Apimec - 2007 Results
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Apimec - 2007 Results

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Apimec - 2007 Results Apimec - 2007 Results Presentation Transcript

  • March 2008
  • 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
  • 2007 Results
  • Highlights of 2007 █ Net income increases 11.6% █ Consolidated EBITDA reaches R$ 1,123 MM in 2007, a growth of 4.6% yoy █ EBITDA growth would be 16.3% if non-recurring items were eliminated (negative impact of R$ 183.1 MM due to extraordinary reduction in Enersul’s RAB) █ Generation segment’s EBITDA grows 62.1% reaching R$ 442 MM █ Generation contributes with 38% of consolidated EBITDA █ Commercialization grows 7.2% yoy in volume and 25.7% yoy in margin █ Net operating revenue from Distribution grows 9.6% █ In Distribution, manageable expenditures per MWh distributed grow 5.5%, increasing less than inflation █ Financial expenses decrease 22.5% █ Company’s Board of Executive Officers restructured with the appointment of a new CEO 4
  • Generation
  • Generation’s performance was outstanding in 2007, driven by the increase in capacity... Volume of Produced Energy Volume Energy Sales (GWh) (GWh) +17.0% +19.7% 4,704 5,568 3,929 4,758 -9.3% +8.4% N.A. 1,355 N.A. 1,480 4Q06 4Q07 2006 2007 4Q06 4Q07 2006 2007 █ Operation of Peixe Angical HPP and the 4th generating unit at Mascarenhas HPP fully integrated throughout 2007 █ Startup of commercial operations at São João SHP 6
  • …which resulted in strong EBITDA growth Net Revenue EBITDA (R$ MM) (R$ MM) +28.3% +62.1% 583 442 454 +26.5% +47.4% 273 170 130 134 88 4Q06 4Q07 2006 2007 4Q06 4Q07 2006 2007 Net Income (R$ MM) +60.7% 206 128 █ EBITDA margin from generation +72.5% increases to 75.8% in 2007 from 63 60.1% in 2006 36 4Q06 4Q07 2006 2007 7
  • Installed capacity has almost doubled since 2005 and with projects already underway, will almost triple in 2012 Installed capacity (MW) +39.2% 1,452 +102.1% 360 409 29 20* 50 25 452 2009 2009 2012 1,043 Estimated start-up of commercial operation 1,043 516 2005 UHE Peixe 4a Máq. PCH São Atual PCH Santa UTE Pecém 2012 Angical Mascarenhas João Fé Repotenciações Assured Energy (average MW) 334 645 980 93.1% 51.9% Projects concluded since IPO Projects in progress * Includes 2.3 MW from the upgrading of Suíça HPP, still awaiting Aneel ratification 8
  • Distribution
  • In distribution, despite market growth... Volume of Distributed Energy Energy Distributed by Customer Class (GWh) (GWh) +4.5% +4.5% 23,948 25,029 25,029 23,948 1% 1% 13% 13% +6.5% +6.5% 37% 37% 34% 34% 6,428 6,428 6,038 6,038 14% 13% 2% 1% 62% 62% 53% 53% 36% 36% 33% 34% 53% 53% 62% 62% 53% 4Q06 4Q07 2006 2007 4Q06 4Q07 2006 2007 Bandeirante Escelsa Enersul End Customers Energy in Transit Other 10
  • ... financial performance was negatively impacted by the reduction in Enersul’s RAB Net Revenue EBITDA (R$ MM) +9.6% (R$ MM) -18.1% 3,916 829 3,573 679 18% 21% -9.0% 21% -87.1% 2% 31% 37% 31% 242 33% 978 891 17% 31 20% 7% 31% 36% 29% 46% 61% 48% 51% 49% 57% 54% 4Q06 54% 4Q07 2006 2007 4Q0654% 4Q07 2006 2007 Net Income (R$ MM) -12.1% 332 292 -79.0% 15% 163 42% 15% 34 █ Reduction in 2007 EBITDA vs 2006 36% 43% reflects a negative non-recurrent 49% effect of R$ 183.1 MM with respect 4Q06 4Q07 2006 2007 to the impact of the reduction in 54% Enersul’s RAB Bandeirante Escelsa Enersul 11
