Q2 2026 Auren Energia SA Earnings Call Transcript
Key Points
- Modulation gains of BRL71 million in Q2 2026 mitigated 72% of the curtailment impact, with 91% neutralization in Q1 2026.
- Debt reduced by BRL194 million in Q2 2026, with leverage at 5.3x and a clear deleveraging path from 2027.
- Cajuina 3 project is 88% complete, with 8 of 19 turbines generating in test phase and commercial operation expected by December 2026.
- Corporate reorganization approved to consolidate assets under CESP, simplifying structure and improving cash management.
- Received Pro-Etica Seal from CGU, recognizing strong governance and compliance practices.
- GSF improved to 99% in Q2 2026 from 96% in Q2 2025, boosting hydro generation results.
- Curtailment compensation from Ordinance 140 is estimated at BRL300 million, with a non-binding adherence decision by August 10.
- Energy balance is strategically positioned: short-term when prices are falling, long-term when prices are stable or rising.
- Cost of purchasing energy to cover curtailment dropped significantly, from BRL128 to BRL83 per MWh in the Southeast and from BRL167 to BRL102 in the Northeast.
- Synergies from AES integration reached BRL280 million, with ongoing cost optimization and AI initiatives.
- Curtailment impact totaled BRL98 million in Q2 2026, with wind curtailment at 16% and solar at 26%.
- Wind generation was 10% below Q2 2025 due to weaker wind resources, despite high asset availability.
- Solar modulation worsened by BRL26 to BRL53, though solar is only 10% of capacity.
- Leverage slightly increased to 5.3x due to lower EBITDA, with stabilization expected through 2026.
- Regulatory uncertainty persists for curtailment compensation, with payments not expected until late 2027 or 2028.
- PLD prices dropped significantly, with July 2026 at BRL214, down from expectations of BRL350, impacting short-term revenue.
- The company faces ongoing challenges with energy curtailment, which is not fully addressed by current regulations.
- Future curtailment discussions are delayed until 2027 due to elections, creating uncertainty.
- The corporate reorganization is still subject to regulatory approvals, with completion expected only by end of 2026.
- The company's trading results were weaker in Q2 2026, contributing to lower EBITDA.
Good morning, ladies and gentlemen. Welcome to Auren Energia's conference call to discuss the results for the second quarter of 2026. This conference is being recorded, and the replay will be available on the company's Investor Relations website, ri.aurenenergia.com.br. The presentation is also available for download. (Operator Instructions)
Before proceeding, I would like to remind you that any forward-looking statements are based on the beliefs and assumptions of Auren's management and on information currently available on the company. Such statements may involve risks and uncertainties as they relate to future events and therefore, depend on circumstances that may or may not occur. Investors, analysts and journalists should bear in mind that events related to the macroeconomic environment, the industry and other factors may cause actual results to differ materially from the expressed -- those expressed in such forward-looking statements.
Joining us today are Mr. Fabio Zanfelice, CEO of Auren; Mr. Mateus Ferreira, CFO and Investor Relations Officer. Our Investor Relations team is also
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