3Q08 Results
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3Q08 Results

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3Q08 Results 3Q08 Results Presentation Transcript

  • 3Q08 Results
  • 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 3Q08 █ The asset swap transaction between EDP Energias do Brasil and Grupo Rede was concluded in September, enabling Energias do Brasil to take over the control and management of Investco █ Net Consolidated Revenue reached R$ 1.226,5 MM in 3Q08, 5,2% more than 3Q07 █ Consolidated EBITDA reached R$ 350,6 MM in 3Q08, a growth of 10,6% compared to 3Q07 █ The consolidated net income of 3Q08 reached R$ 117,6 MM. In 9M08 net income was R$ 269,8 MM. However, it is worth noting that the accumulated nine-month period mainly sweeps up the negative impact of R$ 129.6 million of additional amortization of Enersul’s goodwill premium recognized in 2Q08. The result would have been R$ 413.8 million, 11.4% more than 9M07 if this item is excluded. █ Energy volumes sold by the generation business in 3Q08 was 1,582 GWh, 10.7% up on 3Q07 █ Distributed energy volume in 3Q08 was 6,273 GWh, 6,0% more than the pro forma volume registered in 3Q07 (excluding Enersul’s contribution for the month of September). █ For the third consecutive quarter, ENBR presented significant reduction in consolidated manageable expenses (-14,1%, excluding depreciation and amortization) █ Net debt decreases 21.1% (1.4 times EBITDA) compared to June, 2008 3
  • Generation
  • The growth in the volume of energy sold and good financial performance are consequence of the increase in the Group’s installed capacity Volume Energy Sold Net Revenue (GWh) +37.4% (R$ MM) +11.1% 567 4,548 4,093 413 +10.7% +33.2% 1,429 1,582 183 137 9M07 9M08 3Q07 3Q08 9M07 9M08 3Q07 3Q08 * Não considera eliminações de negócios intra-grupo EBITDA Net Income* +34.9% (R$ MM) (R$ MM) +35.2% 421 312 193 +7.2% 143 -15.5% 119 127 58 49 9M07 9M08 3Q07 3Q08 9M07 9M08 3Q07 3Q08 5
  • New projects already underway will sustain a potential 24% growth in installed capacity until 2011 Installed Capacity 2,116 (MW) 25** 360 6* 29 2011 2009 2009 2008 653 Expected Start-UP 50 25 2008 452 1,702 1,702 1.696 653* 1,043 516 2005 Peixe 4th Engine São João Santa Fé Repowering Pecém 2011 Angical HPP Mascarenhas SHP 2007 Additional Cenaeel 2008 SHP TPP Capacity Lajeado Projects concluded since the IPO Projects under construction * Under approval from agencies. It corresponds to the EnBr’s 45% stake at EDP Renováveis Brasil. ** Mascarenhas, Suíça and Rio Bonito 6
  • Distribution
  • In distribution, despite the market growth... Volume of Distributed Energy Energy Distributed by Customer Class (GWh) (GWh) +2.2% +2.2% 19,004 18,601 19,004 18,601 1% 2% 13% 11% 37% 36% 34% 35% +1.3% +1.3% 6,190 6,273 6,190 6,273 13% 9% 61% 62% 2% 2% 53% 54% 38% 38% 33% 36% 54% 55% 60% 60% 9M07 9M08 3Q07 3Q08 9M07 9M08 3Q07 3Q08 Bandeirante Escelsa Enersul End Customers Energy in Transit Other 8
  • ... financial performance in 3Q08 was positively impacted by Escelsa’s tariff readjustment Net Revenue EBITDA +1.4% (R$ MM) -2.8% (R$ MM) 3,069 648 630 3,025 19% 22% 20% 21% +0.3% +16.0% 30% 31% 31% 32% 1,000 1,003 194 225 21% 14% 13% 49% 28% 33% 16% 50% 47% 48% 25% 34% 51% 53% 59% 53% 9M07 9M08 3Q07 3Q08 9M07 9M08 3Q07 3Q08 Net Income* -0.3% (R$ MM) █ In August, 2008 12.17% Escelsa’s 258 257 tariff readjustment 16% 14% +8.8% 31% 29% █ In 3Q08, the reduction of 83 90 manageable expenditures 4% 7% 53% 37% 57% 19% 30% improved EBITDA and Net Income 77% 63% 9M07 9M08 3Q07 3Q08 Bandeirante Escelsa Enersul * Does not consider intra-group eliminations 9
  • The level of losses presents reduction of 1.6 p.p. without Enersul Commercial Losses (%)* Bandeirante Escelsa ENBR 5.7 5.5 5.7 5.7 6.0 5.8 5.6 6.1 6.0 6.2 5.6 5.8 5.5 5.7 5.6 Dec07 Mar08 Jun08 Sep08 Dec07 Mar08 Jun08 Sep08 Dec07 Mar08 Jun08 Sep08 Including Enersul Total Energy Losses -1.6 p.p. 13.5% 13.5% 13.8% 12.0% 11.9% 12.1% 12.2% ~ 48 thousand inspections undertaken and 5.8% 5.5% 5.7% 5.6% 38 thousand frauds detected in 3Q08 ~ R$ 5,7 MM in recovered revenues 6.2% 6.3% 6.4% 6.6% Dec07 Mar08 Jun08 Sep08 * 12-month average. For Bandeirante, historical numbers were restated according Technical Commercial Including Enersul to Aneel’s new criteria 10
