Unidentified Analyst : We’ll have issue with our files, so we’re going to switch you if you don’t mind Leo, and then we’ll come back with would you be so kind?
Márcio Luiz Simões Utsch: Do you think I know my presentation is very hard?
Marney Tadeu Antunes: As Leonardo said, Márcio left one minute, Reynaldo left eight and you left 29. There’s no way I’m going to beat that record. Okay. First slide please. Good morning, everyone. Welcome analyst, investors. It’s a huge pleasure to have you here with us. I also want to thank Reynaldo for believing and supporting our wonderful project. Leo, all the directors, all the superintendents who are here today. And I also want to thank everyone who’s working here and our clients, the hotel. Am I changing my own slides? Okay. Great. And I want to thank hotel, one of our R$9 billion and I want to say that we are going at 106 kilometers an hour, 106 an hour. We connect 106 new customer distribution. And those customers need investments.
So if we want to speed up our connections. We need to increase investments. And if you do it, well, like sigma did, as Leonardo those amazing customers we connected this year. We’ll need more investment. And make it easier for them to join our trading company. It all starts with distribution. We need to meet each so that we consolidate our relationship with our clients. As I said, our solution by expansion and focusing in our clients. This is a highlight. We used to waste a lot of time, establishing relationship no channels with our partnership with IBM, brought them on Board with us, our customer care which has made our life much easier and it has allowed us and improving operating results. We will know that and I think it’s important to say, I always say this to my team, losses and default go hand in hand and distribution.
The company has to be doing well. Both in terms of losses and in terms of it, because if we stop, just we’ll go up losses will happen anyway so distribution we’ll have a consistent and that’s what we work and that’s what I’d like to show you right now. Just to highlight our investment was record R$7.2 billion CapEx in 2018, 64 substations as Reynaldo said, last year alone on average as Reynaldo said number of stations that is what will allow us to connect our clients. So it’s our heavy clients, clients that use that energy R$2.5 billion for substations 1,500 transmission lines, because we highlight. And we have a lot of burn downs, there’s lot of burn down and we suffer a lot. We really have the right maturity replacing 2.5 is worth of transmission lines.
We’re also connected distributed generation points a 118,000 works, clients are now they complaining have to keep our debt lines. What about revenue? This is very important. We have 235,000 meters. They are smart meters. In total 260,000 smart meters close to 9 million clients in parallel but 64 substations is protected in our billing. We monitor that consumption and our revenue is good because we also monitor all of that connect to 9 million clients. And our revenue is because we also monitor all of those. Also 860,000 obsolete meters are being replaced. So more than one million of share alone considering a 9 million customer base. So more than 1 million then we want to replace all of the obsolete meters and that will losses on our customer base and we will also not loss any energy that’s the main thing, when meters get old everybody knows they favor customers and we are also focusing on the MSO that Reynaldo said, how do we reduce cost?
Like this. We have 400,000 kilometers €“ 300,000 and we want €“ 30,000 kilometers single phase and these reconnectors are completely automated. They’re the best. They reconnect automatically. They bring the number down to zero without happening anything and after two years any temporary outage needed a team outside we had to send and you know what manager is like distances of. So wherever we’ve installed, we use the interruption by 2023, that is and its system reliability. Now back to those CapEx. In 2023 to 2027, 30,000 kilometers of single phase will be converted to teams, this will turn family agricultures into agribusiness owners. This is all about development as Reynaldo said. And this is the contribution we want to help the rural farmers.
We’ll also be building 3,5000 kilometers of distribution lines and we have the largest number 1,250,000 smart meters of the program. We have the largest number of smart meters which is zero or 240,000 companies have connections. It’s because of our problem either they are illegal barrier or it’s not allowed to have power, they are going to meet with the government that all that we can make various legal that we can provide this neighborhood 6,000 families and 4,000 families have connections thanks to the flow of the distribution group. 135,000 there’s a lot of people with illegal connections. And we will deal with this if we were other agencies to find solution and we have the MORE POWER program, we will be building another 136 substations are coming, this is a government program that full energy coming in hopefully this number will only increase from now on.
These are our substations. We had plan to investment R$3 billion worth of investments and as Reynaldo said we can’t do that. We have to go to court. We have to stop those losses, and we’ve changed that. The other one was safeguarding the network, the BT zero network. What does that mean? Zero frauds. There’s no secondary way of getting the energy. Clients can steal it. And BT zero is precisely where most frauds can happen. And right now there is no fraud. And that helps to reduce losses. And obviously, we have 400 technicians out in the field conducting inspections. That was one of our main gains. 40 an hour, do you know what 40 an hour is, 40 frauds detected every hour. That’s a lot. So we have to do something. We have to find the right innovation, the right technology, the best inspections possible to have the best systems, so that losses can remain below regulatory limits.
