence to Propag only makes a difference in terms of the state treasure after 2028 up to '27, '28. The parcel that the state will be paying if they are in the different systems, it will be the same. But the Minas Gerais administration is thinking about the state policy and the commitment of the ability to invest, the ability to be sustainable about the nation -- the state treasure.

We then are thinking about the maximum terms, so that we can adhere to Propag by the end of October of this year. So thinking about the robust economic development that could consolidate results up to the end of the second cycle of 2026, this was the system that we considered with 13 companies associated. So in the economic development secretariat today, we have public policies, taxes that in other states is completely separated. For instance, being a Secretary of Economic Development, I participate on the National Forum of the Minas Mines and Energy Secretariat, and also the National Forum of Science, Technology and Innovation.

Each state separates differently, differently from us because here, we bring together all topics that are regarding economic development, encouraging and stimulation in a single secretariat and associated to economic development. So I was sharing with Marcio. We have the sub-secretariat, and I also worked there for a while. So all the assets that can be leased in the state are under the secretariat, thinking about the assets leased as an induction for economic development. At the same time, to attract investments, science, technology and innovation, economic freedom because it's not possible to think about attracting investments to induce investments if you do not have a good business environment, an environment with no bureaucracy. That's why we have Minas Livre para Crescer, Minas Free to Grow. Today, we have 930 possibilities of licensing in the states that are free.

And along with the partnership with the whole commercial system because there is an agency that helps in opening companies in Minas Gerais. And this agency has an amazing role in automating the approval of these licenses that today no longer depend on the complicated process. So the economic development, assets lease, also regulation of rural areas of science, technology, innovation, economic freedom, mines, energy, mining, gas regulation, that's why gas make the -- the Secretariat of Economic Development regulates the gas and Gasmig is the subsidiary of Cemig. So this is the whole system of economic development.

We have a bank that signed structuring credit lines. Just like Cemig, we have Cemig Agro. BDMG also has a credit line for the agrobusiness and look at the impact in the figures of Minas Gerais. For the first time in history, Minas Gerais' GDP was over BRL 1 trillion of GDP. Never before in history that had happened. We never had such a high GDP meeting that number. And for the first time in history, if you know Minas Gerais, you get to the airport, you go and you pass in front of the administrative city and you probably saw the sentence that is there. For the first time in history, agrobusiness is higher than mining exports.

This was a reason for a big fight already because the mining did not like the comparison. But it is just to tell you that the state that has in its DNA, the brand of mining. We are called Minas Gerais, a general mine since its origin. The main economic activity of the state has been mining. And Cemig's work, BDMG, the Secretariat of Invest Minas, which is also here attracting investments to agrobusiness, that has been so successful that we were able to be outstanding when compared to mining.

Now with Cohab, which has always worked with housing, working together with the Secretariat with land regulation, which is a policy that is mostly valued by our governor. And he always says that one of the most moving events is that when he gives the title of a house, of a place to a family because this brings the guarantee of loans and also this provides a lot of good to people. So this is a structuring policy to the state. Sergio has been the President of Codemge. If you don't know Codemge, you have niobium, and it's one of the largest mines in the world. It's Araxa, they work with Codemge and Codemig.

This is the Minas Gerais development company, COPANOR and COPASA. COPASA, just like Cemig, started to disappear from that complaint list over the years that I was at this agency. Thanks to this professional management of these two state-owned companies. And these are also listed companies with an amazing performance. And COPASA, as all of you know, is in a process of a possible privatization. It is depending only on the approval of the legislative assembly, now also depending on Propag.

FAPEMIG is our research institution. It receives a percentage of the state's revenue to support R&D policies. And FAPEMIG today is very relevant in the system, so much so that it has out a number of publications that joined together the academy, public policies and the productive sector. FAPEMIG is very much aligned into the economic development system, considering what we have in the Secretariat that area of technology and innovation. Gasmig, I already mentioned, and Invest Minas. And the numbers are extraordinary also when you think about attracting investments. In the prior management, BRL 24 billion came in, in investments for Minas Gerais.

Up to -- from 2019 up to today, September of '25, we have BRL 506 billion being invested in the state over BRL 0.5 trillion. Almost 2,000 projects and countless municipalities that are contemplated with this BRL 500 billion, an impact in our GDP and also an impact in that figure of 1 million of jobs. Because the promise of our administration is not to attract investments, but also to have income diversification and also the creation of jobs. So we are at full employment. Thanks to this work that was developed here.

Jucemg, I already talked about it. MGS, this is the company that supplies outsourced labor, not only for the state administration, but also to a number of towns in Minas Gerais and Espirito Santos. It has a [Technical Difficulty] result today. MGI, which manages the assets in Minas Gerais, and also Loteria Mineira has a surplus and is committed to social assistance, social service and important social projects, for instance, different hospitals. And there are a number of projects that have received funds from the Minas Gerais Loto. So now let me go over the story.

This slide -- well, the CEO is not here, but the government in all the meetings with entrepreneurs, he shows this slide to show the figures. This is a consolidated of our state-owned companies from 2011 to '14, from 2015 to '18, and now under Romeu Zema administration from 2019 to 2024. This shows the commitment of a professional management of our state-owned companies. Thanks to the sale of assets that are out of Minas Gerais. The other day, right, Chris, we were at Monte Carlos opening a plant. Cemig was with no openings for decades, no inaugurations for decades. So we also had the opening of service in Betim that will cater to a number of towns. So this is a clear proof of the guidelines of Minas Gerais administration regarding the state-owned companies.

I'm going backwards here in my presentation. Here, we have the matrix, but my time is up. Also, our CEO talked about this. And I would like to share with you other information. Reynaldo said that Minas Gerais was the first state in Latin America to look for ratio 0. We have this commitment to reaching ratio 0. This is very complex, but this is very valued abroad. We were in China and in Japan now in June. And the main interest of investors -- foreign investors in Minas Gerais has to do with the Cemig's capacity, not only of distribution and investments that the company is making today, but also green hydrogen. And Cemig with Invest Minas today are developing a road map, which is a project for green hydrogen, especially with Japan. And Japan is very much interested in investing in hydrogen production in Minas Gerais.

They have a joint venture in Yamanashi working on this project, and they see great potential here. Cemig that already has a GDP that is 100% renewable, this is wonderful for investors. They look at Cemig with this potential. And more than that, here, we have some of the projects. And I will end with this specific project, which is from the Valley of Lithium. You all know about it. It was also -- it was listed in the New York Exchange market in 2021. The idea here is not only to exploit mining for lithium in the region, but especially to bring development because we know that, that area really demands a lot of attention from the state public administration because of the difficulties that the region faces.

So today, we have a task force from all the secretariats of the state that is coordinated by the Economic Development Secretary at Cemig, COPASA and a number of these companies that I also mentioned, so that we can bring actions to this valley within the scope of the Valley of the Lithium, not only to bring investments, but also a hospital, regional hospital that's going to be open there that will cater to the region, high investments today and of safety and security in the area. A number of notices of FAPEMIG that once again are bringing together studies for lithium and also for the region -- for that region of Jequitinhonha. And without the partnership of Cemig, that would not be possible.

With this committed serious results -- committed to the results with the results that Cemig has today, we would not be able to have the numbers that the Minas Gerais administration is posting up to today. Once again, thank you very much for this invitation. And congratulations, Cemig, for the results that have already been shown. And thank you, Marcio, for this partnership with the controlling shareholder, with the state administration. It has proven to be very successful. Thank you once again, and I hope this is a very fruitful year.

Once again, if you wish to ask a question, we have time for a question. Please raise your hand. We'll bring you the microphone. Or we'll have another time for questions and answers at the end of the all the presentations. Thank you very much.

Now moving on, we would like to invite to the stage, CFO and IR Officer, Andrea Marques Almeida. Please, Andrea. Thank you, Andrea.

First, it is a pleasure to be here with you. This is my first Cemig year. I am one of the young people in the team, and I am very happy to be here with you. Welcome, and it's very difficult to talk after our Chairman of the Board, after our Secretary, our CEO, Reynaldo. I will be brief because I'm going to go over figures that you already know by heart, but I will talk about some relevant topics on our financial policies. And also, I will talk about something that really makes me pride at Cemig, which is our sustainability plan and also how the market recognizes this plan and is awarding Cemig over time. But I will try to be brief.

So now talking about the figures that you already know. But of course, approaching them specifically, we have been posting sound results, and we always talk to you over the way in our calls. We are -- and here, we are showing recurring results and also results for the half of the year. So the first half of the year, we reached BRL 4 billion in EBITDA and BRL 2.3 billion of adjusted profit -- net profit. And if we look at everything that happened when compared to last year, we find that most of our businesses, and this is the beauty of diversification of Cemig. So most of our businesses had positive results and even greater than last year in distribution. And I'm looking at Marney, he had BRL 400 million in EBITDA of delta vis-a-vis last year. We already talked about this in the last quarter. It had to do with the reimbursement of subsidies that was a relevant amount. It was posted in the second quarter. We had a tariff rebuilding.

So definitely, in distribution, it's posting a positive contribution year-on-year. So Marney, okay, keep on the good work. But also my friend, Marco has contributed. So in the transmission and generation business also added to our EBITDA when compared to last year. And we also have been always telling you in a very transparent fashion since last year that maybe this is the effect that has a negative effect is that we had a change in model, the new wave that affected the volatility of prices. We are working with higher energy prices. In addition to prices volatility, we are seeing definitely prices among submarkets, and difference in submarket prices that have been an exposure that we always had, but we are seeing now maybe the price differentiation in a more relevant way after the model changed.

And maybe this has been the most relevant effect that we have seen when we compare last half of year to this half of year. So the trading company had a hit of BRL 200 million in addition to margin compression, which we already were expecting the trading company and also minor effects. When we compare year-on-year, we see a positive growth of 2.7%, lower than inflation by the effects that we discussed here. And net income, same thing, BRL 2.3 billion of net income in the half of the year is very relevant. That shows the benefit of our diversification.

I think our CEO has mentioned and he did not like our bond very much. So in the past, we did have the hedge expense and that had a negative effect. And now we have greater effects maybe affecting with a greater depreciation because we have larger investments. Wonderfully, we have a mega investment plan, generating greater depreciation and also some financial expenses that are a little bit higher, of course, because of interest rates that are affecting all over the country. So definitely, these are the main effects. This is nothing new for us. I just would like to go back to them. But once again, these are very relevant results that we are having. And even with these results and also with the trading company, we still had very positive evolution showing the strength of the Cemig portfolio.

