2Q08 Results
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2Q08 Results

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    2Q08 Results 2Q08 Results Presentation Transcript

    • 2Q08 Results 1
    • Disclaimer This presentation may include forward-looking statements of future events or results according to regulations of the Brazilian and international securities and exchange commissions. These statements are based on certain assumptions and analysis by the company that reflect its experience, the economic environment and future market conditions and expected events, many of which are beyond the control of the company. Important factors that may lead to significant differences between the actual results and the statements of expectations about future events or results include the company’s business strategy, Brazilian and international economic conditions, technology, financial strategy, public service industry developments, hydrological conditions, financial market conditions, uncertainty of the results of future operations, plans, objectives, expectations and intentions, among others. Considering these factors, the actual results of the company may be significantly different from those shown or implicit in the statement of expectations about future events or results. The information and opinions contained in this presentation should not be understood as a recommendation to potential investors and no investment decision is to be based on the veracity, current events or completeness of this information or these opinions. No advisors to the company or parties related to them or their representatives shall have any responsibility for whatever losses that may result from the use or contents of this presentation. This material includes forward-looking statements subject to risks and uncertainties, which are based on current expectations and projections about future events and trends that may affect the company’s business. These statements include projections of economic growth and energy demand and supply, as well as information about the competitive position, the regulatory environment, potential opportunities for growth and other matters. Several factors may adversely affect the estimates and assumptions on which these statements are based. 2
    • Highlights of 2Q08 █ Consolidated EBITDA reached R$ 323.4 MM in 2Q08, a growth of 3.8% compared to 2Q07 █ Generation segment’s EBITDA grew 19.0% reaching R$ 118 MM in 2Q08. Generation contributed with 35% of consolidated EBITDA █ Generation’s energy sales grew 9.0% reaching 1,428 GWh in 2Q08 █ Energy distributed reached 6,444 GWh, a growth of 2.8% yoy. █ Significant reduction of manageable expenditures (-15.9%, excluding depreciation & amortization) █ Net financial expenses decreased -26.4% █ Acquisition of 2 wind farms with 13.8 MW of installed capacity by EDP Renováveis Brasil █ Asset swap between Energias do Brasil and Grupo Rede 3
    • Highlights of 2Q08 Asset Swap EBITDA Breakdown Impact on Net Debt - 2007 2007 2007 Consolidated Post-Transaction¹ ² 1,957 603 426 1,803 Generation 39% Distribution 43% 23 Generation Distribution 57% 61% EBITDA: R$1,123 MM EBITDA: R$1,139 MM ENBR's Net Enersul EDP Lajeado ENBR Pro- Debt Lajeado (net Forma cash) Operating Highlights 2007 2007 Consolidated Post-Transaction¹ Generation Generation Installed Capacity (MW) 1,043 Installed Capacity (MW) 1,696 +63% Firm Energy (average MW) 645 Firm Energy (average MW) 1,026 +59% Distribution Distribution Distributed Energy (GWh) 25,029 Distributed Energy (GWh) 21,756 -13% # Clients ('000) 3,207 # Clients ('000) 2,497 -22% 1 Assuming consolidation of 100% of Investco, Rede Lajeado and EDP Lajeado 2 Assuming Enersul’s EBITDA of R$193 MM, excluding extraordinary items 4
    • Generation Parte Interna – Separação de áreas de trabalho 5
