1q19 - amazon s3..."fixed assets" account in the balance sheet and several changes in the...
TRANSCRIPT
![Page 1: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/1.jpg)
1 | 42
São Paulo, May 15, 2019 - Alupar Investimento SA (B3: ALUP11), discloses today its 1Q19 results. The quarterly information (ITR) and standardized financial statements (DFP) are presented in accordance with the accounting practices adopted in Brazil, in compliance with the provisions of the Brazilian Corporate Law, the International Financial Reporting Standards (IFRS) and the standards issued by the Accounting Pronouncements Committee (CPC).
1Q19
Conference Call: 05/16/2019 Portuguese 3:00 p.m. (BRT) 2:00 p.m. (NY Time) Ph:+ 55 (11) 2188-0155 Code: Alupar Replay: +55 (11) 2188-0400 Code: Alupar English (simultaneous translation) 3:00 p.m. (BRT) 2:00 p.m. (NY Time) Ph: +1 (646) 843-6054 Code: Alupar Replay: +55 (11) 2188-0400 Code: Alupar IR Contact José Luiz de Godoy Pereira Luiz Coimbra Kassia Orsi Amendola Lucas Menezes Ph: +55 (11) 4571-2400 [email protected] Live Webcast: www.alupar.com.br/ri
Price on 05/15/2019 ALUP11: R$ 22.50 Total no. of UNITS¹: 293,037,090 Market-Cap: R$ 6.593 billion
(1) Equivalent Units
Period Highlights
• Corporate Law (IFRS): In 1Q19, Net Revenue reached R$ 1,145.8 million, R$ 780.3 million higher than the R$ 365.5 million recorded in 1Q18.
In 1Q19, EBITDA totaled R$ 834.8 million, R$ 576.6 million higher than the R$ 258.3 million recorded in 1Q18.
In 1Q19, Net Income totaled R$ 400.5 million, R$ 341.6 million higher than the R$ 58.9 million recorded in 1Q18.
• Regulatory Income: In 1Q19, Net Revenue reached R$ 464.1 million, 19.4% higher than the R$ 388.7 million recorded in 1Q18.
In 1Q19, EBITDA totaled R$ 286.4 million, against the R$ 298.7 million recorded in 1Q18.
In 1Q19, Net Income totaled R$ 69.4 million, 3.1% higher than the R$ 67.3 million recorded in 1Q18.
• On April 8, 2019, Alupar informed the market that its subsidiary ETAP obtained, on
4/6/2019, authorization to start commercial operation, anticipating in approximately
9 months its start - up, according to ANEEL's schedule, to 12/27/2019.
• On April 29, 2019, the Annual and Extraordinary Shareholders' Meeting approved
the distribution of dividends in the amount of R$ 184,613,366.49 (equivalent to R$
0.63 per Unit), corresponding to 50.2% of net income of the 2018, of which:
1 - R$ 52,746,676.14, equivalent to R$ 0.06 per share or R$ 0.18 per Unit, as interim
dividends:
Ex - dividend as of December 07, 2018; Payment on December 19, 2018.
2 - R$ 131,866,690.35, equivalent to R$ 0.15 per share or R$ 0.45 per Unit, as
dividends:
Ex - dividend as of April 30, 2019; Payment until December 31, 2019.
![Page 2: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/2.jpg)
2 | 42
Key Consolidated Indicators
Key Indicators "CORPORATE LAW (IFRS)"
R$ MM 1Q19 1Q18 Var.%
Net Revenue 1,145.8 365.5 213.5%
EBITDA (CVM 527) 834.8 258.3 223.3%
EBITDA Margin 72.9% 70.7% 2.2 p.p
Adjusted EBITDA Margin* 86.0% 74.6% 11.4 p.p
Financial Results (57.8) (62.2) (7.0%)
Consolidated Net Income 646.9 129.4 399.9%
Subsidiaries' Minority Interest 246.4 70.5 249.6%
Alupar Net Income 400.5 58.9 -
Earnings per UNIT (R$) ** 1.37 0.20 -
Net Debt *** 2,873.8 2,700.7 6,4%
Net Debt / Ebitda **** 0.9 2.6
Key Indicators "REGULATORY”
R$ MM 1Q19 1Q18 Var.%
Net Revenue 464.1 388.7 19.4%
EBITDA (CVM 527) 286.4 298.7 (4.1%)
EBITDA Margin 61.7% 76.8% (15.1 p.p)
Financial Results (57.8) (62.2) (7.0%)
Consolidated Net Income 162.0 154.4 4.9%
Subsidiaries' Minority Interest 92.5 87.0 6.3%
Alupar Net Income 69.4 67.3 3.1%
Earnings per UNIT (R$)** 0.24 0.23 3.1%
Net Debt *** 2,873.8 2,700.7 6,4%
Net Debt / Ebitda **** 2.5 2.3
*Subtracted from Net Revenue the Capex made (Infrastructure Cost) **Net Income / Units Equivalents (293,037,090) *** Including Securities under Non-Current Assets **** Annualized EBITDA.
Notes: 1. “Adjusted” concecpt in corporate law numbers: In accordance to the Corporate Law - IFRS (ICPC 01 and CPC 47) the investments (Capex) of the transmitters should be accounted like a revenue and like a cost. Then, for Adjusted EBITDA Margin calculation, EBITDA should be divided by the Net Revenue subtracted from the Infrastructure Cost (Capex). "Regulatory" concept: Refers to the figures in the regulatory financial statements of our subsidiaries, whose main difference is the non-application of ICPC 01 (IFRIC 12) and ICPC 47 (IFRIC 15). ICPC 01 and 47 have a material impact on our transmission companies with the creation of the "Contractual Assets" account and the elimination of the "Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" in the Statement of Income.
![Page 3: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/3.jpg)
3 | 42
Overview Alupar Investimento S.A. is a privately-held Brazilian holding company operating in the electricity transmission and generation
segments, whose corporate purpose is to construct and operate infrastructure projects related to the energy sector in Brazil
and other selected Latin American countries with economic, institutional and regulatory stability. Alupar is one of the largest
companies in the Brazilian transmission segment in terms of Annual Permitted Revenue (RAP) and the largest one under private
national control.
The Company's ownership structure is shown below:
Alupar seeks to maximize shareholder returns through moderate financial leverage and a debt profile compatible with the low-
risk nature of its business, high revenue predictability and the strong operating cash flow typical of the electricity transmission
and generation segments.
Alupar's corporate credit ratings reflect this solid capital structure and predictable strong cash flow: AAA (bra) for national
scale and BB for international scale, from Fitch Ratings.
Fully committed to creating value for its shareholders and society as a whole, Alupar is a socially responsible company with
substantial technical ability and strong financial discipline, enabling it to continue growing in a sustainable manner through the
development of generation and transmission system projects.
![Page 4: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/4.jpg)
4 | 42
Transmission
Alupar retains an interest in 29 electric energy transmission system concessions with a total extension of 7,736 km of
transmission lines, through 30-year terms, located in Brazil, and one perpetual in Colombia, of which 19 are operational and 10
in the implementation phase, scheduled for commercial startup until 2022.
The main features of Alupar's transmission assets are shown below:
Company Concession Term Start-up Extension RAP/RBNI RAP/RBNI RAP/RBNI Index
Beginning End Operation Line (Cyclo 2016-17) (Cyclo 2017-18) (Cyclo 2018-19) ETEP 06/12/2001 06/12/2031 08/25/2002 323 km R$ 96.5 R$ 56.4 R$ 51.2 IGP-M
ENTE 12/11/2002 12/11/2032 02/12/2005 464 km R$ 221.6 R$ 225.1 R$ 234.7 IGP-M
ERTE 12/11/2002 12/11/2032 09/15/2004 179 km R$ 49.8 R$ 50.5 R$ 52.7 IGP-M
EATE 06/12/2001 06/12/2031 03/10/2003 924 km R$ 422.3 R$ 354.3 R$ 227.2 IGP-M
ECTE 11/01/2000 11/01/2030 03/26/2002 252,5 km R$ 79.7 R$ 47.5 R$ 49.6 IGP-M
STN 02/18/2004 02/18/2034 01/01/2006 541 km R$ 177.3 R$ 180.1 R$ 189.2 IGP-M
Transleste 02/18/2004 02/18/2034 12/18/2005 150 km R$ 40.2 R$ 40.8 R$ 42.5 IGP-M
Transudeste 03/04/2005 03/04/2035 02/23/2007 140 km R$ 24.9 R$ 25.3 R$ 26.4 IGP-M
Transirapé 03/15/2005 03/15/2035 05/23/2007 65 km R$ 29.2 R$ 33.1 R$ 34.5 IGP-M
STC 04/27/2006 04/27/2036 11/08/2007 195 km R$ 41.5 R$ 44.0 R$ 45.2 IPCA
Lumitrans 02/18/2004 02/18/2034 10/03/2007 51 km R$ 26.2 R$ 26.6 R$ 27.8 IGP-M
ETES 04/20/2007 04/20/2037 12/12/2008 107 km R$ 14.3 R$ 14.1 R$ 14.5 IPCA
EBTE 10/16/2008 10/16/2038 07/11/2011 775 km R$ 44.4 R$ 47.0 R$ 48.3 IPCA
TME 11/19/2009 11/19/2039 11/22/2011 348 km R$ 48.3 R$ 50.1 R$ 51.5 IPCA
ESDE 11/19/2009 11/19/2039 01/22/2014 Substation R$ 12.6 R$ 13.1 R$ 13.5 IPCA
ETEM 07/12/2010 07/12/2040 12/16/2011 235 km R$ 12.0 R$ 12.5 R$ 12.9 IPCA
ETVG 12/23/2010 12/23/2040 12/23/2012 Substation R$ 10.2 R$ 10.7 R$ 11.0 IPCA
TNE 01/25/2012 01/25/2042 Pre-Oper. 715 km R$ 162.5 R$ 147.5 R$ 158.1 IPCA
ETSE 05/10/2012 05/10/2042 12/01/2014 Substation R$ 21.6 R$ 19.6 R$ 20.2 IPCA
ELTE 09/05/2014 09/05/2044 Pre-Oper. Substation+40km R$ 34.3 R$ 35.6 R$ 36.6 IPCA
ETAP (Lot I) 09/02/2016 09/02/2046 06/04/2019 Substation+20km R$ 50.5 R$ 52.3 R$ 53.8 IPCA
ETC (Lot T) 09/02/2016 09/02/2046 Pre-Oper. Substation R$ 29.3 R$ 30.3 R$ 31.2 IPCA
TPE (Lot 2) 02/10/2017 02/10/2047 Pre-Oper. 541km R$ 214.7 R$ 221.6 R$ 228.0 IPCA
TCC (Lot 6) 02/10/2017 02/10/2047 Pre-Oper. 288km R$ 146.0 R$ 150.7 R$ 155.0 IPCA
ESTE (Lot 22) 02/10/2017 02/10/2047 Pre-Oper. 236km R$ 101.0 R$ 104.3 R$ 107.3 IPCA
TCE (Colombia) 11/22/2016 Perpetual Pre-Oper. 200km R$ 73.1* R$ 73.1* R$ 86.8** PPI
TSM (Lot 19) 08/11/2017 08/11/2047 Pre-Oper. 330 km R$ 99.1 R$ 101.3 R$ 104.2 IPCA
ETB (Lot E) 09/27/2016 09/27/2046 Pre-Oper. 446 km - R$ 131.1 R$ 134.8 IPCA
EDTE (Lot M) 12/01/2016 12/01/2046 Pre-Oper. 170 km - R$ 64.2 R$ 66.1 IPCA
TOTAL 7,736 km R$ 2,283.1 R$ 2,362.8 R$ 2,314.8 *USD 1.0 - BRL 3.25 **USD 1.0 – BRL 3.86
Below is the evolution of the length in kilometers of the Company's transmission lines:
![Page 5: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/5.jpg)
5 | 42
Generation
Alupar is currently involved in generating electricity by means of HPPs (hydroelectric power plants), SHPPs (small hydroelectric
power plants) and wind farms in Brazil, Colombia and Peru. Its total asset portfolio has an installed capacity of 580.0 MW in
operation and 84.0 MW under construction and one project (Antonio Dias) of 23 MW under licensing phase.
The main features of Alupar's generation assets are shown below:
Concession Term Start-up of Voting Total Installed Assured
Beginning End Operations Capital Capital Capacity - MW Energy - MW
Queluz Apr/04 Apr/34 Aug/11 68.83% 68.83% 30.0 21.4
Lavrinhas Apr/04 Apr/34 Sep/11 61.00% 61.00% 30.0 21.4
Foz do Rio Claro Aug/06 Aug/41 Aug/10 100.00% 69.83% 68.4 39.0
São José - Ijuí Aug/06 Aug/41 Mar/11 100.00% 86.66% 51.0 30.4
Ferreira Gomes Nov/10 Nov/45 Nov/14 100.00% 100.00% 252.0 153.1
Energia dos Ventos Jul/12 Jul/47 Mar/16 100.00% 100.00% 98.7 50.9
Morro Azul (Risaralda) Jan/09 Perpetual Sep/16 99.97% 99.97% 19.9 13.2
Verde 08 Oct/12 Jun/44 May/18 85.00% 85.00% 30.0 18.7
La Virgen Oct/05 Perpetual Pre-Oper. 84.58% 84.58% 84.0 49.3
Antônio Dias Jul/14 Jul/49 Pre-Oper. 90.00% 90.00% 23.0 11.4
TOTAL 687.0 408.8
Below we present the evolution of the Company's generating capacity:
![Page 6: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/6.jpg)
6 | 42
Combined Performance Analysis - Transmission Segment
The figures below reflect the combined results 100% of all the transmission subsidiaries in which Alupar holds an interest, as presented in Note 36 of the 1Q19 financial statements, under "Information by Segment".
