Companhia Paranaense de Energia - COPEL

Copel reported consolidated recurring EBITDA of BRL 1.6 billion in Q2 2026, up 21% versus Q2 2025, and recurring net income of BRL 645.1 million, up 42.6% year over year. Copel DisCo EBITDA rose 34.5% to BRL 765.6 million, while Copel Generation and Transmission EBITDA rose 10.1% to BRL 838 million; Elejor contributed BRL 29.1 million, Copel Comercialização BRL 21.4 million, and holding recorded a BRL 46.2 million loss. CapEx totaled BRL 957.2 million, including BRL 479 million in DisCo and BRL 476.4 million in JE, with BRL 318 million allocated to begin Foz do Areia and Segredo expansion. Management said adjusted net debt was BRL 19.6 billion and leverage was 2.9x, exactly at the new target; average nominal debt cost was 12.92% per year. For forward guidance, management reiterated an unchanged minimum dividend payout of 75%, at least two annual dividend payments, and said it expects to declare at least one more dividend by the end of 2026. They also said the leverage convergence timeline was extended to up to 48 months, to better match the investment cycle tied to LRCAP and related projects.

Daniel Slaviero framed the quarter as evidence of strong execution, saying the company delivered another quarter of strong operating results and completed the Copel Distribution tariff review on strictly technical grounds. He emphasized that the LRCAP win, the planned BRL 5 billion expansion of the two largest plants, and the revised capital structure are part of a new investment cycle, but insisted the dividend policy and shareholder remuneration strategy remain unchanged. His tone was confident and defensive on the market reaction, stressing predictability, capital discipline, and that Copel is now a stronger, more resilient company.

Felipe Gutterres focused on the capital structure update and said the new 2.9x leverage target reflects annual review, stress testing, and the investment plan, with convergence allowed over up to four years. He cited consolidated recurring EBITDA of BRL 1.6 billion, recurring net income of BRL 645.1 million, CapEx of BRL 957.2 million, adjusted net debt of BRL 19.6 billion, and a debt cost of 12.92% per year. He also noted the minimum payout policy of 75% remains in place, but the more flexible leverage band could allow evaluation of additional distributions if balance sheet conditions permit.

Analysts pressed management on whether the shift to a 2.9x leverage target and up to 48 months to converge implied lower dividends; management said no, calling the market reaction a misunderstanding and reiterating that the 75% minimum payout policy is unchanged. They also addressed delinquency and bad debt, with management saying Copel’s trading delinquency rate was just 0.01% and that the concession area remains below 1%, while acknowledging sector-wide regulatory discussions on allowances for bad debt. On capital allocation, management said there is no concrete M&A pipeline, sees batteries as unattractive versus minimum return hurdles, and said any rebidding of hydro assets should be done in a competitive process.