Ladies and gentlemen, thank you for waiting. Welcome to Eletrobras Conference. Welcome to our First Quarter 2021 Results. This presentation will be available in the IR website from Eletrobras. Before we proceed, let me remind you that this call may contain forward-looking statements.

Such statements, operational goals and financial goals are basically beliefs and expectations of Eletrobras' Boards of Directors and information available to the Company. Forward-looking statements do not ensure performance, since they involve risks and uncertainties, and therefore are dependent on circumstances that may or may not occur.

Investors must understand that general economic conditions and other operational factors may influence the results of such future considerations..

Good afternoon, Marcelo, and welcome to our first quarter 2021 results from Eletrobras. I would like to greet investors and analysts, as well as the members of our Board; Ms. Elvira, Mr. Jatoba.

Now before moving on to the results, I would like to acknowledge our former Chairman, Wilson, who has led the Company and who has brought about great positive results that will be presented during this call.

It is a great pleasure for me to lead this first conference call at Eletrobras as a Chairman, especially considering the positive results that we are about to present. You all have access to the deck of slides that was made available on our website. Let's start with our corporate and operating highlights.

I'll begin with Slides 4 and 5, and I will hand it over to Ms. Elvira, who will move on with the presentation. On Slide number 4, we see that our ROL was BRL8.2 million, which was 8% -- an 8% increase compared to the first quarter 2020.

Our EBITDA was at BRL3.8 million, an 11% increase as compared to the first Q 2020, and our net profit was at BRL1.6 million, a 31% increase year-over-year. Let's look at our recurring net operating revenue. We reached BRL8.2 million, 8% above first quarter last year.

Recurring EBITDA was at BRL4.9 million, which is a 30% increase as compared to the first quarter last year. And our recurring net profit was BRL2.74 million, which represents a 48% increase as compared to the same period last year.

Our dividends at BRL1.5 billion declared and approved in the Company's assembly and these were paid in February 2021, accounting for BRL2.3 billion, totaling BRL3.8 billion that will be paid out up until the end of 2021. Debentures, we issued two different series, totaling BRL2.7 billion.

The first series has a maturation of five years, considering the CDI plus 1.8%, and then the second series has a maturation date of 10 years, totaling BRL1.5 billion, and the reference will be the IPCA rates plus 4.9%.

Other highlight is the net debt/adjusted EBITDA ratio at 1.4 times, which is the lowest value we have achieved, and we achieved this number because of the restructuring process that started. We were at 1.4 times, and we went down to 1 point -- we were at 1.5 times and we got down to 1.4 times, which is a great result..

Thank you, Rodrigo. Good afternoon, everyone. I would like to greet all analysts and investors who are present in this call today as we present our first quarter results. On Slide number 6, we got good news. The first chart, at the top of this slide, we see that the daily energy load in Brazil is on the right.

If we compare this quarter with the same period last year, we saw 4.3% increase. The first quarter last year was really impacted because of the pandemic in Brazil, actually in the end of the quarter, the blue line represents last year. So only the final 10 days of the first quarter saw a decrease last year.

That's what we can see on the chart to your left hand side. Here you see the consumption last year. So good news is that, the energy load is on the rise right now..

We are going to start our Q&A session. First question by Carolina Carneiro from Credit Suisse..

How are you, Carolina?.

Good afternoon, everyone. Thank you for disclosing this information. Thank you, Elvira and Rodrigo. Welcome both of you. I wish you the best of success. I have two questions for you. The first one is regarding the report. We do not have the final test of the provisional measure.

We are still waiting for these notifications, but Rodrigo, if you can share with us, what is the main positive aspect of the report? And what point of attention we should have as we wait for the vote in the chamber? Now second question, provisions. This quarter was hard once again as mentioned by Elvira.

And in the congressman report with the special mention from the union's accountants office, he mentioned how important that is for the company's balance sheet. Now that you can negotiate, is there any relevant discussion going on, so that we can think about the privatization process. Can you share anything in that regard? Thank you..

Thank you, Carolina. Good afternoon. Thank you for your wishes on success. It's a pleasure to talk to you. Now with regards to the provision on measure, I can give you the initial remarks and then Elvira can add to what I said.

So as I understand, in Congress, they are willing to move forward, so the climate or the environment is favorable to approve this project. As this provisional measure is being discussed, we can expect some propositions of change to the tax. We haven't had the formal approval.

