2Q08 / 1H08                                    Resultados              Operating and Financial                            ...
2Q08 / 1H08Agenda   ► Introduction   ► Highlights   ► Operating Results   ► Financial Results                         2
2Q08 / 1H08Agenda   ► Introduction   ► Highlights   ► Operating Results   ► Financial Results                         3
2Q08 / 1H08Introduction                      Presentation of Operating and Financial Information  ► The financial informat...
2Q08 / 1H08Agenda   ► Introduction   ► Highlights   ► Operating Results   ► Financial Results                         5
2Q08 / 1H08Operating Highlights  ► CEMAR and Light’s billed energy volume amounted to 13,644 GWh in the 1H08, 0.9% down ye...
2Q08 / 1H08Financial Highlights► Net operating revenues totaled R$1,111.4 million, 6.1% more than in the 1H07, reflecting ...
2Q08 / 1H08 Agenda   ► Introduction   ► Highlights   ► Operating Results   ► Financial Results                         8
2Q08 / 1H08  Distribution – Electricity MarketCEMAR► Billed energy volume climbed 2.1% year-on-year in the 1H08.► In the 2...
2Q08 / 1H08Distribution – Energy Balance and Losses CEMAR ► Losses totaled 28.8% in the 2Q08, 0.7 p.p. down year-on-year. ...
2Q08 / 1H08Distribution – Energy Market     LIGHT SESA     ► Energy trading fell by 1.2% in the 1H08 compared to the 1H07 ...
2Q08 / 1H08Distribution – Energy Balance and Losses         LIGHT SESA         ► Losses totaled 20.4% in the last 12 month...
2Q08 / 1H08Distribution – DEC and FEC (last 12 months) ► CEMAR: 2Q08 DEC fell by 11.5% in relation to the 2Q07 and FEC dec...
2Q08 / 1H08Generation – Light Energia ► In the 1H08, electricity sold in the free and regulated contracting markets moved ...
2Q08 / 1H08 Energy Trading – Light Esco ► In the 2Q08, Light Esco, which has 39 clients, sold 118 GWh, a 170.1% increase o...
2Q08 / 1H08   Agenda   ► Highlights   ► Operating Highlights   ► Financial Results                            16
2Q08 / 1H08Consolidated Performance             NOR (R$MM)           EBITDA (R$MM)          Net Income (R$MM)             ...
2Q08 / 1H08 Consolidated Performance                                                   Contribution per Segment (1H08)    ...
2Q08 / 1H08Consolidated Performance                                                         Contribution by Company       ...
2Q08 / 1H08  Net Income – Recurrent ► 1H08 results were affected by 3 non-recurring effects of significant value. ► Withou...
2Q08 / 1H08Distribution – CEMAR and Light SESA* ► Net Revenue: 1.8% growth in the 1H08 (versus 1H07) and 4.0% growth in th...
2Q08 / 1H08 Generation – Light Energia ► Net Revenue: 18.0% growth in the 1H08 (versus 1H07), boosted by the price increas...
2Q08 / 1H08 Energy Trading - Light Esco  ► Net Revenue: grew 284.3% in the 1H08 (versus 1H07), boosted mainly by energy sa...
2Q08 / 1H08Net Debt - Consolidated                                          100% CEMAR + 25% Light  Net Debt (R$MM)(*) and...
2Q08 / 1H08 Net Debt – Adjusted for Interests                                           65.17% CEMAR + 13.06% Light     Ne...
2Q08 / 1H08 Investments (Light and CEMAR)► In the 2Q08, CEMAR’s investments totaled R$ 58.2 million, while Light’s investm...
2Q08 / 1H08Equity Swap Agreement                                          Objectives:        Emphasize management’s positi...
2Q08 / 1H08Contact                               Carlos Piani                                  CEO                        ...
2Q08 / 1H08  Disclaimer   This presentation may contain forward-looking statements, which are subject to risks and uncerta...
