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Conference Call 2Q12

Conference Call 2Q12. Highlights. Consumption growth of 1.5% compared to 2Q11, mainly driven by the commercial class with a consumption increase of 8.4%; On June/12, non-technical losses ratio reached 42.3% over the low-voltage market, due to the criteria change of longtime default clients;

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Conference Call 2Q12

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  1. Conference Call 2Q12

  2. Highlights • Consumption growth of 1.5% compared to 2Q11, mainly driven by the commercial class with a consumption increase of 8.4%; • On June/12, non-technical losses ratio reached 42.3% over the low-voltage market, due to the criteria change of longtime default clients; • Collection reached 103.9% on 2Q12 , 1.9 p.p. above the 102.0% reached on 2Q11; • The quality indicators ELC and EFC, without removals, decreased from 3.29 to 2.74 and 1.40 to 1.68 respectively, when comparing the quarters; • In the first half, investments in distribution amounted R$ 302.3 million, 3.5% above the same period of the previous year. DISTRIBUTION GENERATION • Strong performance of the generation segment in the quarter, reflecting the increase in the spot prices and higher sales volume in the Free Market Environment; • SHPP Paracambi, in partnership with Cemig, with 25 MW of installed capacity started its operation in May; • The wind farm complex Alto Sertão I, the largest in Latin America, belonging to Renova Energia, with 14 wind farms and 294,4 MW of installed capacity in Bahia, started its operation in July; • Considering the stakes on the new plants, total installed capacity increased to 955 MW. 2

  3. Highlights • 12.1% increase in Net Revenue (without construction revenue) that reached R$ 1,635.7 million in 2Q12, highlighting the 48.3% increase in the net revenue generation segment. • PMSO consolidated cost reduced 3.9% in the quarter, down 5.3% in the distribution segment;. • R$ 255.8 million EBITDA in 2Q12, 6.2% increase, with 15.4% margin. Considering the effect of regulatory assets and liabilities, EBITDA would be 34.5% higher than 2Q11. • Net Income of R$ 39.8 million in 2Q12, a 12.3% reduction when compared to 2Q11. Considering the effect of regulatory assets and liabilities, Net Income would be 83.0% higher than 2Q11. RESULTS CAPITAL STRUCTURE • Operating cash flow (before interest payments and taxes) rose 16.4% to R $ 293.6 million in 2T12, R$ 41.3 million higher than operating cash generated in 2Q11. Including interest payments and taxes, the increase was 21.9%, or $ 34.3 million; • Net debt of R$ 3,516.6 million, with net debt / EBITDA of 2.8x. • On August 7, the Federal Administrative Council of Tax Appeals (“Carf”) judged the case related to the foreign subsidiaries Light Overseas Investment Limited (“LOI”) and LIR Energy Limited (“LIR”), liquidated in 2008 and 2010, respectively. With a favorable judgment to the subsidiary Light Serviços de Eletricidade (“Light SESA”), the tax assessment in the adjusted amount of R$529.4 million was dismissed, including fine and monetary restatement. There was no provision, therefore there is no effect on results. 3

  4. Energy Consumption Distribution ELECTRICITY CONSUMPTION¹ TOTAL MARKET (GWh) +3.2% +1.5% FREE 15% 5,754 5,669 5,460 5,228 OTHERS 15% INDUSTRIAL 7% 23.5ºC 23.4ºC 22.7ºC 22.7ºC COMMERCIAL 29% RESIDENTIAL 34% 2Q09 2Q10 2Q11 2Q12 1Note: To preserve comparability in the market approved by Aneel in the tariff adjustment process, the billed energy of the free customers Valesul, CSN and CSA were excluded in view of these customers’ planned migration to the Basic Network. 4

  5. Total Market ELECTRICITY CONSUMPTION (GWh) TOTAL MARKET – QUARTER +1.5% 5,754 5,669 837 789 -3.6% +8.4% 2,043 1,969 1,866 1,721 4.916 +3.5% -1.8% 180 4.880 167 1,000 937 982 905 48 48 1.685 1.554 609 574 889 857 426 373 2Q11 2Q12 2Q11 2Q12 2Q11 2Q12 2Q11 2Q12 2Q11 2Q12 TOTAL OTHERS RESIDENTIAL INDUSTRIAL COMMERCIAL FREE CAPTIVE 5

  6. Collection COLLECTION RATE BY SEGMENT QUARTER COLLECTION RATE 12 MONTHS 108.3% 107.4% 105.0% 103.9% 102.0% 101.4% 100.7% 100.1% 98.2% 97.5% Jun/11 Jun/12 PUBLIC SECTOR TOTAL RETAIL LARGE CLIENTS 2Q11 2Q12 6

  7. Loss Prevention ENERGY RECOVERY GWh LOSS (12 MONTHS) 42.3% 82.3 41.3% 41.3% -31.0% 40.7% 40.4% Reflets the change on treatment's criteria in the approach to long term delinquent customers, based on Aneel Resolution 414. 56.7 34.2% 7,627 7,619 7,582 7,839 7,665 5,326 5,466 5,229 1H12 5,247 5,316 1H11 INCORPORATION GWh 2,328 2,293 2,372 2,335 2,349 +16.9% 43.1 Jun/11 Sep/11 Dec11 Dec/11 Mar/12 36.8 Non-technical losses GWh Technical losses GWh % Non-technical losses/ LV Market % Non-technical losses / LV Market - Regulatory 1H12 1H11 7

