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2Q07 Results
1. Conference Call
2Q07 Earnings Results
António Martins da Costa
Chief Executive Officer
Antonio José Sellare
Chief Financial Officer
Flavia Heller
Investor Relations Officer
July 25, 2007
2. Disclaimer
This presentation may include forward-looking statements of future events or results according to regulations
of the Brazilian and international securities and exchange commissions. These statements are based on
certain assumptions and analysis by the company that reflect its experience, the economic environment and
future market conditions and expected events, many of which are beyond the control of the company.
Important factors that may lead to significant differences between the actual results and the statements of
expectations about future events or results include the company’s business strategy, Brazilian and
international economic conditions, technology, financial strategy, public service industry developments,
hydrological conditions, financial market conditions, uncertainty of the results of future operations, plans,
objectives, expectations and intentions, among others. Considering these factors, the actual results of the
company may be significantly different from those shown or implicit in the statement of expectations about
future events or results.
The information and opinions contained in this presentation should not be understood as a recommendation
to potential investors and no investment decision is to be based on the veracity, current events or
completeness of this information or these opinions. No advisors to the company or parties related to them or
their representatives shall have any responsibility for whatever losses that may result from the use or contents
of this presentation.
This material includes forward-looking statements subject to risks and uncertainties, which are based on
current expectations and projections about future events and trends that may affect the company’s business.
These statements include projections of economic growth and energy demand and supply, as well as
information about the competitive position, the regulatory environment, potential opportunities for growth
and other matters. Several factors may adversely affect the estimates and assumptions on which these
statements are based.
2
4. Distribution
Volume of Energy Distributed (GWh) Energy Distributed by Customer Class
(% of total volume distributed)
5.0% 5.0%
5,972 6,268
5,972 6,268 1%
1%
763 812 37%
37%
1,991 2,128
62% 62%
3,218 3,328
2Q06 2Q07
2Q06 2Q07
Bandeirante Escelsa Enersul End Customers Energy in Transit Other
Market recovery in Enersul’s concession area (+6.4%) and strong
growth in Escelsa’s region (+6.9%)
Growth in the volume of energy in transit (4.0%)
4
5. Distribution
Program for Curbing Losses
In 2Q07, R$28 million were invested in programs to cut down losses.
Evolution of commercial losses (% of distributed energy - last 12 months)
6.0 7.6 7.8
5.4 5.4 5.9 6.6
5.0
2.2 2.3 2.2 2.4
Jun/05 Jun/06 Dec/06 Jun/07 Jun/05 Jun/06 Dec/06 Jun/07 Jun/05 Jun/06 Dec/06 Jun/07
12.6% 12.8% 12.9% 13.2%
4.2%
~ 167 thousand inspections were made in 2T07
4.1% 3.8% 4.0%
~ 72 thousand frauds identified
8.5% 9.0% 8.9% 9.0% ~ 700 thousand inspections scheduled for
2007
Jun/05 Jun/06 Dec/06 Jun/07 Installation of protected networks and
Technical Commercial
telemetric monitoring
5
6. Project Vanguarda
Savings resulting from the Redundancy Program implemented in 2Q06:
• R$ 8.0 million in 2Q07 vs. 2Q06
• R$ 44.4 million in accumulated annualized savings since the
implementation of the program
PDV – Capture of accumulated annualized savings
Productivity (client/employee)
Cost of Personnel (R$MM/year)
171%
Indirect (Accomplished)
68.4
1,2871,236 Direct (Accomplished)
111%
100% 8.4
1,071 1,060 1,057 Indirect(Estimated)
943 923
890 44.4
776 762 Direct (Estimated) 40.8
654 5.6
585 31.9 5.2
456 502 462 28.8
4.2 60.0
4.0
35.6 38.8
24.8 27.7
Bandeirante Escelsa Enersul
D ec/ 0 6 A cco mp li shed Jun/ 0 7 A cco mp lished t il D ec/ 0 7
t il l D ec/ 0 6 Jun/ 2 0 0 7