Now speaking about our capital structure, our financial management, I think Reynaldo has touched on this. He spoke at length about the things we're achieving, but we are definitely at a moment of deleveraging the company. We have a very low net debt over adjusted EBITDA ratio, 1.59. Comparing to our peers, we're doing quite well. And this is helpful because we have quite a substantial investment plan to be executed in order to execute that investment plan. Well, I normally joke that we have to juggle the many plates.

Well, this is a very nice and cool investment plan. But at the same time, we have to remain with a AAA rating. So we have to have a financial soundness and efficient capital allocation. We are doing this by getting longer durations for our debt. And we can see the average maturity of debt 6 years now. And we will be pursuing average maturity of debt that is higher, avoiding concentration of debt service because we know how relevant is our investment plan and how we are being observed and how we are being awarded for this capital management and this capital structure.

Now speaking about an efficient capital management. We have been benefiting from the local capital markets, which has been a good source of funding for us. We love to issue debentures. I am a buyer. I love to buy debentures of Cemig. And it is a nice market offering good volumes and costs for Cemig. We issued very close to the sovereign, the issuance of BRL 5 billion in the first half of the year. So this was really nice. However, we have to diversify. I normally tell Marcio Luiz that we cannot put all the eggs in the same basket. Well, and he knows a lot about eggs much more than I do. So since we cannot have all eggs in the same basket, we have to diversify. In order to diversify, we have to look at other funding sources, and we are doing that.

There are a number of sources. The local capital markets is great, and we are going to continue to go to the capital market, but we use the 4.131 loan. It was a very successful auction. We were able to renew our concessions with a lower premium than the auction as a whole. But we are working also with multilateral agencies, development of banks. We can have receivables discounts, and some of these structures can even bring us off-balance sheet structures. So these are the kind of works that we will continue to do to diversify our funding sources.

And now we're speaking about our sustainability plan. As Investor Relations, I am happy to speak about this at Cemig. I think that Cemig resorted to market sustainability trends. And we added to that what was most relevant for Cemig. And we put together the sustainability pillars that we wanted to implement at the company. Based on that, we put together short, medium and long-term plans with clear goals of creating value to our shareholders and of course, managing the climate risk, which we know is very relevant. And we communicated this to the market. We communicated several of these plans to the market. I will touch on some of those, and I will do so on behalf of the sustainability department who is here attending the event.

Our friend, Denis and [indiscernible], they always help me speak about sustainability in the right way. Well, one of them is to offset 100% of direct emissions by 2026. Today, we already use biofuels in our light vehicles, so that we can achieve that goal. And we've been doing this. We are also working with equipment that reduces consumption. And we do a lot of work with the families. We have a goal to benefit 120,000 families by regularizing their energy supply. So far, more than 40,000 families have been regularized. And that is very important work because indeed, we are bringing citizenship. Electricity for these households oftentimes means life. And we also bring with it an added service, which is to raise awareness regarding the use of electricity. With the energy efficiency program, we exchange the equipment of these households by more sustainable fridges, light bulbs, and we've been doing this. So 40,000 families have been regularized and benefited.

With this mega investment plan, there were many electricity towers that we replaced. And we generated a lot of industrial waste, and we have a commitment to recycle or reuse at least 99.5% of all industrial waste generating. In 2024, 99.3% of industrial waste from power generation, distribution, et cetera, were recycled. Well, we want to have a zero accident culture, and that's not negotiable at Cemig. We've been working a lot on this topic, and we have actually simplified our golden rules so that everyone knows very quickly and exactly what they need to do. So first thing, they have to think about the risk. And if they think twice and if they think there's a risk involved, they should avoid an accident. And this is super important. We have been reducing our accident rate by 15% in 2024. And now in 2025, we tend to reduce accidents even more.

We have a program to benefit at least 60,000 people with projects for infancy, the elderly and sports. And we intend to comply with 100% of the global compact transparency movement requirements. And with that, we got some recognition and acknowledgment that makes us very proud. I'm not going to mention these, but we are proud perhaps to highlight CDP which is the carbon disclosure program. We got the maximum rate in 10 out of the 16 criteria for a number of reasons because we have efficient management, because we have a net zero plan that is effectively clear and transparent. So that's -- the criteria is transparent disclosure.

We trade, we are among the 10 B3 companies that rank the best in this index. Among those, there are only three better than us in the electrical sector -- the electricity sector. And this Clean200 and here, they choose the top 200 green utilities companies based on carbon emissions and renewable energy. We are the second best Brazilian company in the world's top 200 green utility companies. So I am very proud of the work that we are doing as it relates to sustainability. And with this, I would like to [ handshake ] that we are very proud of everything we are doing and that we will continue to do in order to continue to improve our quality and to make sure that all the strategic plans that we have will be actually put into action and so that we can do this in a sustainable way. This is my take-home message for you. Thank you very much.

Do we have any questions addressed to Andrea, while she's still on stage? Okay. So let's move on. Well, again, thank you, Andrea, for the presentation. We will now proceed with Cemig Distribution. I would like to bring to the stage our Chief Distribution Officer, Marney Tadeu Antunes.

Good afternoon, everyone. I'd like to start congratulating the whole Cemig team, and thank you for the support so that we could execute the highest employ annual plan. I would like to be brief to try to recover some of the time because Reynaldo went way beyond the time allotted to him. He used some of our time.

Energy transition is transforming the whole Brazilian electric sector, given the inclusion of renewable sources and also due to those consumers who are also generating energy and because of BESS. And this is creating some opportunities for us, and it is what I am going to talk about. In addition to the opportunities, there are some great challenges. Some terminology was not used in distribution that we didn't use before. For example, electric vehicles. If you buy an electric vehicle, there are chargers with 40,000 watts. And they use this at least for 6 hours in evening. It's the same time they use the shower for 7 days. So a charger has 40,000 watts. Can you imagine what this is going to cause in the electrical grid and how much work we will need to do to face all that? So in order to face all that, we had to adopt the biggest investment program in our history so that we could prepare for the future.

So this is the investment program of first cycle from 2018 to 2022, BRL 7.2 million. And now in the second cycle, BRL 21.904 million. We are actually in the middle of the second cycle. We are halfway through the execution. In July, more than BRL 10 billion. So we had 50% execution of our investment plan. This is going to generate for us a number -- in addition to a lot of benefits to those unavailable loads that we could not provide. In addition to improving availability, we will improve depreciation. In 2018, we had a grid that was depreciated, 64% was depreciated. In 2022, about 61%. And now the depreciation of our network is expected to drop to 56%. So every cycle, we are recovering the regulatory remuneration base.

Reynaldo -- this is also one of the goals of the investment plan. Reynaldo talked about the deliveries of substations with works completed in 2025. So here, we have these compact substations. If they were not compact, we would not be able to execute so many. We had to look for technology and engineering brought us this compact substations. I'm going to quickly mention losses. I normally say that losses and delinquency work hand in hand. Efficiency in managing one is not enough without managing the other. If you give up losses -- energy losses, your delinquency will increase. Or if you work a lot on losses, it is only natural that delinquency will increase. So you have to be efficient in both access. And that's why the first restructuring, we brought these two departments together, and we manage these indicators with separate teams. Of course, they each have their own characteristics, but these are energy losses.

We are below the regulatory losses with 11.43% compared to 11.48% regulatory losses. As you probably know, we had an increase in losses because this was the victory of our regulatory department together with PRORET and ANEEL. When we reconsidered the losses of the DGs, we considered energy metered and not just build. And that is why the losses of discos increased. And still, we continue below regulatory losses with 11.43% actual losses.

Our collection process, we maintained a level of excellence. And going back to losses, this has been the fifth year where our energy losses will be below regulatory losses. In our first meetings with you, you questioned this. And you didn't want to have losses increasing and dropping ups and downs. But this is the fifth year in which our actual losses are below regulatory losses. We have ARFA with an index of 99.3% projected for 2025. And according to the ABRADEE award, that's another methodology to measure delinquency, by the way. For the second year running, we are the company with a delinquency of about 1.5%, lowest default of all distributors, which is kind of the opposite of ARFA, which is the revenue collection index.

And Secretary Mila mentioned regionalization and decentralization of distribution. It's the opposite of all the other discos are putting into practice because experience has shown to us that you have to be close to customers and to what the problems are, particularly in Cemig's concession, which is a very large territory. So we realized that what are the motivators. We have to ensure excellence to be sure of the execution of our strategy, a culture of safety, our leaders working together with the teams. We have to have representation and presence of Cemig's leadership. And the state of Minas Gerais is practically all Cemig. It's hard to get a benchmarking. And so we do internal benchmarking.

Here, we have six regional senior management offices. We didn't have any of those decentralized. We had just one single central senior management office. Now we have six in Uberlândia, Pouso Alegre, Montes Claros, Governador Valadares. And we created 17 regional medium and low-voltage management units. And the regional high-voltage management unit. All of that used to be centralized and located in the city of Belo Horizonte. And we needed to monitor all high-voltage works. Can you imagine that? Last year alone, we built more than 1,000 kilometers of 138 kV lines. Can you imagine negotiating the expropriation with each property owner? And then, of course, we had to build the network. So this kind of regionalization started bearing fruits for us. We started with this last year, and it is impressive to see how service improved to -- in the eyes of the municipal governments and the city representatives.

I used to see at least four municipal representatives bringing complaints. They would bring to us mayors, their own customers, and we didn't have decentralized service, but we restructured. And now we're working closer. We started with 45, now we have 65 agents to serve the city halls in-person. And with this, we reduced substantially. Now we have two, three state representatives or city counselors. So this was a big change.

Speaking about Cemig Agro, that's kind of interesting. Our minister, the coordinator of Cemig Agro can correct me if I'm wrong, but I got the numbers yesterday, and I thought that they were really interesting. 61% of Minas Gerais municipalities have agrobusiness among the top 3 economic activities. We have 6 million hectares used for agriculture. Only 17% of them are irrigated. And believe it or not, we're just finishing the survey about irrigation. So for irrigation, we need electricity, and that's why we created Cemig Agro. This is the true energy transition, right? We have to stop using diesel and use electricity. And this is one of the first purposes of Cemig Agro. And of course, we want to improve the quality of energy supply, of power supply for all clients in the rural zones. The average outage duration in the rural zones was about 40 or -- it was 60 hours. Now it is down to 40 hours. Average time to service was also reduced.

