ELPC — Companhia Paranaense de Energia

Summary of COPEL Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Recurring EBITDA: BRL 1.4 billion, up 16% year-on-year.
• Recurring Net Income: BRL 683 million, a 30% increase compared to Q4 2024.
• CapEx: BRL 768 million for Q4, totaling BRL 3.4 billion for the full year, focused on network modernization and infrastructure.
• Leverage: Ended the year at 2.7x, consistent with the optimal capital structure.
• Dividend Distribution: Record total of BRL 3.8 billion for 2025, representing an aggregate payout of 144% and a dividend yield of 14%.

2. Strategic Updates and Business Highlights

• Vision 2035: Launched a multiyear investment plan of BRL 18 billion over the next five years.
• Novo Mercado Migration: Successfully migrated to the highest governance level on B3, enhancing stock liquidity and attracting investors.
• LRCAP Preparation: Fully prepared for the Reserve Capacity Auction scheduled for March 2026, with two projects ready for bidding.
• Operational Efficiency: Notable improvements in the Generation and Transmission segment, with a 24% increase in recurring EBITDA.

3. Forward Guidance and Outlook

• Tariff Review: Anticipated DISCO Tariff Review in June 2026, with expectations to exceed a new net remuneration base of BRL 18.5 billion.
• Market Positioning: COPEL aims to leverage its hydroelectric capacity to maintain competitive pricing and enhance profitability amid expected structural price increases in the energy market.

4. Bad News, Challenges, or Points of Concern

• Curtailment Impact: Experienced a significant increase in curtailment from 15.7% in Q4 2024 to 34.2% in Q4 2025, affecting energy availability and costs.
• Increased Energy Costs: The cost of purchased energy rose by BRL 104.7 million, influenced by a GSF of 67.4% and higher spot market prices.
• Operational Costs: A 31.5% increase in PMSO (Personnel, Material, and Services Operations) due to higher maintenance and operational demands.

5. Notable Q&A Insights

• LRCAP Strategy: Management expressed caution regarding the upcoming auction, noting tight cap prices for hydro projects but confident in their ability to create value.
• Energy Pricing Strategy: COPEL is focused on maintaining a long position in energy contracts for 2026, anticipating higher prices and aiming to capitalize on market volatility.
• Dividend Payments: While currently not planning quarterly dividend payments, management remains open to flexible distribution strategies in response to shareholder needs.
• M&A Considerations: COPEL is open to potential acquisitions in the distribution sector but remains disciplined in capital allocation, focusing on hydroelectric opportunities.

Overall, COPEL's performance in Q4 2025 reflects strong operational resilience and strategic positioning, despite facing challenges related to curtailment and rising energy costs. The company's commitment to shareholder value and long-term growth remains evident through its robust financial metrics and strategic initiatives.