1998 2001 2005 2006 2Q07
6
7. Generation
Volume of Energy Produced (GWh) Volume of Energy Sold (GWh)
22.9% 941 10.7%
1,303
766 1,177
2Q06 2Q07 2T06 2T07
Installed Capacity (MW)
452 50 25 1,043 Growth in the volume of energy
sold
516 • Beginning of energy
contracts for Mascarenhas
4th engine and PCH São
2005 Peixe 4th Eng. PCH
João
Angical Masc. S. João Current
7
8. Generation - Creating Growth Opportunities
Participation in energy auctions
Acquisition of existing assets
Coal and biomass thermal plants: preliminary studies
PCHs under construction: +29 MW (Santa Fé)
Power upgrades: +50 MW (under study)
PCHs projects and studies to be presented to ANEEL: +438 MW
Feasibility studies for 7 hydro power plants: +590 MW (235 MW in
partnership with Eletronorte)
Partnership with MPX Mining & Energy to build coal-fired thermal
plants:+ 525 MW (50% stake in each project)
– UTE Maranhão: +350 MW
– UTE Pecém: +700MW
8
9. Commercialization
Volume of Energy Distributed (GWh)
3.8%
1,846 1,915
346
446
1,400 1,569
2Q06 2Q07
Other ENBR Group companies
Number of customers
1.6%
Growth of volume sold to free
63 64 customers (+13.7%) offset the
end of Enerpeixe’s contract
2Q06 2Q07
9
11. Financial Performance
Net Revenues (R$ MM) EBITDA (R$ MM)
27.3% 91.6%
1,157
312
909 13% 5%
13% 10%
163 31%
11%
6%
77% 31% 64%
76%
61%
2Q06 2Q07 2Q06 2Q07
Distribution Generation Commercialization Distribution Generation Commercialization
Net Income (R$ MM)
113
333.0%
26
2Q06 2Q07
11
12. Costs and Expenses
Manageable costs were impacted by non-recurring charges
Costs and Expenses Breakdown of Manageable Expenses
Breakdown* - 2Q07
nd
Manageable Expenses 2 Quarter
%
R$ million 2007 2006
Non- Personnel 86.1 126.6 -40.5 -32.0%
Manageable
manageable
costs costs Material 10.0 11.8 -1.8 -15.0%
R$ 600.3 million R$ 245.4 million
Third Party Services 84.7 68.7 16.0 23.2%
(71%) (29%)
Provisions 42.1 15.4 26.6 172.3%
Other 22.6 20.2 2.4 12.1%
Total 245.4 242.7 2.7 1.1%
R$ 845.7 million
Provisions:
+ R$ 11.7 MM in provisions for non-transfer of revenues by collection
agent
Note: + R$ 6.7 MM in civil and labor contingencies
*Depreciation and amortization were excluded
+ R$ 3.0 MM in receivables due from Ampla
12
13. Financial Result
Reduction in debt servicing due to the fall of basic interest rates
Financial Result
R$ million 2Q07 2Q06 Var.%
Financial Revenue 56.8 67.6 -16%
Financial Expense (89.6) (97.8) -8%
Net Foreign Exchange Result (8.7) (16.9) -49%
Net result from SWAP operations (38.3) (18.7) 105%
FX gain (loss) 29.6 1.8 1525%
TOTAL (41.5) (47.0) -12%
13
14. Investments and Indebtedness
Indebtedness – 2Q07 (R$ Million) Total Debt Index
Net Debt evolution (Mar/07)
3,012
1.6x* 2% 5%
Short-Term
726
(698)
1.5x*
(425) Net Debt / Ebitda
34%
Long-Term 59%
2,286
1,889 1,850
US$ Fixed Rates
Gross Debt Jun.07 (-) Cash and (-) Regulatory Asset Net Debt Jun.07 Net Debt Mar.07 TJLP Floating Rates **
Marktable Securities * and Liabilities
* includes R$ 5.5 million of deposits related to debt with BNDES
** Includes Selic, CDI, IGP-M and INPC
* Ratio: Net Debt / EBITDA 12 months
Investments* – does not include LFA** (R$ MM) Universalization Program R$MM
(includes LPT **)
658
105
192
192
466 19
26
173
2007 (E) 1H07 (A) 2007 (E) 1H07 (A)
Distribution Generation
* Does not include interest capitalization and/or new projects **LPT: Luz para Todos
14
15. Indebtedness
Extended Maturity
Debt Maturity Schedule – Jun/07 vs Jul/07 (R$ million)*
Debentures Issued in Jul/07
– Escelsa:
Escelsa: Reduction of short term debt
R$250 MM
Extension of average maturity
Tenor: 7 years
Grace period (interest and principal): 5 years Reduction of average cost of debt
Remuneration: 105% of CDI
Debt Maturity Schedule (R$ MM)
June/07 After debenture issuance and
repayment of Senior Notes
528.5 511.8 490.8
697.6
582.5
528.5 511.8 490.8 307.4
261.8 240.9
307.4 220.4 207.4
178.5 157.5 130.7
124.0 130.7
Cash and 2007 2008 2009 2010 2011 2012 2013 2014 After 2014 2007 2008 2009 2010 2011 2012 2013 2014 After
marketable 2014
securities
* Debentures issued on July 02, 2007
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