Average time of service was also reduced by 10%. So it was reduced by 10%. And this helps increase resilience of the grid. And ANEEL has been putting a lot of pressure on all power companies given the extreme climate events. Cemig had about 3,000 closers. And now we have those smart reclosers. Hopefully, very soon, they will all be smart ones. This is our purpose. And preventive maintenance, we didn't do -- we didn't use to do preventive management in the rural zones. Even yesterday, the minister mentioned this. We have 10% of our customers in the rural zones, and 90% of our transmission lines are in rural zones. If I provide maintenance to 10% of the lines, I will serve 90% of the urban customers. And that was the previous strategy, and that's why there was no preventive maintenance. And that's why we had around an average of 60 hours of outage duration, which is now down to 40 hours. As Reynaldo mentioned, 76 new bases in 76 municipalities. And this is the secret of our success. The electricians are closer to the points of complaint. So in a nutshell, it's Cemig closer to customers.

This is an example that Reynaldo mentioned, which is cleaning the lanes. We cleaned 44,000 kilometers. And this year, 51,000 right-of-way clearing. It is a lot of pruning, a lot of right-of-way clearing. Now we are completing, and we are going back to the points that have been served. This was the expectation to reduce what we call the green average outage duration. And so prunings, 747,000 prunings that will be performed this year compared to 295,000 in 2018. We will just prune the trees in urban areas in the past. I remember when we joined the company in our budget, Andrea, our budget was put together with no OpEx for rural zones. And then a little bit was added. And I said, but this is too little. And the answer was, but this is just for emergency cases. We all know that emergency service is much more expensive than preventive maintenance. And now we changed and we're able to reduce our OpEx for rural areas with corrective and preventive maintenance. We -- every year, we increase preventive maintenance. And this is the type of machines that we are using for this kind of right-of-way clearing.

And this was mentioned, a lot of people saw what we put outside of Serra da Saudade. BESS is a challenge for us. We are learning how to use BESS. We have BESS installed in two situations, one in the Mineiro region, which is the Cruzeiro football court. And we have another pilot project for the DG with funds of the disco, with the approval of ANEEL and Serra da Saudade, which is double fitting of a municipality, which is the first integrated micro grid of Brazil. It will be inaugurated just this month. And we will be expanding this and suggesting to the Board that another 25 municipalities should be served in this way. And why? Because in 2021, we had 144 municipalities without double supply. Now we still have 70. Some of them will be served with a conventional grid. 20 will be served with this technology.

Well, the DGs, 5.12 of connected power. We have 7 gig already negotiated of DG. And this means half a Itaipu power plant. Solar panels in the state of Minas Gerais. We are ranking first in installations and connections. More than BRL 5 billion have been invested in connecting the DGs. DEC, Reynaldo has mentioned. Just wanted to highlight that we reduced perceived DEC by almost 3 hours. Regulatory DEC, we are slightly above in the month of June, but our commitment is to end the year within the regulatory DEC, like again being the average outage duration per consumer. Yesterday, we had the best performance overall, and this is the moving average of the last 12 years. Now we are at 9.71. And by year-end, we will be delivering within the regulatory DEC. But the customer perceived DEC with a considerable improvement of almost 3 hours.

I'm coming to the end of my presentation. This whole investment that we made also deserves an investment in our operations center. We are building an integrated operations center. According to Denis, our mastermind, it is the largest operational data center in the sector in Latin America. We have an operations data center, and we aim to have generation, transmission, distribution, smart metering, which is part of distribution. But today, we don't have an operations center for that. And this is going to be the transformation of the conventional operations center through smart meters. We will be able to monitor the whole evolution of the electrical system. We are going to also have some cybersecurity, security of the assets and asset management. All in this new integrated operation center to be built in our headquarters in Belo Horizonte.

Delivery scheduled for 2027, investment of BRL 271.2 million. And also, there will be a redundancy center for disaster recovery in case of an emergency. And it is a Tier 3. It has international construction standard. So this is very important because this is the heart of our operation. It is what will control the challenges ahead because the challenge in the future is exactly this, the distribution company will become a DSO, the operator of the distribution system and in Serra da Saudade. Can you imagine the solar panels serving the municipality?

And then we have the curtailment which is a new terminology. The one in charge of this operation and this connection and the management of this power will be by the disco. We have the pursuers as mentioned here. These are the customer generating their own power. Sometimes they are consumers, sometimes they are generators and our renewable sources. And here, LTE, there's a tower here, and we are creating a big telco company. Our three biggest municipalities in Minas Gerais will have their own Cemig mobile phone network.

I like to say that we have a logistics company as part of Cemig. We even deliver paper bills to be paid in rural zones where the postal office will not go. And we are going to have our own mobile phone network. And we have Cemig Agro, of course. Cemig Agro is -- I'm talking a lot about Cemig Agro because the potential of growth of the distribution in this area is huge, and these customers most likely will not migrate to the free market. They will be captive customers also because there is an incentive just like for low income, public lighting. And of course, the market opening is also a challenge for the disco.

But this is how we are working right now. And I would like to end my presentation now. Thank you all very much. We will be available to take your questions later on. Thank you.

Thank you. Good morning. Please let's see if we have any immediate question from the audience. Otherwise, we'll move on. Very well. So we'll now have a quick break. Please do not leave because right after that, we will hear our Chief Generation and Transmission Officer, Marco Soligo. We will also have our Chief Information Technology Officer, Luis Cláudio Correa Villani; and also our Chief Commercialization Officer, Sergio Lopes Cabral. Thank you.

[Break]

Welcome back. We are now continuing our Cemig Day. Before we start our agenda, I would like to ask you to place your phones on mute so that we can have a smooth event. I would like to bring to the floor to continue our Cemig Day, Marco Da Camino Ancona Lopez Soligo, our Chief Generation and Transmission Officer.

Hello, everyone. Good afternoon. Good afternoon also to those that are following us online. Let's start the presentation. Well, I have been at Cemig for 40 months. And for 36 months, I was a Chief Stakeholding Officer. And then I took over generation and transmission area. And for a period of time, I was wearing both hats. Considering all the years of Cemig, we have also been rookies here. So let's talk about generation and transmission.

Under this management, we have two approaches: one, very much focused on engineering; and also a strong focus on the financial area. So we are aware of the millions of reals that transmission and generation bring in terms of cash flow and how these different areas are important for the final results of the company. On this first slide, we have the plant of Emborcacao. This is the largest hydroelectric power plant of the company with 1,192 megawatts of installed power. It was opened in 1982, and it was then retrofitted in 2022. It has four Francis machines, each one with 400 megawatts. It is fully tele-assisted by our operations center, which is in our center in Belo Horizonte. You cannot look at it, but the dam is 1.5 kilometer with a height of 158 meters. So in its generation business, the company has 30 HVPs. It has four photovoltaic plants, two large and two smaller ones. And it has two wind farms. So we have in total 159 generating units in the generating business. Out of these, 97 are hydro.

Diving deep in generation regulation, we know that one of the crucial points for this business to work is the availability of the generating units. And there is an indicator, which is the availability indicator of these plants. The indicator -- this availability indicator says, of all the time that you should be available for generation according to ANEEL's reference of 5 years, how long were you available effectively? It could be a little bit higher, a little bit lower that reference. If you are a little bit lower, you will have financial penalties. Considering the whole business of generation, we have BRL 2 million of penalties. So BRL 2 million of revenue that should come to generation business, which represents 0.05% of net generation -- net revenue of generation is not coming to us. So how can we achieve this result? So one of our guidelines and one of our objectives here is that assets have to be available. They have to be available. In our monthly meetings, we bring to the Board of Directors our availability factors.

So turning to the next slide, we will show you, look at this. Our availability for HVPs, here 96% and the sector reference is 89%. We have the forest unavailability. This is what I was not able to control. And there was a problem, an expected problem. There was an unplanned stoppage. So how much is that? 0.8% in the year. And also look at solar plants availability. We are at 98.9%. And our availability for the wind farms, which is 89.9%. This wind farm availability tends to increase in the second half of the year because we have our planned maintenance done in the first half of the year because we will have less wind. In the second half of the year, we can generate more. So generation business. For that, we have to maintain everything that we have and maintain it very well. And we also have to grow.

Now let's turn to the next slide. Here, we have two undertakings that represented growth in the company. And they were Eduardo Suares solar plant in Montes Claros Minas Gerais, and Jusante solar plant. These are centralized plants. We are also building some of them already energized and different distributed energy units to mega, for instance, like Reynaldo mentioned. Eduardo Suares plant is not dispatched by the ONS, so we do not have curtailment there. But Jusante, we have curtailment. The maximum curtailment of Jusante plant for this year, the average was -- a monthly average was 20%. This is lower than the average curtailment for the solar power plants in the Southeast market, which is 30%.

So what have we done here? How did we do it? Our CEO told us, look, we also always want to have an associated PPA, a pluriannual plan that can be minimized. And most of you check our balance sheet and our -- also our quarterly returns. And you will see that these two undertakings, we invested around BRL 850 million. And we were able with no risks, make them feasible economically because we signed a partnership with six companies here. The Jusante, the supermarkets and an economic group also related to retail. With the help of our trading company, Sergio is going to talk about this later. Our trading company helps us a lot so that we can turn this growth feasible in generation, and it will help us in the future growth as well. So let's move on.

We have shown here. And we already know very briefly, we organized ourselves and we were able to participate on GSF auction. Andrea mentioned that in the second quarter results call. And what I would like to stress is that we were able to get what is equivalent of a plant of 65 megawatts for 30 years for BRL 200 million. This is 1/3 of what it would cost, not counting the risks to build it and also environmental risks and others that we might mention. So it was a very good deal. This goes along the lines that our CEO already said. We will be prepared for opportunities. To be prepared for opportunities means also to have a great M&A team, which nowadays it's under Andrea, our CFO. We can quickly bring together finance, regulation, legal, operations and participate in an auction with a low goodwill and to be able to get a good business for everyone: the company, investors, the state of Minas Gerais and so on.

Now this is Irape plant, this one in the picture. This is one of the largest, over 200 meters high this dam has. This is a beautiful undertaking. It was developed around 20 years ago. So now we are going to show you -- and you remember that I mentioned we have to keep and maintain well what we have, and that means to modernize our assets whenever that is needed. Most of the large plants of this company has been built in the '60s and the '50s or '70s. And of course, just like everything in life, these assets depreciate, and they need to be fixed or renovated or potentialized. And this is what we are doing in this plant. It's a 2-year work. It's going to cost BRL 200 million, and we are working on the three generating units.

