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Earnings release 2Q14

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Earnings release 2Q14

  1. 1. 2Q14 Results
  2. 2. This presentation may contain statements that represent expectations about future events or results according to Brazilian and international securities regulations. These statements are based on certain assumptions and analyses made by the Company pursuant to its experience and economic environment, market conditions and expected future events, many of which are beyond the Company's control. Important factors that could lead to significant differences between actual results and the statements on expectations about future events or results include the Company's business strategy, Brazilian and international economic conditions, technology, financial strategy, developments in the public utilities sector, hydrological conditions, financial market conditions, uncertainty regarding the results of future operations, plans, objectives, expectations and intentions, among others. As a result of these factors, the Company's actual results may differ significantly from those indicated or implied in the forward-looking statements about future events or results. The information and opinions contained in this presentation should not be construed as a recommendation to potential investors and no investment decision should be based on the veracity, timeliness or completeness of such information or opinions. None of the advisors of the Company or parties related to them or their representatives shall be liable for any losses that may result from the use or content of this presentation. This material includes forward-looking statements subjected 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 may include projections of economic growth, demand, energy supply, as well as information about its competitive position, the regulatory environment, potential growth opportunities and other matters. Numerous factors could adversely affect the estimates and assumptions on which these statements are based. Disclaimer 2
  3. 3. 2Q14 Highlights 3 • Operating capacity increased to 1,495 MW distributed in 70 power plants (+30% vs. 2Q13) • Conclusion of the 78.2 MW Macacos I wind complex in Rio Grande do Norte • Net Revenue of R$ 245 million in 2Q14 (+31% vs. 2Q13) and R$ 534 million in 1H14 (+28% vs. 1H13) • EBITDA of R$ 117 million in 2Q14 (+19% vs. 2Q13) and R$ 236 million in 1H14 (-1% vs. 1H13) • Solid financial liquidity: cash of R$ 903 million • Progress made in the association with DESA, expected to be concluded in 3Q14
  4. 4. Contracted portfolio 4 #1 in renewable energy in Brazil with 1.5 GW (84%) of operating capacity Expansion to 1.8 GW of capacity in operation until 2018 Regionally diversified portfolio present in the 4 renewable sources Long-term PPAs, concessions and authorizations Aug 2011 1H13 1H14 2016 2018 Total contracted 2018 651.51 1,153.1 1,495.1 231.02 51.3 1,777.4 18.9%Contracted portfolio growth (MW) 1) Creation of CPFL Renováveis 2) Reduction in the capacity to be installed at Campo dos Ventos and São Benedito complexes (in 2016), from 254 MW to 231 MW is due to the change of a wind turbine. The new equipment operates more efficiently, enabling the purchase agreements average energy to be accomplished with a reduced generation capacity
  5. 5. Project concluded in 2Q14 51) Macacos, Pedra Preta, Costa Branca and Juremas Macacos I wind complex 1 Start of operations Capacity (MW) Physical guarantee (MWaverage) Financing PPA 2Q14 78.2 37.5 BNDES (financing contracted, partially disbursed) LFA Aug/10 - 20 years
  6. 6. Solar SHPP Wind Biomass SHPP Wind Assets in operation Status of association with DESA 6 • Expected Closing: 3Q14 • Contracted capacity of 330.8 MW: • In operation: • 6 wind farms: 205.2 MW • 3 SHPPs : 72.4 MW • Under construction: • 1 SHPP: 29.2 MW • 1 wind farm: 24.0 MW
  7. 7. Operational startup of biomass plants: Bio Coopcana (aug/13) and Bio Alvorada (nov/13) Operational startup of Atlântica wind complex (mar/14) Conclusion of Rosa dos Ventos wind complex acquisition (feb/14) Commercial startup of Santa Clara wind complex (mar/14) Anticipation of the harvest in 2014 Adverse water supply situation (lower generation in the SHPPs) 2Q13 2Q14 1H13 1H14 315.2 232.1 640.4 476.7 164.8 341.2 479.2 643.9 160.5 310.5 182.4 348.1 0.3 0.3 0.6 0.8 SOL BIO WIND SHPP Power generation in 1H14 7 1) Power generation excludes Campo dos Ventos II wind farm and Macacos I wind complex, which are able to generate energy and have already received the revenue under their contracts - pending construction completion of the Shared Installation of Generation (ICG) 37.9% 12.8%Energy generation by source (GWh)1 1,469.5 1,302.6 884.0 640.8