The rapporteur already showed some signals of proposals who wishes to address, mainly with regards to Eletrobras and others that have to do with the electricity sector as a whole. For example, small hydroelectric power plants, some thermal plants and there should be a new state-owned company that should be created after Eletrobras is capitalized.

We believe these debates are marginary. That's part of the Congress activities. These debates will go about all the way up until the moment they come to a conclusion. So maybe by next week, they should vote on this. We are quite optimistic, and we expect we can move forward with the project.

Now with regards to the Eletrobras per se, in the presentation, with regards to bits on energy, that will be important for the capital mission process. We also understand that there is a positive consequence, which is part of the law that can also create some level of difficulties or delays to the capitalization process.

So this is a super-official analysis for now, considering the information that we have received. We believe that is the best way to go for now. So, we are looking into this compulsory initiatives over the past years.

Now aside from Eletrobras, the Government and the Ministry of Energy has interacted with the rapporteur on small hydroelectric position with a great balance considering the rapporteur's preposition and what the ministry has served for. So that's what we have to say with regards to the provisional measure.

We believe that it's positive to be debating that inside the chamber. We got one month, and if it's approved in the chamber Senate of House, then we believe this can be approved in the Federal Senate. With regards to compulsory approach, I will hand it over to Elvira Presta, who wants to add something to my comments..

Yes, I think you said it really well on the propositions in the provisional measure. I have nothing to add..

Great. Thank you very much..

Next question by Andre Sampaio from Santander Bank..

Good afternoon, Andre..

Good afternoon. I have a follow-up question on what Carol asked you. I wanted to learn about two main points from you.

First, what are the main points of discussion along with the Brazilian Senate? And secondly, as far as we can see, there were some weird elements to the process, but it seems that the market is willing to absorb those problems somehow because of all the potential of the privatization process.

How do you see that? How do you see these dynamics and the market perception on what we're willing to accept as compared to what the government is willing to accept? That's what I wanted to hear from you. Thank you..

Thank you, Andre. In Eletrobras, we have to define the conditions in law. And then, this will be detailed according to the studies that are carried out by the BNDES and then will be approved. Now in Eletrobras, also we'll assess the whole process and we are going to see whether or not this is positive for the Company's shareholders.

Of course, we will carry out our own assessment according to legislation. And then, if you're going to look into the modules created by BNDES along with the Ministry of Economy and Ministry of Energy that should be approved later by the CNPE. There are different parameters to that referenced values.

We can do it all at Eletrobras, so that we are sure that this is a good project for the Company. So, I've been talking to BNDES, and we have seen positive perspective, but it all depends on the Congress approval. So we were waiting for the Senate's resolution. The discussion is now happening more in the chamber of congressman. This is only natural.

Now once it is approved in the chamber and in the Senate, then of course, these efforts will need to be intensified and coordinated by the Congress. And of course, it's all the federal government's responsibility..

Thank you. Thank you very much..

Next question by Henrique Peretti from J.P. Morgan..

Good afternoon, sir..

Good afternoon. Good morning -- good afternoon, Mr. Limp and Elvira. I would like to talk about the compulsory aspect. The first question is BRL2.7 billion in the fourth quarter was our provision. And this quarter, we had more provisions. As far as I can see, this is not monetary correction from the compulsory aspects. This is narrow as far as I can see.

Did we changed our understanding, or is there any difference in the process? NHS, you will have more and more compulsory provisions in the future. Can that happen again in the forthcoming quarters? And the second question, in the provisional measure, the rapporteur mentioned BRL80 million of compulsory. We know that it was supposed to be.

And for remote. So this BRL8 million include what we mentioned last year that this could be the total value that it is not seen in the balance sheet? Thank you..

Thank you. Elvira, can you address that one..

Sure. Henrique, with regards to the provisions in the previous quarter, we had BRL2.2 billion of provisions in the fourth quarter, but BRL1.6 billion was only one lawsuit, because of an unfavorable decision that we had of a main author that was worth BRL1.6 billion. And it's important to say that up to the current date, this has not been executed.

We are managed to suspend, and we are still advocating for the Company. Now this process or a lawsuit took us by surprise, because offers demanded many CIFs, goes from different branches and companies that were acquired in the future that were not present in the initial appeal.

Now, since there was an execution decision , we decided to allocate BRL1.6 billion last quarter and the other BRL300 million were because of unfavorable.

So, it's actually very hard to make sure that we're not going to have more collections in the future or new provisions in the future because it all depends on the results or outcomes of these lawsuits that are moving forward of that already executed.