We have studied the other assets modernization. This is the first one, but we know that we have to modernize Tres Marias plant, also Itutinga plant, “Camargos†and others. So we are getting ready. We are running internal studies so that when the time comes, we are able to work on them as well. So growth there and growth always associated to this pluriannual plan to take good care of what we have to modernize the plants and also to care for the safety of our dams. The company has over 40 dams, and dam safety is something that is in our minds every day in generation and transmission. And every week, we talk about this, we discuss a topic of maintenance work or an improvement.

We have this dam here from Peti that has 79 years of age. It is safe. But looking to the future, we know that in a few years, it would not be safe anymore. So preventively, we are building a new dam, which is that one. Every other month -- usually, every month, actually, I go and visit this construction works. And from time to time, we update to the top management about what's happening. This should be ready in September of next year. And our time frame with ANEEL is December of next year. This is another example that we are going to grow.

This should be ready in September of next year and our time frame with ANEEL is December of next year. This is another example that we are going to grow. We are going to take care of what we have of our assets that generate revenue. Let's take good care of our dams. This way we are taking care of citizens because there are citizens, there are dwellers on the path of this dam, of course. So now what do we foresee for the near future? We want to be part of the capacity reserve auction next year, Tresêsmaras. These are 2 machines. These are the official numbers, 163 megawatts to be added. We want to participate in the energy capacity reserve auction for the provisional measure 1304 to contract gigawatts of small HPPs. We have 2 projects for the capacity reserve auctions for batteries.

And also, we are working with the possibility of up to -- starting next year if the Board of Directors approves to build a photovoltaic plant of 210 megawatts associated to Três Marias that is going to make use of all the connections already existing. This is a point of connection already from this plant. So we are getting ready to the future. We are taking care of what we have. We are looking to the future. We are thinking strategically. That's what we have been doing for generation, and these are examples. This is the portfolio. And there are other projects as well that are being developed internally. So let's move on. Concessions renewal for 40 months that I've been in the company, 40 months that I hear talking about this topic. I believe that we have been working very well in the regulatory aspect when we talk about our financial modeling, when we talk to ANEEL, what is worth, what is not worth and the possibilities of renewing all of this.

And right now, we are moving forward with a renewal per quotas. Sá Carvalho already had a recommendation from ANEEL. This is in the ministry and not [indiscernible] yet. But anyway, we are working on that, and it's not under our radar. anything that -- I mean, it's not under our radar not to renew these concessions. Therefore, we intend to keep them in our portfolio.

Moving on. Well, a vision for the future, our perspectives. We talk about renovation, modernization, repowering of existing assets, and that depends a lot on hydrology. It's not always that this can be done. We will be doing that in some plants that add 10% and some not. There are some that you can do it some and you can't. And we will always try to increase the installed capacity and assured power, contracted energy so that we can deliver energy to our trading company.

Of course, we also look for opportunities in auctions as we just saw the one from GSF that showed up as an opportunity, M&A. We also have mapped all the assets in Minas Gerais of generation that somehow can have -- that we can have a conversation with. Do you have interest of selling it or not? Can we talk about it? That's it.

And we are working on it. We also take into consideration the associated, the reversible plants, the ones that are not a huge engineering challenge. We are also mapping all the potential of reversible plants in Minas Gerais and also floating plants. We are taking them into consideration. We have studies to eventually develop some.

So look, I talked about maintaining what we have, maintaining well to fix what needs to be fixed, the planned maintenance, planned downtime when needed to grow at a very low risk, to look at opportunities in the short term that might allow us to be successful in the generation business and also look at the mid and the long term towards development and product portfolio so that we can grow in that segment as well, always analyzing the availability of the assets, the safety of the ability of doing more.

We want to do more in generation, and we want to be able to grow. But now let's look at transmission, which is very different, as you well know. So this is a transmission. This is our substation of Três Marias. We have the plant, and this is the substation. We have here from one end to another 430 meters. And the whole size, one end to the other end, we have 230. So the middle here is 130. So it's very large. These substations are very large, and this one has an annual permitted revenue of BRL 23 million. And somehow, it is related to serving to 139 cities.

Therefore, it needs to be available 100% of the time, ideally. The company has 42 large substations of transmission. They're huge. We have some that are even larger than this one. And we also access 11 substations from other agents. And also in transmission, we are obsessed by available assets, always available, available, available, available to minimize discounts by unavailability. And all of that is a matter of weekly discussions around the top management.

Now here, we show you our permitted annual revenue performance. It's very satisfactory. We had the tariff review, and you know that we had the acknowledgment of the BRL 1.5 billion of extraordinary results, the recognition of investments in a higher amount that those were accounted for. We are investing to minimize or to zero out the permitted annual revenue because of the end of the RBSE.

And now when you look at the variable deduction, this is a percentage of the revenue, you see that this is very close to the sector. We have 135 and 136 in the sector. And look, here, it increased in 2023, increased 1.10 in '23, 1.9 in '24. What happened here is that a transformer of 500 kV, which is a very large one in auto substation that burned. This happened from the third to the fourth quarter of last year and fixing this transformer, it takes a long time. So we had a discount of variable parcel of BRL 535,000 per month because of this problem.

So it should be back in operation in November, and we believe that we'll be able to energize it up to February of next year. Well, net of this effect, we would have a PV of 0.77. And for the year, it would be 0.95. In old assets here, we are talking about assets here of 30, 40 years.

A lot of them already depreciated. And here, we have the regulatory compliance. You can see this indicator, IRCOT, we check it every month. We check it with Andrea's team. We discuss this indicator every month, and we are below the regulatory compliance, and we will remain below the regulatory compliance in this management. If you look at our annual balance sheet and also social responsibility report, you see that transmission has less people.

So we are being able to do more or the same with less people. At the end of 2023, we had 100 -- 3,183 employees. And at the end of 2024, 1,081, and we still are reducing the headcount. Therefore, this contributes to these indicators and everything that is related to productivity. So we are doing very well here regarding our revenue.

Moving on. We show what we are doing. Today, we have 41 contracts that are active. We have 22 suppliers. That means works in 45 transmission components and the ones that I mentioned. So I would say, basically, all substations of transmission of the company have active construction works or some type of work being done. We have already increased in our APD, Annual Permitted Revenue in BRL 200 million since 2021, and we are going to show you what is contracted, what we intend to do. And easily, we'll be able to estimate the additional annual permitted revenue that we are going to have in the next 3 to 4 years and everything that we are doing is finally energized. So we have here some examples of works, a new reactor of 500 kV. This is huge.

We have 3 floors of the building, the substation of [ Simão ], [ Balta, Grande substation ]. We have new equipment and new transformers and a new section of 138 kV. So we have been able to accelerate our investments in transmission in the past 2 years.

Now moving on, we will show you that. In 2019, like Reynaldo was saying, BRL 50 million for transmission, 2023, BRL 111 million, 2024, BRL 488 million, and we have already contracted BRL 1.2 billion for this year in investment.

Remember that our CEO talked about a special care that the company had in creating new groups of suppliers and improving its contracting process. [indiscernible] is here. This has been done in generation and in transmission as well in the last 16 months, and we were successful. Our purchase area with Guilherme and Daniel, they were very helpful with this bidding process because this is a public company, and we have been able to hire good suppliers. We could count on reliable people, people that will deliver on time and also with good quality doing the best they can.

And the Superintendent of transmission always tells me, Marco, this replacement that we contracted here this year. These 2 years, they mean a replacement of transformers that correspond to 1/3 to the capacity of 20,000 MPA of the transmission business. So we are switching transformers that were 100% depreciated with a higher risk of failure problems and all kinds of accidents risks that we can think of, and we are replacing those by new pieces of equipment. It's just like getting a new car. You had an old car and you change it for a brand-new car.

So the chances that you're going to have a problem is very little, this is what we have done here among other improvements. And here, we show you what we intend to do in the next 2 years. We'll keep on investing in reinforcements and improvements. If you ask me how much is reinforcement, how much is improvement, 20% reinforcement and 80% improvement because we are exhausting the possibility of switching equipment. So some piece of equipment that could be considered just a reinforcement.

But in the last tariff reviews, we had no disallowances and the investments that we have made in the transmission business, which is very good. We have also asked now authorization to switch to reactive compensators, and we are also working in retraining for transmission lines. And this is going to gain traction. We have already started looking at this looking to the future.

Now our perspectives, like I mentioned, the capacity upgrade of transmission lines, digitization of substations, we will try to approve a digitization project still this year, and we want to quickly install this work and also opportunities for acquisitions to look at what's happening in Minas Gerais and the possibilities that the company might have to grow and transmission. This is what I had to bring to you. And if you have any specific questions, I will be available during the Q&A. Thank you very much.

Thank you very much, Marco, for your participation and presentation. Now we would like to bring to the floor our Chief Information and Technology Officer, Luis Cláudio Correa Villani.

Good afternoon, everyone. I will try to be brief. I've been in the company for 6 years. In the technology area, I work with IT and telco. I'm going to stress my presentation on a digital transformation program, as our CEO already mentioned. And in this cycle of 10 years from 2019 to 2029, it represents BRL 1.7 billion, which for technology is a lot of money. So far, and I will show you a slide on that, we are very close to BRL 900 million in investments. So we'll be moving on in a linear fashion. We have worked in different areas of digital transformation.

There is a slide at the end, which is a wrap-up, but I would like to focus on a single project which has already been mentioned a few times. And we understand it is what allows us to have this leap in digital transformation for the company, which is a system that manages the distributing electric grid of the company. We operate in old systems developed in the '90s in the beginning of the year 2000.

The technology has evolved a lot. Marney already talked about a huge expansion in the distributing company. We have more digitization in the substations and the reclosures. Therefore, to make use of this possibility of this huge automation potential, we need a system that has intelligence to expedite all the intervention and the planning on top of this environment. So the objective of digital transformation as a whole is to improve management as well as customer service. And talking about the electric grid, customer service has to do with the resilience and availability of the electric network. This project that we call ADMS and ADMS means Advanced Distribution Management System that started as a project in April of 2023.

And in April of '24, we started adding modules into production. So there are lots of letters here. I will try to explain it in a very simple way, but this system involves several layers. The basic layer is what we call SCADA, which is a supervision system here in the network that knows if the circuit is energized or not, if it's open or closed. And then we have a slide right after that, we have another one million of electric points that signal their status for the supervision system. This system, SCADA is implemented in low and mid-voltage. So we have more than 520 substations operated by this new supervision system. We started going live in November of 2024.

