AFLT3: quote, dividends and indicators for Afluente Transmissão de Energia Elétrica

Afluente Transmissão de Energia Elétrica S.A. is a publicly traded company, with common shares listed on B3 under the ticker AFLT3. The company was incorporated on August 18, 2008, initially under the name Imanisse Participações S.A., in the context of the unbundling of the Brazilian electric power sector promoted by Law No. 10,848/2004. This reorganization involved the segregation of generation, transmission and distribution activities of Companhia de Eletricidade do Estado da Bahia (Coelba), resulting in the creation of Afluente Geração e Transmissão de Energia Elétrica S.A. Based on authorizing resolutions issued by the Brazilian Electricity Regulatory Agency (ANEEL), the transmission assets and liabilities were later spun off and merged into the current Afluente Transmissão de Energia Elétrica S.A., which assumed the specific transmission concession. The company’s capital is majority controlled by Neoenergia S.A., which holds around 90.18% of the interest, complemented by Iberdrola Energia S.A. and by a small free float in the market.

The core of Afluente Transmissão de Energia Elétrica’s business model is the provision of public high‑voltage power transmission services under a federal concession regime. The corporate purpose covers studies, planning, design, construction, operation, maintenance and exploitation of transmission systems, including transmission lines, substations and control centers, as well as all related infrastructure and services. The company’s net revenue comes entirely from electricity transmission, characterizing a single operational business segment. Compensation is defined by Concession Contract No. 001/2010, effective until August 2027, which sets the conditions for the provision of the service, including periodic tariff reviews every five years and annual adjustments based on sector indices, especially the IGP-M, in line with ANEEL’s regulatory parameters.

Afluente Transmissão de Energia Elétrica’s operating infrastructure is made up of 230 kV network assets, all located in the state of Bahia. The company operates about 483 km of transmission lines that are part of the Basic Network of the National Interconnected System (SIN) and substations with installed capacity of approximately 600 MVA. Among the facilities under the company’s responsibility are lines that connect substations in Itagibá, Funil, Brumado II, Ford, Polo, Camaçari IV, Tomba, Governador Mangabeira and Poções II, in addition to operating substations such as Tomba, Funil, Brumado II, Itagibá, Ford, Polo and Camaçari. These assets play an electrical integration role in a relevant region of the Bahia system by interconnecting generation and distribution points to the SIN. In recent years, the company has carried out reinforcements and adjustments mandated by ANEEL, such as increasing voltage in specific sections and implementing disconnect switches in substations, with a focus on improving operating reliability and complying with the Grid Procedures.

From an economic standpoint, Afluente Transmissão de Energia Elétrica shows a revenue profile concentrated in the Brazilian market, with 100% of net revenue attributable to customers located in the country. Due to the regulated nature of the transmission activity, revenue does not display material seasonality, since remuneration is structured mainly through the Annual Permitted Revenue (RAP) and system usage charges defined by ANEEL. The company has a single customer responsible for more than 10% of net revenue in each year analyzed, reinforcing the typical concentration of the segment, in which revenue flows are obtained mainly from agents connected to the Basic Network and contracted through standardized instruments such as Transmission Service Agreements (CPST) and Transmission System Usage Agreements (CUST), administered by the National Electric System Operator (ONS). Recent financial performance shows net income generation consistent with the profile of regulated revenues, with margins in line with a transmission infrastructure business.

The environment in which Afluente Transmissão de Energia Elétrica operates is strongly shaped by state regulation of the Brazilian power sector. The Ministry of Mines and Energy (MME) sets energy policy guidelines and sector planning, while ANEEL regulates and supervises concessions, defines tariff methodologies, conducts auctions for new transmission projects, approves tariff reviews and sets quality-of-service standards. ONS coordinates the operation of the SIN, managing generation dispatch and transmission network usage nationwide, ensuring non‑discriminatory open access to the Basic Network. Other bodies, such as the National Council for Energy Policy (CNPE), the Electric Sector Monitoring Committee (CMSE), the Electric Energy Trading Chamber (CCEE) and the Energy Research Company (EPE), indirectly influence the business environment through policy decisions, supply security monitoring, auction design and expansion planning. In transmission, concessions are considered natural monopolies, so there is no direct competition in the operation of existing assets, but there is competition in auctions for new projects.

In terms of taxation and government incentives, Afluente Transmissão de Energia Elétrica benefits from a tax incentive granted by the Northeast Development Superintendence (SUDENE), which provides for a 75% reduction in corporate income tax and surcharges, calculated on the profit from infrastructure investment activities. This benefit, effective until 2034, has a direct impact on the effective tax burden and, consequently, on the company’s cash generation and capacity to distribute earnings. From an accounting standpoint, the tax reduction is recognized as a government grant, classified as revenue in accordance with Brazilian standards convergent with IFRS, which affects the income statement and the creation of tax incentive reserves in equity, pursuant to corporate law.

With regard to environmental, social and governance (ESG) practices, Afluente Transmissão de Energia Elétrica is part of Neoenergia Group’s corporate sustainability agenda. Performance on environmental, social, economic and governance topics is reported annually in a Sustainability Report, which has followed the Global Reporting Initiative (GRI) international standards since 2010 and, as of 2020, incorporates the Sustainability Accounting Standards Board (SASB) standards for the electric power sector, as well as the recommendations of the Dow Jones Sustainability Index (DJSI). In 2021, the recommendations of the Task Force on Climate‑Related Financial Disclosures (TCFD) were added, along with compliance with ANEEL’s social and environmental reporting manual, the principles of the UN Global Compact and the UN Sustainable Development Goals (SDGs). ESG information is subject to internal verification and independent assurance, with the most recent report reviewed by Deloitte Touche Tohmatsu Auditores Independentes Ltda.

Governance of the ESG agenda involves defining a materiality matrix that identifies topics relevant to the group’s strategy and operations, with the participation of executives and various stakeholder groups, including shareholders, the financial market, customers, employees, suppliers, communities, nongovernmental organizations, regulatory and environmental agencies, and industry entities. The material topics defined include climate change, water management, biodiversity and ecosystems, circular economy, working conditions, local communities, network efficiency and reliability, corporate culture, supplier relations, cybersecurity and information privacy. These topics are monitored through specific GRI indicators, which reinforces the alignment of Afluente Transmissão de Energia Elétrica and, consequently, the operation associated with AFLT3 shares listed on B3, with sustainability reporting and management standards widely recognized in the international market.