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    Presentation aes eletropaulo_3_q12_sem discurso_v2 Presentation aes eletropaulo_3_q12_sem discurso_v2 Presentation Transcript

    • 3Q12 Results November, 2012
    • 3Q12 Highlights Operational  Decrease of 12% in SAIDI and 10% in SAIFI - Both below the regulatory limits, as a result of the Action Plan  0.4% decrease in energy consumption  Investments of R$ 225 million, a 10% increase Financial  Gross revenues totaled R$ 3,757 million, a 5% decrease  Reorganization and restructuring costs of R$ 34 million in the quarter  Ebitda of R$ 108 million in the 3Q12, a reduction of 83%  Net income of R$ 14 million, a 96% decrease Debt  Restructuring of all Company’s debts with the flexibility of covenants, increase maturity from 6.6 years to 7.2 years and reduction of average costs from CDI + 1.29% p.a. to CDI + 1.27% p.a. Regulatory  On July 4th, 2012, it was applied the index of tariff review (economic effect: – 5.60%) and tariff adjustment . (economic effect: +4.45%), with average combined effect of -3.25%  On September, 11th 2012, the Energy Costs Reduction Program was announced; through the Provisional Measure 579, that does not directly affect the Company, since its concession was granted after 1995 2
    • MP 579: Context  AES Eletropaulo is not covered by MP 579 rules and has a concession valid until 2028 Goal Opportunities  Aims to reduce tariffs by 20% (Residential: 16.2% and industrial from 20% to 28%), as from February 2013, through: - Decreasing sector charges (RGR, CCC e CDE): - 7% - Renewal of Generation and Transmission Concessions: - 13%  Marginal benefits in collection and potential decrease in delinquency, since energy costs will be reduced  Increase in energy consumption, as a potential result of the drop in tariffs Exchange rate variation of the price of energy purchased from Itaipu will no longer be suportted by distribution companies, but by Eletrobras Risks  Financial impact between tariff adjustments of hydrological risks due to the allocation of energy quotas 3
    • Tariff review: discussions with Aneel Discussion Arguments  Shielded RAB was approved by Aneel in 2003  Shielded RAB Aneel excluded R$ 728 million from shielded RAB, due to the decrease in the amount of cables between the accounting records and the shielded RAB, between cycles and was confirmed in 2007, considering a global consistency criteria  If the exclusion of the amount of cables is maintained, an addition of R$ 660 million of assets in operation (2003 BRR) should be considered  Investments  Losses Aneel did not recognize a R$ 427 million investment performed in the incremental period on Minor Components to Main Equipments (“COM”) and Additional Costs (“CA”) Aneel changed the benchmark company proposed in the Public Hearing, modifying the regulatory losses from 0.49% to 1%  Adequacy of the regulatory standards applied by Aneel for the valuation of real costs incurred in execution of works and recorded in accounting books  Benchmark company is an outlier  Regulatory losses shall be restored to the previous number of 0.49% 4
    • Consumption impacted by industrial production slowdown and migration of commercial clients to free market Consumption evolution (GWh)¹ +1.7% -2.7% -0.1% +3.2% +0.6% -4.7% -0.4% 11,404 11,357 9,307 9,360 4,257 4,331 2,811 2,809 2,097 1,998 1,531 1,489 708 Residential Industrial Commercial Public Sector and Others 3Q11 1 – Own consumption not considered 731 Captive Market Free Clientes Total Market 3Q12 5
    • Best SAIDI since 2006 and within regulatory limits SAIDI¹ (YTD) SAIDI¹ (last 12 months) 9.32 11.86 10.60 8.68 10.36 7.80 10.30 8.67 2009 2010 2011 SAIDI Aneel Reference ► -22% - 16% 10.09 3Q11 3Q12 SAIDI (hours) 6.11 Jan-Sep/11 Jan-Sep/12 SAIDI (hours) ANEEL Reference for 2012 SAIDI: 8.67 hours 1 - System Average Interruption Duration Index Source: ANEEL and AES Eletropaulo 6
    • SAIFI remains below the regulatory limits SAIFI ¹ (last 12 months) 7.87 7.39 SAIFI¹ (YTD) 6.93 -16% -12% 6.17 5.46 5.45 5.42 4.05 4.79 2009 2010 2011 SAIFI Aneel Reference ► 3Q11 3Q12 SAIFI (times) Jan-Sep/11 3.38 Jan-Sep/12 SAIFI (times) ANEEL Reference for 2012 SAIFI: 6.87 times 1- System Average Interruption Frequency Index Source: ANEEL and AES Eletropaulo 7
    • Losses level close to the regulatory reference for the 3rd Cycle of Tariff Reset Regulatory Reference² - Total Losses (last 12 months) Losses (last 12 months) 11.8 10.9 10.5 10.6 10.4 5.3 4.4 4.0 4.1 6.5 6.5 6.5 2010 2011 3Q11 3Q12 9.8 9.4 2013/2014 2014/2015 6.2 2009 10.3 4.2 6.5 10.7 Technical Losses ¹ 2011/2012 2012/2013 Non Technical Losses 1 – In January 2012, the Company improved the assessment of the technical losses, which were decreased to a level of 6.1%. The number for the last twelve months ended in 3Q12 is 6.2% 2 – Values estimated by the Company to make them comparable with the reference for non-technical losses determined by the Aneel 8