Due to the matters already addressed regarding differences between Regulatory and Corporate Law figures (see the Notes on
page 2 of this report), the analysis of the transmission segment focuses on the Regulatory performance, except for the
comments on revenue, EBITDA and income in the Corporate Law income statement.
Key Indicators "CORPORATE LAW (IFRS)"
R$ MM 1Q19 1Q18 Var.%
Net Revenue 1,070.3 276.5 287.1%
Cost of Services (22.4) (19.8) 13.3%
Infrastructure Cost (201.1) (23.8) -
Depreciation / Amortization (0.6) (0.7) (11.4%)
Operating Expenses (8.0) (8.8) (8.8%)
EBITDA (CVM 527) 838.8 224.1 274.2%
EBTDA Margin 78.4% 81.1% (2.7 p.p)
Adjusted EBITDA Margin* 96.5% 88.7% 7.8 p.p
Financial Results (21.5) (25.3) (15.0%)
Net Income 681.2 158.3 330.4%
Net Debt ** 1,283.8 1,238.1 3.7%
Net Debt / EBITDA *** 0.4 1.4
Key Indicators "REGULATORY"
R$ MM 1Q19 1Q18 Var.%
Net Revenue 263.4 290.8 (9.4%)
Operating Costs (18.9) (18.4) 2.9%
Depreciation / Amortization (32.1) (31.9) 0.6%
Operating Expenses (8.0) (8.8) (9.0%)
EBITDA (CVM 527) 236.5 263.7 (10.3%)
EBITDA Margin 89.8% 90.7% (0.9 p.p)
Financial Results (21.5) (25.3) (15.0%)
Net Income 167.1 182.1 (8.2%)
Net Debt ** 1,283.8 1,238.1 3.7%
Net Debt / EBITDA *** 1.4 1.2
* Subtracted from Net Revenue the Capex made (Infrastructure Cost) ** Including Securities under Non-Current Assets *** Annualized EBITDA
Throughout 1Q19, the Company's transmission lines presented consistent operational performance, maintaining a physical availability higher than 99.9%.
A The line's physical availability is an operational indicator that demonstrates the percentage of hours the line was available
during a given period.
VP shows the impact of unavailability on the company's results.
![Page 7: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/7.jpg)
7 | 42
Combined Performance Analysis for Transmission - Regulatory Net Revenue
In 1Q19, net revenue totaled R$ 263.4 million, compared to R$ 290.8 million in 1Q18. This change is due to: (a) a R$ 32.7 million reduction in the revenue of EATE and ETEP transmitters, due to the 50% decrease in the Annual Permitted Revenue (RAP) for the 2018/2019 cycle, given the 15-year anniversary of the start-up of operations (EATE: Mar/18; ETEP: Aug/17); (b) an increase of R$ 3.7 million in the revenue of other transmission companies, impacted by the readjustment of the RAPs, pursuant to Ratifying Resolution No. 2,408 of June 26, 2018, which established an adjustment of 2.85% for IPCA-indexed contracts and 4.27% for contracts indexed by IGP-M. For further information, see the table in the section "Transmission" (page 4).
Operating Costs
Totaled R$ 50.2 million in 1Q19, compared to R$ 49.4 million in 1Q18. Cost of Services Rendered presented an increase of R$ 0.5 million, mainly due to: (i) a growth of R$ 1.4 million in the STN transmitter, resulting from non-recurring costs for transmission line repairs, given that in early 2019 the transmitter was the target of several criminal attacks in the state of Ceará; (ii) an increase of R$ 0.7 million in the ENTE transmitter, due to higher
expenses with access recovery, O&M services and environment; (iii) a reduction of R$ 1.7 million in the EATE transmitter, due to the decrease in O&M costs, since these services, previously performed by Eletronorte, were internalized in 2019. Depreciation/Amortization recorded an increase of R$ 0.2 million, basically in the EATE, ENTE, ERTE and ECTE transmitters, as a result of the depreciation of improvement projects and small reinforcements that were accounted for in this quarter.
Operating Expenses
Totaled R$ 8.8 million in 1Q19, against R$ 9.6 million in 1Q18. The General and Administrative account showed a reduction of R$ 0.4 million due to: (i) a reduction of R$ 0.2 million in the EATE transmitter, arising from lower expenses with external auditing and rental of property; (ii) a reduction of R$ 0.1 million in the ETEM transmitter, since in 1Q18 there was an increase in engineering expenses resulting from five-year maintenance works (mandatory preventive maintenance with ONS), which did not occur in 1Q19; (c) reduction of R$ 0.1 million in the ETEP transmitter, arising from lower expenses with legal advice as well as the publication of the balance sheet. The Personnel and Management account had a reduction of R$ 0.3 million, basically in the EATE transmitter, which registered a decrease of R$ 0.2 million, mainly due to lower paid leave expenses in this quarter, an impact of R$ 0.1 million.
![Page 8: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/8.jpg)
8 | 42
EBITDA and EBITDA Margin
Totaled R$ 236.5 million in 1Q19, compared to R$ 263.7 million in 1Q18. This change is mainly due to a R$ 29.0 million reduction in Gross Revenue , as a result of: (i) a R$ 32.7 million decrease in revenue of EATE and ETEP transmitters, due to the 50% drop in the Annual Permitted Revenue (RAP) for the 2018/2019 cycle, given the 15-year anniversary of the start-up of operations (EATE: Mar/18; ETEP: Aug/17) and; (ii) an increase of R$ 3.7 million in the revenue of other transmission companies, impacted by the readjustment of the RAPs, pursuant to Ratifying Resolution No. 2,408 of June 26, 2018, which established an adjustment of 2.85% for IPCA-indexed contracts and 4.27% for contracts indexed by IGP-M. For further information, see the table in the section "Transmission" (page 4).
EBITDA margin reached 89.8% in 1Q19 versus 90.7% in 1Q18.
Net Income
Totaled R$ 167.1 million in 1Q19, compared to R$ 182.1 million in 1Q18.
The income was affected by the: (a) reduction of R$ 27.1 million in EBITDA, especially by the fall of the gross revenue, as explained above; (b) reduction of R$ 3.8 million in Financial Result, chiefly influenced by the reduction of R$ 4.1 million in financial expenses, on the basis of: (i) fall of the average rate of interbank deposits ("CDI"), which recorded 1.51% in 1Q19 compared to 1.59% in 1Q18; (ii) reduction of R$ 1.3 million in the EATE transmitter, R$ 1.1 million in the ENTE transmitter, R$ 0.9 million in the STN transmitter and R$ 0.8 million in the ECTE transmitter, due to the reduction of R$ 198.1 million in the balance of the debt, basically due to amortizations over the last 12 months and; (c) reduction of R$ 8.6 million in the Income Tax and Social Contribution line, mainly explained by the reduction of R$ 8.8 million in the EATE transmitter, arising from lower income in this quarter, as a result of the 50% decrease in the Annual Permitted Revenue (RAP) for the 2018/2019 cycle.
![Page 9: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/9.jpg)
9 | 42
1Q19 Consolidated Results – Transmission Regulatory
TNE TME ETB
Equity Pick-up
TNE / TME /
ETB
Equity Pick-up -
Indirect
Investments
Gross Operating Revenue 287,633 1,446 14,235 - - 271,952
Energy Transmission Revenue 288,200 1,572 14,259 - 272,369
( - ) Variable Portion (567) (126) (24) - (417)
Deductions (24,207) (122) (1,908) - - (22,177)
PIS (2,281) (11) (242) - (2,028)
COFINS (10,403) (50) (1,114) - (9,239)
Quota for Global Reversal Reserve - RGR (7,636) (38) (370) - (7,228)
Research & Development - R & D (1,082) (5) (50) - (1,027)
National Development Fund and Technological Development - FNDCT (1,082) (5) (50) - (1,027)
Ministry of Mines and Energy - MME (542) (3) (25) - (514)
Electricity services inspection fee - TFSEE (1,181) (10) (57) - (1,114)
Net Operating Revenue 263,426 1,324 12,327 - - 249,775
Operating Costs (50,213) (1,281) (3,290) - - (45,642)
Cost of Services Rendered (18,879) (393) (1,167) - (17,319)
Depreciation/Amortization (31,334) (888) (2,123) - (28,323)
Gross Income 213,213 43 9,037 - - 204,133
Expenses and Operating Revenues (8,788) (132) (297) - 2,969 4,445 (945)
General and Administrative (2,348) (58) (118) - (2,172)
Personnel and Management (5,696) (74) (179) - (5,443)
Equity Pickup - - - - 2,969 4,445 7,414
Depreciation/Amortization (756) - - - (756)
Other Revenues 16 - - - 16
Other Expenses (4) - - - (4)
EBIT 204,425 (89) 8,740 - 2,969 4,445 203,188
Depreciation / Amortization (32,090) (888) (2,123) - - (29,079)
EBITDA 236,515 799 10,863 - 2,969 4,445 232,267
Financial Expenses (26,271) (3) (2,729) - - - (23,539)
Debt charges (24,148) - (2,550) - (21,598)
Exchange rate variations (527) - - - (527)
Others (1,596) (3) (179) - (1,414)
Financial Revenues 4,763 103 591 - - - 4,069
Revenue from investments 4,313 101 368 - 3,844
Others 450 2 223 - 225
(21,508) 100 (2,138) - - - (19,470)
EBT 182,917 11 6,602 - 2,969 4,445 183,718
Taxes (15,803) (61) (515) - - - (15,227)
Income Tax (5,159) (38) - - (5,121)
Social Contribution (10,644) (23) (515) - (10,106)
Deferred Income Tax - - - - -
Deferred Social Contribution - - - - -
Consolidated Net Income 167,114 (50) 6,087 - 2,969 4,445 168,491
Non - Controlling Participation (87,230)
Alupar Net Income 81,261
Quarter ended in 03/31/2019
Transmission
Combined
Transmission
Consolidated
Share Control
![Page 10: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/10.jpg)
10 | 42
Transmission - Combined Analysis - Corporate Law (IFRS)
1 - With the adoption of IFRS, the Revenue for Provision (RAP - PV) was replaced by three new revenue categories: Infrastructure
Revenue, Energy Transmission Revenue (O&M) and Revenue from Concession Asset Remuneration.
2 - With the adoption of CPC 47 - Contract with Clients Revenue (IFRS 15), a new model was introduced to recognize revenues
from customer contracts, as of January 1, 2018:
Accordingly, the balance sheet of the transmission companies started to present a Contractual Asset account, which is expected to have a movement according to the example detailed below:
Contractual Asset on 12/31/2018 (Operating assets) Financial Asset on 12/31/2018 (Assets under implementation)
+ +Infrastructure Revenue from 01/01/2019 to 03/31/2019 Infrastructure Revenue from 01/01/2019 to 03/31/2019
+ =Monetary adjustment of the contractual asset from 01/01/2019 to 03/31/2019 Contractual Asset on March 31, 2019
+Remuneration of Contractual Assets from 01/01/2019 to 03/31/2019
+Transmission Revenue from 01/01/2019 to 03/31/2019
-RAP from 01/01/2019 to 03/31/2019
-Residual Value received from 01/01/2019 to 03/31/2019
=Contractual Asset on March 31, 2019
Financial Asset Remuneration
Investment volume (CAPEX) in the transmission companies
Revenue that remunerates the operational and maintenance costs of the transmission assets (O&M)
It is the result of multiplying the rate of return (variable) of a given transmission asset by the amount of its financial asset
Energy Transmission Revenue
Infrastructure Revenue
Remuneration of
Contractual Assets
Investment volume (CAPEX) in the transmission companies, considering construction margin
Revenue that remunerates the operational and maintenance costs of the transmission assets, considering O&M margin
The result of the multiplication of the effective interest rate (fixed at the date of the execution of the concession contract) of a given transmission asset by the amount of its contractual assets
Energy Transmission Revenue
Infrastructure Revenue
Assets Monetary Correction
Cumulative inflation of the period applied on the balance of the Contractual Asset
![Page 11: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/11.jpg)
11 | 42
Net Revenue - IFRS Totaled R$ 1,070.3 million in 1Q19, R$ 793.8 million higher than the R$ 276.5 million recorded in 1Q18.
The main changes were: (a) an increase of R$ 926.1 million in Infrastructure Revenue, which totaled R$ 960.5 million in this quarter, compared to R$ 34.4 million in 1Q18. This change is due to: (i) an increase of R$ 181.9 million, as a result of investments made in the transmission companies under implementation; (ii) R$ 353.4 million growth in transmission projects under construction, due to the application of CPC 47 (IFRS 15) - Revenue from Contracts with Customers, effective as of January 1, 2018 and; (iii) an increase of R$ 390.8 million in transmitters in operation, due to the application of CPC 47 (IFRS 15) - Revenue from Contracts with Customers, as of January 1, 2018; (b) a R$ 124.7 million increase in Energy Transmission Revenue, which totaled R$ 170.8 million in 1Q19, compared to R$ 46.0 million in 1Q18, this change being exclusively in the transmitters in operation and because of the application of CPC 47 (IFRS 15) - Revenue from Contracts with Customers, effective as of January 1, 2018; (c) a reduction of R$ 190.8 million in the Revenue from Concession Asset Remuneration, exclusively due to the application of CPC 47 (IFRS 15) and; (d) in contrast, an increase of R$ 66.2 million was recorded in deductions, exclusively due to the increase in gross revenue, which, in turn, resulted from the application of CPC 47 (IFRS 15).
EBITDA and EBITDA Margin - IFRS
Totaled R$ 838.8 million in 1Q19, compared to R$ 224.1 million in 1Q18.
Adjusted EBITDA margin reached 96.5% in 1Q19, against 88.7% in 1Q18.
