Centrais Electricas Brasileiras S A American Depositary Shares (Each representing one) (NYSE:EBR) Q3 2022 Earnings Call Transcript

Elvira Baracuhy Presta: So if I could start, Andre, thanks for your question. The decision of not doing the PCLD total, This quarter was related to what Limp explained. The improvements that we could have because of the regulator has been doing a good job, and we debated with our auditors that this assessment will be made next quarter when we finish the annual report.

Rodrigo Limp Nascimento: We have objective criteria to talk about provisioning, as you said, Enel approved the readjustment of the tariff. But it is connected to the payment certificate and Eletronorte. Put Amazonas distributor in the fall because of the preliminary injection that prevented Eletronorte to put them in the fall, but they won another administrative proceeding with Enel. So Enel, we try to give them a good payer certificate that will allow them to receive resources and since the judicial sentences did not comprehend all the resources. So this readjustment was in dispute and we think that the distributor has worked for the judicial ruling to contemplate this readjustment. Because for us, Eletrobrás, it’s interesting for us that the readjustment is supplied because otherwise, it’s going to worsen.

Andre Sampaio: If I could only add to my question to see if I understood that correctly. I had understood that Amazon didn’t paid the overhead?

UnidentifiedCompany Representative: When the distributor is in the fall, they can’t have the good payer certificate issued by Enel. But in this case, even being in the fall, they could have a luminar decision that made Enel to issue them the certificate for them to be able to have the readjustment. So it was not that comprehensive before, not consider all the resources, but the distributor has sought to have an injunction to have the right to this readjustment. And we believe that it will be applied soon.

Operator: Our next question comes from Antonio Francisco, sell-side analyst of .

Unidentified Analyst: I have two questions. One, regarding ESG. We talked about some goals and purposes, in short term and including the commissioning of thermal units. And my question is regarding the emission of carbon dioxide. If you have anything connected to the agreement. And my second question is regarding the voluntary dismissal program. What’s the expectation of impact in the payroll for the next three years?

Wilson Ferreira Jr.: Thank you, Antonio. First, regarding ESG, yes. Part of our strategic plan. We have the commitment to — at zero — Scope 1, 2 and 3. Certainly, the 3 is for 2050, 1 and 2, maybe we can implement in shorter term. It’s important to highlight, and I should describe to you because we have been talking at Eletrobrás in an international scale to be the second better company in benchmarking and in best practices for emissions and renewable sources of energy, but there are still improvements to be done regarding the emission of some like coal plants or natural gas plants. So we see a potential for optimization. And in our vehicle — vehicles that are used in company since we — if you look at the scope #3, you have like lost energy in transmission lines, and we are assessing that.

The next enterprise we are getting involved with the Trans North Energy that connects Manaus to Boa Vista. This unit will — when made available, we’ll eliminate over major amount of emissions from thermal units in this kilometers. So the company will commit itself with the in scopes, number 1, 2 and our actions will be followed by the market. Regarding the dismissal plan, we have the inscription up to November 18. So we believe that we will have a massive adherence. So up to the end of December, we will have this reference board because maybe it’s important to share with you, we haven’t done any kind of admission exam. So the newest employee has over 36 years old. So we will have new opportunities to bring new talent, young people from the market to be part of this staff, the staff of the company that is a little more seasoned and we will reduce our experience.

We have many people over 65 years old, and we will refresh our staff and it will be made available by the TMO. We will share that with you and so there’s a possibility for a major reduction here. Remind you that the oldest personnel, people have — that have been working with us for a longer time. They receive bigger salaries. And that’s the reason we have an 11.2 months payback planned. We have over BRL 1.5 billion reductions of costs if the employee adhere to this program. And we will share the results with you. And clearly, we will have the reduction of costs. We know that. So we had like some automation improvements. We started to operate remotely in more systems, and we have robotizations. And we have some robots in the administrative process.

We will implement 150 more to rationalize the shared services of the company. And we also have naturally — we had that before when we defined this board before some optimizations and modernizations that established, exceeding number of 600 people approximately. So we have a very effective cost reduction action. Even if we hire new talents for the company, young talents for the company to have this age diversity in the company.

Operator: Our next question made by Henrique Peretti, sell-side analyst of JPMorgan. Please, Henrique, you can move on.