presentation ? 2q14 results

8/11/2019 Presentation ? 2Q14 Results

1/21

Conference Call

2th Quarter 2014


2/21

Highlights

Energy consumption grew by 3.0% between 2Q14 and 2Q13, driven by an 8.0% consumption

increase in the residential segment;

Non-technical losses/BT market in the last 12 months stood at 41.9%, 0.5 p.p. down quarter-over-

quarter with a drop of 2.3 p.p. year-over-year;

Collections fee in the quarter reached 103.5%, 0.7 p.p. down year-over-year;

Allowance for doubtful accounts (PCLD) of 1.7% of revenue from energy billing in 2Q14, 0.8 p.p.

down on PCLD of 2.5% recorded in 2Q13;

DEC e FEC, in the last 12 months, increase 26.21% and 16.91%, respectively, in comparation with

the same period of the previous year;

OPERATING

Net revenue, excluding construction revenue, grew by 1.4% year-over-year, totaling R$ 1,601.5

million;

Consolidated EBITDA in 2Q14 of R$239.3 million, 13.9% down on 2Q13;

Net income for 2Q14 totaled R$15.3 million, compared to a net income of R$58.2 million in 2Q13; Consolidated net debt of R$5,229.6 million, 2.1% down on the same quarter last year;

FINANCIAL

CDE FUNDS

CDE (Energy Development Account) transfer of funds to distribution companies to settle energy

purchase commitments with CCEE (Electricity Chamber of Trade);

Amount of R$224.3 million in April and May was recorded in profit or loss as cost reduction with

Portion A;

Total transfer of R$1,385 million in the first half, reducing its period tariff deficit to R$250 million, whichwill be passed on to consumers in the next tariff adjustment through the CVA.


3/21

Energy ConsumptionDistributionQuarter

1Note: To preserve comparability in the market approved by Aneel in the tariff adjustment process.the billed energy of the free customer CSN has been considered back.

TOTAL MARKET (GWh)

Industrial

captive5.3%

Free

20.3%

Otherscaptives

14.0%

Commercialcaptive27.6%

Residentialcaptive32.8%

2Q12

Q11

2Q13 2Q14

+3.0%

6,304

5,754

23.2C

23.1C

5,669

6,495

23.5C

22.7C

+4.6%


4/21

Energy ConsumptionDistributionAccumulated

1Note: To preserve comparability in the market approved by Aneel in the tariff adjustment process.the billed energy of the free customer CSN has been considered back.

TOTAL MARKET (GWh)

Industrial

captive5.1%

Free

18.6%

Otherscaptives

13.6%

Commercialcaptive27.6%

Residentialcaptive35.2%

+5.5%

1H12

H11

+5.1%

1H13 1H14

13,145

11,934

25.7C

11,960

13,869

25.2C

25.1C 25.1C


5/21

Total Market

RESIDENTIAL INDUSTRIALCOMMERCIAL OTHERS TOTAL

2Q13 2Q14

ELECTRICITY CONSUMPTION (GWh)TOTAL MARKET QUARTER

2Q13 2Q14

2Q13 2Q14

2Q13 2Q14

2Q13 2Q14

FREECAPTIVE

4,954

5,176

6,304

1,349

1,319

+2.3%

893

910

942

49

54

964

+2.8%

1,962

215

224

2,017

1,428

1,085 1,041

1,385

+8.0%

1,972

2,128

-3.0%

1,748

1,793

+3.0%

342 344

6,495


6/21

Total Market

RESIDENTIAL INDUSTRIALCOMMERCIAL OTHERS TOTAL

1H13 1H14

ELECTRICITY CONSUMPTION (GWh)TOTAL MARKET - ACCUMULATED

1H13 1H14

1H13 1H14

1H13 1H14

1H13 1H14

FREECAPTIVE

5,176

893

910

1,748

342 344

+5.5%

10,526

11,292

13,145

2,618

2,576

13,869

+4.2%

1,806

1,880

1,909

103

109

1,990

5.7%

4,055

430

457

4,284

701 705

2,787

2,086 2,010

2,715

+11.1%

4,395

4,880

-2.6%

3,625

3,827


7/21

Collection

PCLD/Gross Revenue

(Billed Sales) - Quarter

COLLECTION RATE BY SEGMENTQuarter

2Q13 2Q14

103.5%

104.5%

105.1%

101.8%

102.9%

108.1%

Total

Retail

Large Clients

Public Sector

104.2%

97.3%

2Q12 2Q1 4Q13

3.4%

2.5%

1.7%

-0.8 p.p.