While the decision is unfavorable for repetitive lawsuits, we end up having to correct this provisions. Now the numbers you have mentioned regards to BRL16 billion that are likely to happen, BRL11 billion possible and BRL7 billion remote. That's what we have in our balance sheet.

With regards to the President Faculty of Accounting Office accounting officer, which is very higher than the balance that we have in our balance sheet..

Good afternoon. the accounting office decided that our provisioning was the As I mentioned, there may be some oscillations through the time, because it should have been observed, but it was not.

So because going to be conscious, we decided we would provision that value, but we did not really know where that came from with regards to the Brazilian Federal Accounting Office. Thank you. Henrique, any follow-up questions..

With the provisional measures,. Thank you..

Henrique, we don't really know what the rapporteur will write on his report. But our impression is that this would be one more obstacle, because we are talking about the very high volume of losses with very complex calculations, because that engages inflation studies, different economic plan, different economics thesis.

So as far as the delays, this is a very complex topic to be discussed at this point. I believe this could be a serious obstacle to this program that we are looking for. And we believe we can follow on that next year. So we are fully concerned, if there is any provisional measure regarding this compulsory loan through this provisional measure.

Someone has their mic open, if you're not speaking, can you please mute yourself. Thank you. Finally, regarding the federal accounting office, as far as I can see, the value that was mentioned involves other liabilities, not only the compulsory loan. I will double check that and the IR department is at your full service to address that question. Mr.

Limp, you want to add something to what was said?.

I think that's it, Elvira. This is a very complex topic that are hundreds of lawsuits. It's hard to think of this provisional measure that we're not really know what will be like, but that could get in the way of our timeline for capitalization for that reason.

Henrique, any follow-up questions?.

Yes, thank you. No, that's okay. Thank you..

Next question by Andre Sampaio from Santander Bank..

Good afternoon.

Can you talk about golden shares? Do you know exactly what the rapporteur should propose? Should we have influenced from these golden shares?.

Thank you, Andre. As I said, we haven't been able to see the final report. But as far as we know, there was no change to what the executive branch suggested for the provisional measure. As far as we understand, this would be positive as compared to the original proposal..

Thank you..

.

Marcelo, as we wait for the next question, I just wanted to clarify something. I double-checked with my accountancy team. So, we can better address the previous question on the GCL's report. I think that.

I will read a question that was in our webcast. What are the suggestions would be to use the resources component that will belong to electric nuclear per sector funds? Minority shareholders are also entitled to these dividends.

How would they be paid in this scenario?.

Thank you, Marcelo..

The question was by Bruno Rauis..

Well, during the process of creation, this Company and the capitalization process will have to assess all of that during the process. That happens by the federal government on behalf of Eletrobras.

We will also have to carry out our own assessment as long as I can understand from the congressman Elmar proposition hit out about Itaipu, after the debt has been paid. 2023, which would not necessarily affect the lighter nuclear plan. But this is present in the bill that was approved and in the model that is to be defined.

I think we still have to detail that, both in the bill and in the module created by BNDES that will later on be approved. And this will naturally need to be approved in the Eletrobras. The same release of that shareholders can approve whether or not that is good business for the Company.

I'm not sure anyone from Eletrobras wants to add something to this question?.

Well, with regards to your question, I would say that this process hasn't been defined yet. We are still waiting on that. We're studying and creating module on that as done by the BNDES, so that we can just find how we're going to segregate the Eletronorte participation and Itaipu participation because of different reasons they can't be privatized.

Itaipu because of the financial treaty and Eletronorte because of the constitution. So, we're still not sure how that will segregated BNDES studies, so that we can truly know how that can be done. We are going to higher company to give us evaluation.

BNDES is studying that, but Eletrobras will also study that, because at the end of the day, this approval of what will be presented as a final proposition is something that will be done by the Board of Directions of Eletrobras and by the assembly of shareholders.

Because of some conflict of the interest, the provisional measure determines that the federal government can't vote. So we will have to also assess that..

Daniel from Safra Bank..

Good afternoon, Daniel..

Good afternoon. Rodrigo, good luck, as the new Chairman of the Company and good luck to all the Board of Directors. I wanted to talk about the plant and the prices. Was that debated in light of the provisional measure prices impact to the plants. Thank you..

Limp, you want to start?.

Well, yes, I was part of the ministry until not long ago. So I can, of course, comment based on my experience. But the provisional measures should not have a tax impact. And for that, some measures were impacted vertically, so that there is no impact in prices. The first one was including. As we included , we have more value generation.

