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  • 1. OPERATING AND FINANCIAL RESULTS 2Q13
  • 2. 22 Agenda ► Highlights ► Operating Results ► Introduction ► Financial Results
  • 3. 3 ► Highlights ► Operating Results ► Financial Results ► Introduction Agenda
  • 4. 4 Introduction 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 34.89% related to minority interests before Net Income, resulting in participation of 65.11% ii) 100% of CELPA’s results, excluding 3.82% related to minority interests before Net Income, resulting in participation of 96.18%; and iii) 100% of Equatorial Soluções’ results, which in turn consolidated 100% of Sol Energias’ results, excluding 49% of minority interest before Net Income. ► The operating information presented herein consolidates 100% of CEMAR’s results, 100% of CELPA’s results and 25% of Geramar’s results. ► 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.
  • 5. 5 ► Highlights ► Operating Results ► Introduction ► Financial Results Agenda
  • 6. 6 Operating Highlights ► CEMAR’s total billed energy volume reached 1,250 GWh in 2Q13, 4.2% higher than in 2Q12. The total volume distributed by CELPA (captive and free markets) totaled 1,759 GWh in 2Q13, representing growth of 6.4% YoY. ► In CEMAR, energy losses of the last 12 months ending 2Q13 represented 21.1% of the required energy, with a reduction of 0.7 percentage points compared to 20.4% recorded in 2Q12. In CELPA, total losses ended the year at 36.4% of the required energy. ► In 2Q13, CEMAR’s DEC and FEC indexes (accumulated over the last 12 months) were 20.1 hours, a decrease of 7.7%, and 10.9 times, a decrease of 5.6%, compared to those observed at the end of 2Q12. In CELPA, these same indexes closed the quarter with improvements of 17.8% and 13.3%, respectively. Analyzing CELPA’s indexes only in the quarter, we can see improvements of 28.1% and 17.3%, respectively.
  • 7. 7 ► Net operating revenues (NOR) in 2Q13 reached R$1,117 million, almost twice 2Q12’s NOR, which reflects the beginning of the consolidation of CELPA. ► In 2Q13, EBITDA totaled R$64 million, a 46.0% decrease compared to the 2Q12 amount, due to the effect of the dispatch of thermal plants and the beginning of consolidation of Celpa. If we consider the constitution or amortization of net regulatory assets, Equatorial’s Adjusted EBITDA would have been R$153 million, 73.9% higher than 2QT12’s. ► The net result of the quarter was a loss of R$44 million, due to the effect of the dispatch of thermal plants and the beginning of consolidation of Celpa. Considering the constitution or amortization of net regulatory assets, Equatorial’s adjusted net income would have been R$31 million, 25.7% higher than 2Q12’s. ► In 2Q13, Equatorial's consolidated investments totaled R$156 million, 12.7% higher than those made in 2Q12. ► As of last quarter, we no longer consolidate the interest of 25% in Geramar. On a pro-forma basis, we also do not consolidate its numbers in previous quarters in this Earnings Release. Geramar’s results only impact Equatorial’s Consolidated Income Statement in the Equity Income line. ► In August 2013, Equatorial injected R$50 million in Future Capital Increase in Celpa. ► In August, ANEEL approved CELPA’s tariff adjustment, in which the average effect on the consumers will be 9.18%. Financial Highlights
  • 8. 8 ► Highlights ► Operating Results Agenda ► Introduction ► Financial Results
