1 q08 earnings call presentation

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1 q08 earnings call presentation

  1. 1. 1Q08 Results May, 2008
  2. 2. Highlights 1Q08 – EBITDA of R$ 313.8 million in 1Q08, an 9.3% increase when compared to 1Q07 (R$ 287.2 million) – Net Income of R$ 172.8 million in 1Q08, 7.7% above the same period of 2007 (R$ 160.5 million) – Generation 18% above Assured Energy – Accounting reclassifications to fulfill the law # 11,638/2007, without impact on results Subsequent Events – Since April 1st, 2008, the Company’s issued stocks are quoted by the unit – On May 8th the Company paid R$ 165.7 million as Dividends and Interest on Equity regarding 4Q07 results – The Management proposes the distribution of R$ 172.8 million on Dividends, corresponding to 100% of 1Q08 Net Income: - R$ 0.43 per common share (CS) - R$ 0.48 per preferred share (PS) 2
  3. 3. Energy Balance Generation – MW Average Billed Energy – GWh 4,166 121% 389 115% 118% 3,339 107% 112% 109% 978 148 321 1,467 1,543 1,511 2,799 2,869 1,392 1,363 1,424 2003 2004 2005 2006 2007 1Q08 1Q07 1Q08 Generation - MW Average Generation / Assured Energy Eletropaulo MRE CCEE/Losses Reduction of 20.2% on Generated Energy Current Price – Bilateral Contract with (1Q08 x 1Q07) Eletropaulo: R$ 131.98/MWh Generation 18.0% above Assured Energy MRE Tariff – R$ 7.77/MWh (1,275 MW average) Average price of 1Q08 billed energy through CCEE – R$ 275.86/MWh (R$ 19.27/MWh in 1Q07) 3
  4. 4. Investments 1Q08 Capex – 1Q08: R$ 5.6 million – Equipment restoration and upgrade of operating 27.4% plants - R$ 2.1 million Equip – Environmental projects, reforestation projects, archaeological and fishing areas management– R$ 8.7% Environment 1.4 million 38.3% Hidroway – Investments on IT – R$ 0.5 million IT – Investments on SHPP “São José” and “São 25.6% SHPP's Joaquim”, at Jaguari-Mirim´s river, at São Paulo (total capacity of 7 MW) – R$ 1.0 million Investments – R$ million – Investments on 3 SHPP at Rio de Janeiro: • Installed Capacity: 52MW 224.0 • The Installation licence was obtained in SHPPs - RJ October 2007 141.2 • Until 03/31/2008 R$ 20.0 million were invested, of which R$0.5 million in 1Q08 • Waiting for the Vegetation Suppression 46.5 50.7 82.8 27.5 authorization in order to start the construction 5.6 2005 2006 2007 2008 (E) 1Q08 4
  5. 5. Expansion Requirement Requirement: increase installed capacity, by at least, 15% (400 MW), until December 2007: – Increase the installed capacity in São Paulo State; or – Purchase energy from new plants, located at São Paulo, through long term agreements (at least 5 years) Restrictions to accomplish the requirement: – Insufficient hydro resources at São Paulo State and environmental restrictions to install Thermo Plants; – Insufficiency of gas supply; – “New Model of the Eletric Sector” (Law # 10,848/04) On February 2008, AES Tietê received a report prepared by a Consulting company, regarding the evaluation of the possibilities of expanding its generation capacity in São Paulo State. The Company has been developing discussions with different members of São Paulo State Government, regarding opportunities related to: – Hydroelectric potentials – Opportunities for joint generation – Alternative energies 5