And as we distribute that, we can minimize the price impact. We also changed the to that. And of course, Eletrobras will run its own investment to make the better decision. The Board will make the proposition. The Council will and then there we understand that the government also looking to mitigating interest. I think that's what I had to say.

If anyone had something to what I said..

Can I chime in? Just wanted to you said that the resources will be allocated for our customers markets, which would exclude customers from the free market.

How do you see that? Do you think that can create any kind of struggle?.

Well, I think so, yes. This is a proposal by the rapporteur. And of course, I believe Congress will discuss that. There are different arguments to both sides for the free market and for consumers. But we also have to minimize prices impact to final consumers.

This debate was ongoing in Congress and the rapporteur also debated the exceeding production from Itaipu had CD, which can also contributes to the price reduction. But of course, this is something that should be debated in the chamber this week. But I wouldn't be able to tell you exactly what the final outcome will be..

Perfect. Thank you..

Next question by Marcelo from Itau Bank..

Good afternoon. Thank you for this call. Welcome to Eletrobras, Mr. Limp. We have been addressing many questions about the provisional measure, but there is an aspect of report that I wanted to clarify. The first thing is the possibility of improving for contracts at a lower value based on the price from the page from 2019.

And if company do that, and if so, will that happen voluntarily or would this be mandatory according to the rapporteur? That's the first question. The second question is regarding flexibility. The way the text was written, it's not clear to me.

What practical measures will be taken considering the report? They talk about prioritizing some elements, but they don't really touch on incentives or resources that will be used to make it work, or if that's only going to be a public tender organized by the governance.

I just wanted to know in practical terms, what is the intention behind that? I wanted to talk about the Company too. Eletrobras has a very high volume of contracted thresholds and the results should be good this year considering the expectations, mainly in the third quarter.

What is the Company's strategy for the next years considering contracting surveillance? We want to reduce the amount of people that was hired, or should that change considering the prices in the short-term? Thank you..

Well, I can address the two first questions, and I can hand over to Elvira. Mr. Jatoba is also here, he can address that question. I guess you can help us. And so that with regards to Proinfa and thermal plants, these issues are not directly related to Eletrobras. Proinfa was going to be intermediary only.

That's going to be postponed or not, that can't -- that what we wouldn't propose that as a compulsory measure. I think this should be something these agents should look far, especially , but we still have to look into the final text. Same thing for thermal plants.

Have to say, if they will be hired in the same tender or if I know modality will be proposed, hard to answer that question now, since we don't know what the rapporteur will propose just giving you some overview. Now regarding our sales strategy, I believe. Mr. Jatoba can help us address that question..

Mr. Jatoba is the Director of Sales. Can you please -- Director of Generation rather.

Can you please give us your insights?.

Hello, can you hear me?.

Yes, we can sir. Mr.

Pedro Jatoba, can you hear us?.

Thank you, Marcelo for your question. We are now going through a restructuring process at Eletrobras with regards to commercialization. Our goal is to expand our participation in the free market and we want to revisit our distribution strategy.

Just like other players in the market, we are following up on different changes that are going about in the market and different initiatives that are now being implemented. We are also planning our positioning strategy. I agree with your assessment.

Our expectation is to see a press increase for PLD that we should increase and improve our results of energy in the short term. However, we are reviewing this strategy and we believe that by the second half of this year, we should have some concrete elements to present in the short term..

Perfect. Thank you..

Thank you, Marcelo..

This concludes today's question-and-answer session. I would like to hand the floor over to Ms. Elvira Presta for her final remarks..

Thank you, Marcelo. Once again, I would like to thank you all for joining us this afternoon. Thank you for your questions. Thank you for your interest. I also want to ask our new Chairman, Mr. Rodrigo Limp to conclude our conference. Rodrigo, over to you..

Thank you, Elvira. Thank you, Marcelo. I also want to voice my thanks to all of you.

Thank you for your questions, and thank you for this great opportunity of clarifying these doubts and present the results to you and present our overview on the provisional measure that is under way and some other aspects of the corporate, especially with regards to the electricity sector. This is a valuable opportunity for us.

So as a company, since we are about transparency towards the market. So thank you very much once again. We are at your full service, if you need us in the future. We'll soon have another earnings release. Thank you very much, and good afternoon, everyone. Thank you, Marcelo for mediating this event..

Thank you very much. At this point, we conclude Eletrobras audio conference. Thank you very much for your participation and have a good day..