  • 9. 9 ► CEMAR: 2Q13 energy sales moved up by 4.2%, reaching 1,250 GWh. Energy Market - CEMAR Electricity Consumption per Segment (GWh) Energy Balance (GWh) CONSUMPTION SEGMENTS * (MWh) 2Q12 1Q13 2Q13 Chg. 1S12 1S13 Chg. Residential 562,098 607,543 606,984 8.0% 1,091,171 1,214,527 11.3% Industrial 114,104 114,112 112,909 -1.0% 226,719 227,021 0.1% Commercial 241,607 248,706 253,536 4.9% 465,754 502,243 7.8% Others 281,422 265,669 276,432 -1.8% 533,576 542,101 1.6% TOTAL 1,199,232 1,236,031 1,249,861 4.2% 2,317,221 2,485,892 7.3% * Does not include sales to CEPISA and own consumption. ENERGY BALANCE (MWh) 2Q12 1Q13 2Q13 Chg. 1S12 1S13 Chg. Required Energy 1,473,569 1,526,616 1,581,854 7.3% 2,868,290 3,108,469 8.4% Sold Energy (*) 1,201,269 1,237,996 1,251,923 4.2% 2,321,097 2,489,919 7.3% Losses 272,300 288,619 329,931 21.2% 547,193 618,550 13.0% (*) Considers sale to the segments, own consumption and sales to CEPISA
  • 10. 10 Distribution – Energy Losses in CEMAR
  • 11. 11 DEC (hours) FEC (times) Distribution – DEC and FEC - CEMAR ► CEMAR: In 2Q13, the DEC index decreased 7.7% compared to 2Q12 while the FEC index decreased 5.6% compared to the same quarter last year. 20.1 21.8 2Q12 2Q13 -7.7% 11.5 10.9 2Q12 2Q13 -5.6%
  • 12. 12 ► CELPA: Energy demand growth of 6.4% in energy sales in 2Q13 (Captive Market + Free), reaching 1,759 GWh. . Energy Market - CELPA Electricity Consumption per Segment (GWh) Energy Balance (GWh) CONSUMPTION SEGMENTS * (MWh) 2Q12 1Q13 2Q13 Chg. 1S12 1S13 Chg. Residential 624,415 629,910 669,518 7.2% 1,221,803 1,299,428 6.4% Industrial 304,910 286,923 302,887 -0.7% 630,158 589,809 -6.4% Commercial 366,918 371,956 402,887 9.8% 710,886 774,844 9.0% Others 287,853 277,267 300,736 4.5% 557,714 578,003 3.6% TOTAL 1,584,095 1,566,057 1,676,027 5.8% 3,120,561 3,242,084 3.9% Free Consumers 69,653 83,857 83,002 19.2% 121,566 166,859 37.3% TOTAL (Captive + Free) 1,653,748 1,649,913 1,759,030 6.4% 3,242,128 3,408,943 5.1% * Does not include own consumption. ENERGY BALANCE (MWh) 2Q12 1Q13 2Q13 Chg. 1S12 1S13 Chg. Energy Sales (Captive + Own Consumption) 1,591,187 1,572,212 1,682,452 5.7% 3,135,698 3,254,664 3.8% Total Losses 860,770 956,065 1,006,117 16.9% 1,648,682 1,962,182 19.0% Required Energy 2,451,949 2,528,196 2,688,525 9.6% 4,784,386 5,216,721 9.0% Own Generation 96,741 102,633 110,366 14.1% 186,799 212,999 14.0% Energy Purchase (Contracts) 2,407,254 2,231,622 2,375,732 -1.3% 4,707,390 4,607,355 -2.1% Energy Purchase (Spot) 60,005 247,460 263,496 339.1% 121,209 510,955 321.5% Basic Network Losses (112,050) (53,519) (61,069) -45.5% (231,011) (114,588) -50.4% (*) Includes sales to the segments, own consumption and free market.
  • 13. 13 Distribution – Energy Losses in CELPA
  • 14. 14 DEC (hours) FEC (times) Distribution – DEC and FEC ► CELPA: In 2Q13, the DEC index improved 17.8% compared to 2Q12 while the FEC index decreased 13.3% compared to the same quarter last year. Analyzing CELPA’s indexes only in the quarter, we can see improvements of 28.1% and 17.3%, respectively. CELPA – Last 12 months CELPA – Quarterly 105.1 86.5 2Q12 2Q13 -17.8% 52.5 45.5 2Q12 2Q13 -13.3% 28.0 20.1 2Q12 2Q13 -28.1% 13.2 10.9 2Q12 2Q13 -17.3%
  • 15. 15 ► Highlights ► Operating Results Agenda ► Introduction ► Financial Results
  • 16. 16 Quarterly Results Equatorial’s EBITDA (30) 118 118 88 153 89 64 EBITDA IFRS 2Q12 Net Reg. Assets Adj. EBITDA 2Q12 Adj. EBITDA 2Q13 Net Reg. Assets EBITDA IFRS 2Q13 74.1% 2Q12 1Q13 2Q13 Chg. 1H12 1H13 Chg. EBITDA CEMAR 119 87 121 2.1% 249 208 -16.2% EBITDA CELPA - (17) (53) N/A - (70) N/A EBITDA Holding + Other (1) (10) (4) 566.7% (6) (14) 144.8% Consolidated IFRS EBITDA 118 60 64 -45.7% 243 124 -49.0% Net Regulatory Assets CEMAR (30) 45 37 N/A (46) 82 N/A Net Regulatory Assets CELPA - 59 52 N/A - 111 N/A Consolidated Regulatory EBITDA 88 164 153 74.1% 197 317 61.0%
