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    2 q10 presentation 2 q10 presentation Presentation Transcript

    • 2Q10 Resultados Operating and Financial Operacionais Results e Financeiros 2Q10 1T08 August 12, 2010 1
    • 2Q10Agenda ► Introduction ► Highlights ► Operating Results ► Financial Results ► Redentor 2
    • 2Q10Agenda ► Introduction ► Highlights ► Operating Results ► Financial Results ► Redentor 3
    • 2Q10Introduction 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. The consolidated financial information represents: i) 100% of CEMAR’s results, excluding 34.86% related to minority interests, ii) 25% of Geramar’s results and iii) 100% of Equatorial Soluções Results. In view of Equatorial’s partial spin-off, as from this quarter, we no longer consolidate Light’s figures. ► The operating information presented herein consolidates 100% of CEMAR’s results and 25% of Geramar’s results. Since this quarter, we are no longer consolidating Light’s operating results. ► In order to facilitate comparisons between quarters and semesters, the operating and financial information of 2Q09, 1Q10, 1S09 and 1S10 is pro forma, so that the interest held by Equatorial in RME is not being considered. ► The following information was not reviewed by the independent auditors: i) non-financial information relating to CEMAR, Light and the PLPT (Programa Luz para Todos - Light for All Program); ii) pro forma information and its comparison with the results presented in the period; and iii) management expectations regarding the future performance of the Companies. 4
    • 2Q10Agenda ► Introduction ► Highlights ► Operating Results ► Financial Results ► Redentor 5
    • 2Q10Operating Highlights ► Starting this quarter, due to Equatorial’s partial spin-off, we are no longer consolidating Light’s financial and operating results. ► CEMAR’s total energy volume amounted to 1,020 GWh in 2Q10, 29.0% greater than in 2Q09. ► CEMAR’s last-12-month energy losses totaled 22.2% of required energy by the end of 2Q10, 5.9 p.p. less than in 2Q09. ► CEMAR’s last-12-month 2Q10 DEC index improved 12.2%, dropping to 23.0 hours, while last-12-month FEC index improved 5.7%, to 15.0 times, in comparison with 2Q09. ► On August 09, 2010, Redentor Energia, a company resulting from Equatorial Energia’s spin-off, received the authorization to be registered as publicly-traded company by the Brazilian Securities and Exchange Commission (CVM). We note that the shares issued by Equatorial, EQTL3, are still traded “cum rights” to the spin-off until the conclusion of the process of listing and admission of trading of Redentor shares in the Novo Mercado segment. 6
    • 2Q10Financial Highlights ► Net operating revenues (NOR) reached R$315.8 million in 2Q10, 20.3% up over 2Q09. ► 2Q10 EBITDA reached R$113.4 million, up by 22.5% over 2Q09 adjusted EBITDA. ► Net income came to R$44.1 million in 2Q10, reflecting a 30.5% increase over 2Q09 adjusted Net income. ► In 2Q10, Equatorial’s consolidated investments totaled R$96.5 million, 20.0% lower in comparison with 2Q09. CEMAR’s investments (excluding direct investments in the PLPT program) totaled R$43.4 million in 2Q10. PLPT investments reached R$45.7 million. 7
    • 2Q10Agenda ► Introduction ► Highlights ► Operating Results ► Financial Results ► Redentor 8