And in June of 2025, we launched SCADA for medium tension voltage. So all the supervision part of the electrical grid, more than 1 million points controlled, but they're already operating on this new platform. It is a market platform positioned by Gartner in the technology evaluation as the best electric grid management system. And we are working on the other modules. OTS, Operating Training Simulator. This is something we never had before. We can simulate failure situations or disaster situations or extreme climate events and ensure that the systems operate or will be able to operate in any difficulty scenario we might face in the grid. This module was deployed in April of this year.

And now we are completing the outage management system in [indiscernible] just mentioned, the distributed energy resource management system in [indiscernible]. The remaining of the modules will be deployed by the end of next year. So in the coming months, this project is going to deliver a lot of value for the company. These are the 3 last lines, the OMS module for outage management system.

So any unavailability, the system will identify other failure allies, isolating it and trying to restore the affected areas as a side effect or the area itself by another power source. And OMS outage management system looks at the quality of the energy, energy balance, power flow. And thus, it issues the quality of the power supplied. And the rims that will, like I said, manage all distributed energy resources, not just the photovoltaic plants in Minas Gerais, could be the wind farms as well. And in the future, eventually, the electric vehicles will also be part of this energy injection in the grid.

Please click on the slide. This shows what [indiscernible] is all about. We have distributed energy resource, power generation, battery systems, electric vehicles, flexible loads. And the objective of [indiscernible] is to do the orchestration. Traditional distribution of energy was always radial, having a power plant, delivering power to the edges of the grid. But when we start adding in micro and mini DGs, there is an imbalance in the power flow. There's energy moving in all directions, and that can oscillate tension frequency and reaction of the grid. If we don't have a system to manage all that, the grid will get worse.

DERMS is the first DERMS project in Brazil. And this is the biggest distribution company running this kind of solution, Cemig Minas Gerais. This in the southern hemisphere of the planet. This is a big project. It is very representative for the solution provider without which we will not have a DSO model, as Marney mentioned. In other words, for us to be able to dispatch micro plants, mini plants at the edges, the regulation does not allow that for now.

But soon, it will need to because ONS on its own will not be able to manage all that. So every distributor company will become a mini DOS, a mini distribution company. And this is a ticket to play. Very well here, we summarize on the slide the advantages of the system. So we are talking about fast detection and significant reduction in the outage duration and frequency. To give you an idea, you already know the concept of DEC. Our regulatory DEC is about 9.5 hours rounding it. And this is the expectation of a minimum gain of 30 to 40 minutes in reduction of DEC by using automatic incident restoration systems. We start having more efficiency in energy flows, reducing technical losses, which means efficiency and money in our pocket. We have more resilience because energy will be a lot more balanced.

Any disturbance perceived, this system will react faster. And of course, we have a smarter decision-making because I see a dynamic energy balance. I can see, for example, where it is useful to have new distributed sources, strengthening my grid, my network from the technical standpoint because I started having a track record of seasonalities of all of the renewable sources connected to the system. These are the numbers I mentioned, almost 2 million data points.

In average voltage, we have more than 18,000 pieces of equipment, most of reclosures. Marney expects that this will serve everyone. We'll expect to get to 50,000 reclosures, more than 500 substations and more than 2,000 feeders and more than 500,000 kilometers of networks. Now with this system, with the ADS, we will have a lot of improvement in managing all that. And these are the benefits of DERMS.

We monitor all distributed power sources in real time. We can predict energy generation and consumption, avoiding [indiscernible] which is a big enemy. We optimize dispatching when we become a DSO, the suspending ANEEL regulation. But we believe that this is going to happen in the short term. We avoid overloads and voltage fluctuation. We reduced incidents by doing so, we reduced financial compensations as we improve the financial efficiency of the operation. And this allows us to create virtual power plants, VPPs.

I'm going to explain this very simply. Imagine having a neighborhood where everyone has photovoltaic panels on their roofs for more efficient management, we could group together all these micro DGs, almost as if they were a virtual power plant and dispatch has a bigger load. So these modes of operation will allow us if the regulation evolves, will allow us to provide this kind of service to the owners of DGs in the future. It is a monetization option if the regulation evolves in that direction.

And moving to my last slide, just to say we're bit going. In this BRL 1.7 billion to be invested by year-end, BRL 900 million. Well, BRL 700 million have been contracted. And hopefully, in this quarter, we'll complete that cycle. Basically, with 3 pillars. One is infrastructure availability with a good response time and cybersecurity, which is a constant concern. All of our environment is now in the cloud. And now we are moving to a multi-cloud system that is very resilient.

Second pillar with the sale of Axxiom, which was a company of the group and Marco divested, we stopped doing in-house development and moved to market solutions. So our model is using the best market solution we can have for every need we have, which brings us time to market to evolve as AI software automation parts evolve.

And the third part, which is the most relevant, is that we are going to have network sensoring, smart middling, billions of data points collected in short periods of time. So we'll have the infrastructure, data lakes that are able to transform this huge amount of data into useful information for decision-making. So perhaps we have the largest data lake integrating smart meters in the Brazilian electricity sector. This data governance is what feeds into the creation of AI agents with high-quality data. If no use having a wonderful AI that has hallucinations because the AI is collecting not so good quality data.

If I limit AI to work with quality data, data that I can trust, and in which I know the semantic layer and in which I can trust the quality, the AI application becomes much more useful for the business. So this is what I had.

And summarizing everything in one sentence, by managing elections, providing excellence in services and information to the company and clients in a way that is resilient, timely and safe. This is what we are pursuing from now on.

[Operator Instructions]

You have if you have any questions to Marco, he's here as well and he can..

Technology, as we know, is getting more and more integrated to people's daily life and its advantages represent a valuable opportunity to improve processes, efficiency and innovation in the works carried out by CEMIG. Moving on with the presentation, we will address the trading strategy of the company and its outlook. With that, we invite to the stage the Chief Trading Officer, Sergio Cabral.

Hello. Good afternoon, everyone. I have a difficult task of making the last presentation. I've been with the company for about 7 months, and this is my first [ Investor ] day. I'm very happy to be here. We have a lot of challenges ahead of us, but also many, many opportunities as we are going to see now in trading.

Andre spoke a little about this, our CEO as well. We have been -- we and the market have been suffering with 3 points, one more specifically related to us. The first one is the price differences between submarkets. In other words, the prices in the North and Northeast are different than the prices in the South and Southeast.

The difference in March was BRL 268, but we can observe that there is today a movement by the regulator to [indiscernible]. And we see that in June, this is -- this price difference has been almost 0. In August, it increased a little, but we don't expect this to increase more than this. In other words, the effect of having transfer increasing interchange of power between the South, Southeast, North and Northeast is being captured by the model.

We had a problem of reduction of liquidity in the market, but we are talking about the exposure of gold, a counterpart that defaulted in the market. And until June, we have a loss of BRL 28 million already booked. And of course, these are good moments for us to review our risk policy and try to add more security to our modeling. But also, it is an opportunity to look at our partners with whom we are relating to purchase power. There was also a change in the price formation model. This impacted us.

If we look at this curve, the blue curve is our budget. We're looking at future prices with the previous model and what was actual. For example, we see the detachment in March 2025. I think that all of the effects happened in the same month, shortage of water, change of the transformation model. There's a price difference. We had budgeted at BRL 59 and the price increased to BRL 327. So these are the 3 impacts that we are dealing with in the market. But like I said, we have some opportunities and some strategies, strategy options.

First, we have to seek growth in the most profitable segments. We, as a company, offering the highest number of consuming units in the free market. And this is a very important piece of data because it means how much CEMIG has bet in the free market since the beginning of the free market, and that gives us some opportunities. We are the ones that know our customers the most, the customers of our portfolio. So we can have more customized products, adding value to the customers in our portfolio.

Of course, we'll continue to look out and to prospect customers, but we will also focus on our own customers in our portfolio where we are sure we can extract more value. I mentioned differentiated product creation, trying to tap into more profitable segments. And we have been increasing sales in the North and Northeast regions. This is something that we are observing an effort we are making, and I'm going to speak more about that. This is a little bit of our balance sheet. We started adopting a strategy.

Given those 3 facts that I mentioned, we started adopting a strategy which is more risk averse. We kind of stepped on the brakes to understand the market and what our peers are doing, and we decided to close our positions. So in 2025, we practically closed our position in 2026, BRL 127 million, 2027, BRL 128 million and a little more in 2028, BRL 326 million. But when we observe this number proportional to our portfolio, we have less than [indiscernible] exposure in 2025. And the maximum is 12% in 2028, and we're wing for that recomposition. Starting in 2029, we have an opportunity to sell power this part in gray, which is energy that is not contracted. It is available for sale.

So we are operating, aiming to maximize gains and to increase the margin. I think that this is our primary focus. This is what I mentioned, sale of energy increasing in the North and Northeast submarkets. In 2017, we sold 118 megawatts there. This year, we'll get to 359. We more than doubled our sales in these submarkets. And a little bit about the margin.

And this is a take-home message for this slide. We are suffering with low margins in 2025, '26, '27. But we project very interesting margins in 2028, '29 and '30. In other words, we have a positive horizon. Although it's not such a good moment for the market, we understand the whole sector is suffering. We envision a bright future compared to what we are having now. This is our position.

We remain ranking first in the retail market. Like I said, we had 10,000 consumer units, 7,000 in wholesale, 3,000 in retail. We are present in all states of Brazil with the exception of Roraima, which is not integrated yet. But about that, we operate all over Brazil. And here, our trading strategy.

First, we acted on wholesale, now in retail. And this is positioning us for the future, which is opening of the market for low voltage. So here, we have e-commerce, the first -- our e-commerce in Brazil. The customer journey all happens in our site, and simulation to signing the contract. It's all done in our website. It's very interesting. It's technology bringing us a tool. We see this happening in retailers, but in low voltage, this is convenience for the customer. It's flexibility for the customer.

And one part that we've been working on is to expand our partnerships to have partners who will help us sell power to the rest of the country. With a program that we call Synergia. And here, we see the improvement, the evolution in the number of partners we've had since 2023. In 2025, we are reaching 661 partners, helping us sell power all over Brazil. I think it is an important point that we want to keep our margins. We are working to close our positions, but also keeping an eye on strategic sales to strategic partners when it makes sense to open our position, ensuring margin for CEMIG.