    • Higher energy sales and average tariff increase resulted in strong EBITDA and Net Income growth Volume Energy Sales Net Revenue (GWh) (R$ MM) +39.4% +11.4% 2,966 384 2,663 +9.0% +20.1% 275 1,311 1,428 163 135 1H07 1H08 2Q07 2Q08 1H07 1H08 2Q07 2Q08 EBITDA Net Income* (R$ MM) (R$ MM) * Does not consider intra-group eliminations +69.4% +51.9% 294 145 +19.0% +23.3% 193 85 99 118 52 42 1H07 1H08 2Q07 2Q08 1H07 1H08 2Q07 2Q08 6
    • New projects already underway will sustain a potential 102.3% growth in installed capacity until 2012 Installed capacity (MW) 2,110 25** 360 29 2012 2009 2009 1,067 653* Expected Start-Up 50 25 452 1,043 1,043 516 2005 Peixe 4th turbine São João Current Lajeado Santa Fé Repowering Pecém 2012 Angical HPP Mascarenhas SHP additional SHP TPP capacity Concluded projects since IPO Projects in progress * Asset swap depending solely on BNDES and BASA approval ** Includes 5 MW of power upgrades in UHE Suíça and PCH Rio Bonito under Aneel's approval 7
    • Distribution Parte Interna – Separação de áreas de trabalho 8
    • In distribution, despite the market growth... Volume of Distributed Energy Energy Distributed by Customer Class (GWh) (GWh) +2.6% +2.6% 12,411 12,731 12,411 12,731 2% 13% 1% 13% +2.8% +2.8% 36% 37% 34% 34% 6,444 6,268 6,444 6,268 2% 2% 13% 13% 37% 36% 34% 34% 53% 62% 53% 62% 53% 53% 62% 62% 1H07 1H08 2Q07 2Q08 1H07 1H08 2Q07 2Q08 Bandeirante Escelsa Enersul End Customers Energy in Transit Other 9
    • ... financial performance was negatively impacted by tariff reviews Net Revenue EBITDA +2.0% (R$ MM) -10.8% (R$ MM) 454 2,025 2,065 405 +0.5% 24% 21% 21% 23% -2.1% 31% 31% 1,025 1,030 34% 208 204 31% 22% 20% 26% 18% 29% 30% 30% 25% 48% 48% 42% 49% 50% 46% 43% 57% 1H07 1H08 2Q07 2Q08 1H07 1H08 2Q07 2Q08 Net Income* -4.6% (R$ MM) 174 166 █ Reduction in 2Q08 EBITDA reflects 22% +3.6% 18% tariff review of the subsidiaries 28% 80 83 37% 23% 11% █ However, the growth of the Net 16% 41% 37% 54% 31% Income in 2Q08 reflects significant 73% 46% reduction of manageable expenses and net financial expenses 1H07 1H08 2Q07 2Q08 Bandeirante Escelsa Enersul * Does not consider intra-group eliminations 10
    • Productivity indicators show continuous improvements GWh / employee 12.9 12.9 12.8 12.0 10.3 8.9 9.0 9.1 8.1 6.6 4.3 4.4 4.5 4.5 3.6 Bandeirante Escelsa Enersul 2005 2006 2007 1Q08 2Q08 Customers (th.) / employee 1.36 1.36 1.37 1.29 1.15 1.17 1.18 1.07 1.06 0.98 1.00 0.94 0.96 0.89 0.76 Bandeirante Escelsa Enersul 2005 2006 2007 1Q08 2Q08 11
    • Actions are being taken to keep losses under control Commercial Losses* Bandeirante Escelsa Enersul EDB 5.7 6.0 5.8 8.0 8.9 5.7 6.1 6.2 Dec07 Jun08 Dec07 Jun08 Dec07 Jun08 Dec07 Jun08 * 12-month average. For Bandeirante, historical numbers were restated according to Aneel’s new criteria Total Losses 13.5% 13.8% 6.1% 6.2% ~ 150 thousand inspections undertaken and 73 thousand frauds detected in 2Q08 7.4% 7.6% ~ R$5.7 MM in recovered revenues Dec07 Jun08 Technical Commercial 12
    • COMERCIALIZAÇÃO Commercialization Parte Interna – Separação de áreas de trabalho 13
    • Despite the decrease in energy commercialized … Volume of Energy Commercialized (GWh) -1.0% 3,616 3,579 581 457 -6.5% 1,915 1,790 346 239 3,035 3,122 1,569 1,551 1H07 1H08 2Q07 2Q08 Energias do Brasil Group Companies Other 14
    • … financial performance reflects profits from short term high prices in 1H08 Net Revenue EBITDA (R$ MM) (R$ MM) +17.9% +30.2% 389 29 24 -36.9% +7.2% 298 18 166 178 11 1H07 1H08 2Q07 2Q08 1H07 1H08 2Q07 2Q08 Net Income* (R$ MM) +14.4% 20 -33.5% 18 12 8 * Does not consider intra-group eliminations 1H07 1H08 2Q07 2Q08 15
    • Consolidated Financial Performance 16
    • Financial performance was positively impacted by the generation segment Net Revenues EBITDA (R$ MM) (R$ MM) +9.6% +8.7% 2,488 +3.9% 650 707 +3.8% 2,271 1,157 1,203 312 323 1H07 1H08 2Q07 2Q08 1H07 1H08 2Q07 2Q08 17
    • Net Income was affected by accounting, non-cash adjustments Net Income (R$ MM) +21.8% 293 241 +14.5% 113 129 152 -4 1H07 1H08 2Q07 2Q08 2Q08 1H08 Consolidated Net Income (R$ million) R$ R$ Reported Net Income (4.0) 152.2 Elimination of non-recurring effects 1 Additional amortization of Enersul's goodwill 129.6 129.6 Enerpeixe subsidy 3.7 11.7 Adjusted Net Income 129.3 293.4 1 Non recurring, non cash adjustment. ENBR will propose to its Board of Directors a payout adjustment in order to compensate the negative effect on minimum dividend of extraordinary items. 18