    • 2Q10 CEMAR – Electricity Market► CEMAR: 2Q10 energy sales moved up by 29.0%, reaching 1,020 GWh. Electricity Consumption per Segment (GWh) CONSUMPTION CLASS (GWh) 2Q09 1Q10 2Q10 Chg. 1S09 1S10 Chg. Residential 363.7 449.4 474.6 30.5% 746.7 924.0 23.7% Industrial 80.7 97.3 105.6 30.9% 171.2 202.9 18.5% Commercial 160.4 190.4 200.5 25.0% 321.7 390.9 21.5% Others 186.6 222.8 239.9 28.6% 368.3 462.7 25.6% TOTAL 791.2 959.9 1,020.5 29.0% 1,608.0 1,980.4 23.2% Energy Balance (GWh) ENERGY BALANCE (GWh) 2Q09 1Q10 2Q10 Chg. 1S09 1S10 Chg. Required Energy 1,119 1,240 1,286 14.8% 2,235 2,526 13.0% Sales (*) 793 960 1,022 29.0% 1,611 1,982 23.1% Losses 327 280 264 -19.4% 624 544 -12.8% (*) Includes sales to the market, own consumption and sales to CEPISA. 9
    • 2Q10Distribution – Energy Losses in CEMAR Total Losses over Required Energy (last 12 months) 28.7% 28.9% 28.6% 28.9% 28.5% 28.1% 28.1% 26.4% 25.6% 24.2% 25.2% 22.2% 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 Regulatory Target Total Losses (from Aug-09 until Jul-10) Non-technical Losses over Low-Voltage Market (last 12 months) 30.4% 30.6% 30.0% 29.9% 29.0% 28.7% 27.3% 24.2% 21.5% 23.7% 19.8% 15.9% 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 Regulatory Target Non-technical Losses (from Aug-09 until Jul-10) 10
    • 2Q10Distribution – DEC and FEC (Last 12 months) ► CEMAR: The DEC index improved 12.2% compared with 2Q09 and the FEC index improved 5.7% in the same period. DEC (hours) FEC (times) -12.2% 26.2 23.0 -5.7% 15.9 15.0 2Q09 2Q10 2Q09 2Q10 11
    • 2Q10Agenda ► Introduction ► Highlights ► Operating Results ► Financial Results ► Redentor 12
    • 2Q10 Consolidated Performance Net Operating Revenues* EBITDA* 2 0 .3 % 3 15 .8 2.9% 0.9% 2 6 2 .6 113 .4 5.2% 2 1.7 % 9 3 .2 1.8% 96.2% 100.0% 93.0% 100.0% 2T09 2T10 2T09 2T10 CEM A R EQTL So luçõ es Geramar CEM A R EQTL So luçõ es Geramar Net Income* 5 4 .5 - 19 .1% 0.3% 4 4 .1 2.6% 3.6% 99.7% 93.8% 2T09 2T10 CEM A R EQTL So luçõ es Geramar*Only operating companies are being considered in these graphs. 13
    • 2Q10 Pro-forma EBITDA Pro-forma EBITDA 22.5% 0.6 113.4 93.2 92.6 2Q09 EBITDA BT Security 2Q09 Adjusted 2Q10 EBITDA EBITDA► BT Security: R$0.6 million recognized in NOR, arising from the principal amount of the collateral offered by CEMAR to take out a loan with the Brazilian Treasury in prior years► Like in 1Q10, 2Q10 EBITDA was also negatively affected by the R$10.6 million amortization of the Low Income Subsidy to the extent this asset was already recognized in 3Q09’s result when it was defined as a Financial Component of CEMAR’s Periodic Tariff Review. If the previous accounting rule were applied in 2Q10, its EBITDA would be R$124.1 million, which represents a 34.0% increase over 2Q09 (instead of the 22.5% increase reported above). 14
    • 2Q10 CEMAR’s EBITDA: Low Income Subsidy Accounting CEMAR’s EBITDA Evolution -7 -10 32 -11 -10 107 105 96 130 107 89 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10* Reported EBITDA Asset Constitution Asset Amortization * Hypothetical example of 3Q10 EBITDA’s behavior. It does not represent a value forecast.► We highlight the change in accounting standards related to the Low Income Asset occurred in the Tariff Revision of August, 2009. Though treated as a Financial Component in the review process, said grant will be determined and granted to the company in each annual readjustment, always in August, and shall be effective for the subsequent 12 months being monthly amortized.► Always in the 3Q of each year, the amount granted by ANEEL relating to the Low Income Subsidy will be booked in CEMAR’s EBITDA. In all other quarters, this value will be amortized meaning a reduction of EBITDA under the new accounting standards. 15