  8. Net Revenue NET REVENUE BY SEGMENT (2Q12)* NET REVENUE (R$MM) Comercialization 4.2% Generation 6.9% Distribution 88.9%** +6.6% 3,702,.2 3,472.6 299.7 326.3 +9.8% * Eliminations not considered ** Construction revenue not considered 1,797.9 1,637.9 NET REVENUE FROM DISTRIBUTION (2Q12) 162.2 3,402.5 179.2 3,146.3 1,635.7 1,458.7 Others (Captive) 13% Network Use (TUSD) 9.8% (Free + Concessionaires) Industrial 6.7% 2Q11 1H11 2Q12 1H12 Construction Revenue Revenue w/out construction revenue Residential 40.1% Commercial 30.4% 8

  9. Operating Costs and Expenses DISTRIBUTION MANAGEABLE COSTS (R$MN) COSTS (R$MM)* 2Q12 -1.5% 661.5 651.6 -9.8% Manageable (distribution): R$ 321.8 (21.8%) 356.8 321.8 Non manageable (distribution): R$ 1,053.0 (71.2%) 1H11 2Q12 1H12 2Q11 Generation and Commercialization: R$ 104.5 (7.1%) * Eliminations not considered 9

  10. EBITDA EBITDA BY SEGMENT* 2Q12 CONSOLIDATED EBITDA (R$MM) +2.0% 689.6 Generation 33.4% (EBITDA Margin: 75.9%) 675.7 Distribution 63.7% (EBITDA Margin: 11.3%) +6.2% 255.8 240.8 Commercialization 2.9% (EBITDA Margin: 10.9%) *Eliminations not considered 2Q11 2Q12 1H11 1H12 10

  11. EBITDA EBITDA – 2Q12/2Q11(R$ MM) +34.5% +6.2% 177 76 332 15 256 6 246 241 8 (186) Net Revenue Non-Managable Costs Managable Costs (PMSO) Provisions Adjusted EBITDA 2Q11 Regulatory Assets and Liabilities EBITDA2Q11 EBITDA2Q12 Regulatory Assets and Liabilities Adjusted EBITDA 2Q12

  12. Net Income NET INCOME – 2Q12/2Q11(R$ MM) +83,0% -12.3% Adjusted Net Income2Q11 Regulatory Assets and Liabilities Adjusted Net Income2Q12 2Q11 Taxes Others EBITDA Financial Result 2Q12 Regulatory Assets and Liabilities 12

  13. Indebtedness NET DEBT AMORTIZATION SCHEDULE* (R$ MM) Average Term: 3.5 years 3,516.3 2,549.3 830 788 803 687 557 2.8 2.0 289 Jun/11 Jun/12 2012 2013 2014 2015 2016 After 2016 Net Debt / EBITDA * Principal only COST OF DEBT TJLP 21.4% CDI/Selic 77.3% 11.08% 11.01% 9.84% 9.25% US$/Euro 1.3%* 5.30% 4.87% 4.51% 4.13% 2009 2010 Jun/12 2011 Nominal Cost Real Cost * Considering Hedge 13

  14. Investments CAPEX BREAKDOWN (R$MM) 2Q12 CAPEX (R$MM) 928.6 +32.5% 169.9 700.6 563.8 546.7 181.8 758.7 -2.6% 92.9 116.9 337.1 328.4 45,1 26,0 518.8 446.9 453.8 292.0 302.3 Generation Maintenance 7.2 Generation Projects 1.3 2008 1H11 2010 2011 2009 1H12 Others 33.8 Investments in Electric Assets (Distribution) Develop. Of Distribution System 122.5 Quality Improvement 56.9 Losses Combat 106,6 14

  15. Important Notice This presentation may include declarations that represent forward-looking statements according to Brazilian regulations and international movable values. These declarations are based on certain assumptions and analyses made by the Company in accordance with its experience, the economic environment, market conditions and future events expected, many of which are out of the Company’s control. Important factors that can lead to significant differences between the real results and the future declarations of expectations on events or business-oriented results include the Company’s strategy, the Brazilian and international economic conditions, technology, financial strategy, developments of the public service industry, hydrological conditions, conditions of the financial market, uncertainty regarding the results of its future operations, plain, goals, expectations and intentions, among others. Because of these factors, the Company’s actual results may significantly differ from those indicated or implicit in the declarations of expectations on events or future results. The information and opinions herein do not have to be understood as recommendation to potential investors, and no investment decision must be based on the veracity, the updated or completeness of this information or opinions. None of the Company’s assessors or parts related to them or its representatives will have any responsibility for any losses that can elapse from the use or the contents of this presentation. This material includes declarations on future events submitted to risks and uncertainties, which are based on current expectations and projections on future events and trends that can affect the Company’s businesses. These declarations include projections of economic growth and demand and supply of energy, in addition to information on competitive position, regulatory environment, potential growth opportunities and other subjects. Various factors can adversely affect the estimates and assumptions on which these declarations are based on. 15

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