This is one product that is growing in sales, CEMIG REC and IREC. These are energy certificates that our energy is 100% clean. We can see that this kind of certificate is selling more. In other words, we are adding more value to our product, added value to our clients. They can use this in their sustainability reports. And I think that this carries an intrinsic value. And again, this sets us apart in the market once we offer this kind of solution.

And this is the future prospects. Here, like I said in the beginning, we are going through a moment of a lot of changes in our industry, many variables playing a role. And on the other hand, we have a lot of opportunities, and it's up to us to position ourselves to control them. CEMIG with a number of customers and clients we have and our experience in the free market, might be one of the first companies that can take advantage of the future prospects because we are seasoned. First is market opening. We are preparing processes and systems, optimizing them to pursue the best margins. That is our focus in the low-voltage segment.

For new products and services, we're carrying out some studies using BEVs to optimize the system. As our CEO said, we have a lot of pilot projects underway so that we can capture value based on these products. Development of customized products, we are starting to use the customer journey via our [ BLD ] or spot price and the things that will bring us the best margins and conditions to operate in the assessment of our supply services, such as data centers.

We are looking at this with a magnifying glass with a lot of care. We know it's going to happen, but the data center cannot be just a fad. We shouldn't just pursue data centers if we don't have visibility of the profitability of this kind of asset. Well, I guess that this was my last slide. Thank you very much. And I will be around for questions. I take home messages. We still have a hard second half of the year, but we have a very positive horizon in trading.

And now we will start the Q&A session. Please choose one of the chats because you're going to be here with us. This is a time for us to exchange more information, answer questions and share knowledge. I would like to bring to the stage our Chief Distribution Officer, Marney Antunes, our Chief Generation and Transmission Officer, Marco Da Camino Ancona Soligo, our CFO and IRO, Andrea Marques Almeida; our Chief Legal Officer, Cristiana Maria Fortini Pinto Silva, next Chief IT Officer, Luis Cláudio Correa Villani, who's already here on stage; our Chief Trading Officer, Sergio Lopes Cabro; our next CEO, Carlos [indiscernible] de Colon. CEO of [indiscernible]. And so we have everyone here -- and this is the time for the Q&A.

And if you have questions to Sergio Cabral was the last one to present. Please, you can ask. And we can also take questions from people following us online. We have hands raised.

I'm Daniel [indiscernible] with Safra Bank. I have a question about curtailment. Actually, I have 2 questions in one. I just want to understand how the company is evaluating ideas to solve this topic. You mentioned one of the solutions to use distribution companies to operate kind of an operator. And you mentioned some tech solutions that can make this possible.

I would like to understand that if you think that this is one way to solve curtailment and how you could implement this, how long it would take? And still on this topic, how do you evaluate the idea of a competition mechanism similar to what was done with the GSF mechanism to deal with the curtailment issue. How do you see these possibilities?

All right. Well, first of all we are waiting for the regulation regarding curtailment. As presented here by myself and [indiscernible] information curtailment, we are preparing the company because we are thinking that technically the DESCO, will need to have the curtailment. We are doing joint work with ANS and we've had some meetings with them to evolve in this discussion and to see how we are going to be doing this.

What would be the percentage of curtailment for the plant? Will it be 0.1 or a different percentage for all?

So this is not regulated yet. We're still waiting to see what we will be doing. What's your name? Daniel, Safra Bank Sapre, Well, thank you for the question. Regarding curtailment, this is being debated extensively in our industry, both by associations, power companies and the agents that are impacted by it.

As we all know, we don't have a definitive solution yet. Actually, no solution for the case. We cannot really tell you how this issue is going to be resolved. Hopefully, it will be satisfactory for the whole industry, the whole power industry, but we haven't got any definitions yet.

Victor Silva from [indiscernible] Investments. So right now, in Minas Gerais legislative house, the bill of law has been approved, and this removes the mandatory aspect for a popular vote for privatization. Talking about a subsidiary of yours, Gasmig in the past, you have considered the possibility of an IPO. And I would say that after this bill of law is approved, you could even privatize it. Does that make sense? Still -- are you too still considering the possibility of generating value with this specific asset block or CEMIG's plans for Gasmig?

Let me start. Talking on behalf of CEMIG. We have a strategic plan to prepare Gasmig for an IPO. This is what we had in our strategic plan. What's being actually discussed at the legislative house has no participation. We are not participating. It's not up to us. It's not our decision what is going to come out of this bill of law.

This is a strategic decision of the state, and it has to do also with [indiscernible] , that involves CEMIG as well. So about CEMIG in regards to CEMIG, we are prepared, and we will be prepared for a possible conversion and corporation. That is for CEMIG itself. But we have had no communication regarding any other company, just CEMIG.

And in a way, we will just prepare ourselves and get ready if the state requests and if they request us to convert stocks to become a corporation. But in fact, the only thing that we have today in our strategic plan is to prepare Gasmig for a possible IPO. And in a way, the company is prepared. And of course, Carlos can talk about it.

I think Andrea said it all. This is a decision that is on the hands of the controlling shareholder. The controller of our controlling shareholder. This is a state decision that is being discussed by the legislative panel and we have to wait for a decision. But Gasmig is ready. If we had to go for an IPO tomorrow, the company is ready for that. But there are no plans today for anything. This is a state's decision.

I have 2 questions. First, I would like to hear from you about [indiscernible] and [indiscernible] and the whole process because there was a ruling from the Supreme Court. I would like to know what is your understanding, although we do not have the final ruling, especially regarding the possibility of not being able to have the expected amount, the amount that has already been transferred to consumers?

And the second question I want to know is about the potential M&As of Broomfield assets, a possible partnership with Taesa for the acquisition of Quantum's assets.

We are waiting for this final ruling because for now, we do not understand what is the Supreme Court's decision. Actually, what we realize is that there is a shared question here because you can interpret that the 10 years that are in the decision would be retroactive. The company has to reimburse. For instance, it received in 2019, and it has to reimburse up to 2019. That could be done also for the past.

So we need to wait for this final ruling to try to understand. But CEMIG has already paid some of those amounts. So we have an understanding, an initial understanding regarding what was disclosed for this ruling that there is no loss for CEMIG after the Supreme Court judgment.

But we need to wait and see what's really written in this ruling. About your second question, we did see the news in the market, but we don't talk about news. But what I can tell you is that we are considering opportunities that fit into CEMEG's strategic plan. And when we come to a conclusion that is then approved by the Board of Directors, we communicate to the market. We have nothing to communicate to the market, but this is our position right now. We have seen the news, and we do not comment on news, and there are a lot of them in the market usually.

I am Vladimir Pinto with Bloomberg. My question was about CPM 2. What is the company's view of CP? And how would you be positioned? What is your preliminary position?

This is regarding modeling of the cost of [ Tradesco]. Again, what's the name again?

Vladimir.

Okay. Well, actually, this cost modeling for Tradesco, the way in which it is done, CEMIG is actually going to take advantage of that. It's going to be in a favorable position because it is including the complexity of losses, mainly technical losses. There's also a separation of urban and rural networks. And again, this is in our favor. So we believe that with this modeling, we are actually going to become a benchmark.

The big distribution companies with long rural transmission lines where technical losses tend to be better. Well, they might have an advantage, and we hope that this will happen, but this is still at the public hearing stage.

Are there any more questions from the audience, please just raise your hand. And we still have about half an hour. So I'd like to invite on stage -- well, I'm actually going to ask questions that came from the online audience. The Superintendent of Investor Relations Officer, please come on stage. Raise your hand and go ahead and ask a question. You have a priority. Please go ahead.

Actually, I'd like to ask one more question regarding trading margins. You showed in the chart a reduction, an abrupt drop in the years of 2025, '26 and then a substantial recovery, a rebound. Could you elaborate on the reasons why there is such a volatility in the margins?

Your name again?

Daniel [indiscernible] with Safra Bank.

Thank you for the question, Daniel. Well, actually, we suffered a lot with the submarket. This stressed a lot our margins in the years of 2025, '26 and '27. That's when the margins are going to be more impacted because we lost our positions. But after that, we understand that we are going to have a solution for the submarket and the margin will improve. So the difference of prices in the submarket is what impacted our margins in these year and in the coming 2 years.

Yes, go ahead. Two more questions.

This is Andre with Santander. First, I'd like to hear from you about the auction that happened a few months ago about the HPPs, the hydro plants.

Why didn't you participate with the 3 plants that are about to expire because you submitted a renewal request and that did not allow you to take part in the auction? And the second question is about dynamic of post-employment.

Yes, name is Andre from Santander, right? Okay. Are you asking about the GSF auction? Okay. That was the strategy, I cannot explain our strategy. I'm so sorry. If the company's strategy, we preferred to apply for a smaller one, smaller plant, but we didn't win. But I'm not going to explain our strategy. It's about the strategy of the company.

Well, actually, we looked into the value of that. And if we won the auction, we might lose the value we currently have in the hydropower plants today. Perhaps [ Robinho ] is the best person to explain this. in, get the mic and he can explain this. He can explain this brilliantly. So I'd like to ask [ Robinho ] to explain this. It's not a problem. He's the expert in valuation. [ Robinho ], please?

Well, thank you. Actually the 3 power plants would have the contracts expiring very soon. And because we had started the process to renew the concessions with ANEEL and the Ministry, Mines and Energy, we would run the risk of bidding, gaining an extension. And according to the law in force, we would have an anticipated renewal at the discretion of the current in power.

So part of this extension could be lost in the process of concession renewal. And this was the possible risk that we considered. And this was the kind of evaluation we did of the assets. Still on post-employment, We have 2 big post employment fronts. One is a discussion about parity in terms of subsidy of private pension and one related to the health insurance plan.

In both cases, we are in the process of negotiating regarding [indiscernible] we have a partial agreement already advancing to release values that were deposited and to make payments directly to [indiscernible] of the part that is not debatable. We still have one part of the payment, which is debatable.

And as regards BSI or the health insurance, the process of negotiation is unfolding. It is evolving. It is very important that we remember that the company has a concern, not that it doesn't exist in another case. But speaking about the health insurance, we want people to have a sustainable health insurance plan that has financial soundness that will continue to exist in the future.

CEMIG is guided not only by legal aspects, but also by this approach, one of ensuring the future of the health insurance plan. Hopefully, very soon, we will bring you more on these 2 topics related to post-employment in particular, the health insurance. And let me add something to this. It was very positive that the unions have submitted proposals, something that we didn't have before. I think that we are finally getting closer to an agreement.