This change is due to: (a) a R$ 860.0 million increase in Gross Revenue - IFRS, mainly due to the R$ 926.1 million growth in infrastructure revenue, as follows: (i) an increase of R$ 181.9 million resulting from investments made in the transmitters under implementation and; (ii) growth of R$ 744.2 million due to the application of CPC 47 (IFRS 15); (b) an increase of R$ 66.2 million in Deductions, exclusively due to the increment in gross revenue, which, in turn, resulted from the application of CPC 47 (IFRS 15) - Revenue from Contracts with Customers and; (c) an increase of R$ 177.3 million in Infrastructure Cost, due to investments made in transmission projects in Brazil.
![Page 12: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/12.jpg)
12 | 42
Net Income - IFRS
Totaled R$ 681.2 million in 1Q19, compared to R$ 158.3 million in 1Q18. The main impacts on net income were as follows (a) an increase of R$ 614.7 million in EBITDA, basically due to: (i) increase of R$ 793.8 million in Net Revenue, as a result of the R$ 926.1 million increase in Infrastructure Revenue, as previously detailed in the section "Net Revenue - IFRS" and; (ii) an increase of R$ 177.3 million in infrastructure costs, due to investments made in transmission projects in Brazil. (b) a reduction of R$ 3.8 million in the Financial Result resulting from the reduction of R$ 4.1 million in financial expenses, due to: (i) the decrease in the average interbank deposit rate ("CDI"), which recorded 1.51% in 1Q19 compared to 1.59% in 1Q18; (ii) a reduction of R$ 1.3 million in the EATE transmitter, R$ 1.1 million in the ENTE transmitter, R$ 0.9 million in the STN transmitter and R$ 0.8 million in the ECTE transmitter, due to the reduction of R$ 198.1 million in the balance of the debt, basically due to amortizations over the last 12 months; (c) an increase of R$ 95.6 million in Taxation, of which R$ 102.6 million in Deferred Corporate Income Taxes (IRPJ/CSLL), due to the R$ 62.1 million growth in the transmitters under implementation and R$ 40.5 million in the transmitters in operation, as a result of the application of CPC 47 (IFRS 15) - Revenue from Contracts with Customers, effective as of January 1, 2018, which generated an increase in the balance receivable from concession assets and the consequent recognition of deferred taxes on this increase.
![Page 13: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/13.jpg)
13 | 42
1Q19 Consolidated Results - Transmission Corporate Law (IFRS)
TNE TME ETB
Equity Pick-up -
TNE / TME /
ETB
Equity Pick-up -
Indirect
Investments
Gross Operating Revenue 1,158,347 (12,877) (6,410) 172,520 1,005,114
Energy Transmission Revenue 171,317 (3,619) 4,115 - 170,821
Infrastructure Revenue 960,521 6,124 80,709 172,520 701,168
Concession Asset Remuneration 27,076 (15,256) (91,210) - 133,542
( - ) Variable Portion (567) (126) (24) - (417) -
Deductions (88,017) 1,631 622 (16,649) (73,621)
PIS (2,281) (11) (242) - (2,028)
COFINS (10,403) (50) (1,114) - (9,239)
PIS Deferred (17,997) 235 341 (2,847) (15,726)
COFINS Deferred (43,952) 1,089 1,569 (13,112) (33,498)
Quota for Global Reversal Reserve (7,636) (38) (370) - (7,228)
Deferred Quota for Global Reversal Reserve (2,965) 372 537 - (3,874)
Research & Development - R&D (1,082) (5) (50) - (1,027)
National Develop. Fund and Tech. Develop (1,082) (5) (50) - (1,027)
Ministry of Mines and Energy - MME (542) (3) (25) - (514)
TFSEE (1,181) (10) (57) - (1,114)
Deferred TFSEE 1,104 57 83 (690) 1,654
Net Operating Revenue 1,070,330 (11,246) (5,788) 155,871 931,493
Cost of Services (223,498) (1,203) (1,167) (25,578) (195,550)
Cost of Services Rendered (22,406) (393) (1,167) - (20,846)
Infrastructure Cost (201,091) (810) - (25,578) (174,703)
Depreciation/Amortization (1) - - - (1)
Gross Income 846,832 (12,449) (6,955) 130,293 735,943
Expenses and Operating Revenues (8,659) (132) (297) - 40,219 12,088 44,076
General and Administrative (2,350) (58) (118) - (2,174)
Personnel and Management (5,696) (74) (179) - (5,443)
Equity Pickup - - - - 40,219 12,088 52,306
Depreciation/Amortization (616) - - - (616)
Other Revenues 7 - - - 7
Other Expenses (4) - - - (4)
EBIT 838,173 (12,581) (7,252) 130,293 40,219 12,088 780,019
Depreciation/Amortization (617) - - - (617)
EBITDA 838,790 (12,581) (7,252) 130,293 40,219 12,088 780,636
Financial Expenses (26,270) (3) (2,729) - (23,538)
Debt charges (24,148) - (2,550) - (21,598)
Exchange rate variations (527) - - - (527)
Others (1,595) (3) (179) - (1,413)
Financial Revenues 4,762 103 591 - 4,068
Revenue from investments 4,291 101 368 - 3,822
Others 471 2 223 - 246
(21,508) 100 (2,138) - (19,470)
EBT 816,665 (12,481) (9,390) 130,293 40,219 12,088 760,549
Taxes (135,442) 4,269 2,761 (35,382) (107,090)
Income Tax (5,895) (38) - - (5,857)
Social Contribution (11,458) (23) (515) - (10,920)
Deferred Income Tax (82,551) 3,184 1,917 (23,655) (63,997)
Deferred Social Contribution (35,538) 1,146 1,359 (11,727) (26,316)
Consolidated Net Income 681,223 (8,212) (6,629) 94,911 40,219 12,088 653,459
Non - Controlling Participation (239,950)
Alupar Net Income 413,510
Quarter ended in 03/31/2019
Transmission
Combined
Transmission
Consolidated
Share Control
![Page 14: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/14.jpg)
14 | 42
Projects in Progress:
Status of the Projects:
Transmission Companies being
Implemented
Extension (km)
RAP (MM)(1)
ANEEL Estimated Investment
(MM)(2)
Investment Made (MM)(3)
Start-up of Operations
(Regulatory)
Start-up of Operations (Management)
TNE(4) 715 R$ 151.8 R$ 1,481.1(5) R$ 283.5 2015 -
ELTE 40 R$ 36.6 R$ 262.0 R$ 9.3 2017 -
ETC - R$ 31.2 R$ 151.0 R$ 64.9 2019 2019
TPE(6) 541 R$ 228.0 R$ 1,268.7 R$ 97.2 2022 2022
TCC(6) 288 R$ 155.0 R$ 698.8 R$ 38.2 2022 2022
ESTE(7) 236 R$ 107.3 R$ 485.8 R$ 12.3 2022 2022
TCE 200 US$ 22.5 U$ 130.0 U$ 10.7 (8) 2021 2021
TSM(6) 330 R$ 104.2 R$ 889.0 R$ 18.2 2022 2022
ETB(6) 446 R$ 134.8 R$ 720.5 R$ 76.2 2020 2020
EDTE(9) 170 R$ 66.1 R$ 368.0 R$ 55.9 2019 2019 (1) Cycle 2018/2019 (2 Investment in the base date foreseen in the announcement of the respective auctions. (3) Considering the asset value of the fixed asset presented in the regulatory financial statements. (4) Total investment. This Project is 51% owned by Alupar and 49% by Eletronorte
(5) Initial investment of R$ 969.0 in Sep/11, updated by the IPCA rate Dec/18. (6) Total investment. This Project is 51% owned by Alupar and 49% by Perfin. (7) Project owned by subsidiary EATE (ESTE). There is no Alupar equity. (8) Considering the asset value of the fixed asset presented in the regulatory financial statements. Considering U$1.0 = R$ 3.90 (Base 03/29/2018) (9) Project owned by subsidiary ENTE (EDTE). There is no Alupar equity.
Transmission Companies being
Implemented
Concession Agreement
Effective Date State Environmental Licenses REIDI Enrollment
Priority Project
MME RFB MME
ETC (Lot T) 09/02/2016 ES IL IEMA – 03/23/18 Approved 03/23/2017
Approved 07/27/2017
Approved
02/21/2017
TPE (Lot 2) 02/10/2017 MG/BA IBAMA
IL – 03/20/19 Approved
07/11/2017 Approved
10/04/2017
Approved
10/13/2017
TCC (Lot 6) 02/10/2017 MG/ES
IBAMA
PL – 10/01/18 IL – Registered
12/20/18
Approved 07/12/2017
Approved 11/06/2017
Approved
10/13/2017
ESTE (Lot 22) 02/10/2017 MG/ES IBAMA
PL – 01/16/19 Approved
07/24/2017 Approved
09/29/2017
Approved
09/14/2017
TSM (Lot 19) 08/11/2017 SP/RJ IBAMA
PL – 03/13/19 Approved
11/06/2017 Approved
04/06/2018 Approved
11/14/2017
ETB (Lot E) 09/27/2016 BA
INEMA Line 1 – IL 03/14/19 Line 2 – IL 02/16/19
Approved 02/21/2017
Approved 08/10/2017
Approved 12/06/2017
EDTE (Lot M) 12/01/2016 BA INEMA
IL – 01/09/19 Approved
05/08/2017 Approved
08/10/2017 Approved
12/06/2017
TCE (Colombia) 11/23/2016 Risaralda / Tolima /
Cundinamarca / Caldas
ANLA Registered 04/05/19
- - -
![Page 15: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/15.jpg)
15 | 42
TNE: Is a SPC company established by the partnership between Alupar (51%) and Eletronorte (49%) to implement a transmission
system that will connect the State of Roraima to the National Interconnected Grid System (SIN), via the Lechuga substation, in
the State of Amazonas, covering approximately 715.0 km of 500 kV line, in a double circuit, with two new substations, the
Equador substation - 500 kV, to be installed in the city of Rorainópolis (RR) and the Boa Vista substation - 500/230 kV - 800
MVA, located in the city of Boa Vista (RR).
However, due to environmental licensing issues, the consortium filed an application with ANEEL (National Electric Energy
Agency) on September 2, 2015 to amicably terminate the Concession Contract 003/2012 - ANEEL, due to the failure of FUNAI
to issue a conclusive statement as to the viability of the project with regard to the indigenous component.
On December 19, 2016, the Aneel Decision 3,265 was published, reflecting the decision of its board, taken at the meeting held
on December 13, 2016, which refers to the amicable termination of the TNE Concession Agreement, with recommendations to:
(i) accept TNE's petition and, on merit, give it partial approval, recognizing that there are elements for the termination of the
Concession Agreement 003 / 2012- ANEEL; and (ii) forward the records of this Administrative Proceeding to the Ministry of
Mines and Energy with recommendations to: (a) terminate the Concession Agreement, by rescission, pursuant to article 472 of
the Civil Code, or other form that it deems appropriate; (b) in the event of termination of the Concession Agreement, appoint
a federal body or entity, in this case Eletronorte, to continue the provision of the public transmission service related to the CER
of Boa Vista substation, until a later decision establishes an onerous reversal of the assets in service, and the Granting Authority
may award the concession without prior reversal of the assets linked to the respective public service; and (c) in the event of
termination of the Concession Agreement, consider as a reference for the indemnification of the assets in service, the new
replacement value criterion, writing off the depreciation in the period, in an accounting opinion to be audited by the ANEEL, it
being prohibited the indemnification of assets that were not in service.
On September 13, 2017, TNE filed the request, at the Federal Court, for the termination of Concession Agreement No. 003/2012-
ANEEL, Case Nr.: 1012027-22.2017.4.01.3400, due to the impossibility of the implementation of the venture.
On February 22, 2018, the Ministry of Mines and Energy (MME), after receiving and analyzing the case file, forwarded to ANEEL
Office No. 66/2018/SPE-MME for which it did not comply with the Dispatch no. 3,265/2016 and returned the file to ANEEL for
reassessment.
On September 2018, after meeting with the indigenous community, TNE was authorized to develop studies within the affected
area for the preparation of the Indigenous Component of the Basic Environmental Plan (PBA). Currently, such studies are being
prepared and, after their conclusion, they will be sent to FUNAI for analysis. However, there is no forecast for the issuance of
the Installation License, the main condition for the beginning of the project.
We emphasize that the Boa Vista substation started its operations in May 2015, generating revenue equivalent to 4% of the
Venture's total Annual Permitted Revenue (RAP).
ELTE: It is an SPC established for the concession of public electricity transmission service through the Domênico Rangoni
345/138 kV and Manoel da Nóbrega 230/88kV substations, with an additional 40 km of transmission line. The project will be
connected to the National Interconnected System and will reinforce the distribution companies' networks, in addition to
meeting the increased demand for electrical power in the region of lower Santos, composed of nine municipalities (Bertioga,
Cubatão, Guarujá, Itanhaém, Mongaguá, Peruíbe, Praia Grande, Santos and São Vicente).
This project has a justifiable displacement in the schedule, regarding environmental licensing. Although ELTE is making its best
efforts to obtain Environmental Licenses from the environmental agency of the State of São Paulo - (Companhia Ambiental do
Estado de São Paulo - CETESB), the environmental licensing process has been extended for reasons that are not manageable on
the part of ELTE, resulting in the displacement of the schedule originally established in the Concession Agreement 016/2014.
The issuance of the Preliminary License ("LP" in the Portuguese acronym) for the Domênico Rangoni 345/138 kV substation and
its respective transmission lines was scheduled for October 2015; however, due to the unfavorable manifestation of the
Regional Flight Protection Service of São Paulo (SRPV-SP), responsible for the Airport Zoning Plan for the Santos Air Base, and
an unfavorable manifestation of the Forest Foundation, responsible for the State Park of Serra do Mar, CETESB rejected the
request for a Preliminary License of this section and consequently, officially closed the process, due to the environmental
unfeasibility of that part of the development. Additionally, the issuance of the Preliminary License for the Manoel da Nóbrega
![Page 16: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/16.jpg)
16 | 42
230/88 kV substation and its respective transmission line, also scheduled for October 2015, was issued in March 2017. The
National Electric Energy Agency - ANEEL is aware of the situation and is evaluating the best way forward for this case.