And I was talking to my kids the other day, we went to see a Coldplay shows, and there was a huge sign there. I think most of you from Sao Paulo probably have seen it, return the bracelets because this is a sustainable show. Each band that comes in brings something new. And they had €“ no, they had the number of places, the number of €“ no, the countries that were returning the bracelets the most or the least. And guys who was the worst was Argentina with 80%. And then I thought, what is going to be what €“ how Brazil is going to rank? And my daughter said it’s going to be 100%, but the results were out who are 79%. So even lower than Argentina. So yes, even that leaflet from masses people take it away. Can you imagine the energy, power 24-hour available?
So this has to do with the inspection program. But we have a balance point here. If what if I have an electrician in each home, we won’t have fraud, great. But we have losses coming down, delinquency coming down, and our PMSO also coming down, then we can invest more in losses and bring this back to us. Well, I think we are fine here. In terms of losses, I covered everything. The ARFA index, the receivables collection index. That is how much we were able, well, the billings that are due on the month over what we collect on that month. So here we have the €“ accumulated from other periods, but that has to do with the efficiency we’re looking for. Right now, we are at 99.68% of that, the amount of billing over the amount of collection over the amount of billing.
So that our ARFA indicator collection over billing. We also have the last 12 months results. So in our delinquency, we are also with good results. Now talking about operating efficiency, we have another example here, which is collection. Collection is expensive. But here, using digital channels, we are at 56.5%, a significant development. We are bringing down the lottery houses that also collect money. And that has a reason to be expensive because people don’t have that €“ don’t have a bank account. They use the lottery places to pay the bills. But here we are looking at our average tariff for a collection at 0.79 per client billed. And I have a number of examples here and likes this one because it involves money. And whenever it involves money, he likes it.
Here we have our default provision, our allowance for doubtful accounts. Obviously, here we have an improvement in the accounting rules, always aiming in the best practices in the market, how other companies are doing it. But there was a change here. But here, what we really have to consider is the assertiveness of disconnections. So that delinquency doesn’t move up. And we are reaching 2.5 million of disconnections. That’s why it’s a cultural thing. That’s why clients pay the energy bill. Otherwise they know it’s going to be disconnected. We cannot lose sight of that. So disconnections are crucial, but disconnections are expensive. So what we have to do, we have to have other types of technology. So that we can collect quicker or send WhatsApp, send SMS, and also make our clients’ life easier so that they can bill €“ pay the bill.
Those that don’t have a bank account only have €“ only can pay with money. We can have another option for them closer to their home so that they can pay their bill. So that will improve us, our results in our ADA. And here we have some other still in this area, we have campaigns for picks that instant payment system. Also here we had 2 million temporary disconnections. So we do have to be aggressive in that action and fighting delinquency. We have here 80,000 remote disconnections. And it’s important to say that our client a group, all of that is protected. Second category were the clients of average voltage. All of them protected. Then indirect low voltage clients, the ones that consume the most, all of them protected and they will perform the 280,000 clients I mentioned.
And now when we are a low voltage, we are not going to add them to the ones that consume the most. No, we are going to add that on the clients where we have delinquency problems, fraud problems, which is the BT zero or low-voltage zero and network and also safety because in some of the neighborhoods you just cannot go in to make any disconnection. So it has to be a remote meter or a smart meter. So that shows that we are on the right track. And this is also good because many times clients are delinquent and not because they don’t want to pay, it’s just because they can’t. And a lot of those tell us, I’ll get my payment tomorrow or I’ll be paid on Monday. And then we reconnect because we trust them, because it’s easy to do it and it’s easy to disconnect again on Monday if they don’t pay.
So it’s a good relationship that we have with our clients. So for low income delinquency, for instance, why did we have a low delinquencies in the pandemic period? Because disconnections were suspended for a long period of time. And when does connections restarted, again, we brought solutions, energy efficiency and also installment payments just as we have done with the stores when they were closed for a long period in the pandemic, we created special conditions for merchants to pay. So this is a very humanized relationship because a lot of clients are not in that situation because they are fraudsters, it’s just because they are unemployed. So we respected that a lot and that has helped us to bring facilities to easy €“ to offer easy solutions.
So for instance, when we go for a disconnection, we bring in a credit card machine or allow them some time to pay using the PIX, the instant payment system. And also we have the regulation of the debt of public authority and hospitals because of prior strategies, they removed the relationship with public authorities of the public power. We did not have direct service to city administrations. Now we created a project that’s called approximation. And our goal is zero problems with the city €“ halls with city administrations. And we have 774 of them and we have been able to control delinquency. There is one of them that there is a problem, but everything else is solved. Credit cards option I already mentioned. And we have that low income tariff that already was mentioned here when we increased the number of clients enrolled and that really helped them.
Thank you very much for your attention. And in the afternoon I’ll be here available to take your questions.