Thank you. So let me know if you have any other questions, but I'll move on to the online questions. There are 2 of them that have not been addressed yet, and they came via chat. And first one, I'm going to turn to Andrea. It has to be with the credit risk. Once we had a situation with trading. So the question is what the company is doing to mitigate negative effects regarding that considering we have other contracts with the trading company. If you can talk about this, what we are doing internally on this front, please?

So we are strengthening the risk governance, the financial risk governance that has to do with the market risk and credit risk as well. And we are bringing that to the finance area, which will be establishing risk limits for the trading company to operate. And in the credit area, we are running more robust analysis. We are then in this process of applying more severe criteria.

And so that's how we are going to move on. In case of some trading companies, we have a critical situation, but we are going to start now to follow up on the trading companies and also on individuals, the owners of the trading companies because sometimes they open and close trading companies. And so we have to have an open close follow-up of these counterparts. And we believe that would make sense to have a stronger governance to do that under the financial area in partnership with Sergio, of course. So we will be doing that in my area as well to do the risk evaluation for marketing for credit in that area.

The other question is to Yuri from CMI. Reynaldo presented an exponential growth of EBITDA for CEMIG in terms of energy generation. How is the strategy? Are you developing new projects? Do you have acquisitions, M&A? So if you can give us more details of CEMIG that explain this growth.

So our accelerated growth is following our strategy of reaching 1 gigawatt peak of capacity. Currently, we have 355 megawatts speed, 100% traded and occupied with clients that is keeping up with our growth pace. But our strategy, as our CEO said, has a greenfield model. We have some ongoing constructions right now in some mobilized works already. And we are also considering brownfields as opportunities, especially in our asset-light strategy of using assets that can be leased with the right to purchase in our growth strategy for time to market with the level of energy balance and risk mitigation according to our behavior and our growth.

So we have a leader in the market with 20% of market share in Minas. And last month, we are not leader, but we reached the leadership of the process. And now we are working to have 60% of our capacity strategy on top of our own assets and 40% of our strategy being asset-light.

And finally, this year, we expanded our area, CEMIG distribution, the group CEMIG is in 744 towns and Minas Gerais has 853 towns and CEMIG already has 7% of the capacity out of the distribution traditional area, completing 100% of Minas Gerais penetration. And this is one of the options to offer energy by subscription for low voltage. So we are at a very good growth pace, and we tend to expand to the Midwest and Southeast as we have announced not long ago to maintain our growth in the market and also the trading that is already national.

We understand that as a group that it is only fair that we participate in the market, the competitive market being as one of the options nationwide. So growth is happening. We have taken the first step in Minas Gerais as a whole. And now we are looking for new opportunities in other states. Thank you very much. Any other questions from our audience?

No?

So if there are no further questions, I will turn to our MC to end the event. On behalf of the IR area, I thank you all very much for being here with us. Have a nice evening. Thank you. So once again, I thank you very much. Please stay on the stage for official picture. Thank you all for your participation.

I would like to start by everyone that is here in this afternoon. Chief Distribution Officer, Marney Tadeu Antunes; Chief Generation and Transmission Officer, Marco Da Camino Ancona Soligo; Chief Financial Officer and IR Officer, Andrea Marques Almeida; Chief Legal Officer, Cristiana Maria Fortini Pinto Silva; Chief Technology Information Officer, Luis Cláudio Correa Villani; Chief Trading Officer, Sergio Lopzcarrao; CEO of Camigo, Carlos Camo CEO of CEMIG's team [indiscernible] and also Carolina Sena for your mediation.

Thank you all for being here with us and also for all of those that have been with us online. And thank you for those that asked questions either in person or online that allows us to have a very enriching exchange. We end today's event CEMIG's. Thanks, everyone, for being here, and we hope to see you soon in another edition of our investors meeting or CEMIG Day. Have a nice day.

Good afternoon, everyone. I am Carolina Senna, Superintendent of Investor Relations at Cemig. Welcome to Cemig's Second Quarter 2025 earnings video conference call. We inform you that this video conference is being recorded, and will be available on the company's IR website, ri.cemig.com.br, where you also find the full package on this call.

Should you need simultaneous interpretation, the feature is available on the platform. Just click on the globe icon located on the bottom of the screen, chose interpretation and then select the language of your choice. Portuguese or English. [Operator Instructions]

We will now start our call with Reynaldo Passanezi Filho, our CEO; Andrea Marques de Almeida, CFO and IR Officer; Luis Cláudio Correa Villani, Chief Information Officer; Marco Da Camino Ancona Soligo, Chief Generation and Transmission Officer; Marney Tadeu Antunes, Chief Distribution Officer; and Sergio Lopes Cabral, Chief Trading Officer.

For the initial remarks, we would like to turn the floor to our CEO, Reynaldo Passanezi Filho.

Good afternoon, everyone. It's a pleasure to be here talking to you and to show the progress of our company. I would say that as our initial video brought to you, we are now with our largest investment program at all times. Once again this quarter, with growing investments, we already have BRL 2.7 billion in investments in this first half of the year and also with great consistency in resource generation, adjusted EBITDA of BRL 2.2 billion, a very sound result. This is our adjusted EBITDA with the highlights.

So once again, an investment plan in full execution, we will see the opening of substations, greater grid and conclusion of works in generation, also in gas. This is -- we are very close to starting our Midwest gas pipeline. So we are at full speed in our investment plan. And with an adjusted EBITDA that is very sound, growing BRL 2.2 billion in the quarter, I would say that this shows how sound and resilient our operating performance is. There are three topics here that we should be highlighting and they are something special for this quarter.

The first is RBSE, the existing system basic grid and the review of the calculation methodology here. So for Cemig, we have a noncash impact for the quarter of BRL 199 million. It's worth mentioning that the EBITDA that we usually disclose is the IFRS. So -- and this EBITDA result shows, but cash will come over time. Also, there is another impact of a topic that is of concern, and we are fully alert about that, and we see positive scenarios regarding to this topic for the second half of the year.

But for the first half of the year, specifically for the second quarter, we had difference among energy submarkets in our trading sector of negative BRL 76 million. Our projections are that once we have the review of the criteria by the ONS and the greater interchange, this amount tends to be close to zero. This is what we expect, obviously, this is what we are hoping to happen. Also a tariff adjustment of 7.78% in line with other adjustments for distribution. Basically, here, we have inflation and also charges.

And finally, our GSF auction. Again, we participated in this auction. And we were able to ensure the concession extensions for three power plants, one for 7 years and another for 3 years. So this is a total of funds disbursement of BRL 200 million. So I would say that the -- this also shows our commitment to the company's sustainability. After all, we are talking about concessions that we're doing 2037, and we are extending those worth 2044, so we are really thinking about the future. This is not an immediate decision, but this is an extension of concessions that are due in the future, but we understood that those were opportunities considering the energy sold for the companies. And the prices are very competitive.

And therefore, we believe that this really adds value to be part in this GSF auction. So another BRL 200 million, two of them, 7 years and one of them for 3 years. I would say that these are the main highlights I would like to start the call with.

Now I'll turn the floor to Andrea. And obviously, we are available to take any questions you might have shortly. Thank you.

Good afternoon, everyone I apologize, I have a cold. But we, again, are following our investment plan. It's going very well. Out of these BRL 2.8 billion that we have for the year, we have concentrated investments in distribution so that we can better serve our clients, and we have been doing that in a very structured fashion. Therefore, we have energized nine substations in these initial months. Also, we have been able to build over 2,600 kilometers in low and medium voltage networks.

In generation, also, we had relevant investments in expansion. Also, we have investments in maintenance in terms of safety as well and transmission, again, investments of BRL 200 million, and especially in reinforcement and improvements for Cemig as well, as Reynaldo mentioned, we had Central West project, over 100 kilometers of gas pipelines and Cemig -- also, we added 21 megawatts following our investment plan. This is being very well executed. These are some pictures to show our substations in our Mais Energia program or more energy.

And now, this is our a photovoltaic plant in Advogado Eduardo Soares, we have a grand term of 35 years, CapEx of BRL 464 million and the potential of CO2 reduction that is very relevant for us.

Now turning to our results. Reynaldo already mentioned that when we compare that, now whenever we look at this comparison to 2024, we will have some nonrecurring effects from '24. And if we analyze IFRS, we will see that -- some of the effects might show a reduction. But in the recurring effect, we had a great quarter with an increase of 15% in our EBITDA. And a major factor that helped was the reimbursement of the tariff subsidies that we have received via CDE, the energy development account.

And we know that in Minas Gerais, we have this large effect, and we had a significant reimbursement that came from the CDE subsidies. Also, we had a reduction of BRL 21 million and another migration of our employees to the premium plan. That was a reduction there again. and also exposure to the submarket prices already mentioned by Reynaldo.

Now, analyzing our IFRS EBITDA, talking about the nonrecurring effects, we would have a reduction. But then because we had a reversal last year. And if you remember that, those were tax provisions reversals regarding INSS in the profit sharing program that were very relevant, BRL 584 million in the net profit. We also had an effect of those provisions and also reversal of amounts to be reimbursed from PIS and COFINS. And there was a decision from the Supreme Court at the end of last week, and we are still waiting the final ruling to know which will be the facts for Cemig.

Now moving forward, we show a quick snapshot of the effects to the submarket exposures, and over time, we were showing you our monthly exposure, so BRL 480 in April, BRL 533 in May, BRL 619 in June, but you see that the price difference is already coming down. We've seen June a price difference of BRL 4.88. So the effect on this quarter has been much lower than the one that we had in the past quarter and a gross effect gross effect of BRL 76 million regarding the price difference here in the submarkets.

Another positive result here in -- when we look at managerial expenses, we have increased those below inflation with some effects here in terms of the PDVP or the voluntary redundancy program, the effect was a little bit lower in terms of outsourced services. We are still working pruning trees, also disconnection of some meters. And we are intensively working that, and we are making great investments in distribution. Therefore, we have greater deactivation and disposal of assets.

Now looking at our debt profile, it is very good. We have come to a leverage indicator of net debt over adjusted EBITDA of 1.59, now already, including all the debentures issuing the BRL 5 billion that we mentioned last quarter and already counting on the amortization of a prior debenture, and that helped us to reach an average that tenure of 6 years. So we are also evolving in this average term here. And obviously, we have a very comfortable position in terms of leverage to move forward with our investment plan that is ongoing.

Now analyzing our cash flow for the end of the quarter, we ended at BRL 3 billion, and it was well supported by our operating cash generation of BRL 2.3 billion, the debentures that we talked about, the BRL 5 billion, we had the payments on other debentures that were amortized around 2.3%, also payments of interest on capital and dividends and also our activities on investments.