8/21

2 9 2 2 2 2 2 3

Loss Prevention

LOSS (12 MONTHS)

% Non-technical

losses/ LV Market

Non-technical losses GWh

Technical losses GWh

Jun/13

Sep/13 Mar/14

Jun/14

ec/13

INSTALLED METERS

(Thousand Units)

Communities

Without Communities

2010

2011 2013012

115

Jun/14

43.7%

5,738

2,614

8,552

44.2%

5,972

2,843

8,352

41.9%

5,953

2,629

8,815

5,905

2,647

8,582

- 2.3 p.p.

42.2%

42.4%

5,955

2,793

8,748

351

30

79

102

227

432

272

330

7

122

116

509

197

393


9/21

Losses Combat ActionsAPZ Results

By June. the program coverd 505 thousand customers in 29 APZs. which ones 22 hadthe results calculated:

* Reflects the results accumulated until mar/14 since the begining of the implementation of each APZ. Subtitle: N = N / Y = Yes.

-30.0 p.p


10/21

Net Revenue

Industrial

(Captive)

5.9%

NET REVENUE (R$MN) Generation7.5%

Distribution

80.5%**

NET REVENUE BY SEGMENT (2Q14)*

Commercialization

12.0%

* Eliminations not considered

** Construction revenue not considered

NET REVENUE FROM DISTRIBUTION (2Q14)

Commercial

(Captive)

42.6%

Others (Captive)

12.2%

Network Use (TUSD)

(Free + Concessionaires)

7.8%

Residential (Captive)

31.5%

Construction Revenue

Revenue w/out construction

revenue

+3.5%

1.580

1.602

378

333

1,755

3,677

2Q14

+1.4%

1H13

3.344

3.720

+11.2%

214

76

1,816

4,098

2Q13 1H14

1,580

1,602

3,344

3,720

+11.5%


11/21

Operating Costs and Expenses

Manageable

(distribution):R 309

(18.8%)

Generation and

Commercialization:R 249

(15.2%)

Non manageable

(distribution**):R 1,084

(66.1%)

* Eliminations not considered** Construction revenue not considered

DISTRIBUTION PMSO COSTS (R$MN)COSTS (R$MN)*2Q14

COSTS (R$MN)*

1H14Non manageable

(distribution

**

):R 2,293

(66.0%)

Generation and

Commercialization:

R 506

(14.6%)

Manageable

(distribution):

R 677

(19.5%)

R$ MN 2Q13 2Q14 Var. 1H13 1H14 Var.

PMSO (212.0) (207.1) -2.3% (412.7) (412.3) -0.1%

Provisions (66.6) (14.1) -78.8% (111.8) (79.4) -29.0%

PCLD (48.4) (36.1) -25.5% (77.4) (61.4) -20.8%

Contingencies (18.2) 21.9 - (34.4) (18.0) -47.5%

Depreciation (83.8) (86.2) 2.8% (164.5) (171.6) 4.3%

Other operational/revenues expenses

(5.7) (1.2) -79.5% (12.9) (13.3) 2.6%

Total (368.0) (308.5) -16.2% (701.9) (676.6) -3.6%

368

309

-16.2%702

677

1H14H13

-3.6%

2Q14Q13


12/21

Tarif Deficit

12

Tarif Deficit Balance

DE Fund

Total

Aporte CDE -1H14 (R MN)

Decree8203

(jan/14)

SPOT market Involuntary Exposure 1,238

Availability contracts with thermal plants 299

Hydrological Risk 39

A-1 Auction Contract 30

A-0 Auction Contract 28

TOTAL 1,635

(250)

(1,635)

1,385

The remaining balance of R$ 250 millions refers to the portion of items not covered by the decrees, with an emphasis on:

availability contracts in January , energy contracted through the A-1 auction, a portion of the energy contracted in the A-0

auction, hydrological risk, revenue from hydrological risk deducted from the January and February transfers and from the

cut in the April transfer

The exposure to the spot Market and its high prices, which reflect the low levels of hydroplant reservoirs and the dispatch of thermal plants, resulted in an expressive deficit for

distributors


13/21

EBITDAEBITDA BY SEGMENT (R$ MN)

Generation and Commercialization

Distribution

56.0%

244

-12.5%

279

45.8%

54.2%

37.4%

62.6%

2Q13 2Q14 1H13 1H14

63.3%

36.7%

44.7%

+9.9%

636

55.3%

699 Consolidated EBITDA(R$ MN)

2Q14 2Q13 Var. 1H14 1H13 Var.