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2 q08 financial and operating results presentation

  1. 1. 2Q08 / 1H08 Resultados Operating and Financial Operacionais Results e Financeiros 2Q08 and 1H08 1T08 1
  2. 2. 2Q08 / 1H08Agenda ► Introduction ► Highlights ► Operating Results ► Financial Results 2
  3. 3. 2Q08 / 1H08Agenda ► Introduction ► Highlights ► Operating Results ► Financial Results 3
  4. 4. 2Q08 / 1H08Introduction Presentation of Operating and Financial Information ► The financial information contained herein is presented in consolidated figures, pursuant to Brazilian Corporate Law, based on revised financial information. ► Consolidated financial information represents 100% of CEMAR’s results and 25% of Light’s results. ► Consolidated operating information represents 100% of both CEMAR´s and Light’s results. ► In order to facilitate comparisons with the 2Q07 and the 1H07, the financial information is presented on a pro-forma basis considering the same interest currently held by Equatorial in RME (25.0%) and by RME in Light (52.25%). ► Equatorial’s pro-forma results for the 2Q07 and 1H07 are based on Light’s pro-forma results for the same periods, which exclude the reversals of provisions in the 2Q07, since these were reconstituted in the 4Q07. In addition, Light’s pro-forma result includes the adjustments related to Law 11,638, determined by CVM Instruction 469/08. ► Non-financial information relating to CEMAR, Light and the PLPT (“Programa Luz para Todos” - Light for All Program), as well as management expectations regarding the future performance of the companies, were not reviewed by the independent auditors. 4
  5. 5. 2Q08 / 1H08Agenda ► Introduction ► Highlights ► Operating Results ► Financial Results 5
  6. 6. 2Q08 / 1H08Operating Highlights ► CEMAR and Light’s billed energy volume amounted to 13,644 GWh in the 1H08, 0.9% down year- on-year. In individual terms, CEMAR’s billed volume moved up 2.1%, while Light’s fell by 1.2%. ► CEMAR’s last-12-month energy losses totaled 28.8% in the second quarter, 0.7 p.p. less than the 2Q07 ratio of 29.5%. ► Light’s losses came to 20.4%, in line with previous quarters reduction tendency. ► CEMAR’s DEC and FEC for the 12 months ended in June improved 11.5% and 13.0% respectively. Light’s indicators worsened over the previous year. DEC moved up 3.6 hours and FEC was 1.8 time higher in the 2Q08. 6
  7. 7. 2Q08 / 1H08Financial Highlights► Net operating revenues totaled R$1,111.4 million, 6.1% more than in the 1H07, reflecting CEMAR’s 14.1% increase and Light’s slight 1.2% upturn. In the 2Q08, net operating revenue moved up by 6.0%.► First-half EBITDA came to R$338.6 million, 4.0% up on the 1H07. In the 2Q08, EBITDA was R$173.4 million, a 4.8% growth year on year.► Net income of R$143.7 million in the 1H08, 6.7% higher than in the 1H07. Net income in the 2Q08 was R$71.9 million, 20.6% down from the 2Q07.► In the 2Q08, Light obtained a favorable verdict from the Supreme Court regarding the expansion of the calculation base for PIS and COFINS taxes. As a result, the Company reversed provisions worth R$432.4 million, with a positive impact on Equatorial’s net income.► CEMAR’s investments (excluding direct investments in the PLPT program) totaled R$58.2 million in the second quarter, 29.3% higher than the 2Q07 figure, and R$97.0 million year-to-date, 26.7% up on the 1H07.► Light invested R$257.8 million in the 1H08 and R$164.6 million in the 2Q08, 156.9% more than the R$64.1 million recorded in the 2Q07.► On May 7, Equatorial paid R$135.9 million in dividends and R$14.7 million in interest on equity relative to 2007. 7
  8. 8. 2Q08 / 1H08 Agenda ► Introduction ► Highlights ► Operating Results ► Financial Results 8