    • Investments mainly focused on system expansion, maintenance and quality of client services Investments (R$ million) 3Q12 Investments (R$ million) 3T12 800 700 739 682 R$ 225 million 841 46 9M12 R$ 579 million 56 22 10 11 28 600 20 25 26 137 49 500 37 400 654 717 794 +10% 205 225 200 6 11 100 198 213 1Q11 1Q12 300 154 9 0 2010 2011 2012(e) 53 75 141 Maintenance¹ Client Service System Expansion Losses Recovery Own Resources Paid by the clients IT Paid by the Clients 1 – Maintenance capex is the investment s made for the grid modernization and improvement in quality of service Others 9
    • Revenues variation reflects the new tariff and industrial activity slowdown Gross Revenues (R$ million) 11,429 11,403 +0.2% 4,032 532 4,046 579 3,937 6,839 6,804 -5% 3,757 1,298 227 2,348 9M11 1,380 208 2,232 9M12 3Q11 3Q12 Net revenue ex-construction revenue Construction revenues Deduction to Gross Revenue 10
    • Higher average cost of energy purchased due to energy from auctions and exchange rate Operating Costs and Expenses ¹ (R$ million) +19% 5,113 6,068 1,133 893 +23% 4,936 4,220 2,107 1,706 186 358 1,520 9M11 9M12 1,749 3Q11 3Q12 Energy Supply and Transmission Charges 1 - Depreciation and other operating income and expenses are not included PMS² and Others Expenses 2 - Personnel, Material and Services 11
    • Manageable PMSO items below the inflation PMS and other expenses (R$ million) 15 34 9 12 90 11 277 186 Non recurring 3Q11¹ 289 3Q11: ex non recurring Pension plan Collective bargaining 308 308 308 Vehicles mainten. and others² 3Q12 Costs of reorganization and restructuring 358 186 3Q11 277 343 1 – Reversal of tax and labor contingencies and changes in accounting criteria for ADA 2 – Change in PMSO, excluding Pension Fund, collective bargaining and fleet maintenance 3 – Public lighting points (PMSP agreement) with reversion expected for 4Q12 and IT costs Non recurring 3Q12³ 3Q12: ex non recurring 12
    • Ebitda reduction due to the tariff review and costs with reorganization and restructuring Ebitda (R$ million) (264) (105) (63) 642 (36) (34) 378 272 3Q11 Market and tariff review and adjustment at Parcel B Non recurring 3Q11 and 3Q12 210 Parcel A (32) 174 Others revenues and expenses 108 Costs with reorganization and restructuring 1 – PMSO variation, excluding costs with reorganization and restructuring and non-recurring costs related to the 3Q11 and 3Q12 PMSO¹ 3Q12 13
    • Recurring financial results benefited by exchange rate and lower interest rate Financial Results (R$ million) - ex non-recurring¹ Financial Results (R$ million) - 33% 12 0 8 (11) (43) (50) (54) (69) 9M11 9M12 3Q11 3Q12 9M11 9M12 - 19% 3Q11 3Q12 ¹ Non-recurring items: R$ 54,3 million corresponding to the Finsocial recorded in 3Q11and recognition of R$ 18,5 million due to inflation adjustment of lawsuit involving PIS credit 14
    • Net income variation due to tariff review and costs with reorganization and restructuring Net Income (R$ million) 885 -80% 182 181 142 561 348 699 182 -96% 269 (258) (103) 14 51 (17) (20) (260) 9M11 9M12 3Q11 3Q12 Net Income - Adjusted Regulatory assets and liabilities variation Tariff review postponement effect 15
    • Lower cash generation due to tariff review and higher cost of energy purchased and charges Operational Cash Generation (R$ million) Final Cash Balance (R$ million) +6% -51% 878 735 932 3Q11 3Q12 363 3Q11 3Q12 13
    • Debt refinancing conclusion of R$ 1 billion resulting in more flexible covenants • Increase in the average debt maturity from 6.6 years to 7.2 years Benefits • Debt average costs decrease from 1.29% to 1.27% • More flexible covenants Debt amortization schedule Before restructuring After restructuring 1.133 1.133 R$ 491 million R$ 1,241 million 744 578 388 494 44 387 275 86 533 302 2013 51 47 228 2014 51 2015 58 280 54 337 2016 Debt in R$ (ex-pension plan debt ) M 436 2017 2018 321 2019 530 54 383 62 226 732 58 637 732 225 400 2020 2028 Pension plan debt 138 128 86 52 44 83 2014 2015 62 476 178 2013 587 47 383 686 321 2016 Debt in R$ (ex-pension plan debt ) M 2017 2018 2019 400 2020 2028 Pension plan debt 17
    • More flexible covenants and considering IFRS changes FROM Financial Index Net debt / Adjusted Ebitda < 3.5 Gross debt / Adjusted Ebitda < 3.5 Default If the limit is exceeded in any quarter Regulatory assets and liabilities Not considered in the calculation Pension plan debt Compulsory loans TO (equivalent to 4.5x Gross Debt / Adjusted Ebitda) If the limit is exceeded for two consecutive quarters Considered in the calculation (concept before IFRS adoption) Debt recognized in liabilities excluding the Total debt recognized in liabilities Considered in the calculation of debt “corridor” concept Out of debt calculation
    • 3Q12 Results The statements contained in this document with regard to the business prospects, projected operating and financial results, and growth potential are merely forecasts based on the expectations of the Company’s Management in relation to its future performance. Such estimates are highly dependent on market behavior and on the conditions affecting Brazil’s macroeconomic performance as well as the electric sector and international market, and they are therefore subject to changes.