  • Manageable expenditures per MWh increased less than inflation in the period, despite the increase in contingencies Manageable Expenditures (R$ MM) 4Q06 4Q07 ∆% 2006 2007 ∆% Personnel 65.9 70.2 6.4% 303.2 259.1 -14.5% Material 7.9 10.5 32.4% 33.6 40.0 19.3% Third Party Services 73.1 87.2 19.3% 265.2 311.2 17.3% Provisions 14.6 24.0 64.4% 66.7 132.5 98.7% Others 24.6 18.5 -24.9% 63.8 64.9 1.8% Total 186.1 210.3 13.0% 732.4 807.7 10.3% Distr. energy vol. (GWh) 22,394 23,061 3.0% 23,948 25,029 4.5% R$ / MWh 8.31 9.12 9.7% 30.58 32.27 5.5% IGPM 7.8% 7.8% Provisions and Others Third Party Services + R$ 11.5 MM in PDD at subsidiary companies + R$ 14.3 MM in operating efficiency programs and support activities + R$ 23.9 MM in civil, tax and labor contingencies recognized by the discos + R$ 9.9 MM in conservation and repair of discos’ networks + R$ 3.4 MM in expenditures with collections, meter reading, billing, disconnections and reconnections 12
  • Productivity indicators show continuous improvements GWh / employee 12.9 12.0 10.3 10.1 8.9 8.1 6.6 5.8 4.3 4.4 3.4 3.6 Bandeirante Escelsa Enersul Client / employee 1.29 1.40 1.15 1.06 1.07 1.06 0.89 0.94 0.96 0.80 0.71 0.76 Bandeirante Escelsa Enersul 2004 2005 2006 2007 13
  • Measures taken allowed losses to be kept under control, within existing limits Commercial Losses Bandeirante Escelsa Enersul EDB 2.4 2.5 2.3 5.3 5.6 6.0 7.8 8.2 8.0 2.3 5.4 7.6 4.0 4.2 4.4 4.4 Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec 2007 2007 2007 2007 Total Losses ~ 745 thousand inspections undertaken and 13.2% 13.5% 13.5% 13.0% 300 thousand frauds detected in 2007 4.1% 4.2% 4.4% 4.4% ~ R$32.5 in recovered revenues Efficacy of investments aimed at 8.9% 9.0% 9.1% 9.1% combating losses is reflected primarily in avoidance of increased fraud Mar Jun Sep Dec 2007 14
  • And in April, we conclude the second cycle of periodic tariff review ENERSUL 2nd Tariff Review Cycle ESCELSA BANDEIRANTE (preliminary) Verified Revenue 1,356,583 2,146,463 925,262 Parcel A 814,707 1,402,476 512,844 Parcel B 452,202 567,473 379,984 Model Company 221,263 262,867 183,254 Delinquency 8,852 12,667 7,571 Remuneration 143,590 184,119 117,407 Regulatory Depreciation 78,497 107,820 71,752 Total Required Revenue 1,266,908 1,969,950 892,827 (-) Other Revenue 4,177 12,443 1,285 Net Required Revenue 1,262,730 1,957,506 891,542 Tariff Review (excl. fin. adjust.) -6.92% -8.80% -3.64% Financial Adjustments 2007 4.76% -0.52% -12.29% Financial Adjustments 2006 -7.46% -3.15% -3.00% Post Fin. Adjust Tariff Review -9.62% -12.47% -18.93% Gross RAB 1,842,657 2,354,144 1,704,327 Net RAB 952,457 1,221,292 778,778 15
  • Commercialization
  • In commercialization, the growth of volume combined with the increase in margin... Volume of Energy Commercialized Number of Customers (GWh) +50% 78 +7.2% 52 7,188 6,702 814 1,193 +8.6% 2006 2007 6,374 1,706 5,509 1,571 222 37 Commercialization Margin 1,349 1,669 2007 vs 2006 4Q06 4Q07 2006 2007 Energias do Brasil Group Companies Other 25.7% 17
  • …resulted in growth of 37% in EBITDA, adjusted to exclude the impact of provisions for Ampla’s receivables Net Revenue Adjusted EBITDA (R$ MM) (R$ MM) +24.9% + 37.2% 59 618 47 + 37.5% 12 495 43 +30.2% 8 11 47 8 40 3 153 3 118 40 8 3 -32 -32 4Q06 4Q07 2006 2007 4Q06 4Q07 2006 2007 Net Income (R$ MM) > 10x 34 7 9 -18 4Q06 4Q07 2006 2007 18
