• Consolidated Cash Position: BRL2.8 billion, an increase of more than EUR600 million compared to December 2023.
• Collection Rate: 98.6% for the 12 months ending in June 2024, up 0.8 percentage points year-over-year.
• Adjusted EBITDA (Distribution Company): EUR754.9 million year-to-date, up 23.9% from the same period last year.
• Market Invoiced Growth: 8.7% increase in the second quarter compared to the same quarter last year.
• Adjusted EBITDA minus CapEx: BRL371 million year-to-date, BRL141 million more than the same period last year, a 60% year-on-year increase.
• Distribution Market Growth: 4.8% increase compared to the previous year.
• Energy Generation and Trading EBITDA: BRL342 million in the first half of the year, down 17.7% year-over-year.
• Debt Conversion: BRL2.2 billion in credits to be converted into shares as part of the reorganization plan.
• Capital Increase: Up to BRL1.5 billion, with up to BRL1 billion anchored by the reference shareholder.

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

Release Date: August 15, 2024

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

Positive Points

• Light SA (LGSXY) successfully approved a recovery plan with 99.41% and 99.12% creditor support, indicating strong backing for the company's future.
• The company achieved a significant reduction in debt by converting BRL2.2 billion in credits into shares and plans a private capital increase of up to BRL1.5 billion.
• Light SA (LGSXY) reported a consolidated cash position of BRL2.8 billion, an increase of over EUR600 million compared to December 2023.
• The collection rate improved to 98.6% for the 12 months ending June 2024, showing enhanced financial discipline.
• Adjusted EBITDA for the distribution company increased by 23.9% year-over-year, driven by a significant growth in consumption and market invoicing.

Negative Points

• The company continues to face challenges with rising losses in risk areas, impacting overall operational efficiency.
• Quality of supply issues were reported, particularly in Ilha do Governador, requiring urgent attention and investment.
• The energy generation and trading segment experienced a 17.7% decline in EBITDA due to expiring contracts with higher past energy sales prices.
• DEC (Duration of Equivalent Interruption per Consumer Unit) levels have been above regulatory limits for two consecutive quarters, raising concerns about service reliability.
• The concession renewal process is still pending, creating uncertainty about future operations and investments.

Q & A Highlights

Q: Can you provide more details about the DEC levels, which have been above the regulatory limit for two consecutive quarters? Is this due to reduced investments? A: Alexandre Ferreira, CEO: The DEC levels are not related to reduced investments. The levels in January were far from the regulatory limit, which is why we haven't met the requirement for two quarters. We are reinforcing our teams, adding more than 50 teams in August, and expect to reach regulatory levels for DEC and VEC by the end of the year.

Q: What are the company's expectations regarding the announcement date for the concession renewal? Is this a priority for the Ministry of Mines and Energy? A: Alexandre Ferreira, CEO: The Ministry of Mines and Energy issued a decree on May 29 setting out guidelines. Light is closely monitoring the process, and we expect it to conclude shortly.

Q: When will the shareholders' choices be published, as the website currently states September? A: Rodrigo Tostes, CFO: The bond selection process will conclude by September 4. There are several legal and operational requirements to meet, so the exact date will be after September 4.

Q: How is Light addressing operational challenges and improving service levels? A: Alexandre Ferreira, CEO: We are implementing more efficient processes focused on results and have started to see positive signs. We are also increasing our service teams to better prepare for servicing our concession areas.

Q: Can you elaborate on the company's financial health and cash preservation efforts? A: Rodrigo Tostes, CFO: The company ended the quarter with a consolidated cash position of BRL2.8 billion, an increase of over EUR600 million since December 2023. Our collection rate improved to 98.6% for the 12 months ending June 2024, and adjusted EBITDA minus CapEx increased by BRL141.2 million year-to-date compared to the first six months of 2023.

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