  • 17. 17 Quarterly Results Net Income This quarter’s result was a loss of R$44 million. However, if we adjust the results for the quarter by the formation of net regulatory assets, would have made a profit of R$31 million, 25.7% better than the adjusted profit for 2Q12. (20) 75 44 24 24 31 (44) Net Income IFRS 2Q12 Net Reg. Assets Adj. Net Income 2Q12 Adj. Net Income 2Q13 Net Reg. Assets Net Income IFRS 2Q13 25.7%
  • 18. 18 Debt: Schedule of Gross Debt Maturities Consolidated Gross Debt (100% CEMAR + 100% CELPA) 1,569 186 87 423 173 154 546 1,508 377 2 7 8 8 1,106 Gross Debt Short Term 2014 2015 2016 2017 After 2017 CEMAR Celpa
  • 19. 19 100% CEMAR + 100% CELPA Net Debt - Consolidated Net Debt (R$MM) and Net Debt/ EBITDA (Last 12 months) Net Debt Reconciliation (R$MM) We adjusted Equatorial’s net debt of previous quarters excluding the 25% stake in Geramar due to the change in the accounting consolidation rule. Despite the consolidation of 100% of CELPA’s gross debt, its EBITDA contribution to Equatorial’s consolidated figure represents values as from November 2012. 1,001 989 932 1,430 969 1,403 2.31.9 2.0 1.8 2.6 2.9 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3,076 1,001 1,520 556 Gross Debt Net Regulatory Asset Cash Net Debt
  • 20. 20 65.11% CEMAR + 61.37% CELPA Net Debt – Pro-rata Net Debt (R$MM) and Net Debt/ EBITDA (Last 12 months) Net Debt Reconciliation (R$MM) We adjusted Equatorial’s net debt of previous quarters excluding the 25% stake in Geramar due to the change in the accounting consolidation rule. 638 601 1,001 628 984 629 2.41.9 2.0 1.8 2.7 3.1 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 2,472 629 499 1,343 Gross Debt Net Regulatory Asset Cash Net Debt
  • 21. 21 ► CEMAR: In 2Q13, total capex reached R$61 million, of which R$54 million are own capex and R$7 million regarding the Light for All Program (PLPT). ► CELPA: In 2Q13, total capex reached R$95 million, of which R$90 million are own capex and R$5 million regarding the Light for All Program (PLPT). Capex - Equatorial INVESTMENTS (R$MM) 2Q12 1Q13 2Q13 Chg. 1S12 1S13 Chg. Celpa Own (*) 101 78 54 -46.4% 175 132 -24.7% Light For All Program 37 5 7 -81.5% 82 12 -84.9% Total 138 83 61 -55.8% 256 144 -43.8% Celpa Own (*) 83 90 N/A 174 N/A Light For All Program 3 4 N/A 7 N/A Total 86 95 N/A 180 N/A Geramar Generation 0 0 0 201.1% 0 0 -37.9% TOTAL 138 169 156 12.7% 257 144 -43.8% (*) Including indirect Light For All Program investments
  • 22. 22 CELPA In August 2013, ANEEL approved CELPA’s Tariff Adjustment, which is valid since August 07, 2013. Adjustment Index (economic): 7.35% Average Effect on Consumers: 9.18% Through the CDE pass-through, CELPA should receive: CEMAR The final figures of CEMAR’s Tariff Review should only be known by the end of this month. However, in July 16, 2013, ANEEL declared the amount of the Gross Regulatory Asset Base to be R$3,308 million and the Net Regulatory Asset Base to be R$2,069 million. CELPA’s Tariff Adjustment CVA Energy Purchase 92.531 CVA System Service Charge (ESS) 32.053 Tariff Affordability 20.956 TOTAL 145.540 CDE Pass-through (in R$ thousands)
  • 23. 23 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 Contacts
  • 24. 24 • 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. Disclaimer