  9. 9. 2Q08 / 1H08 Distribution – Electricity MarketCEMAR► Billed energy volume climbed 2.1% year-on-year in the 1H08.► In the 2Q08, billed volume fell 2.3% due to exceptionally high rainfall, which is atypical for this time of year. Electricity Consumption (GWh) Electricity Consumption per Segment (GWh) Consumption 2.1% Class 2Q07 2Q08 Chg. % 1H07 1H08 Chg. % Residential 335 341 1.8% 646 682 5.6% Industrial 112 93 -17.2% 207.2 197 -5.1% 1.516 1.547 Commercial 156 156 0.0% 300 307 2.1% Others 187 183 -2.4% 363 362 -0.3% TOTAL 791 773 -2.3% 1,516 1,547 2.1% 1H07 1H08 Market in 2Q08 - Main impacts: ► Atypical rainfall volume in the period (data vs. 2Q07, in mm). São Luis: + 45% and Imperatriz: + 86%. Consequences: • Reduced residential and commercial consumption, due to the less intensive use of refrigeration equipment; • Reduced activity in the pig-iron plants (jeopardizing the logistics and transportation of charcoal). ► Production stoppage in 2 important industrial clients due to maintenance and relocation of production facilities. 9
  10. 10. 2Q08 / 1H08Distribution – Energy Balance and Losses CEMAR ► Losses totaled 28.8% in the 2Q08, 0.7 p.p. down year-on-year. Energy Losses (*) (Last 12 months) Energy Balance Energy Balance Chg. Chg. (Gwh) 2Q07 2Q08 % 1H07 1H08 % Required Energy (*) 1,092 1,119 2.4% 2,143 2,199 2.5% Sales (**) 792 774 -2.2% 1,518 1,549 2.1% Losses 300 345 14.8% 625 650 3.9% (*) Including own generation. (**) Including energy sales, own consumption and energy sales to CEPISA. (*) Energy losses over required energy 10
  11. 11. 2Q08 / 1H08Distribution – Energy Market LIGHT SESA ► Energy trading fell by 1.2% in the 1H08 compared to the 1H07 and by 0.8% in the 2Q08 over the 2Q07. Electricity Consumption (GWh) Electricity Consumption per Segment (GWh) -1.2% Mercado de Energia 2Q07 2Q08 Chg.% 1H07 1H08 Chg. % Residential 1,862 1,821 -2.2% 3,922 3,849 -1.9% Industrial 511 459 -10.3% 1,020 910 -10.8% 12,248 12,097 Commercial 1,459 1,452 -0.5% 2,992 2,985 -0.2% Others 829 797 -3.8% 1,629 1,608 -1.3% Free Clients 1,330 1,416 6.5% 2,685 2,746 2.3% TOTAL 5,991 5,946 -0.8% 12,248 12,097 -1.2% 1S07 1S08 Market in 2Q08 - Main impacts: ► Residential consumption: reduction of 1.0ºC in the average quarterly temperatures in relation to the 2Q07 levels, resulting in a big decline in electricity use by refrigeration-related home appliances; one-day reduction in the billing calendar ► Industrial consumption: suspension of the Energia Plus program; interim migration of clients from the captive to the free market in 2007; one-day reduction in the billing calendar; ► Free consumers: increase in consumption by steel and mining companies; entry of a client; migration of two captive clients to the free market in 2007. 11
  12. 12. 2Q08 / 1H08Distribution – Energy Balance and Losses LIGHT SESA ► Losses totaled 20.4% in the last 12 months, maintaining the downward trajectory of the previous quarters. Energy Losses (*) Energy Losses (*) (Last 12 months) (Last 12 months) ENERGY BALANCE (GWh) 2Q07 2Q08 Chg. % 1H07 1H08 Chg. % Required energy 6,030 5,984 -0.8% 12,921 12,725 -1.5% Sales (*) 4,661 4,530 -2.8% 9,563 9,351 -2.2% Losses (**) 1,369 1,454 6.2% 3,358 3,373 0.5% (*) Sales to captive market (**) Not considering losses in basic network(*) Energy losses (required energy + free market) 12
  13. 13. 2Q08 / 1H08Distribution – DEC and FEC (last 12 months) ► CEMAR: 2Q08 DEC fell by 11.5% in relation to the 2Q07 and FEC decreased 13.0% over the same period. ► LIGHT: 2Q08 DEC worsened 3.6 hours and FEC increased 1.8 time. CEMAR LIGHT 11.5% 45.3% 32,0 11,4 7,8 DEC (hours) 28,3 2Q07 2Q08 2Q07 2Q08 13.0% 21,8 29.5% 7,8 6,0 18,9 FEC (times) 2Q07 2Q08 2Q07 2Q08 13
