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4 q09 presentation
- 1. 4Q09 Resultados Operating and Financial Operacionais Results e Financeiros 4Q09 1T08 March 30, 2010 1
- 2. 4Q09 Agenda ► Introduction ► Highlights ► Operating Results ► Financial Results ► Adherence to REFIS ► Recent Events 2
- 3. 4Q09 Agenda ► Introduction ► Highlights ► Operating Results ► Financial Results ► Adherence to REFIS ► Recent Events 3
- 4. 4Q09 Introduction Presentation of Operating and Financial Information ► The financial and operating information contained herein is presented in consolidated figures, pursuant to Brazilian Corporate Law, based on revised financial information. The consolidated financial information represents 100% of CEMAR’s results, excluding 34.86% related to minority interests, 25% of Light’s results, excluding 11.97% related to minority interests, and 25% of Geranorte’s result, which is currently at the pre-operating stage. ► The consolidated operating information represents 100% of CEMAR’s and 25% of Light’s results. ► In order to facilitate comparisons with 4Q08, the financial information is presented on a pro forma basis considering the same interest held by Equatorial in RME and by RME in Light at the end of 4Q09. ► Equatorial’s pro forma results for 4Q08 are based on Light’s pro forma results for the same period, which were adjusted to reflect the changes introduced by Law 11,638/07, pursuant to CVM Instruction 565/08, together with Profit Sharing, which is no longer recorded as personnel costs/expenses and is now recognized after the Income Tax line. ► The following information was not reviewed by the independent auditors: i) non-financial information relating to CEMAR, Light and the PLPT (Programa Luz para Todos - Light for All Program); ii) pro forma information and its comparison with the results presented in the period; and iii) management expectations regarding the future performance of the Companies. 4
- 5. 4Q09 Agenda ► Introduction ► Highlights ► Operating Results ► Financial Results ► Adherence to REFIS ► Recent Events 5
- 6. 4Q09 Operating Highlights ► CEMAR’s and Light SESA’s total energy volume amounted to 2,414 GWh in 4Q09, 8.5% more than in 4Q08. CEMAR’s quarterly volume grew by 8.2%, while Light’s increased by 8.8% (considering both captive and free markets). ► CEMAR’s last-12-month energy losses totaled 25.2% of required energy by the end of 4Q09, 3.7 p.p. less than the 4Q08 ratio of 28.9%. Light’s last-12-month losses came to 21.8%, 1.4 p.p. up compared with 4Q08. ► CEMAR’s last-12-month 4Q09 DEC index decreased 13.6%, to 23.6 hours, while last-12- month FEC index improved 9.5%, to 15.2 times. Light’s last-12-month DEC and FEC moved down by 9.0% and 9.2%, reaching 10.1 hours and 6.1 times, respectively. 6
- 7. 4Q09 Financial Highlights ► Net operating revenues (NOR) reached R$696.6 million in 4Q09, 7.6% up over 4Q08, reflecting a 15.2% increase by CEMAR and a 1.8% upturn by Light. ► Adjusting for non-recurring effects, 4Q09 EBITDA reached R$187.6 million, up by 9.3% over 4Q08. ► Adjusted net income came to R$46.3 million in 4Q09, reflecting a 7.8% decrease over 4Q08. ► In 4Q09, Equatorial’s consolidated investments fell 16.6% when compared with 4Q08. CEMAR’s investments (excluding direct investments in the PLPT program) totaled R$63.6 million in 4Q09, while Light’s investments came to R$52.8 million in the period, up by 23.4% over 4Q08. Geranorte’s investments reached R$13.5 million in 4Q09. 7
- 8. 4Q09 Agenda ► Introduction ► Highlights ► Operating Results ► Financial Results ► Adherence to REFIS ► Recent Events 8