  • Commercialization
  • Despite the decrease in energy commercialized … Volume of Energy Commercialized (GWh) -2.2% 5,482 5,362 777 639 -4.5% 1,866 4,705 4,722 1,783 196 182 1,670 1,601 9M07 9M08 3Q07 3Q08 Energias do Brasil Group Companies Other 12
  • … the increase of the sales prices was fundamental for the net revenue growth Net Revenue EBITDA (R$ MM) (R$ MM) +1.5% +23.7% 575 38 39 464 +12.0% -26.2% 186 14 166 11 9M07 9M08 3Q07 3Q08 9M07 9M08 3Q07 3Q08 Net Income* +0.8% (R$ MM) 27 27 EBITDA and Net Income -24.8% was negatively impacted by the increase in the cost 9 of energy purchased to 7 resell 9M07 9M08 3Q07 3Q08 * Does not consider intra-group eliminations 13
  • Consolidated Financial Performance
  • Financial performance was positively impacted by the distribution segment Net Revenue EBITDA (R$ MM) +9.3% (R$ MM) +8.1% 3,438 3,715 1,057 967 +5.2% +10.6% 1,166 1,227 317 351 9M07 9M08 3Q07 3Q08 9M07 9M08 3Q07 3Q08 Net Income +11.4% (R$ MM) 414 371 144 -9.9% 131 118 270 Adjusted by Enersul's additional goodwill amortization and Enerpeixe's subsidy 9M07 9M08 3Q07 3Q08 15
  • Significant reduction on manageable expenses, mainly provisions and third party services Manageable expenses (R$ MM) 3Q07 3Q08 ∆% Personnel 77.0 74.8 -2.9% Material 12.1 8.3 -32.1% Third Party Services 90.2 75.9 -15.9% Provisions 38.9 17.4 -55.4% Others 12.8 22.3 74.6% 231.1 198.6 -14.1% IGPM: 12,3% Depreciation and amortization 80.7 79.2 -1.9% Total 311.8 277.7 -10.9% Provisions Third Party Services - R$ 12.2 MM in decline in discos’ bad debt allowances - lower costs of business consultancy due to the successful combating of delinquency - reduction in outlays for meter readings and - R$ 8.2 MM in of the provision for contingencies billings, inspection services, conservation and maintenance of the electricity system network and telecommunications 16
  • Financial result presented reduction in the period Financial Result (R$ MM) 3Q07 3Q08 ∆% Financial Income 74.1 50.4 -32.0% Financial Expenses (90.6) (100.0) 10.3% Net Forex Result (1.2) (6.2) 413.5% Foreign Exchange Rate Variation 15.9 (17.3) n.a. Swap - net result (17.1) 11.1 n.a. TOTAL (17.8) (55.8) 214.0% █ Other factors contributing to the variation in net financial results were: - a reduction in the financial income due to lower outstandings of regulatory assets and the divestment of Enersul; - net foreign exchange result; - extinction of the CPMF. 17
  • The Group has an extended debt maturity, low leverage and low FX exposure Net Debt/EBITDA (x) Debt Maturity Schedule 942.3 2,345 5 1,879 1,957 1,680 780.0 2,000 3.0 1,702 4 3 610.6 1,000 2 459.8 457.6 1.9 1.8 1.7 1 1.4 0 0 162.6 2004 2005 2006 2007 Set08 Net Debt/EBITDA Net Debt Cash and After 2008 2009 2010 2011 Cash Equiv. 2011 (Sep/08) Net Debt Gross Debt Breakdown (R$ MM) (Sep/08) 2,633 2,6332 5% Short-Term 667 (780) Floating Rates* (172) Long Term Basic 49% Long-Term 46% Interest Rate (TJLP) 2,131 2,315 1,680 Fixed Rates Gross Debt Sep.08 (-) Cash and (-) Regulatory Asset Net Debt Sep.08 Net Debt Jun.08 * Includes Selic, CDI, IGP-M and INPC Marktable Securities and Liabilities 18
  • Higher trend to reinforce the Capex to generation projects Capex Breakdown* Investments - Universalization (R$ MM) (R$ MM) 972 128 679 354 426 31 72 138 37 323 288 293 9M07 9M08 2008E 9M07 9M08 2008E Distribution Generation Estimated Investments ** (R$ MM) 1,100 1,180 1,008 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 19
  • We are working to create new growth opportunities the in generation business █ SHP projects under development, with a total installed capacity of 601 MW; █ 2 CCGT projects, with 500 MW each, in a partnership with Petrobrás; █ 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. 20
  • Stock Performance in the nine months of 2008 Market Capitalization: R$ 3.9 bilhões* ENBR3 x Desempenho dos Índices Base 100: 2008 130 100.000 120 80.000 110 100 60.000 90 40.000 80 20.000 70 60 0 dez-07 jan-08 mar-08 abr-08 mai-08 jun-08 jul-08 ago-08 set-08 Volume R$ ENBR3 ENBR3 IBOVESPA IEE ENBR3 = +15,5% -13.8% IBOV = +1,8% -22.5% IEE = +10,8% -5.3% *Updated until September 30, 2008 21
  • Investor Relations Tel.: 55 11 2185-5907 ri@enbr.com.br www.energiasdobrasil.com.br