  6. 6. Results Gross Revenue - R$ Million Costs and Operational Expenses - R$ Million +4.4% +11.6% 99 396 414 17 89 3636 17 397 397 360 360 54 43 +10.2% 29 29 16 16 1Q07 1Q08 1Q07 1Q08 Net Revenue Deductions Power purchase and sector charges Higher energy revenue sold to CCEE/MRE (R$ Other operation expenses 32.8 million) Depreciation – Higher average price on CCEE (R$ 275,86 / MWh in 1Q08 x R$ 19.27 / MWh in 1Q07) Increase of the transmission cost (TUSDg): Reduction of R$ 19.2 million on Deductions, – Tariff Cycle 2007/2008, R$ 44.3 million (R$ due to change of PIS/Cofins tax, from 11 millions / quarter) cumulative (9.25%) to non-cumulative TUSDg Methodology is being discussed by (3.65%), on June, 2007 Aneel, in a Public Hearing, from April 23 until May, 19. 6
  7. 7. EBITDA EBITDA ( R$ Million ) Margin = 79.8% Margin = 79.1% 36.7 ( 12 ) 1.6 313.8 287.2 1Q07 Net Revenue Transmission and Other Costs and 1Q08 Connection Expenses EBITDA: +9.3% 7
  8. 8. Results Financial Results - R$ Million Net Income - R$ Million 1Q07 1Q08 43.6% 44.6% + 7.7 % 173 161 (29) + 22.5 % 1Q07 1Q08 (36) Net Income Net Margin Increase of average IGP-M (2.38% in 1Q08 Proposed Dividends of 100% of 1Q08´s x 1.11% in 1Q07), which accrues the Net Income: Company’s debt – Dividends: R$ 172.8 million; – Total payment by stock: Negative impact on financial revenues due - R$ 0.43 / common stock to the drop on average SELIC - R$ 0.48 / preferred stock Ex-Dividends Date 05/15/2008 (11.18% in 1Q08 x 12.93% in 1Q07) Payment Date 05/29/2008 8
  9. 9. Consolidated Debt in R$ million Amount Ceditor Maturity Cost Collateral 1,280.4 Eletrobras May, 2013 IGP-M + 10% p.a. Receivables 0.2 FunCesp III Sep, 2027 IGP-DI + 6% p.a. Receivables Net Debt - R$ Million 2.0x 1.4x 1,253.5 0.7x 0.6x 0.6x 0.4x 1,096.3 676.5 681.9 660.9 462.8 2003 2004 2005 2006 2007 1Q08 Net Debt (R$ million) Net Debt / EBITDA Cash Availability 03/31/2008 = R$ 821.0 million – Marketable securities with maturities lower than 90 days – Average rates around 100% of CDI 9
  10. 10. Managerial Cash Flow R$ Million 1Q07 2Q07 3Q07 4Q07 1Q08 INITIAL CASH 687.9 683.5 571.2 589.0 633.7 Operating Cash Flow 287.9 307.9 248.9 271.2 261.5 Investments (9.7) (12.0) (9.3) (15.0) (4.1) Net Financial Expenses (16.1) (18.0) (19.3) (18.4) (15.3) Net Amortization (46.4) (48.3) (50.8) (52.0) (46.2) Income Tax (220.1) (16.6) (9.8) - (15.1) Dividends and IoE - (325.4) (141.9) (141.0) - Free Cash Flow (4.4) (112.3) 17.8 44.7 180.9 Final Cash of Parent Company 683.5 571.2 589.0 633.7 814.6 Final Cash of subsidiaries and associated Companies 11.9 28.3 4.2 4.6 6.5 Final Cash 695.4 599.4 593.2 638.3 821.0 Investments – the construction of the SHPPs at Rio de Janeiro will start after the authorization for the Vegetation Suppression is obtained Tax Credits of approximately R$ 165 million were utilized in 1Q08 10
  11. 11. Conclusion Generation was 18% above Assured Energy in 1Q08 EBITDA of R$ 313.8 million in 1Q08, an increase of 9.3% when compared to 1Q07 (R$ 287.2 million) Net Income of R$ 172.8 million in 1Q08, represents an increase of 7.7% when compared to 1Q07 (R$ 160.5 million) Proposed dividends of R$ 172.8 million, corresponding to 100% of the 1Q08 Net Income 11
  12. 12. 1Q08 Results The statements contained in this document with regard to the bussiness prospects, projected operating and financial results, and growth potencial are merely forecasts based on the expectstions 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.

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