ETC: Is an SPC established for the concession of public electricity transmission service through Rio Novo do Sul substation,
located in the city of Rio Novo do Sul, in the State of Espírito Santo. The project will be connected to the Brazilian National Grid
and will supply the Southern region of the State of Espirito Santo, in order to supply the Basic Network and the Basic Network
of the Border by 2022, scheduled to be implemented through June 27, 2019. In 1Q19, it was concluded: (i) the assembly of the
portals; (ii) the installation of the 138kV and 345kV patio equipment supports; (iii) the assembly of the 138kV aerial busbars
and; (iv) civil works of the cable ducts and the 345kV grounding grids. In addition, there were the assembly of the 138kV and
345kV patio equipment, assembly of the 345/138kV transformers and the release for the assembly of the panels in the control
houses. Furthermore, cable launching began on troughs of the 138kV and 345kV courtyards. Regarding the sectioning of the
345kV transmission line, 67% of the tower assembly was completed.
TPE: Is an SPC established for the concession of public electricity transmission service through the 500 kV Poções III - Padre
Paraíso 2 transmission line, 334 km in length, and the 500 kV Padre Paraíso 2 - Governador Valadares 6 transmission line, 207
km in length; and the 500 kV Padre Paraíso 2 substation and the 500/230 kV Governador Valadares 6 substation. Located
between the cities of Poções and Governador Valadares, in the States of Bahia and Minas Gerais, scheduled to be implemented
through February 9, 2022. The TPE preliminary License was issued on 08/27/2018 and the Installation License was issued on
03/20/2019.
TCC: Is an SPC established for the concession of public electricity transmission service through the 500 kV Governador Valadares
6 - Mutum transmission line, 156 km in length, the 500 kV Mutum - Rio Novo do Sul transmission line, 132 km in length, and
the 500 kV Mutum substation and the 500/345 kV Rio Novo do Sul substation. Located between the cities of Governador
Valadares and Rio Novo do Sul, in the States of Minas Gerais and Espírito Santo, scheduled to be implemented through February
9, 2022. The TCC Preliminary License was issued on 10/01/2018 and the request for the Installation License was submitted on
12/20/2018. Additionally, on March 20, 2019, TCC received from IBAMA (Official Letter 117/2019/CGLIN/DILIC) the Permit for
Construction Site Mobilization.
ESTE: Is an SPC established for the concession of public electricity transmission service through the 500 kV Mesquita - João Neiva 2 transmission line, 236 km in length, and the 500/345 kV João Neiva 2 substation. Located between the cities of Santana do Paraíso and João Neiva, in the States of Minas Gerais and Espírito Santo, scheduled to be implemented through February 9, 2022. In 1Q19, after the PL was issued on January 16, 2019, the Installation License (IL) was requested. The PBA (Basic Environmental Plan) was filed with IBAMA while the PAIPA (Archaeological Heritage Impact Assessment Project) was filed with IPHAN, in compliance with the requirements to obtain the IL.
TCE: Is an SPC established for the concession of public electricity transmission service through Transmisora Colombiana de
Energia S.A.S, comprised of a 500kV transmission line linking the Nueva Esperanza substation (near Bogotá) and the La Virginia
substation (near Pereira), approximately 200 km in length, scheduled to be implemented through November 2021.
In 1Q19, the archaeological prospecting activities were completed in the stretch of the transmission line and there was
continuity in the rescue activities of the Nueva Esperanza substation. On the 05/04/2019 the Environmental Impact Study (EIA)
was registered to obtain the Environmental License.
TSM: Is an SPC established for the concession of public electricity transmission service through the 500kV Fernão Dias - Terminal
Rio transmission line, 330 km in length. The project aims to reinforce the supply in the Southeast region, which will enable the
receipt of surplus energy from the North region. The line is located between the States of São Paulo and Rio de Janeiro,
scheduled to be implemented through August 11, 2022. The Preliminary License was requested on May 30, 2018, through the
protocol of the Environmental Impact Study (EIA/RIMA) and issued on March 13, 2019.
![Page 17: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/17.jpg)
17 | 42
ETB: Is an SPC established for the concession of public electricity transmission service to implement and develop the Juazeiro
III - Ourolândia II transmission line, in 500 kV, approximately 186 km in length and the Bom Jesus da Lapa II - Gentio do Ouro II
transmission line, in 500 kV, approximately 260 km in lenght. BJL will increase the transmission capacity of the Northeast -
Southeast interconnection to ensure the proper supply of current and future generation projects to be implemented in the
Northeast region through June 27, 2020. The protocol of the EMI (Medium Impact Study) environmental study was carried out
on January 24, 2018 for section 1 and on February 2, 2018 for section 2. The Preliminary License of section 1 was published on
07/27/2018 and of section 2 on 08/15/2018. The Installation License for section 2 (LT Juazeiro III - Ourolândia II) was issued on
February 16, 2019 and for section 1 (Bom Jesus da Lapa II - Gentile of Gold II) on March 14, 2019.
EDTE: Is an SPC established for the concession of public electricity transmission service to implement and develop the 500 kV
Ibicoara - Poções III Transmission Line, 230 kV Poções III - Poções II Transmission Line and 500/230 kV Poções III Substation,
with a total length of approximately 170 km. The benefit that IB will bring to the system is the expansion of the transmission
system of the southern region of the State of Bahia, aiming at the adequate electric service to the consumers of that region. It
is scheduled to be implemented through December 2019. In 1Q19, after the publication of the IL on January 9, 2019,
construction works began on the project. The earthworks of the Poções III substation was completed and the foundations of
Potions III substation and the 500kV Ibicoara LT - Potions III transmission line were started.
![Page 18: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/18.jpg)
18 | 42
Generation Combined Performance Analysis - Corporate Law (IFRS)
The figures below reflect the combined results of 100% of all the generation subsidiaries in which Alupar holds an interest, as
presented in Note 36 of the 1Q19 financial statements, under “Information by Segment”.
Unlike in the transmission segment, the adoption of ICPC 01 and CPC 47 has had no material effects on the corporate figures
vis-à-vis the regulatory figures. Thus, the regulatory and corporate performance analyses are basically the same.
Key Indicators "CORPORATE LAW (IFRS)"
R$ MM 1Q19 1Q18 Var.%
Net Revenue 174.7 118.7 47.2%
Operating Costs (23.3) (42.9) (45.7%)
Depreciation / Amortization (25.7) (23.4) 9.9%
Energy Purchase (94.5) (23.5) 301.8%
Operating Expenses (3.8) (3.5) 9.9%
EBITDA (CVM 527) 53.1 48.8 8.8%
EBITDA Margin 30.4% 41.1% (10.7 p.p)
Financial Result (27.8) (29.3) (5.2%)
Net Income / Loss 3.6 (9.2) -
Net Debt * 1,523.2 1,571.9 (3.1%)
Net Debt / EBITDA ** 7.2 8.0
* Includes Securities under Non-Current Assets ** Annualized EBITDA
Net Revenue
Totaled R$ 174.7 million in 1Q19, R$ 56.0 million or 47.2% higher than the R$ 118.7 million recorded in 1Q18.
This change is due to: (a) an increase of R$ 8.4 million in Verde 8 SHPP revenues, due to its commercial start-up (sale of 15.0 MW at an average price of R$ 249.08/MWh, totaling R$ 8.1 million and sale of 3.0 MW at an average price of R$ 209.63/MWh, totaling R$ 1.4 million); (b) an increase of R$ 18.1 million in the Queluz and Lavrinhas SHPPs due to the hedge strategy used in the SHPPs, aiming at mitigating the volatility of the PLD/market in the first quarter: (i) sale of an additional 21MW in the Queluz SHPP, totaling R$ 8.1 million; (ii) sale of an additional 18 MW in the Lavrinhas SHPP, totaling R$ 7.4 million and; (iii) positive settlement in the CCEE of R$ 2.3 million; (c) a R$ 20.7 million increase in the Ferreira Gomes HPP, mainly explained by the additional sale of 54.4 MW in the quarter at an average price of R$ 231.80/MWh, totaling R$ 27.2 million (in 1Q18, an additional 16.3 MW was sold, at an average price of R$ 180.01/MWh, totaling R$ 6.3 million); (d) an increase of R$ 9.0 million in Foz do Rio Claro and Ijuí HPPs, due to the adjustment of MRE (Energy Reallocation Mechanism) above 1 (secondary energy) during 1Q19 and; (e) the adjustment of energy sales contracts, which are inflation-indexed (IPCA / IGP-M).
![Page 19: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/19.jpg)
19 | 42
See below the breakdown of the evenue of the Generation companies:
REVENUES FROM GENERATORS / TRADING Invoiced Average Gross Revenue
Energy (MWh) Price (R$/MWh) (R$ million)
1. Long Term - Revenues of Bilateral Contracts 904,785 189.31 171.3 1.1 ACR (Long Term Contract) 471,008 157.07 74.0 1.2 ACL (Short Term Contract) 224,026 237.54 53.2 1.3 ACL (Short Term Contract) - Trading 209,751 210.18 44.1
2. SPOT / CCEE 13.4
3. TOTAL GROSS GENERATION 184.7
4. TRADING 105.1
5. TOTAL GENERATION / TRADING 289.8
6. ELIMINATION (59.1)
7. GENERATION CONSOLIDATED 230.7
Operating Costs
Totaled R$ 143.2 million in 1Q19, compared to R$ 89.5 million in 1Q18. This change is explained by: (a) a R$ 21.2 million reduction Cost of Services Rendered, mainly arising from: (i) a R$ 23.1 million
reduction in Queluz and Lavrinhas SHPPs, since a provision was recorded in 1Q18 for the negative exposure (retroactive) to the GSF, of R$ 23 million; (ii) an increase of R$ 0.7 million in Verde 8 SHPP resulting from its start-up of operations in May/18 and; (iii) an increase of R$ 0.6 million in Energia dos Ventos wind farm complex, due to the start-up of operations of the transmission line in Dec/18; (b) an increase of R$ 71 million in Energy Purchase, due to: (i)
increase of R$ 42.1 million in Ferreira Gomes HPP, arising from: (i.a) purchase of 146.6 MW at the average price of R$ 54.68/MWh, totaling R$ 17.3 million, due to the energy seasonality strategy adopted in the period, since the plant was exposed throughout the quarter; (i.b) energy purchase totaling R$ 5 million, of which 42.4 MW at the average price of R$ 54.68/MWh, for ballast recomposition; (i.c) negative settlement in the CCEE, primarily by the sale of 54.4 MW, as mentioned in the Net Revenues section, totaling R$ 24.4 million; (ii) R$ 11.5 million increase in Queluz SHPP, as a result of: (ii.i) purchase of 29.9 MW at the average price of R$ 226.53/MWh, totaling R$ 14.7 million, of which: (ii.i.a) 8.3 MW due to the energy allocation strategy and totaling R$ 6.8 million, given that the plant was exposed throughout the quarter; (ii.i.b) 21.6 MW due to the hedge strategy, totaling R$ 7.9 million and; (ii.ii) negative settlement of R$ 5.7 million in the CCEE due to the energy seasonality strategy, with exposure throughout the quarter; (iii) an increase of R$ 8.5 million in Lavrinhas SHPP due to: (iii.i) purchase of 26.2 MW at the average price of R$ 239.77/MWh, totaling R$ 13.6 million, of which: (iii.i.a) 13.0 MW due to the energy allocation strategy and totaling R$ 6.8 million, since the plant was exposed throughout the quarter; (iii.i. b) 13.2 MW due to the hedge strategy, totaling R$ 6.8 million; (iii.ii) negative settlement of R$ 3.6 million in the CCEE resulting from the seasonality strategy, with exposure throughout the quarter and; (iv) increase of R$ 10.3 million in Verde 8 SHPP due to: (iv.i) purchase of 11.8 MW at the average price of R$ 306.01/MWh, totaling R$ 7.8 million, as a result of the energy seasonality strategy adopted in the period; (iv.ii) negative settlement in the CCEE of R$ 3 million; (c) an increase of R$ 1.4 million the Hydro Resources – CFURH line, exclusively by the addition of same amount in Ferreira Gomes HPP, due to the higher generation recorded in this quarter; and (d) an increase of R$ 2.3 million in the Depreciation/Amortization line, basically due to the growth of R$ 1.5 million in Verde 8 SHPP, as a result of its commercial start-up (May/18).
Operating Expenses
Totaled R$ 4.1 million in 1Q19, compared to R$ 3.7 million in 1Q18. The increase of R$ 0.4 million is mainly due to the General and Administrative account, which totaled R$ 2.0 million in this quarter, compared to R$ 1.6 million in 1Q18, and this growth was explained exclusively by the start-up of the Verde 8 SHPP and the Energia dos Ventos wind farms, which contributed an increase of R$ 0.2 million and R$ 0.1 million, respectively.
![Page 20: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/20.jpg)
20 | 42
EBITDA and EBITDA Margin
In 1Q19, EBITDA totaled R$ 53.1 million, 8.8% higher than the R$ 48.8 million recorded in 1Q18.