  14. 14. 2Q08 / 1H08Generation – Light Energia ► In the 1H08, electricity sold in the free and regulated contracting markets moved up 2% year-on-year thanks to the policy of allocating energy to free customers via Light Esco. ► CCEE spot market sales declined 41.7% in the 1H08 over the same period last year, due to the concentration of assured energy sales in the 1Q08. LIGHT ENERGIA (GWh) 2Q07 2Q08 Chg. % 1H07 1H08 Chg. % Regulated Market Sales 1,020 1,021 0.2% 2,093 2,081 -0.6% Free Market sales 98 97 -0.8% 152 208 36.7% Spot Sales (CCEE) 95 91 -4.6% 226 131 -41.7% TOTAL 1,212 1,209 -0.2% 2,471 2,420 -2.0% 14
  15. 15. 2Q08 / 1H08 Energy Trading – Light Esco ► In the 2Q08, Light Esco, which has 39 clients, sold 118 GWh, a 170.1% increase over the 2Q07. In the 1H08, growth was 187.8%. ► New clients in portfolio: Crystalsev, ArcelorMittal and MD Papéis ► Sales of 402 GWh in the 2Q08 through consulting and brokerage services for clients with CCEE, a 32.8% increase year-on-year. ► Negotiation with Votorantim to sell 100 average-MW through an agreement terminating in 2027. Estimated revenue is around R$ 2.0 billion. ► Negotiation with another client for 120 average-MW, with current sale value of R$1.4 billion. VOLUME (GWh) 2Q07 2Q08 Chg. % 1H07 1H08 Chg.% Trading 44 118 170.1% 87 250 187.8% Broker 303 402 32.8% 585 724 23.7% TOTAL 347 520 49.9% 672 974 44.9% 15
  16. 16. 2Q08 / 1H08 Agenda ► Highlights ► Operating Highlights ► Financial Results 16
  17. 17. 2Q08 / 1H08Consolidated Performance NOR (R$MM) EBITDA (R$MM) Net Income (R$MM) 4.0% 338,6 1.047,4 6.1% 1.111,4 325,6 6.7% 134,7 143,7 1H07 1H08 1H07 1H08 1H07 1H08 17
  18. 18. 2Q08 / 1H08 Consolidated Performance Contribution per Segment (1H08) NOR EBITDA Net Income (*) Holdings: Equatorial, RME and Light S.A. 18
  19. 19. 2Q08 / 1H08Consolidated Performance Contribution by Company NOR EBITDA Net Income (*) Excludes R$18.5 million in 1Q08 equity income in Equatorial from RME related to November and December/07, in the 1Q08. (**) Holdings: Equatorial, RME and Light S.A. 19
  20. 20. 2Q08 / 1H08 Net Income – Recurrent ► 1H08 results were affected by 3 non-recurring effects of significant value. ► Without these effects, net income is R$ 100.4 million, a 9.2% increase over the 1H07, also adjusted for the non- recurring effects. In R$ MM 18.5 +9.2% 37.1 12.3 143.7 100,4 91,9 Booked Net Equity Income Reversal of Change in Recurring Net Recurring Net Income 1H08 from RME (1Q08) PIS/COFINS Light Recognition Income 1H08 Income 1H07 (*) SUDENE Benefit (*) Excluding the activation of deferred fiscal assets relating to the period between 2003 and 2Q07, constituted by Light, in the amount of R$ 327.7 million, with a positive effect of R$ 42.8 million for Equatorial in its 2007 pro-forma result 20
  21. 21. 2Q08 / 1H08Distribution – CEMAR and Light SESA* ► Net Revenue: 1.8% growth in the 1H08 (versus 1H07) and 4.0% growth in the 2Q08 (versus 2Q07). Growth in the quarter was affected by the 3.0% increase in Light and 9.7% in CEMAR. ► EBITDA: In the 1H08, EBITDA dropped by 1.8%. In the 2Q08, it increased by 8.5%, boosted by the 11.9% growth at Light, which offset the 1.1% decrease at CEMAR. ► Net Income: There was a 12.4% decrease in the 1H08 versus the 1H07. In the 1Q08, the decrease was 14.5% due to the non-recurring event in the 2Q07, relating to the booking of Light’s fiscal assets. NOR (R$MM) EBITDA (R$MM) Net Income (R$MM) 1.8% 2.926,9 717,0 -1.8% 2.876,3 704,3 -12.4% 593,7 520,4 1H07 1H08 1H07 1H08 1H07 1H08 * 100% of CEMAR’s results + 100% of Light SESA’s results. 21
  22. 22. 2Q08 / 1H08 Generation – Light Energia ► Net Revenue: 18.0% growth in the 1H08 (versus 1H07), boosted by the price increases in the regulated market, in line with IPCA consumer price index, and in the spot markets in the 1Q08. ► EBITDA: growth of 29.2% between 1H07 and the 1H08, totaling R$103.0 million in the 1H08. EBITDA margin stood at 67.5%, a 9 p.p. increase over the 1H07. ► Net Income: In the 1H08, net income was R$51.4 million, growing 57.2% year-on-year. Net margin stood at 33.7%. NOR (R$MM) EBITDA (R$MM) NET INCOME (R$MM) 1H07 – 1H08 1H07 – 1H08 1H07 – 1H08 18.0% 103,0 51,4 152,6 29.2% 57.2% 129,3 79,7 32,7 1H07 1H08 1H07 1H08 1H07 1H08 22
