Release Date: November 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Eneva SA (BSP:ENEV3, Financial) reported a consolidated EBITDA of BRL1.134 billion, marking a 27% increase compared to the third quarter of 2023.
- The company's leverage decreased significantly from 4.4 times to 3.5 times within the quarter, indicating improved financial health.
- Eneva achieved a record operating cash flow of BRL1.3 billion, driven by asset availability, dispatch, and positive working capital variations.
- The company successfully started contracts on its on-grid and off-grid gas monetization fronts, enhancing its commercial operations.
- Eneva's corporate rating was upgraded to the highest local level by Fitch, reflecting a stable outlook and robust operating cash generation prospects.
Negative Points
- The company faced a riser leak issue in the FSRU, temporarily halting gas movement to the Porto do Sergipe TPP, requiring a costly replacement.
- Eneva's contingency plan for the riser issue is expected to cost between BRL60 million and BRL120 million, depending on LNG load sales and energy prices.
- There was a reduction in EBITDA from the solar segment due to higher energy purchase costs and adverse hydrological conditions.
- The coal segment experienced a BRL132 million EBITDA reduction due to a mismatch between inventory costs and the medium CVU of the period.
- The company will not certify new reserves at the beginning of next year due to the lack of a drilling campaign this year, potentially impacting future resource assessments.
Q & A Highlights
Q: Could you comment on the contract established with Vale and the small-scale business operation?
A: The gas supply to Vale will be through the Sergipe Hub or other origin contracts in our grid. Details on margins are confidential. The small-scale business is currently in the testing phase, and we expect it to reach rated capacity by the end of the week. Initial costs are due to commissioning processes, which will decrease as operations stabilize. - Lino Lopes Cancado, CEO
Q: Can you comment on the perspective on thermal dispatch in Q4 and the upcoming capacity auction?
A: Despite expected higher rainfall, the ParnaÃba Complex has been dispatched, and we anticipate exporting to Argentina in November and December. Regarding the capacity auction, we expect it to occur by 2028 due to a power deficit, but the exact timing is uncertain. - Lino Lopes Cancado, CEO
Q: Can you give us an update on the construction of Azulao 950?
A: The project is progressing well, with 97% adherence to the schedule. Key milestones have been met, and we expect the first turbine to start operating in Q1 2026, with the combined cycle by the end of 2026. - Lino Lopes Cancado, CEO
Q: Is the company considering distributing dividends based on 2024 results?
A: We have turned from accumulated losses to profits, and depending on Q4 results, we may pay dividends. However, due to significant liabilities and a strong investment plan for next year, we might only distribute the mandatory 25%. Higher dividends could be considered from 2027 onwards. - Lino Lopes Cancado, CEO
Q: What are the financial impacts of the recent follow-on and acquisition of BTG's thermoelectric assets?
A: The follow-on raised BRL3.2 billion, optimizing our capital structure and reducing leverage. The acquisition of BTG's assets adds significant revenue streams, further reducing leverage to around 2.1 times net debt over EBITDA. - Marcelo Habibe, CFO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