  • Energias do Brasil
  • Reduction in Enersul’s RAB also had a significant impact on consolidated results… Net Revenue Adjusted EBITDA (R$ MM) (R$ MM) +16.3% +13.3% 1.340 1.152 4,513 1074 1123 3,985 -11.0% -0.8% 1,074 1,123 384 342 1,085 1,076 290 156 290 156 4Q06 4Q07 2006 2007 4Q06 4Q07 2006 2007 Net Income (R$ MM) +11.6% 440 394 -55.8% █ The retroactive impact (2003-2007) 155 of the reduction in Enersul’s RAB of 68 R$183.1MM, was fully recognized in 4Q07 accounts 4Q06 4Q07 2006 2007 20
  • …offsetting the positive effect of the growth in the result for generation EBITDA 2007 vs. 2006 (R$ MM) 169 34 -14 -183 43 1,123 1,074 B 06 07 n s n n er A io tio io 20 20 lR th at ut i za O rsu er rib al en e ist ci En G D er m om C 21
  • Excluding non-recurring events, EBITDA posted growth of 16.3% non- in 2007 2007 2006 Change R$ R$ R$ % Reported EBITDA 1,123.0 1,073.6 49.4 4.6% Elimination of non-recurring effects Bandeirante Enersul’s RAB Reduction – retroactive impact (2003 - 2007) 183.1 - 183.1 Provision for receivables due from Ampla - Enertrade 12.0 40.2 (28.2) Delinquency from collection agent - Bandeirante 11.7 - 11.7 RTE Write-off - Bandeirante 9.9 - 9.9 Redundancy program - 51.6 (51.6) Recognition of R&D – regulated by Aneel (Apr/2006) - 18.4 (18.4) Fiscal contingencies - Bandeirante (ICMS - Santos e Salto) - 7.9 (7.9) Reversion of CVA - Enersul - 6,3 (6.3) Sectorial contribution - FNDCT (Nat. Fund for Scientific and Tech. Development) - 4,5 (4.5) Tariff readjustment – Impact from deverticalization (Aug/2006) - (34.4) 34.4 RAB revision - Bandeirante (Resol. 226 of October 18, 2005) - (16.0) 16.0 Adjusted EBITDA 1,339.7 1,152.1 187.6 16.3% 22
  • Discos’ debt restructuring was important in reducing financial expenses by 22.5%... Financial Result (R$ MM) 4Q06 4Q07 ∆% 2006 2007 ∆% Financial Income 117.3 41.1 -65.0% 321.0 234.3 -27.0% Financial Expenses (313.9) (215.7) -31.3% (639.3) (495.6) -22.5% Net Forex Result (14.5) (12.4) -14.2% (59.5) (42.4) -28.8% Swap - net result (21.6) (15.5) -28.4% (110.7) (110.4) -0.3% Foreign Exchange Rate Variation 7.1 3.0 -57.2% 51.2 68.0 32.7% TOTAL (211.1) (187.0) -11.4% (377.8) (303.7) -19.6% █ Other factors contributing to improvement in the financial result were – Lower monetary restatement due to reduction in regulatory asset outstanding; and – Lower expenses with interest on shareholders’ equity. 23
  • Extended debt maturity, which, together with low levels of leverage, provides us with a higher investment capacity… Net debt/EBITDA Debt Maturity Schedule 906.2 2,345 5 1,879 1,957 689.2 2,000 3.0 1,702 4 539.1 524.8 3 504.1 1,000 2 321.4 1.9 1.8 1.7 1 0 0 2004 2005 2006 2007 Cash and 2008 2009 2010 2011 Após Net Debt/EBITDA Net Debt Cash Equiv. 2011 (Dec/07) Net Debt Gross Debt Breakdown (R$ MM) (Dec/07) 2,796 1% 6% Short-Term Floating Rates 321 (689) (149) Long Term Basci Long Term Interest Rate 2,474 38% 1,957 1,879 55% Dollar Fixed Rates Gross Debt (-) Cash and (-) Regulatory Net Debt Net Debt Dec/07 Marketable Asset and Dec/07 Dec/06 Securities Liabilities *** Includes Selic, CDI, IGP-M and INPC 24
  • A substantial increase in CAPEX is envisaged for 2008, largely allocated to generation projects Capex Breakdown* Investments – Universalization (R$ MM) 1,023 (R$ MM) 585 595 581 106 159 157 217 81 475 438 378 2006 2007 2008E 2006 2007 2008E Generation Distribution (*) Does not include Capex for Universalization Program 25