EBITDA was impacted mainly by: (a) an increase of R$ 56.8 million in Gross Revenue, due to: (i) increase of R$ 8.4 million in the revenue of Verde 8 SHPP resulting from its start-up of commercial operations; (ii) increase of R$ 18.1 million in Queluz and Lavrinhas SHPPs, resulting from the hedge strategy used in the SHPPs aiming at mitigating the volatility of the PLD/market in the first quarter; (iii) increase of R$ 20.7 million in Ferreira Gomes HPP, mainly explained by the additional sale of 54.4 MW in this quarter at the average price of R$ 231.80/MWh, totaling R$ 27.2 million; (iv) increase of R$ 9 million in Foz do Rio Claro and Ijuí HPPs due to the adjustment of MRE above 1 (secondary energy) during the 1Q19 and; (v) readjustment of energy sale contracts, which are indexed for inflation (IPCA/IGP-M). For more information on changes in Revenue, please see the section "Net Revenue". (b) R$ 19.6 million reduction in Operating Costs, as previously detailed in the section "Operating Costs", of which: (i) R$ 23.1 million reduction in Queluz and Lavrinhas SHPPs, given that in the 1Q18 we recorded a provision for the negative exposure to the GSF of R$ 23 million; (ii) increase of R$ 0.7 million in Verde 8 SHPP due to its start-up of commercial operations (May/18) and; (iii) increase of R$ 0.6 million in Energia dos Ventos wind farm complex, resulting from the start-up of operations of its transmission line (Dec/18); (c) an increase of R$ 71 million in Energy Purchased for Resale, of which: (i) increase of R$ 42.1 million in Ferreira Gomes HPP; (ii) increase of R$ 11.5 million in Queluz SHPP; (iii) increase of R$ 8.5 million in Lavrinhas SHPP and; (iv) increase of R$ 10.3 million in Verde 8 SHPP. For more information on energy purchased for resale, see the "Operating Costs" section.
Net Income
In 1Q19, the generation segment registered an income of R$ 3.6 million, compared to a loss of R$ 9.2 million in 1Q18.
This result is explained by: (a) an increase of R$ 4.3 million in EBITDA, as explained above; (b) an increase of R$ 2.3 million in Depreciation/Amortization, basically by the growth of R$ 1.5 million in Verde 8 SHPP, arising from its start-up of commercial operations (May/18); (c) a reduction of R$ 1.5 million in Financial Result, mainly as a result of the increase of R$ 1.3 million in financial revenues, explained by: (i) increase of R$ 0.4 million in Verde 8 SHPP resulting from the asset´s start-up of operations; (ii) R$ 0.6 million increase in Queluz and Lavrinhas SHPPs, resulting from the increased cash position in this quarter when compared to 1Q18 and; (d) R$ 9.3 million reduction in the Income Tax/ Social Contribution line, arising from: (i) R$ 3 million reduction in Verde 8 SHPP, which recorded no amount in 1Q18 as at that time the project was under implementation, while in 1Q19 a total of R$ (3.0) million was recorded, arising from the constitution of Deferred Income Tax/ Social Contribution and; (ii) R$ 6.0 million reduction in the Ferreira Gomes HPP, mainly by the decrease of R$ 5.4 million in Deferred Income Tax/ Social Contribution, due to the negative result in this quarter.
![Page 21: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/21.jpg)
21 | 42
Operational Indicators - Generation
Availability was less than 100% because of the shutdowns for annual preventive maintenance of the equipment and contractual maintenance scheduled with the supplier. The Company's energy balance, demonstrate the impact of the secondary guarantee of 69.3 GW, due to a average GSF of 149% in the 1Q19.
Note: considering flat allocation for Morro Azul SHPP and for the Energia dos Ventos Wind Complex
Trading
Alupar recorded a revenue of R$ 105.1 million in 1Q19, against R$ 15.5 million in 1Q18. This revenue refers to: (a) sales of energy in the market, totaling R$ 47.0 million, of which: (i) R$ 1.3 million related to the sale of 3 MW of energy at the average price of R$ 194.35/MWh; (ii) R$ 33.4 million related to the sale of 36.1 MW at the average price of R$ 428.17/MWh; (iii) R$ 12.3 million related to swap operations of 35.0 MW between north (sale) and southeast (purchase) submarkets, at an average sale price of R$ 163.22/MWh; (b) sale of 1.1 MW at an average price of R$ 428.66/MWh to Foz do Rio Claro HPP, in order to replace the reserve as a result of the revision of the plant's physical guarantee, totaling R$ 1.0 million; (c) sale of 10.8 MW to Verde 8 SHPP, at an average price of R$ 316.67/MWh, due to its exposure in 1Q19 resulting from the energy seasonality strategy, totaling R$ 7.4 million; (d) sale of 36.6 MW to Queluz and Lavrinhas SHPPs at an average price of R$ 226.04/MWh, due to the SHPPs´ seasonality strategy and ballast recomposition, totaling R$ 17.8 million; (e) sale of 125.6 MW to Ferreira Gomes HPP at an average price of R$ 55.46/MWh, totaling R$ 15.0 million, due to the seasonality strategy, as the plant was exposed throughout the quarter and; (f) positive adjustment in the CCEE of R$ 16.8 million, mainly related to the liquidation of 17.8 MW at the average price of R$ 290.08 (SE submarket) totaling R$ 11.2 million.
Purchases totaled R$ 88.5 million in this quarter against R$ 15.5 million in 1Q18. Purchases in 1Q19 refers to: (a) purchase of 3 MW from Verde 8 SHPP, referring to the energy incentive, at the average price of R$ 209.67/MWh and totaling R$ 1.4 million; (b) purchase of 39.9 MW from Ferreira Gomes by Alupar, totaling R$ 16.5 million; (c) energy purchase operations in the market, totaling R$ 38.5 million, of which: (i) R$ 14.5 million related to swap operations of 35.0 MW between submarkets (SE x N), as detailed in item a.iii of the Revenue, with the purchase at the average price of R$ 192.55/MWh (average swap premium: R$ 29.33/MWh). Out of these 35 MW, 17.8 MW were settled in the SE submarket at an average price of R$ 290.08, totaling R$ 11.2 million and; (ii) purchase of 184.7 MW at an average price of R$ 60.0/MWh, totaling R$ 23.9 million, for the sale to the group's plants, as a result of the allocation strategy adopted in this quarter; (d) negative settlement in the CCEE of R$ 37.9 million, basically related to the sale of 36.1 MW to the market, as mentioned in item a.ii of the revenue detailed above, which generated a negative exposure in the CCEE; and (e) R$ 5.9 million in Pis/Cofins tax credits.
Eliminations In 1Q19, eliminations between intercompany operations totaled R$ 59.1 million, as detailed below:
Company Amounts (Millions of R$)
Ferreira Gomes Alupar 16.5 Alupar Queluz 8.9 Alupar Lavrinhas 8.9 Alupar Foz do Rio Claro 1.0 Alupar Verde 08 7.4 Alupar Ferreira Gomes 15.0 Verde 8 Alupar 1.4
Total 59.1
![Page 22: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/22.jpg)
22 | 42
1Q19 Consolidated Results – Generation
Generation
Combined Trading
AF Energia +
ACE
Eliminations
Intercompany
Generation
Consolidated
Gross Operating Revenue 184,670 105,135 1,770 (60,904) 230,671
Energy Supply 184,670 105,135 - (59,134) 230,671
Regulatory consulting and advice - - - - -
O&M Services - - 1,770 (1,770) -
Deductions (9,933) (6,226) (210) - (16,369)
PIS (1,478) (2,806) (29) - (4,313)
COFINS (6,819) (3,420) (134) - (10,373)
ICMS - - - - -
ISS - - (47) - (47)
IVA (105) - - - (105)
Quota for Global Reversal Reserve - RGR - - - - -
Research & Development - R & D (432) - - - (432)
National Development Fund and Technological Development - FNDCT (432) - - - (432)
Ministry of Mines and Energy - MME (217) - - - (217)
Electricity services inspection fee - TFSEE (450) - - - (450)
Net Operating Revenue 174,737 98,909 1,560 (60,904) 214,302
Cost of Services (143,221) (88,655) (1,903) 60,904 (172,875)
Energy Purchase for Resale (94,479) (88,469) - 59,134 (123,814)
Electric Grid Charges - CUST (7,269) - - - (7,269)
Hydro Resources - CFURH (3,436) - - - (3,436)
Cost of Services Rendered (12,566) (186) (1,895) 1,770 (12,877)
Depreciation/Amortization (25,338) - (8) - (25,346)
Use of Public Property - UBP (133) - - - (133)
Gross Income 31,516 10,254 (343) - 41,427
Expenses and Operating Revenues (4,091) - (4) - (4,095)
General and Administrative (1,986) - (4) - (1,990)
Depreciation/Amortization (247) - - - (247)
Personnel and Management (2,085) - - - (2,085)
Equity Pickup - - - - -
Other Revenues 228 - - - 228
Other Expenses (1) - - - (1)
EBIT 27,425 10,254 (347) - 37,332
Depreciation/Amortization (25,718) - (8) - (25,726)
EBITDA 53,143 10,254 (339) - 63,058
Financial Expenses (32,378) - (7) - (32,385)
Debt charges (36,513) - - (36,513)
Exchange rate variations 4,920 - - 4,920
Others (785) - (7) (792)
Financial Revenues 4,600 - 15 - 4,615
Revenue from investments 3,984 15 3,999
Others 616 - 616
(27,778) - 8 - (27,770)
EBT (353) 10,254 (339) - 9,562
Taxes 3,939 - (42) - 3,897
Income Tax (2,728) - (29) - (2,757)
Social Contribution (1,367) - (13) - (1,380)
Deferred Income Tax 6,021 - - - 6,021
Deferred Social Contribution 2,013 - - - 2,013
Consolidated Net Income 3,586 10,254 (381) - 13,459
Non - Controlling Participation (2,511)
Alupar Net Income 10,948
Quarter ended in 03/31/2019
![Page 23: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/23.jpg)
23 | 42
Projects in Progress:
Generation Companies
Installed Capacity
(MW)
Assured Energy (MW)
Estimated Investments
(million)
Investments Made
(million)
Estimated Start-up
(Regulatory)
Estimated Start-up
(Management)
Antônio Dias 23.0 11.9 R$ 168.7(1) R$ 7.8 2018 -
La Virgen 84.0 49.3 US$ 170.0(2) US$ 148.7 (3) N/A 2019 (1) Investment forecast by the area of implementation at the project's base date Dez/13 (R$ 125.0 mm) updated by IPCA up to Dec/2018. (2) Investment foreseen by the Company Management, base Dec/18. (3) 3) Considering U$ 1.0 = R$ 3.90 (Base March 29, 2019)
La Virgen: La Virgen is an SPC established to implement the HPP La Virgen, with an installed capacity of 84.0 MW and assured energy of 49.3 MW, located in the province of Chanchamayo, Peru, to be developed in accordance with Generation Concession Agreement 253-2005 of October 7, 2005 and the Transmission Concession Agreement 313-2008 of June 11, 2008, entered into with the Ministry of Mines and Energy. In 1Q19, tunnel reinforcement work continued, together with detailed studies throughout the structure, to avoid further water leakage. The electromechanical equipment of the plant is assembled with the dry tests already carried out. Água Limpa: Água Limpa is an SPE established to develop and implement the SHPP Antônio Dias, located in the city of Antônio Dias, in the State of Minas Gerais, with an installed capacity of 23.0 MW and assured energy of 11.4 MW. We emphasize that the construction of this project has not yet begun.
![Page 24: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/24.jpg)
24 | 42
Analysis of Consolidated Income
Net Operating Revenue - IFRS
Alupar and its subsidiaries recorded and Net Revenue of R$ 1,145.8 million in the 1Q19, against the R$ 365.5 million registered in 1Q18.
The variation in Net Revenue is mainly explained by the: (a) an increase of R$ 671.9 million in Infrastructure Revenue, which totaled R$ 701.2 million in this quarter against R$ 29.3 million in 1Q18. This change was recorded mainly in transmission projects being implemented in Brazil, as follows: (i) an increase of R$ 160.5 million due to investments made in transmission companies under implementation (EDTE, ETAP, ETC, TPE, TCC, ESTE and TSM) and; (ii) an increase of R$ 511.4 million as a result of the application of CPC 47 (IFRS 15) - Revenue from Contracts with Customers, effective as of January 1, 2018;
(b) an increase of R$ 126.2 million in Energy Transmission Revenue, which totaled R$ 170.4 million in 1Q19, compared to R$ 44.2 million in 1Q18, exclusively in transmission companies in operation, mainly due to the application of CPC 47 (IFRS 15) - Revenue from Contracts with Customers, effective as of January 1, 2018;
(c) a R$109.4 million increase in Energy Supply Revenue, due to: (a) R$ 56.8 million growth in the combined revenues of the generators, basically by: (i) growth of R$ 18.1 million in Queluz and Lavrinhas SHPPs as a result of the hedge strategy used in the SHPPs aimed at mitigating the volatility of the PLD/market in the first quarter; (ii) increase of R$ 20.7 million in Ferreira Gomes HPP, mainly explained by the additional sale of 54.4 MW in this quarter at the average price of R$ 231.80/MWh, totaling R$ 27.2 million (in 1Q18, an additional 16.3 MW was sold at the average price of R$180.01/MWh, toalizando R$ 6.3 million); (iii) an increase of R$ 8.4 million in revenues from Verde 8 SHPP, due to its startup of operations; (iv) increase of R$ 9 million in Foz do Rio Claro and Ijuí HPPs, resulting from the adjustment of the MRE above 1 (secondary energy) during the 1Q19 and; (v) readjustment of energy sale contracts, which are indexed for inflation (IPCA/IGP-M); (b) increase of R$ 89.6 million in revenues from the trading company, which recorded R$ 105.1 million this quarter, compared to R$ 15.5 million in 1Q18 and; (c) increase of R$ 37 million in eliminations due to higher intercompany transactions. For more information on changes in the generation revenue, please refer to the “Generation Segment” section;
(d) an increase of R$ 60.2 million in deductions, basically due to the R$ 51.7 million increase in deferred PIS/COFINS taxes, arising from the increase in gross revenue from the transmission segment, which, in turn, resulted from the application of CPC 47 (IFRS 15) - Revenue from Contracts with Customers.