  8. 8. Net revenue 8 Beginning of sales contract fulfillment of Bio Coopcana, Bio Alvorada, Campo dos Ventos II, Atlântica wind complex, Rosa dos Ventos and Macacos I wind complex Net revenue (R$ million) By source (1H13 vs. 1H14) 1) The share of solar energy is 0.02% in 1H14 vs. 0.03% in 1H13 2Q13 2Q14 1H13 1H14 186.7 245.1 415.7 534.1 Generation increase in biomass plants: anticipation of sugarcane harvest, benefiting the energy cogeneration 28.5% 31.3% 44.9% 21.5% 33.6% 1H14 WIND BIO SOL SHPP 45.3% 12.7% 42.0% 1H13 1
  9. 9. 2Q13 2Q14 115.4 173.6 50.4% 2Q13 2Q14 60.2 60.0 Costs of energy generation and general and administrative expenses 9 • Extraordinary costs with energy purchase to meet: (i) projects with changes in schedules, (ii) the effect of GSF and (iii) SHPPs that are not part of the MRE (R$ 34 million in 2Q14 and R$ 106 million in 1H14) • Higher depreciation cost – new assets in operation (increase of R$ 16 million and R$ 31 million between the respective quarter and semester periods being compared) -0.4% Costs (R$ million) Expenses (R$ million) 1H13 1H14 230.6 388.2 1H13 1H14 118.4 115.6 68.4% -2.4%
  10. 10. 121.5 98.7 58.4 11.5 31.0 2.5 117.1 151.4 EBITDA and net income in 2Q14 EBITDA 2Q13 Net Revenue Extraord. expenses Operating Expenses EBITDA 2Q14 52.9% 47.8% EBITDA Margin 61.8% Operating Costs 65.1% +24.7% Adjusted EBITDA 2Q14 Adjusted EBITDA 2Q13 + 18.7% Net revenue • Expansion of operating portfolio (342MW) Extraordinary expenses • Energy purchase to meet projects with changes in schedule, GSF effects and SHPPs that are not part of the MRE Operating costs • Energy purchase to meet the seasonality of the sales agreements for SHPPs • Higher PMSO due to the operational startup of new projects 2Q14 (R$ 65.9) million 2Q13 (R$ 51.6) million Net result 10 EBITDA growth (R$ million)
  11. 11. EBITDA and net income in 1H14 1H14 (R$ 120.2) million 1H13 (R$ 66.8) million 294.2 239.0 118.4 51.2 75.4 5.7 236.4 342.8 EBITDA 1H13 Net Revenue Extraord. expenses Operating Expenses EBITDA 1H14 57.5% 44.3% EBITDA Margin 64.2% Operating Costs 70.8% +16.5% Adjusted EBITDA 1H14 Adjusted EBITDA 1H13 -1.1% Net result Net revenue • Expansion of operating portfolio (342MW) Extraordinary expenses • Energy purchase to meet projects with changes in schedule, GSF effects and SHPPs that are not part of the MRE Operating costs • Energy purchase to meet the seasonality of the sales agreements for SHPPs • Higher PMSO due to the operational startup of new projects 11 EBITDA growth (R$ million)
  12. 12. 3Q13 4Q13 1Q14 2Q14¹ 553.4 563.1 542.1 560.6 Net Debt² EBITDA LTM³ Caixa 2014 2015 2016 2017 2018+ 735.6 227.6 167.9 436.4 325.9 355.6 389.0 3,131.5 Debt by index (%)Net Debt/EBITDA (R$ million) Debt amortization (R$ million) • Average term: 6.3 years • Average nominal cost: 8.6% (79.3% of CDI in Jun/14) Debt profile (1) Refers to funding for projects under construction for which long-term financing has not yet been obtained; (2) Cash balance considers the balance in reserve accounts (restricted deposit); and (3) Last 12 months Debt Profile 12 CashReserve Accounts Bridge Loans(1) Loans and Debentures 903.5 664.0 6.8x 6.9x 7.3x 7.1x Leverage 13.7% 2.5% 1.8%1.6% 53.4% Fixed CDI TJ6 IGPM TJLP 3,772.1 3,874.8 3,949.0 3,962.5
  13. 13. (1) Gradual operational entrance starting 2Q16 (2) Operational entrance starting 1H18 (3) Reduction in the installed capacity at Campo dos Ventos and São Benedito complexes from 254 MW to 231 MW is due to the change of a wind turbine. The new equipment operates more efficiently, enabling the purchase agreements average energy to be accomplished with a reduced generation capacity Next projects 13 Start of operations 20161 20182 Capacity (MW) 231.03 51.3 Physical guarantee (MWaverage) 120.9 26.1 Financing BNDES (being structured) BNDES (to be structured) PPA ACL – 20 years A-5 2013 13 Campo dos Ventos and São Benedito wind complex Pedra Cheirosa wind complex
  14. 14. • Market value equivalent to R$ 5.6 billion (R$ 13.00/share)1 • Average volume of 118,000 shares/day • Since the IPO the shares valued 3.9%1 Capital markets 141) Reference date: 06/30/2014 2) Base 100 on 07/19/2013 Stock performance2 80 85 90 95 100 105 110 115 120 07/19/13 08/03/13 08/18/13 09/02/13 09/17/13 10/02/13 10/17/13 11/01/13 11/16/13 12/01/13 12/16/13 12/31/13 01/15/14 01/30/14 02/14/14 03/01/14 03/16/14 03/31/14 04/15/14 04/30/14 05/15/14 05/30/14 06/14/14 06/29/14 IBOV IEE CPRE3 12.2% 10.1% 3.9%
  15. 15. Contacts 15 Closing price on 08/12/2014: R$12.66 Market Value: R$ 5.6 billion US$ 2.5 billion Andre Dorf CEO Marcelo Souza Chief Financial and Investor Relations Officer Maria Carolina Gonçalves Investor Relations Superintendent Luciana Silvestre Fonseca Investor Relations Analyst Priscila de Oliveira Investor Relations Analyst Natalia Troccoli Investor Relations Analyst E-mail: ri@cpflrenovaveis.com.br Phone: +55 11- 3157-9312 Press Relations RP1 Comunicação Empresarial E-mail: marianacasena@rp1.com.br Phone: +55 11-5501-4655

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