Now analyzing Cemig's D results, and we will go over again what we already said about the holding. For Cemig's D results, when we compare again, the EBITDA -- adjusted EBITDA effect not considering the nonrecurring effects, we had a growth of 39%, mainly thanks to the reimbursement of the tariff subsidies, as we mentioned. Now if you analyze these results, adding the items that are nonrecurring, obviously, this effect was lower when compared to prior quarter.

Now for the energy market for Cemig distribution, there was a drop of 3.3% this quarter. Obviously, we still see the effect of migration of clients, industrial clients going to the free market to relevant clients this time have migrated large clients. They migrated to the transmission network also affecting the transported energy to our right, we see the development of distributed generation. We know this is growing over time. So when we look at the progress, 2Q '24 compared to 2Q '25, we see a significant growth of around 20%.

Very well. For operating efficiency for Cemig D, once again, we are working in this efficiency. One of our focuses is the collection. We are aiming to collect digitally our payments, of course, pick instantaneous payment is for Brazil as a whole, one of the most efficient way of getting paid. And today, around 67.5% collections is done via digital channels, not only Pix. And also, we have our ARFA receivables collection index of around 99%, showing that we are at a very good position vis-a-vis our collection and billing and access.

Now our OpEx. It is, of course, in compliance with our regulatory OpEx and EBITDA as well as within the regulatory EBITDA. Very good results here. analyzing regulatory losses. There was a change in the calculation of losses instead of build the market, now we are considering the measured market, and that was positive to reduce distortions that were affecting losses at the distributing companies. So that's why we see a progress here in the chart.

And also, there was an increase, but we are still within the regulatory limits. So here, we added losses that before, they were not taken into consideration, and this is a continuous work on losses. We continue installing smart meters. We continue working with legal energy with over 4,000 families being catered by this work of loss reduction and Cemig.

Now for Cemig GT, we have the effect of contracts -- trading contracts that are in here in a way, this was the main impact of reduction we have forecasted, and we know that. We already -- we were telling that to the market. The Commercial margins regarding 2024 to 2025, these margins of the contracts come down, and this is because the margins drop. So on the side of net profit, we have a positive effect because of the repayment of the bonds that really had a negative impact in our net profit for Cemig GT because of the FX exposure. So now we have a positive effect in our adjusted net profit for Cemig GT. We have already talked about the GSF auction success. Here, we have some more details regarding the BRL 200 million and the three plants that we were awarded, Irapé and Queimado. Two plants where we had contracts with sales price that were higher over BRL 350 per megawatt that we're extending beyond the time period of the concession. So this extension was very positive for us.

Therefore, obviously, we went in with a controlled premium. We were awarded. These plants, and we are very happy to add 3 more years for Irapé and 7 years more for Joaquim and Queimado. And also an important piece of news here for us. ANEEL has recommended the approval of the concession extension request for Sá Carvalho. This is a very important news in terms of renewing our concessions per quotas. It's important to say that in Pai Joaquim, we also had a benefit of discount in the TUSD.

For Gasmig as well, we had great and positive effects. EBITDA for Gasmig is in line and net profit is much higher, especially driven by efficient cost management. And also, we had debentures issuance that allowed it to be funded, and this allowed us to have positive result for net profit, and we will keep on investing. And we believe that very soon, we will have the opening of our Central West project.

And of course, we would like to end this call inviting you all to our Cemig day. It's going to happen on September 10, 2025. And we will go into more details about our strategy and how we see Cemig moving forward with the challenges and opportunities for Cemig because we are a wonderful company in the energy sector. Thank you all very much.

So we end the presentation now, and we open the floor for the Q&A session and your questions.

[Operator Instructions] Our first question is from Carolina Carneiro, analyst from Banco Safra.

Hello. Thank you very much for the call. I would like to take this opportunity and ask you to comment about capital allocation. You went into the GSF auction. Of course, you have a robust investment plan, but the cash situation of the company is very much under control. If you can give us a little bit more of visibility, what's going to be your focus for the next transmission auction. If you were looking at any other segment?

And also about the concession renewals, you had that opportunity via GSF auction, but we have some important concessions that are due in the next few years. Do you have any updates in terms of regulatory changes or discussions that are on the table that would allow us to have greater visibility about the plans for these plants? That would be very interesting. Thank you.

While the best guideline is our strategic planning, our BRL 59 billion of investment plan since 2019 up to 2029. As you know, as it is included in this plan, the bulk part of this investment will be in distribution. This is a regulated sector. We were in a situation in the past where we did not have enough investments and a great need of an unmet load, almost 15% of the load was unmet in the past. And also a huge connection of distributed generation. So this initial movement of growth and distribution is really a movement to address the expansion needs to cater an unmet load and also to also cater to distributed generation.

We now have almost 5 gigawatts of distributed generation that obviously needs a lot of investment. So these are known projects, Mais Energia, Minas 3-phase and more energy. So after we conclude this initial step to face the needs of expansion to cater these two flows, the demand and supply, we then have a need of increasing resilience and automation, ANEEL and the Ministry of Energy also are requesting that.

So in the beginning, it was expansion. Now in the second moment, we are making this investment to increase resilience and the quality of the service provided. This will be the bulk of our investments. We also have a gas investments in another regulated sector and about the concessions generation that you asked.

Here, what we have are the regulatory rules. What we have today and we like what we see is the ANEEL's recommendation to have the renewal per quotas of Sá Carvalho. The same topic is being analyzed by ANEEL regarding our other two plants. And then ANEEL recommends that to the Ministry of Mines and Energy. And then we would have the renewal for quotas. We would not need to make any disbursement and then we would leave the free market and we go to the regulated market.

A decision to go to the free market. It depends on the changes in the capital changes -- capital structure changes, and that does not depend on the company's management. So any other decision of maintaining the plants in the free market, obviously, they depend on decisions from the executive power and the statehouse, Minas Gerais in terms of changes in the capital structure.

I would say these are the main comments that I can tell you about in terms of capital allocation, I don't know if anyone else would like to add, feel free if you have any comments to add. But clearly, the main guideline here is to follow our strategic plan. And there is something that I always like to highlight about our strategic plan, which is to focus in Minas Gerais and to win. So 100% of our investments will be focused in Minas Gerais. This is a role that is very strict for us. So our full investments will be done in our competitive advantages.

And we understand that these involve to be here in our territory where we have the concession in most part of our assets, our plants, and that's where we have all the synergies. We take this very seriously. So any M&A possible situations, they have to happen in Minas Gerais.

Thank you very much, Reynaldo. If I can ask another question. Last week, the Supreme Court ruled about PIS/COFINS and ICMS. I know that it might be too early to ask you, but if you already have any comments and other companies in the sector have a significant balance in a possible credit to be transferred to tariffs or even to the company, do you have any ruling or do you have any reading about what was decided last week? That would be great to know. Thank you.

Well, this allows the deduction of the taxes and honor areas that have been paid. And yes, this is positive. And as you said, Cemig has already reimbursed clients for over 10 years. So now we have to see how this final ruling will be to check the impacts for us, but two positive things are to be able to discount taxes and also honoraries. This is positive, yes, but we cannot calculate that without knowing the final ruling. Let's wait for that.

[Operator Instructions] Our next question is from analyst Victor Cunha.

Good afternoon, everyone. Thank you for this opportunity. Now looking at the energy balance that you presented, we saw a reduction in the short position for the short term, '25, '26, but an increase in the short position for '27, '28. Can you share with us what was the rationale and this decision to increase the short position for '27, '28, especially during a pressure for energy prices, considering the new parameters and risk aversion, but also probable higher cost and the marginal cost of expansion, considering all challenges that renewable plants are facing. If you can tell us what you have in mind for that, I would appreciate.

Victor. Thank you for your question. Actually, we have been working to close this position. We have been looking at the market and we have been closing positions and increasing our exposure. The short exposure in these 2 years you mentioned, still a gold effect. The counterpart that we had contracted and because we do not have delivered energy, we had to buy energy and to expose ourselves a little bit more. But we are looking ahead and closing our positions. This is our guide, we do not wish to open more positions.

Our next question is from Lilyanna Yang, analyst from HSBC.

I can also read your question. Okay. Well, there was a problem here with transmission, but she has two questions. First, in distribution, your next tariff review will happen just in 2028. Can you comment on how the current changes in the regulatory environment might affect the profitability of the company?

And second question, when can we expect an expense reduction in the pension plan fund?

Good afternoon, Lilyanna. I can comment on those. Once again, it's too early to talk about an efficient frontier of costs. We have to be prepared to be talking about efficiency. This is one of our mantras. We want to improve the quality of services provided and at the same time, to look for more efficiency. This is something that needs to go hand in hand, and they are mantras for us, and we'll always be aiming for more efficiency.

And if that -- and from time to time implies tariff modes, we will welcome it because it's good for consumers as well that need to have tariff models. We have to look for efficiency, and we know that every 5 years, there is a discussion on tariff modes and efficiency. We just hope that it's not only tariff modes regarding distribution parcel, but also that it is regarding CDEs, subsidies, charges, all of this discussion that we are following in the sector and we know that the line that has increased the most and that has affected the tariffs are charges and subsidies and not the parcels and generation and transmission. And the one that has moved forward the least was distribution.

Therefore, we are working in order to look for efficiency. And we know that every 5 years, we have changes and of course, the more automation, more technology, the better. We are now working to grow our smart meters. These are all topics that aim for better service providing. And also, they work in savings. Our IT area is looking for that. About pension funds, there was another comment from Carol about health care plans. This is the post employment. That's a very relevant topic, a very relevant line in the company's results, and we are negotiating all of these topics, whether it is health care plan or pension funds, especially the benefits from Cemig.

We will know more as soon as we conclude any of these topics. And before that, I think it is too early to say anything. I can tell you that we are all interested in coming into an agreement with all beneficiaries to make sure that both plants are guaranteed and for the health care plan and also the pension funds and as well as aiming Cemig's efficiency.

If there are no further questions, we end now our Q&A session. I would like to turn the floor to our CFO and IR Officer, Andrea Marques de Almeida for her final remarks.

I would like to thank you very much for your questions and for your participation. We are here available to take any questions in the IR area and our leaders to help you at any time. Thank you very much, and have a nice afternoon.

Our media conference call for the second quarter 2025 Cemig's results has ended. Thank you very much.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]