Net Revenue (R$ MM)
1Q19 1Q18 Var.%
Energy Transmission Revenue 170.4 44.2 285.3%
Infrastructure Revenue 701.2 29.3 -
Remuneration of Concession Assets 133.5 200.5 (33.4%)
Energy Supply 230.7 121.3 90.2%
Gross Revenue - IFRS 1,235.8 395.3 212.6%
Deductions 90.0 29.8 202.2%
Net Revenue - IFRS 1,145.8 365.5 213.5%
![Page 25: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/25.jpg)
25 | 42
Operating Costs - IFRS In 1Q19, Cost of Services totaled R$ 368.4 million, compared to R$ 122.1 million in 1Q18.
This change is due to: (a) an increase of R$ 155.3 million in Infrastructure Costs, due to the increase of R$ 160.5 million in transmitters under implementation in Brazil (ETAP, ETC, TPE, TCC, ESTE, EDTE and TSM), arising from the 2016 and 2017 auctions. For more information on the changes in Infrastructure Costs (CAPEX), please see the "Investments" section below; (b) increase of R$ 106.9 million in Energy Purchased for Resale, on the grounds of: (i) growth of R$ 71 million in the combined cost of generators, of which: (i.a) an increase of R$ 42.1 million in Ferreira Gomes HPP, resulting from the energy seasonality strategy adopted in this period and the ballast recomposition; (i.b) increase of R$ 11.5 million in Queluz SHPP and R$ 8.5 million in Lavrinhas SHPP, resulting from the energy allocation and hedge strategies performed during this quarter and; (i.c) increase of R$ 10.3 million in Verde 8 SHPP, resulting from the seasonality strategy adopted for the period; (ii) an increase of R$ 73 million in the trading company and an increase of R$ 37 million in eliminations, as detailed in section "Generation-Trading Segment"; (c) R$ 19.9 million drop in the cost of services rendered, primarily because of: (i) R$ 23.1 million reduction in Queluz and Lavrinhas SHPPs, given that in 1Q18, we recorded a provision for negative exposure (retroactive) to the GSF of R$ 23 million; (ii) increase of R$ 0.7 million in Verde 8 SHPP, due to its start-up of commercial operations (May 18); (iii) increase of R$ 0.6 million in Energia dos Ventos wind farm complex, due to the start-up of operations of the transmission line (Dec/18); (iv) R$ 1.7 million growth in the STN transmitter, due to non-recurring expenses for repairs on the transmission line and; (v) increase of R$ 0.6 million in ENTE transmitter resulting from higher expenses for access recovery, O&M and environmental services and; (d) a R$ 2.3 million increase in the Depreciation/Amortization account, due to the increase of R$ 1.5 million in Verde 8 SHPP and R$ 0.8 million in the Energia dos Ventos wind farm complex, due to the assets´ start-up of operations in May/18 and Dec/18, respectively.
Operating Expenses - IFRS
In 1Q19, Operating Expenses totaled R$ (30.7) million, compared to R$ 9.7 million in 1Q18. The change of R$ (40.3) million in this account is exclusively due to the R$ 41.6 million increase in Equity Pickup, explained by the increase of R$ 47.2 million in the ETB transmitter, which, as a result of the investments of R$ 25.6 million realized in this quarter and the application of CPC 47 (IFRS 15) - Revenue from Contracts with Customers, presented an income of R$ 94.9 million in the period.
Operating Costs R$ (MM) Operating Costs 1Q19 1Q18 Var.%
Cost of Services Rendered 33.7 53.6 (37.1%)
Energy Purchased for Resale 123.8 16.9 -
Charges of Electric Grid - CUST 7.3 7.1 2.7%
Hydro Resources - CFURH 3.4 2.0 72.4%
Infrastructure Cost 174.7 19.4 -
Depreciation / Amortization 25.5 23.2 9.9%
Total 368.4 122.1 201.7%
Operating Expenses R$ (MM)
Operating Expenses 1Q19 1Q18 Var.%
General and Administrative 8.6 7.4 15.9%
Personnel and Management 11.5 11.5 -
Equity Pickup (52.3) (10.7) 388.4%
Others 0.2 0.1 54.9%
Depreciation / Amortization 1.3 1.3 -
Total (30.7) 9.7 -
![Page 26: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/26.jpg)
26 | 42
EBITDA - IFRS
In 1Q19, EBITDA totaled R$ 834.8 million, R$ 576.6 million higher than the R$ 258.3 million recorded in 1Q18.
Adjusted EBITDA Margin reached 86.0%, 11.4 p.p. higher than the 74.6% recorded in 1Q18.
The change in EBITDA is due to: (a) an increase of R$ 780.3 million in Net Revenue, resulting from: (i) growth of R$ 731.1 million in the Revenue from the Energy Transmission Segment, mainly as a result of the increase of R$ 671.9 million in Infrastructure Revenue, arising from the investments made in the transmitters under implementation in Brazil and the application of CPC 47 (IFRS 15)- Revenue from Contracts with Customers, effective as of January 1, 2018 and; (ii) an increase of R$ 109.4 million in Revenue from the Energy Generation Segment, as previously detailed in the section "Net Operating Revenue – IFRS"; (b) an increase of R$ 155.3 million in Infrastructure Cost, resulting from investments made in the transmitters being implemented in Brazil (ETAP, ETC, TPE, TCC, ESTE, EDTE and TSM) from the 2016 and 2017 auctions, which showed an increase of R$ 160.5 million when comparing 1Q19 vs. 1Q18; (c) an increase of R$ 106.9 million in costs with Energy Purchased for Resale, due to: (i) a R$ 71.0 million increase in the combined cost of the generators, of which: (i.a) R$ 42.1 million increase in the Ferreira Gomes HPP, due to the energy seasonality strategy adopted in this period and ballast recomposition; (i.b) an increase of R$ 11.5 million in the Queluz SHPP and R$ 8.5 million in the Lavrinhas SHPP, due to the energy allocation and hedging strategy carried out in this quarter; (i.c) an increase of R$ 10.3 million in the Verde 08 SHPP, due to the seasonal energy strategy adopted for period and; (ii) an increase of R$ 73.0 million in the scope of the trading and an increase of R$ 37.0 million in eliminations, as detailed in the section "Generation Segment - Trading" and; (d) increase of R$ 41.6 million in Equity Pickup, due to the R$ 47.2 million growth in ETB transmitter, which, as a result of the investments of R$ 25.6 million in this quarter and the application of CPC 47 (IFRS 15)- Revenue from Contracts with Customers, presented an income of R$ 94.9 million in the period.
* Subtracted from Net Revenue the Capex made (Infrastructure Cost)
Follow below the EBITDA Compositon:
EBITDA - IFRS (R$ MM)
1Q19 1Q18 Var.%
Net Revenue - IFRS 1,145.8 365.5 213.5%
Operating Costs (44.4) (62.7) (29.1%)
Infrastructure Costs (174.7) (19.4) 801.9%
Energy Purchase (123.8) (16.9) 633.6%
Operating Expenses (20.3) (19.0) 6.9%
Equity Pickup 52.3 10.7 388.4%
EBITDA 834.8 258.3 223.2%
EBITDA Margin 72.9% 70.7% 2.2 p.p
Adjusted EBITDA Margin* 86.0% 74.6% 11.4 p.p
![Page 27: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/27.jpg)
27 | 42
EBITDA - Regulatory
In 1Q19, EBITDA totaled R$ 286.4 million, compared to R$ 298.7 million in 1Q18.
EBITDA margin reached 61.7%, against 76.8% in the same period of the previous year.
The main changes in Regulatory EBITDA when compared to the EBITDA - IFRS are in the revenue, infrastructure cost and equity pickup lines. 1-Revenue: While in corporate figures an increase of R$ 780.3 million in net revenue was registered, as explained earlier in the analysis of the "Net Operating Revenue – IFRS", in regulatory figures an increase of R$ 75.4 million in net revenue was recorded; this variation was exclusively in revenue from the transmission segment, which presented an increase of R$ 731.1 million in corporate figures, compared to a reduction of R$ 30.3 million in regulatory figures, mainly due to: (i) a decrease of R$ 32.7 million in the revenue of the EATE and ETEP transmitters, arising from the 50% drop in the Annual Permitted Revenue (RAP) for the 2018/2019 cycle, given the 15-year anniversary of the start of operations (EATE: Mar/18; ETEP: Aug/17); (ii) an increase of R$ 2.4 million in revenue from the other transmission companies, affected by the adjustment of the RAPs, according to Ratifying Resolution 2,408 of June 26, 2018, which established an adjustment of 2.85% for IPCA-indexed contracts and 4.27% for contracts indexed by IGP-M. 2 - Infrastructure Cost: It is not accounted for in regulatory figures. In corporate figures, however, there was an increase of R$ 155.3 million, due to the investments made in the transmission projects under implementation in Brazil. 3 - Equity Pickup: Change was recorded exclusively in the transmission segment. The main impact in this line is due to the deployment of the ETB transmitter, which, while it did not present a result in the regulatory standard, it turned a net profit of R$ 94.9 million in IFRS figures, impacting this line in R$ 47.2 million.
Follow below the EBITDA Compositon:
EBITDA Regulatory (R$ MM)
1Q19 1Q18 Var.%
Net Revenue 464.1 388.7 19.4%
Operating Costs (40.9) (61.3) (33.2%)
Energy Purchase (123.8) (16.9) -
Operating Expenses (20.3) (19.0) 6.9%
Equity Pickup 7.4 7.1 4.5%
EBITDA 286.4 298.7 (4.1%)
EBITDA Margin 61.7% 76.8% (15.1p.p.)
![Page 28: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/28.jpg)
28 | 42
Financial Results
Totaled R$ (57.8) million in 1Q19, R$ 4.4 million lower than the R$ (62.2) million registered in the same period of the previous year.
This change in the financial result arises from: (a) a reduction of R$ 5.4 million in financial expenses, due to: (i) the decline in the average rate of interbank deposits ("CDI"), which recorded 1.51% in 1Q19 against 1.59% in 1Q18; (ii) reduction of R$ 1.3 million in the EATE transmitter, R$ 1.1 million in the ENTE transmitter, R$ 0.9 million in the STN transmitter and R$ 0.8 million in the ECTE transmitter, due to the reduction of R$ 198.1 million in the balance of the debt, basically due to amortizations over the last 12 months; (iii) a reduction of R$ 3.8 million in the La Virgen HPP, due to the decrease in the exchange rate variations account in provisions for the acquisitions of goods related to the project, and; (iv) on the other hand, an increase of R$ 3.9 million was registered in Verde 8 SHPP, which did not present a balance in 1Q18 but recorded an expense of R$ 3.9 million in this quarter, due to its commercial start-up (May/18). (b) a reduction of R$ 1.1 million in financial revenues, mainly due to: (i) a decrease of R$ 2.1 million in Alupar - Holding, as a result of: (i.a.) decrease in the average rate of interbank deposits ("CDI "), which recorded 1.51% in 1Q19, compared to 1.59% in 1Q18 and (i.b.) a reduction of R$ 94.3 million in cash, mainly due to the investments made in transmission projects under implementation and; (ii) an increase of R$ 0.4 million in Verde 8 SHPP due to its start-up of operations.
![Page 29: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/29.jpg)
29 | 42
Net Income - IFRS
In 1Q19, net income totaled R$ 400.5 million, compared to R$ 58.9 million in 1Q18.
This change is due to: (a) an increase of R$ 576.6 million in EBITDA, as explained above; (b) an increase of R$ 61.2 million in Taxation, being: (i) an increase of R$ 77.5 million in Deferred Income Tax and Social Contribution of the transmitters, due to the application of CPC 47 (IFRS 15), which generated an increase in the balance receivable from concession assets, and consequently the recognition of deferred taxes on this increase; (ii) reduction of R$ 9.0 million in the Income Tax and Social Contribution of Ferreira Gomes (R$ 6.0 million) and Verde 8 (R$ 3.0 million) due to the constitution of deferred Income Tax and Social Contribution and; (c) an increase of R$ 175.9 million in Minority%, mainly due to the increase in transmitters' results, due to the application of CPC 47 (IFRS 15).
Net Income – Regulatory
In 1Q19, Net Income totaled R$ 69.4 million, 3.1% higher than the R$ 67.3 million registered in 1Q18.
The changes in regulatory income, when compared to the Income - IFRS, mainly occur in EBITDA and Taxation. In the EBITDA line, there was a reduction of R$ 12.2 million, while in corporate figures there was an increase of R$ 576.6 million, as detailed earlier in the section "EBITDA - Regulatory". In relation to Taxation, a reduction of R$ 17.9 million was recorded, while in corporate figures an increase of R$ 61.2 million was registered. This variation is explained exclusively in the transmission segment, which showed an increase of R$ 70.4 million in the numbers consolidated in IFRS, basically in deferred taxes, due to the application of CPC 47 (IFRS 15) - Revenue from Contract with Customers, a decrease of R$ 8.7 million in consolidated regulatory figures was registered, due to the reduction of R$ 8.8 million in the EATE transmitter, due to the lower result in this period, given the 50% drop in the Annual Permitted Revenue - RAP, for the 2018/2019 cycle.