  • Historical Performance
  • From 2004 to 2007, Energias do Brasil delivered an average annual EBITDA growth of 20.0% and achieved a better balance in its asset portfolio by growing in the generation segment EBITDA EBITDA Breakdown (R$ MM) Adjusted CAGR 1,340 4% +20.0% 5% 5% 1,074 1123 15% 913 38% 775 58% 1,123 90% 2004 2007 Generation Distribution Commercial. 2004 2005 2006 2007 440 27
  • Energias do Brasil is today a company that has made important achievements ... Today we are... .. with important achievements since the IPO █ One of the largest listed companies in the electricity sector Healthy growth of the business (+45%, EBITDA since 2004) Doubling of capacity with better █ A company focused on high standards of balanced asset portfolio (generation governance and sustainability increasing from 5% of EBITDA in 2004 to 30% currently) █ The 3rd largest commercialization company Creation of the Shared Services Center █ One of the leading discos with about a 3- platform and a reduction of 600 in the million-customer base number os employees Continuous productivity improvements in █ A company well placed to leverage market distribution (MWh/employee and opportunities customers/employee increased 25% and 27% respetively between 2004 and 2007) – Experience and know-how along the entire value chain Sharp increase in the commercialization – Financial capacity business (+48% in volumes since 2004) – Parent company has an expanding international presence 28
  • Grouth Opportunities
  • I. We currently have a portfolio of thermoelectric projects with a total capacity of 2,080 MW Main projects in our portfolio Capacity (MW) █ Joint venture partnership in the Pecem (720 MW) TPP with MPX (50% stake), and 720 360 1.080 an eventual participation in a further 360MW of capacity █ Acquisition of the Resende (Rio de Janeiro) gas-fired TPP with 500 MW of 500 capacity █ Development of a proprietary project for a gas-fired TPP in the north of the state of 500 Espírito Santo with 500 MW of capacity 30
  • I. In addition, the hydroelectric project portfolio amounts to a capacity of more than 1,400 MW Main projects in our portfolio Capacity (MW) █ Partnership agreement with Cemig for developing feasibiility studies for HPPs with a total capacity of 1,034 MW (360 MW 1.034 with Cemig and 674 MW with Cemig, Concremat and AG) █ Partnership agreement with Eletronorte for developing feasibility studies for HPPs with 235 a total capcity of 235 MW █ Partnership agreement with Engevix for developing feasibility studies for HPPs 170 with a total capacity of 170 MW 31
  • II. We currently have renewable generation projects in portfolio in excess of the ~ 1,000 MW target Main projects in our portfolio Capacity (MW) █ 24 SHP projects totaling 538 MW of capacity – 8 already filed with the regulator for licensing – 8 to be filed for licensing by July 538 – 5 to be filed in the second half of 2008 – 3 to be filed in the first half of 2009 █ Partnership agreement with Cemig for developing 500 500 MW in wind farm capacity in the state of Minas Gerais █ Biomass projects under analysis, with a total capacity of 350 MW 350 32
  • March 2008 www.energiasdobrasil.com.br