Release Date: November 14, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Light SA (LGSXY) successfully finalized the payment of around 30,000 creditors as part of its judicial recovery process.
• The company completed a capital increase of 300 million reals in its distribution business.
• Light SA (LGSXY) achieved a consolidated net income of 157 million reals in Q3 2024.
• The company's collection rate improved to 98.8% over the past 12 months.
• Light SA (LGSXY) is undergoing significant operational transformation, focusing on customer orientation and operational efficiency.

Negative Points

• The generation and trading segments experienced a 16.7% decline in EBITDA year over year.
• The company faces challenges with non-technical energy losses and payment defaults.
• There is uncertainty regarding the renewal of Light SA (LGSXY)'s concession, which expires in 2026.
• The judicial recovery process involves complex restructuring and issuance of new financial instruments.
• Light SA (LGSXY) must navigate regulatory challenges and potential capital requirements imposed by ANEEL.

Q & A Highlights

• Warning! GuruFocus has detected 3 Warning Signs with LGSXY.

Q: What is the expected date for the swap? A: The company has already started the development of this material with its advisers. We do not yet have a deadline, but we are striving to finish as soon as possible and expect it to be completed in the coming months.

Q: How are you coping with the record rating and the expected renewal already includes the change in this measurement? A: This is Alexandre. We are expecting to offer differentiated incentives to companies that have high-risk areas in their concession area, which is the case of Light. We are reviewing the conditions and will contribute to the public hearing offered by ANEEL, providing our inputs about this specific aspect regarding Light's concession area.

Q: The right of preference of the convertible debentures should be manifested by November 28th. Is there an obligation? A: No, there's no obligation, but it can be expressed. It's optional, and you can express this right until November 28th.

Q: When will the new bonds after the judicial recovery be available to debenture holders and creditors? A: After we swap them with B3, they will be negotiable and available to you.

Q: There was a discussion at ANEEL about the limit leverage, mentioning Light among others. Will you be able to increase your capital by the required amount, and what happens if you do not fulfill that requirement? A: This is Alexandre. We are monitoring the situation and the ruling. Light has a differentiated view of the renewal of the concession, and we are closely monitoring the entire process. Regarding the contract, Light fits into the situation and is pursuing financial capacity as established in the decree.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.