    • 2Q10 Consolidated Performance Adjusted Net Income 2.9 30.5% 17.8 44.1 54.5 33.8 2Q09 Net BT Security Fiscal Asset Adjusted 2Q09 2Q10 Net Income Net Income Income► BT Security: In 2Q09, the subsidiary CEMAR recorded R$2.9 million due to monetary corrections and exchange level variations of a collateral used as a guarantee for operations with the Brazilian Treasury in past quarters.► CEMAR’s 2Q09 net income was extraordinarily affected by the recognition of a positive adjustment of R$17.8 million of Deferred Tax Assets related to fiscal losses, negative bases and temporary differences of past quarters.► Like in 1Q10, 2Q10 Net Income was also negatively affected by R$6.3 million related to the amortization of the Low Income Subsidy to the extent this asset was already recognized in 3Q09’s result when it was defined as a Financial Component of CEMAR’s Periodic Tariff Review. If the previous accounting rule were applied in 2Q10, its Net Income would be R$50.4 million, which represents a 49.1% increase over 2Q09 (instead of the 30.5% increase reported above). 16
    • 2Q10Debt: Schedule of Gross Debt Maturities Consolidated Gross Debt (100% CEMAR + 25% Geramar) 108.7 65.2 Geramar 188.7 - 63.3 - 170.6 - 282.9 1,187.2 - 106.5 43.5 CEMAR 375.2 Gross Debt Short Term 2011 2012 2013 2014 After 2014 17
    • 2Q10Net Debt - Consolidated 100% CEMAR + 25% Geramar Net Debt (R$MM)(*) and Net Debt/ EBITDA Net Debt Reconciliation (R$MM) (Last 12 months) 2.1 1.9 1.7 1.7 1.7 29.4 857.9 804.7 490.8 768.7 754.3 775.7 1,295.9 775.7 2Q09 3Q09 4Q09 1Q10 2Q10 Debt Regulatory Cash and Net Debt Assets Equivalents 18
    • 2Q10Net Debt – Pro-Rata 65.12% CEMAR + 25% Geramar Net Debt (R$MM)(*) and Net Debt/ EBITDA Net Debt Reconciliation (R$MM) (Last 12 months) 2.0 1.9 1.7 1.7 1.7 19.1 542.0 519.6 350.0 500.7 494.7 512.7 881.8 512.7 2Q09 3Q09 4Q09 1Q10 2Q10 Debt Regulatory Cash and Net Debt Assets Equivalents 19
    • 2Q10 Capex - Equatorial► CEMAR: In the 2Q10, total capex reached R$89.1 million, of which R$43.4 million are own capex and R$45.7 million regarding the Light for All Program (PLPT).► Geramar invested R$7.4 million in the final steps of its plants’ construction. INVESTMENTS (R$MM) 2Q09 1Q10 2Q10 Chg. 1H09 1H10 Chg. CEMAR Own (*) 70.1 38.3 43.4 -38.1% 113.3 81.7 -27.9% PLPT 28.6 33.1 45.7 59.7% 64.4 78.8 22.3% Total 98.7 71.4 89.1 -9.8% 177.7 160.5 -9.7% Geramar Generation 21.9 6.3 7.4 -66.3% 29.7 13.7 -54.1% TOTAL EQUATORIAL 120.6 77.6 96.5 -20.0% 207.4 174.1 -16.1% (*) Includes indirect PLPT investments. 20
    • 2Q10Agenda ► Introduction ► Highlights ► Operating Results ► Financial Results ► Redentor 21
    • 2Q10Spin-off ► Since Equatorial’s partial spin-off approved by the Annual and Extraordinary General Meeting, held on 04/29/2010, the company’s corporate structure is as presented below: PCP Minorities 54.1% 45.9% Redentor Equatorial Energia S.A. Energia S.A. 100% 65.1% 25% 100% RME Equatorial CEMAR Geramar Rio Minas Energia Soluções 13.03% Light S.A. 22
    • 2Q10 Contacts Eduardo Haiama CFO and IRO Thomas Newlands Investor Relations Telephone 1: +0 55 (21) 3206-6635 Telephone 2: +0 55 (21) 3217-6607 Email: ir@equatorialenergia.com.br Website: http://www.equatorialenergia.com.br/ir 23
    • 2Q10 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. 24