![Page 30: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/30.jpg)
30 | 42
Consolidation of Results – IFRS
]
Gross Operating Revenue 1,005,114 230,671 1,235,785
Energy Transmission Revenue 170,821 170,821
Infrastructure Revenue 701,168 701,168
Concession Asset Remuneration 133,542 133,542
Energy Supply - 230,671 230,671
(-) Variable Portion (417) (417)
Deductions (73,621) (16,369) (89,990)
PIS (2,028) (4,313) (6,341)
COFINS (9,239) (10,373) (19,612)
PIS Deferred (15,726) (15,726)
COFINS Deferred (33,498) (33,498)
ICMS -
ISS (47) (47)
IVA (105) (105)
Quota for Global Reversal Reserve (7,228) - (7,228)
Deferred Quota for Global Reversal Reserve (3,874) - (3,874)
Research & Development - R&D (1,027) (432) (1,459)
National Develop. Fund and Tech. Develop (1,027) (432) (1,459)
Ministry of Mines and Energy - MME (514) (217) (731)
TFSEE (1,114) (450) (1,564)
Deferred TFSEE 1,654 - 1,654
Net Operating Revenue 931,493 214,302 1,145,795
Cost of Services (195,550) (172,875) (368,425)
Energy Purchase for Resale (123,814) (123,814)
Electric Grid Charges - CUST (7,269) (7,269)
Hydro Resources - CFURH (3,436) (3,436)
Cost of Services Rendered (20,846) (12,877) (33,723)
Infrastructure Cost (174,703) (174,703)
Depreciation/Amortization (1) (25,346) (25,347)
Use of Public Property - UBP (133) (133)
Gross Income 735,943 41,427 - - 777,370
Expenses and Operating Revenues 44,076 (4,095) (8,587) (714) 30,680
General and Administrative (2,174) (1,990) (4,036) (434) (8,634)
Personnel and Management (5,443) (2,085) (3,823) (168) (11,519)
Equity Pickup 52,306 52,306
Depreciation/Amortization (616) (247) (309) (112) (1,284)
Other Revenues 7 228 - - 235
Other Expenses (4) (1) (419) - (424)
EBIT 780,019 37,332 (8,587) (714) 808,050
Depreciation/Amortization (617) (25,726) (309) (112) (26,764)
EBITDA 780,636 63,058 (8,278) (602) 834,814
Financial Expenses (23,538) (32,385) (19,822) (2,970) (78,715)
Debt charges (21,598) (36,513) (19,673) (4,778) (82,562)
Exchange rate variations (527) 4,920 1 1,828 6,222
Others (1,413) (792) (150) (20) (2,375)
Financial Revenues 4,068 4,615 11,221 991 20,895
Revenue from investments 3,822 3,999 10,208 403 18,432
Others 246 616 1,013 588 2,463
(19,470) (27,770) (8,601) (1,979) (57,820)
EBT 760,549 9,562 (17,188) (2,693) 750,230
Taxes (107,090) 3,897 - (116) (103,309)
Income Tax (5,857) (2,757) (84) (8,698)
Social Contribution (10,920) (1,380) (32) (12,332)
Deferred Income Tax (63,997) 6,021 - (57,976)
Deferred Social Contribution (26,316) 2,013 - (24,303)
Consolidated Net Income 653,459 13,459 (17,188) (2,809) 646,921
Non - Controlling Participation (246,418)
Alupar Net Income 400,503
Holdings Windpar /
Transminas / Reunidas /
Apaete / Alupar Peru and
Colombia
Consolidated
Trimestre findo em 31/03/2019
Transmission Consolidated Generation
Consolidated Holding Alupar
![Page 31: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/31.jpg)
31 | 42
Consolidation of Results – Regulatory
]
Gross Operating Revenue 271,952 230,671 502,623
Energy Transmission Revenue 272,369 272,369
( - ) Variable Portion (417) (417)
Energy Supply 230,671 230,671
Deductions (22,177) (16,369) (38,546)
PIS (2,028) (4,313) (6,341)
COFINS (9,239) (10,373) (19,612)
ICMS - -
ISS (47) (47)
IVA (105) (105)
Quota for Global Reversal Reserve - RGR (7,228) - (7,228)
Research & Development - R&D (1,027) (432) (1,459)
National Develop. Fund and Tech. Develop - FNDCT (1,027) (432) (1,459)
Ministry of Mines and Energy - MME (514) (217) (731)
Electricity services inspection fee - TFSEE (1,114) (450) (1,564)
Net Operationg Revenue 249,775 214,302 464,077
Cost of Services (45,642) (172,875) (218,517)
Energy Purchase for Resale (123,814) (123,814)
Electric Grid Charges - CUST (7,269) (7,269)
Hydro Resources - CFURH (3,436) (3,436)
Cost of Services Rendered (17,319) (12,877) (30,196)
Depreciation/Amortization (28,323) (25,346) (53,669)
Use of Public Property - UBP (133) (133)
Gross Income 204,133 41,427 - - 245,560
Expenses and Operating Revenues (945) (4,095) (8,587) (713) (14,340)
General and Administrative (2,172) (1,990) (4,036) (433) (8,631)
Personnel and Management (5,443) (2,085) (3,823) (168) (11,519)
Equity Pickup 7,414 - - 7,414
Depreciation/Amortization (756) (247) (309) (112) (1,424)
Other Revenues 16 228 - - 244
Other Expenses (4) (1) (419) - (424)
EBIT 203,188 37,332 (8,587) (713) 231,220
Depreciation/Amortization (29,079) (25,726) (309) (112) (55,226)
EBITDA 232,267 63,058 (8,278) (601) 286,446
Financial Expenses (23,539) (32,385) (19,822) (2,970) (78,716)
Debt charges (21,598) (36,513) (19,673) (4,778) (82,562)
Exchange rate variations (527) 4,920 1 1,828 6,222
Others (1,414) (792) (150) (20) (2,376)
Financial Revenues 4,069 4,615 11,221 991 20,896
Revenue from investments 3,844 3,999 10,208 403 18,454
Others 225 616 1,013 588 2,442
(19,470) (27,770) (8,601) (1,979) (57,820)
EBT 183,718 9,562 (17,188) (2,692) 173,400
Taxes (15,227) 3,897 - (116) (11,446)
Income Tax (5,121) (2,757) - (84) (7,962)
Social Contribution (10,106) (1,380) - (32) (11,518)
Deferred Income Tax - 6,021 - - 6,021
Deferred Social Contribution - 2,013 - - 2,013
Consolidated Net Income 168,491 13,459 (17,188) (2,808) 161,954
Non - Controlling Participation (92,506)
Alupar Net Income 69,448
Quarter ended in 03/31/2019
Transmission Consolidated Generation
Consolidated Holding Alupar
Holdings Windpar / Transminas /
Reunidas / Apaete / Alupar Peru
and Colombia
Consolidated
![Page 32: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/32.jpg)
32 | 42
Investments In 1Q19, total investments of R$ 200.4 million were made in our companies, of which R$ 179.0 million was allocated to the transmission segment, R$ 21.1 million to the generation segment and R$ 0.3 million for new business development, against R$ 68.6 million recorded in 1Q18, when R$ 22.0 million were allocated to the transmission segment, R$ 39.3 million to the generation segment and R$ 7.2 million towards the development of new business. The investment volume made in 1Q19 mainly reflects the implementation of ETAP, ETC, TPE and TCC, which jointly amounted R$ 144.1 million in this quarter front of R$ 12.0 recorded in 1Q18.
Investments (R$ MM)
1Q19 1Q18
Transmission* 179.0 22.0
ELTE 0.0 0.2
ETAP 42.7 4.2
ETC 27.3 3.2
TCC 16.3 1.2
TPE 54.7 3.3
TCE 4.3 2.7
ESTE 1.5 0.7
TSM 5.5 1.3
EBTE - 5.1
EDTE 26.5 -
Other 0.1 0.0
Generation 21.1 39.3
Energia dos Ventos 7.3 15.9
La Virgen 12.0 2.8
Verde 08 - 18.5
Other 1.8 2.1
Holding 0.3 7.2
Total 200.4 68.6
*Except for TCE, the amount of the investimento of the transmitters is exactly the amount accounted for as infrastructure cost.
![Page 33: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/33.jpg)
33 | 42
Indebtedness Alupar - Holding:
In 1Q19, the gross debt of Alupar - Holding amounted to R$ 699.6 million, R$ 19.6 million higher than the R$ 680.0 million registered in December 18. This change is explained by: (i) provision for charges, totaling R$ 13.2 million; and (ii) provisions for monetary variation, amounting to R$ 6.5 million.
Alupar - Holding's cash and cash equivalents totaled R$ 735.6 million, R$ 10.0 million lower than the R$ 745.6 million recorded in December 18. This change is mainly explained by the contributions of R$ 7.5 million made in the projects, of which R$ 6.1 million in Windepar and R$ 1.4 million in Alupar Colombia for the implementation of the TCE.
The gross debt of Alupar - Holding consists of 100% in debenture issues, all indexed by IPCA, with a very long profile, with approximately 19% of maturities after 2024. Short-term debt totaled R$ 40.1 million, R$ 12.6 million higher than the R$ 27.5 million recorded in December 2018, mainly due to the provision of charges and monetary variations of the V and VI issues of the Holding's debentures.
For more information on Alupar - Holding's debt, please see Explanatory Notes 24 "Loans and Financing" and 25 "Debentures" in the 1Q19 financial statements.
Alupar - Holding's debt profile is shown below:
4%96%
Debt Profile Alupar - Holding Dec/18
Short Term Long Term
6%
94%
Debt Profile Alupar - Holding 1Q19
Short Term Long Term
699.6 735.6
(35.9)
Gross Debt Cash Net Debt
Total Debt 1Q19
680.0 745.6
(65.6)
Gross Debt Cash Net Debt
Total Debt Dec/18
![Page 34: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/34.jpg)
34 | 42
Consolidated
Consolidated gross debt of Alupar and its subsidiaries totaled R$ 6,380.4 in 1Q19, R$ 22.9 million lower than the R$ 6,403.3 million recorded in Dec/18. This change is mainly explained by: (i) provisions for charges and monetary variations in the debts of Alupar - Holding, in the amount of R$ 19.7 million; (ii) amortization of the debts of the subsidiaries, in the amount of R$ 139.2 million; (iii) payments of charges on debts of the subsidiaries, in the amount of R$ 106.8 million; (iv) provisions for charges and monetary variations of subsidiaries, totaling R$ 128.2 million; (v) gain on the appreciation of the BRL against the USD on the debts of the La Virgen HPP and the Morro Azul SHPP, impact of R$ 7.5 million; (vi) release of the second tranche for Alupar Peru, of the financing raised from Santander for the implementation of the La Virgen HPP, in the amount of R$ 67.8 million.
Cash and cash equivalents totaled R$ 3,506.7 million in 1Q19 against the R$ 3,600.2 million recorded in Dec/18. This change of R$ 93.5 million in cash was mainly due to the investments in the projects being implemented, of which we highlight: (i) a reduction of R$ 33.9 million in the cash of ETAP transmitter; (ii) a R$ 23.1 million decrease in the cash of the TCC transmitter and; (iii) a reduction of R$ 48.8 million in the cash of the TPE transmitter.
Net debt recorded in 1Q19 totaled R$ 2,873.8 million, compared to R$ 2,803.1 million recorded in Dec/18.
Short-term debt totaled R$ 696.7 (11% of total debt) in 1Q19, R$ 9.4 million lower than the R$ 706.1 million recorded in December 18.
Of the consolidated gross debt, R$ 699.6 million refers to Alupar - Holding, as detailed above, another R$ 2,826.4 million is allocated to operating companies that have a payment flow compatible with the respective cash generation and, finally, R$ 2,854.4 million refers to the projects being implemented, of which R$ 514.7 million was allocated to Alupar Peru/ La Virgen to implement the La Virgen HPP; R$ 154.3 million allocated to the implementation of the ETAP transmitter; R$ 114.7 million to the implementation of the ETC transmitter; R$ 667.6 million to the implementation of the TCC transmitter; R$ 1,050.6 million to the implementation of the TPE transmitter; R$ 312.1 million to the implementation of the EDTE transmitter and; R$ 40.4 million to the implementation of the TCE transmitter (Colombia).
In 1Q19, debenture issues corresponded to R$ 4,497.0 million or 70.5% of total debt. The debentures issued by: (i) Alupar - Holding represent a balance of R$ 699.6 million; (ii) the operating subsidiaries (EATE, ECTE, ENTE, ETEP, EBTE, ETES, ETVG, STN, Ferreira Gomes, Transirapé, Transleste, Transudeste, EDVs - Windepar and Verde 8) totaled R$ 1,339.0 million and; (iii) the projects under implementation recorded a balance of R$ 2,458.3 million.
Foreign currency debt totaled R$ 701.2 million or 11.0% of total debt, and is allocated to generation and transmission projects in Peru and Colombia.
Of the 11% of short-term debt, 1,6% or R$ 11,1 million refers to bridge loans, with maturity in 2019.
6,380.4
2,873.8
3,506.4
Gross Debt Cash Net Debt
Total Debt 1Q19
6,403.3
2,803.1
3,600.2
Gross Debt Cash Net Debt
Total Debt Dec/18
![Page 35: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/35.jpg)
35 | 42
Alupar’s consolidated debt profile is quite lengthy, consistent with the Company’s low risk business nature, high predictability of revenues and strong operating cash generation from the transmission and generation of electric power segments.
![Page 36: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/36.jpg)
36 | 42
Capital Markets Alupar was listed on the São Paulo Stock Exchange - BM&FBOVESPA on April 23, 2013. Its UNITS are traded under code ALUP11 and include 1 common share and 2 preferred shares (1 UNIT = 1 ON + 2 PN).
In all trading sessions since our listing, Alupar’s Units were traded, with an average daily volume of R$ 7.1 million. We highlight that during the 01/01/2019 – 05/15/2019 the average daily volume was R$ 14.9 million.
On May 15, 2019, the market value of Alupar was R$ 6,593 billion.