  23. 23. 2Q08 / 1H08 Energy Trading - Light Esco ► Net Revenue: grew 284.3% in the 1H08 (versus 1H07), boosted mainly by energy sales from Light Energia’s hydrological hedge. ► EBITDA: grew 637.5% in the 1H08 versus the 1H07. EBITDA margin was 25.3%, 12.1 p.p., year-on-year. ► Net Income: In the 1H08, net income was R$ 7.3 million, up 563.6% over the 1H07. Net margin stood at 15.7%, 6.6 p.p. higher than in the 1H07. NOR (R$MM) EBITDA (R$MM) Net Income (R$MM) 46,5 563.6% 7,3 284.3% 637.5% 11,8 12,1 1,6 1,1 1H07 1H08 1H07 1H08 1H07 1H08 23
  24. 24. 2Q08 / 1H08Net Debt - Consolidated 100% CEMAR + 25% Light Net Debt (R$MM)(*) and Net Debt/ EBITDA (Last 12 months) Net Debt Reconciliation (R$MM) (*) Excluding the debt with Braslight (**) Pro-forma 24
  25. 25. 2Q08 / 1H08 Net Debt – Adjusted for Interests 65.17% CEMAR + 13.06% Light Net Debt (R$MM)(*) and Net Debt/ EBITDA (Last 12 Net Debt Reconciliation (R$MM) months) (*) Excluding the debt with Braslight (**) Pro-forma 25
  26. 26. 2Q08 / 1H08 Investments (Light and CEMAR)► In the 2Q08, CEMAR’s investments totaled R$ 58.2 million, while Light’s investments totaled R$ 257.8 million. INVESTMENTS - R$MM 2Q07 2Q08 Chg. % 1H07 1H08 Chg. % CEMAR Proprietary (*) 45.0 58.2 29.3% 76.6 97.0 26.7% PLPT 41.6 34.2 -17.8% 77.0 65.5 -15.0% Total 86.6 92.4 6.7% 153.6 162.5 5.8% Light Distribution 54.0 145.1 168.6% 103.2 232.0 124.9% Generation 4.1 12.2 195.5% 6.0 14.4 140.3% Energy Trading 0.2 0.1 -22.1% 0.4 0.2 -35.9% Administration 5.7 7.1 24.2% 11.4 11.1 -2.3% Total 64.1 164.6 156.9% 120.9 257.8 113.2% (*) Including indirect investments in the PLPT 26
  27. 27. 2Q08 / 1H08Equity Swap Agreement Objectives: Emphasize management’s positive view on the potential appreciation of Equatorial’s share price and improve return on excess cash. % of CDI + performance fee Equatorial Δ % EQTL3 price Bank ► Notional: Up to R$ 50 million ► One or multiple SWAP contracts ► Maximum Maturity: 365 days ► Payment at the end of the maturity of each SWAP contract 27
  28. 28. 2Q08 / 1H08Contact Carlos Piani CEO Leonardo Dias CFO and IRO Maria Eliza Castro IR Manager Phone 1: +0 XX (21) 3206-6635 Phone 2: +0 XX (21) 3217-6607 Email: ir@equatorialenergia.com.br Website: http://www.equatorialenergia.com.br/ir 28
  29. 29. 2Q08 / 1H08 Disclaimer This presentation may contain forward-looking statements, which are subject to risks and uncertainties, as they were based on the expectations of Company’s management and on available information. These prospects include statements concerning the Company’s current intentions or expectations for our clients; this presentation will also be available at our website www.equatorialenergia.com.br/ir and in the IPE system of the Brazilian Securities and Exchange Commission (CVM). Forward-looking statements refer to future events which may or may not occur. Our future financial situation, operating results, market share and competitive positioning may differ substantially from those expressed or suggested by said forward-looking statements. Many factors and values that can establish these results are outside Company’s control or expectation. The reader/investor is advised not to completely rely on the information above. The words “believe", “can", “predict", “estimate", “continue", “anticipate", “intend", “forecast" and similar words, are intended to identify estimates, which refer only to the date on which they were expressed. Hence, the Company has no obligation to update said statements. This presentation does not constitute any offering, invitation or request of subscription offer or purchase of any marketable securities. And, this statement or any other information herein, does not constitute the basis for any contract or commitment of any kind. 29

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