Distribution 132.3 174.5 -24.2% 387.1 402.6 -3.9%

EBITDA Margin (%) 9.2% 12.5% -3.3 p.p. 12.2% 13.5% -1.3 p.p.

Generation 88.0 100.1 -12.1% 270.8 219.4 23.4%

EBITDA Margin (%) 66.0% 75.9% -9.9 p.p. 78.6% 79.1% -0.6 p.p.

Commercialization 23.9 4.4 449.3% 41.5 14.3 190.6%

EBITDA Margin (%) 11.1% 2.8% 8.3 p.p. 9.2% 4.6% 4.6 p.p.

Others and eliminations (4.9) (1.1) 360.2% (7.1) (3.3) 118.9%

Total 239.3 277.9 -13.9% 633.1 692.3 9.3%

EBITDA Margins (%) 14.9% 17.6% -2.7 p.p. 18.9% 18.6% -0.3 p.p.


14/21

EBITDA

EBITDA

2Q13

EBITDA

2Q14

Net

Revenue

Non-

Manageable

Costs

Manageable

Costs

(PMSO)

Provisions

egulatory

Assets and

Liabilities

Regulatory

Assets and

Liabilities

Adjusted

EBITDA

2Q13

Adjusted

EBITDA

2Q14

Adjusted EBITDA 2Q13 / 2Q14(R$ MN)

Other

operacional

revenues

Equity

Pikup

- 9.4%

- 13.9%

397

278

(110)(2)

(4)

239

360

11922

3 52

120


15/21

EBITDA

EBITDA

1H13

EBITDA

1H14

Net

Revenue

Non-

Manageable

Costs

Manageable

Costs

(PMSO)

Provisions

egulatory

Assets and

Liabilities

Regulatory

Assets and

Liabilities

Adjusted

EBITDA

1H13

Adjusted

EBITDA

1H14

Adjusted EBITDA 1H13 / 1H14(R$ MN)

Other

operacional

revenues

Equity

Pikup

- 6.9%

+9.3%

854

220

633

376 (328)

(10) (6) 32 (6)

692

102

794


16/21

Net Income

2Q13

2Q14

BITDA Financial

Result

Taxes Depreciation

ADJUSTED NET INCOME2Q13 / 2Q14 (R$ MN)

Regulatory

Assets and

Liabilities

Regulatory

Assets and

Liabilities

Adjusted Net

Income

2Q13

Adjusted Net

Income

2Q14

58

95

- 73.8%

-30.8%

137

(39)

(16)(3)

15

79

15

79


17/21

Net Income

1H13

1H14

BITDA Financial

Result

Taxes Depreciation

ADJUSTED NET INCOME1H13 / 1H14 (R$ MN)

Regulatory

Assets and

Liabilities

Regulatory

Assets and

Liabilities

Adjusted Net

Income

1H13

Adjusted Net

Income

1H14

(16) (3)

+ 43.1%

- 6.8%

282

145

137

59

44 (36) (8)

196

67

263


18/21

Indebtedness

Average Term: 3.9 years

AMORTIZATION SCHEDULE* (R$ MN)

Nominal Cost Real Cost

NET DEBT

*ConsideringHedge* Principal only

COST OF DEBT

2012

011

2Q14

013

Net Debt / EBITDA

2.24%

8.21%

3.87%

10.49%

4.25%

11.03% 9.68%

3.55%

TJLP

13.3%

CDI

74.5%

IPCA

11.0%

Others

3.7%

U /Euro

-2.7%

408

781

1,031

832

1,166

717

729

476

573

4,056.15,341.8 5,229.6

Jun/13

2.90

2.99

Jun/14ar/14

2.62


19/21

Investments

CAPEX (R MN)

CAPEX BREAKDOWN

(R MN)

1H14

Generation

8.4

Administration

12.2

Others

5.0

Develop. of

Distribution

System

207.5

Losses

Combat

119.7

Investments in Electric Assets (Distribution)

Commerc./

Energy

Eficiency

5.0

519

2010

701

2011

2012

797

694

103

519

182

775

154

713

132

845

+9.5%

2013

327

1H13

1H14

54

26

273

332

358

929


20/21


21/21

presentation ? 2q14 results

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