    • Significant reduction on manageable expenses, excluding depreciation and amortization, especially on provisions and others Manageable expenses (R$ MM) 2Q07 2Q08 ∆% Personnel 86.1 79.7 -7.4% Material 10.0 11.1 10.9% Third Party Services 84.7 81.5 -3.8% Provisions 42.1 19.6 -53.5% Others 22.6 14.5 -36.0% IGPM: 13.4% 245.4 206.3 -15.9% IPCA: 5.8% Depreciation and amortization 79.9 83.1 4.0% Subtotal 325.3 289.4 -11.0% Enersul's goodwill amortization - 129.6 - Total 325.3 419.0 28.8% Provisions Others - R$ 11.7 MM due to the non-transfer of revenues - R$ 4.1 MM in service orders for earlier periods at from a collection agent in 2007 Bandeirante - R$ 6.4 MM in reversal of contingencies – Escelsa - R$ 3.0 MM in recovery of judicial deposits - R$ 5.0 MM in reduction of allowance for bad debt in the subsidiaries 19
    • The 26.4% reduction of net financial expenses is mainly related to an improvement in the FX result Financial Result (R$ MM) 2Q07 2Q08 ∆% Financial Income 56.8 68.9 21.3% Financial Expenses (89.7) (95.9) 7.0% Net Forex Result (8.7) (3.6) -58.7% Foreign Exchange Rate Variation 29.6 11.6 -60.8% Swap - net result (38.3) (15.2) -60.3% TOTAL (41.5) (30.6) -26.4% █ Other factors contributing to the improvement in net financial results were: - Revenue from interest over progress payment and delinquency; - Extinction of the CPMF. 20
    • The Group has an extended debt maturity, low leverage and low currency exposure Net Debt/EBITDA (x) Debt Maturity Schedule 1,042.0 2,345 2,131 5 1,879 1,957 2,000 1,702 4 736.5 3.0 3 562.9 553.6 1,000 2 499.1 1.9 1.8 1.7 1.8 1 324.0 0 0 2004 2005 2006 2007 Jun08 Net Debt/EBITDA Net Debt Cash and After 2008 2009 2010 2011 Cash Equiv. 2011 (Jun/08) Net Debt Gross Debt Breakdown (R$ MM) (Jun/08) 2,982 Short-Term (736) 1% 6% 667 Floating Rates* (115) Long Term Basic Interest Rate (TJLP) Long-Term 2,315 2,131 1,963 52% 41% Dollar Fixed Rates Gross Debt Jun.08 (-) Cash and (-) Regulatory Asset Net Debt Jun.08 Net Debt Mar.08 Marktable Securities and Liabilities * Includes Selic, CDI, IGP-M and INPC 21
    • A substantial increase in CAPEX is estimated for 2008, largely allocated to generation projects Capex Breakdown* Investments - Universalization (R$ MM) (R$ MM) 1,034 166 679 297 193 54 19 114 26 355 174 183 1H07 1H08 2008E 1H07 1H08 2008E Distribution Generation Estimated Investments** (R$ MM) 1,781 1,200 1,098 2008E 2009E 2010E * Does not include Capex for Universalization Program ** Subject to changes. Includes implementation of SHP projects still in phase of approval by Aneel 22
    • We are working to create new growth opportunities █ Creation of EDP Renováveis Brasil (EDPRB) and acquisition of 2 wind farms with 13.8 MW of installed capacity and expansion project of 70 MW; █ SHP projects under development, with a total installed capacity of 601 MW; █ 2 CCGT projects, with 500 MW each, and agreements signed with Petrobrás for the supply of natural gas from 2013 on; █ Potential participation in the expansion of Pecém TPP (360 MW); █ Partnership with Eletronorte, Cemig and engineering companies for the development of feasibility studies for HPPs (1,439 MW); █ Partnership with Cemig for the development of wind farms (500 MW); and █ TPP projects with sugar cane bagasse under development with an installed capacity of 100 MW, with potential expansion to 350 MW. 23
    • Stock Performance on the 1st semester 2008 Market Capitalization: R$ 5.3 billion* ENBR3 x Indexes Performance Base 100: 2008 130 100,000 120 80,000 110 60,000 100 40,000 90 80 20,000 70 0 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Volume R$ ENBR3 ENBR3 IBOVESPA IEE ENBR3 = +15,5% +15.5% IBOV = +1,8% +1.8% IEE = +10,8% +10.8% *Updated until June 30, 2008 24
    • Investor Relations Tel.: 55 11 2185-5907 ri@enbr.com.br www.energiasdobrasil.com.br 25