Next Events 1Q19 Earnings Conference Call Date: May 16, 2019
Portuguese 3:00 p.m. (Brasilia Time) 2:00 p.m. (New York Time) Phone: +55 (11) 2188-0155 Password: Alupar Replay: +55 (11) 2188-0400 Password: Alupar
English (simultaneous translation) 3:00 p.m. (Brasilia Time) 2:00 p.m. (New York Time) Phone: +1 (646) 843-6054 Password: Alupar Replay: +55 (11) 2188-0400 Password: Alupar
![Page 37: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/37.jpg)
37 | 42
APPENDIX 01 – CORPORATE
03/31/2019 12/31/2018 03/31/2019 12/31/2018
ASSET
CURRENT 970,343 984,044 4,854,763 4,986,366
Cash and Cash Equivalents 249,251 231,878 2,907,339 2,975,423
Short-Term Investments 486,325 513,756 486,325 513,756
Marketable Securities - - 107,934 105,979
Trade Accounts Receivable 60,457 48,972 387,435 324,347
Receivables from related parties 64,335 63,219 - -
Dividends to be received 68,465 79,734 17,387 17,387
Interest on Equity - - - -
Income tax and social contribution compensable 33,877 37,790 64,483 61,770
Other Taxes Recoverable - - 19,988 16,887
Advance for Suppliers 141 138 11,981 9,733
Inventories - - 1,197 1,144
Prepaid Expenses 58 38 12,025 7,030
Cauções e depósitos judiciais - - - -
Accounts Receivable - Concession Assets - - - -
Accounts Receivable - Contractual Assets - - 784,593 906,633
Assets held for sale - - - -
Other Assets 7,434 8,519 54,076 46,277
NON CURRENT 4,651,915 4,227,467 10,551,186 9,620,214
Trade Accounts Receivable - - 11,697 12,130
Receivables from related parties - - - -
Adavances for Future Capital Increases 177,483 170,023 - -
Marketable Securities - - 5,064 4,992
Income tax and social contribution compensable - - 28,897 29,398
Taxes Recoverable - - 2,774 2,774
Deferred Income and Social Contribution Taxes - - 18,457 10,063
Advance for Suppliers - - 1,095 1,012
Inventories - - 35,272 25,213
Collaterals and Judicial Deposits 3,021 2,965 26,265 23,933
Accounts Receivable - Concession Assets - - - -
Accounts Receivable - Contractual Assets - - 5,463,620 4,624,825
Other Assets 6,172 696 33,685 26,366
Investments in associates and controlled jointly 383,447 343,228 472,295 419,989
Investments in controlled companies 3,993,585 3,622,294 - -
Property to investiments 7,826 7,826 7,826 7,826
Fixed assets 764 1,004 4,300,396 4,283,482
Intangibles Assets 79,617 79,431 143,843 148,211
TOTAL ASSET 5,622,258 5,211,511 15,405,949 14,606,580
Holding Consolidated
![Page 38: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/38.jpg)
38 | 42
03/31/2019 12/31/2018 03/31/2019 12/31/2018
LIABILITIES
CURRENT 221,442 221,389 1,499,055 1,528,902
Loans and Financing - - 197,029 197,184
Debentures 40,054 27,463 499,719 508,893
Suppliers 44,141 53,986 361,105 293,192
Salaries, vacation pay and social charges 3,600 3,396 23,036 20,633
Income and social contribution payable - - 20,864 52,372
Deferred income and social contribution taxes
Deferred PIS/COFINS - -
Other payable taxes 1,754 4,653 37,070 44,552
Provision for assets built up - - 89,131 79,341
Dividends payable 131,868 131,868 156,973 158,192
Environmental l iabil ity accrual - - 23,201 23,400
Regulatory charges payable - - 65,085 85,107
Provision for l itigation - - 856 1,071
Advances from customers - - - 1,110
Other l iabilities 25 23 24,986 63,855
NON CURRENT 669,965 662,074 6,989,761 6,815,969
Loans and Financing - - 1,686,438 1,663,297
Debentures 659,593 652,527 3,997,234 4,033,896
Suppliers - - - -
Advance for future capital increase - - - -
Taxes payable - - - -
Current income and social contribution taxes - - 1,485 1,485
Deferred income and social contribution taxes - - 782,083 684,758
Deferred PIS/COFINS - - - -
Deferred Sector Taxes - - 155,069 137,327
Provision for l itigation 5,374 4,936 10,803 10,057
Advances from customers - - - -
Environmental l iabil ity accrual - - 734 734
Regulatory charges payable - - - -
Provision for assets built up - - 6,677 6,678
Other l iabilities - - 349,238 277,737
Provision to uncovered liability 4,998 4,611 - -
EQUITY 4,730,851 4,328,048 6,917,133 6,261,709
Capital Subscribed and Paid 2,981,996 2,981,996 2,981,996 2,981,996
(-) Expenses on Issue of Shares (65,225) (65,225) 65,225- (65,225)
Capital Reserve 43,695 43,695 43,695 43,695
Income Reserves 1,343,354 1,343,354 1,343,354 1,343,354
Retained Earnings - - - -
Accumulated Earnings 400,503 - 400,503 -
Other Comprehensive Income 26,528 24,228 26,528 24,228
Non-controlling interest - - 2,186,282 1,933,661
Total Liabilities and Equity 5,622,258 5,211,511 15,405,949 14,606,580
Holding Consolidated
![Page 39: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/39.jpg)
39 | 42
03/31/2019 03/31/2018 03/31/2019 03/31/2018
GROSS OPERATING REVENUE
Energy Transmission System - - 1,005,114 273,996
Energy Generation System 105,135 15,505 230,671 121,292
Service Rendering - - - -
105,135 15,505 1,235,785 395,288
DEDUCTIONS (6,226) (1,386) (89,990) (29,783)
NET OPERATING REVENUE 98,909 14,119 1,145,795 365,505
OPERATING COSTS
Cost of Energy
Energy Purchased for Resale (88,469) (15,481) (123,814) (16,878)
Charges of Electric Grid - CUST - - (7,269) (7,077)
Hydro Resources - CFURH - - (3,436) (1,993)
Operating Costs
Cost of Services Rendered (186) (189) (33,723) (53,617)
infrastructure Cost - - (174,703) (19,370)
Depreciation / Amortization - - (25,480) (23,183)
(88,655) (15,670) (368,425) (122,118)
GROSS PROFIT 10,254 (1,551) 777,370 243,387
OPERATING INCOME (EXPENSES)
General and Administrative (8,168) (6,648) (21,437) (20,248)
Equity Pickup 407,437 74,542 52,306 10,710
Other Income - - 235 134
Other Expenses (419) (233) (424) (256)
398,850 67,661 30,680 (9,660)
INCOME BEFORE FINANCIAL INCOME (EXPENSES) 409,104 66,110 808,050 233,727
Financial Expenses (19,822) (20,507) (78,715) (84,140)
Financial Income 11,221 13,336 20,895 21,973
(8,601) (7,171) (57,820) (62,167)
INCOME BEFORE TAXES 400,503 58,939 750,230 171,560
Current income and social contribution taxes - - (21,030) (27,576)
Deferred income and social contribution taxes - - (82,279) (14,555)
- - (103,309) (42,131)
NET INCOME FOR THE PERIOD 400,503 58,939 646,921 129,429
Attributed to Company Shareholders 400,503 58,939 400,503 58,939
Attributed to Non-Controlling Shareholders - - 246,418 70,490
400,503 58,939 646,921 129,429
Period ended in
Consolidated
Period ended in
Holding
![Page 40: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/40.jpg)
40 | 42
APPENDIX 02 – REGULATORY
03/31/2019 12/31/2018 03/31/2019 12/31/2018
ASSET
CURRENT 970,343 972,865 4,080,821 4,094,262
Cash and Cash Equivalents 249,251 587,165 2,907,339 3,330,710
Short-Term Investments 486,325 158,469 486,325 158,469
Marketable Securities - - 107,934 105,979
Trade Accounts Receivable 60,457 48,972 387,435 324,347
Receivables from related parties - - - -
Dividends to be received 64,335 63,219 - -
Interest on Equity 68,465 68,555 17,387 17,387
Income tax and social contribution compensable - - 3,799 3,677
Other Taxes Recoverable 33,877 37,790 74,322 74,486
Advance for Suppliers - - 19,988 16,887
Inventories - - 4 4
Prepaid Expenses - - 1,122 1,069
Cauções e depósitos judiciais 58 38 12,025 7,030
Accounts Receivable - Concession Assets - - - -
Assets held for sale - - 30,149 29,040
Other Assets 7,575 8,657 32,992 25,177
NON CURRENT 3,370,833 3,276,477 7,957,614 7,760,974
Trade Accounts Receivable - - 12,194 12,130
Receivables from related parties - - - -
Adavances for Future Capital Increases 177,483 170,024 - -
Marketable Securities - - 5,064 4,992
Income tax and social contribution compensable - - 3,187 3,187
Taxes Recoverable - - 2,774 2,774
Deferred Income and Social Contribution Taxes - - 17,667 10,063
Advance for Suppliers - - 1,095 1,012
Inventories - - 9,746 714
Collaterals and Judicial Deposits 3,021 2,965 26,326 23,994
Accounts Receivable - Concession Assets - - - -
Other Assets 6,172 695 31,944 24,621
Investments in associates and controlled jointly 264,506 261,564 314,639 307,020
Investments in controlled companies 2,831,444 2,752,968 - -
Property to investiments 7,826 7,826 7,826 7,826
Fixed assets 764 1,004 7,308,743 7,141,868
Intangibles Assets 79,617 79,431 216,409 220,773
TOTAL ASSET 4,341,176 4,249,342 12,038,435 11,855,236
Holding Consolidated
![Page 41: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/41.jpg)
41 | 42
03/31/2019 12/31/2018 03/31/2019 12/31/2018
LIABILITIES 221,443 89,524 1,512,418 1,358,893
- - 197,029 197,184
CURRENT 40,054 27,463 499,719 508,893
Loans and Financing 44,141 53,986 361,105 287,767
Debentures 3,600 3,396 23,999 21,454
Suppliers - - 32,632 65,717
Salaries, vacation pay and social charges 1,754 4,653 33,339 50,366
Income and social contribution payable - - 89,131 79,341
Other payable taxes 131,868 1 156,973 20,795
Provision for assets built up - - 23,201 23,400
Dividends payable - - 58,181 55,689
Environmental l iabil ity accrual - - 6 121
Regulatory charges payable - - 14,013 26,800
Provision for l itigation 26 25 23,090 21,366
Advances from customers
Other l iabilities 670,073 662,183 5,796,984 5,804,870
- - 1,686,438 1,663,297
NON CURRENT 659,593 652,527 3,997,241 4,033,896
Loans and Financing - - - 515
Debentures - - - -
Suppliers - - 1,636 1,528
Advance for future capital increase - - 6,366 8,457
Taxes payable 5,374 4,936 10,796 10,057
Deferred income and social contribution taxes - - 57,736 50,310
Provision for l itigation - - 734 734
Advances from customers - - - -
Environmental l iabil ity accrual - - 6,677 6,678
Regulatory charges payable - - 29,360 29,398
Provision for assets built up 5,106 4,720 - -
Other l iabilities
Provision to uncovered liability 3,449,660 3,497,635 3,449,660 3,497,635
2,981,996 2,981,996 2,981,996 2,981,996
EQUITY (65,225) (65,225) 65,225- (65,225)
Capital Subscribed and Paid 337 337 337 337
(-) Expenses on Issue of Shares 436,576 257,227 436,576 257,227
Capital Reserve - - - -
Income Reserves 69,448 299,072 69,448 299,072
Retained Earnings 26,528 24,228 26,528 24,228
Accumulated Earnings
Other Comprehensive Income - - 1,279,373 1,193,838
Non-controlling interest
Equity + non-controlling interest
4,341,176 4,249,342 12,038,435 11,855,236
4,729,033
Holding Consolidated
3,449,660 3,497,635 4,691,473
![Page 42: 1Q19 - Amazon S3..."Fixed Assets" account in the balance sheet and several changes in the presentation of "Revenue" i 1. “Adjusted” concecpt in corporate law numbers: In accordance](https://reader034.vdocuments.us/reader034/viewer/2022050404/5f81b64878811411c94f89cf/html5/thumbnails/42.jpg)
42 | 42
03/31/2019 03/31/2018 03/31/2019 03/31/2018
GROSS OPERATING REVENUE
Energy Transmission System - - 271,952 302,261
Energy Generation System 105,135 15,505 230,671 121,292
Service Rendering - - - -
105,135 15,505 502,623 423,553
DEDUCTIONS (6,226) (1,386) (38,546) (34,835)
NET OPERATING REVENUE 98,909 14,119 464,077 388,718
OPERATING COSTS
Cost of Energy
Energy Purchased for Resale (88,469) (15,481) (123,814) (16,878)
Charges of Electric Grid - CUST - - (7,269) (7,077)
Hydro Resources - CFURH - - (3,436) (1,993)
Operating Costs
Cost of Services Rendered (186) (189) (30,196) (52,194)
infrastructure Cost - - - -
Depreciation / Amortization - - (53,802) (51,253)
(88,655) (15,670) (218,517) (129,395)
GROSS PROFIT 10,254 (1,551) 245,560 259,323
OPERATING INCOME (EXPENSES)
General and Administrative (8,168) (6,648) (21,574) (20,370)
Equity Pickup 76,382 82,952 7,414 7,098
Other Income - - 244 134
Other Expenses (419) (233) (424) (256)
67,795 76,071 (14,340) (13,394)
INCOME BEFORE FINANCIAL INCOME (EXPENSES) 78,049 74,520 231,220 245,929
Financial Expenses (19,822) (20,507) (78,716) (84,140)
Financial Income 11,221 13,336 20,896 21,973
(8,601) (7,171) (57,820) (62,167)
INCOME BEFORE TAXES 69,448 67,349 173,400 183,762
Current income and social contribution taxes - - (19,480) (27,575)
Deferred income and social contribution taxes - - 8,034 (1,795)
- - (11,446) (29,370)
NET INCOME FOR THE PERIOD 69,448 67,349 161,954 154,392
Attributed to Company Shareholders 69,448 67,349 69,448 67,349
Attributed to Non-Controlling Shareholders - - 92,506 87,043
69,448 67,349 161,954 154,392
Period ended inPeriod ended in
Holding Consolidated