- 9. 4Q09 Distribution – Electricity Market Consolidated ► CEMAR: 4Q09 energy sales moved up by 8.2%, fueled by the 14.3% increase of the residential consumption. ► Light: Consumption at Light’s concession area (captive + free clients*) increased 8.8% on the 4Q09, reaching 1,429 GWh, largely due to the residential (14.7%) and commercial (9.3%) segments. Electricity Consumption (GWh) Electricity Consumption per Segment (GWh) CONSUMPTION CLASS AND 4Q08 3Q09 4Q09 Chg. 2008 2009 Chg. FREE CLIENTS (GWh) Residential 854.8 879.2 978.9 14.5% 3,312.9 3,611.1 9.0% 2,225 2,414 Industrial 236.1 221.6 230.6 -2.4% 898.9 846.1 -5.9% 8.5% Commercial 558.5 541.4 594.4 6.4% 2,133.3 2,222.3 4.2% Others 410.7 426.5 451.5 10.0% 1,574.7 1,657.8 5.3% Free Clients 164.8 151.8 159.0 -3.5% 659.0 602.0 -8.6% Total 2,224.8 2,220.4 2,414.4 8.5% 8,578.8 8,939.3 4.2% 8.8% 1.429 1,314 *To preserve comparability with the market approved by Aneel in the Tariff Review process, the energy and demand measured of free customers Valesul, CSN and CSA were excluded as the exit of these customers to the core network is planned. 911 985 8.2% 4Q08 4Q09 CEMAR Light 9
- 10. 4Q09 Distribution – Energy Losses in CEMAR Non-technical Losses over Low-Voltage Market (last 12 months) 30.4% 30.6% 29.9% 30.0% 29.0% 28.7% 27.3% 24.2% 23.7% 21.5% 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 Regulatory Target Non-technical Losses (from Aug-09 until Jul-10) Total Losses over Required Energy (last 12 months) 28.7% 28.9% 28.6% 28.9% 28.5% 28.1% 28.1% 26.4% 25.6% 25.2% 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 Regulatory Target Total Losses (from Aug-09 until Jul-10) 10
- 11. 4Q09 Distribution – Energy Balance and Losses Total Losses over Wire Load (*) - Light Non-technical Losses over Low Voltage Market - Light 42.3% 42.4% 41.7% 41.8% 41.8% 21.5% 21.8% 20.8% 21.2% 20.4% 4Q08 1Q09 2Q09 3Q09 4Q09 4Q08 1Q09 2Q09 3Q09 4Q09 (*) required energy + free clients Energy Balance ENERGY BALANCE (GWh) 4Q08 3Q09 4Q09 Chg. 2008 2009 Chg. Required Energy 1,271 1,247 1,295 1.9% 4,712 4,776.1 1.4% CEMAR Sales (*) 913 975 987 8.1% 3,353 3,572 6.6% Losses 358 272 308 -14.1% 1,359 1,204 -11.5% Required Energy 1579.2 1516.3 1789.9 13.3% 6232.4 6610.7 6.1% Light Sales 1,149 1,096 1,270 10.5% 4,573 4,771 4.3% Losses (†) 430 421 520 20.9% 1,660 1,840 10.8% (*) Includes sales to the market, own consumption and sales to CEPISA (†) Does not consider basic network losses 11
- 12. 4Q09 Distribution – DEC and FEC (Last 12 months) ► CEMAR: The DEC index decreased 13.6% compared to the 4Q08 and the FEC index fell 9.5% on the same period. ► LIGHT: The DEC and FEC index decreased 9.0% and 9.2% respectively. CEMAR LIGHT 27,8 -9.0% -13.6% 11.1 10.1 DEC (hours) 23.6 4Q08 4Q09 4Q08 4Q09 16.8 -9.5% -9.2% 6.7 6.1 15.2 FEC (times) 4Q08 4Q09 4Q08 4Q09 12
- 13. 4Q09 Generation and Trading Light Energia ► The volume of electricity sold on the 4Q09 was 10.9% bigger compared to the 4Q08 figure. GENERATION - Light Energia (GWh) 4Q08 3Q09 4Q09 Chg. 2008 2009 Chg. Regulated Market Sales 295 259 275 -6.8% 1,089 1,047 -3.8% Free Market Sales 11 30 40 265.1% 87 122 39.2% Spot Sales (CCEE) 5 26 29 517.9% 49 98 100.2% Total 311 314 345 10.9% 1,225 1,267 3.4% Light Esco ► The 4Q09 sales, on Trading and Broker totaled 131 GWh, 49.8% more than in the 4Q08. Volume - GWh 4Q08 3Q09 4Q09 Chg. 2008 2009 Chg. Trading 16 36 62 288.8% 108 161 49.5% Broker 72 69 69 -3.7% 331 264 -20.2% Total 88 105 131 49.8% 439 426 -3.0% 13
- 14. 4Q09 Agenda ► Introduction ► Highlights ► Operating Results ► Financial Results ► Adherence to REFIS ► Recent Events 14
- 15. 4Q09 Consolidated Performance Net Operating Revenues EBITDA Net Income 232.0 -8.5% 212.1 647.2 696.6 76.9 7.6% 53,9% 39,9% 5.3% -90.8% 54,0% 57,0% 47.0% 60,1% 7.1 46,0% 46,1% 47.7% 43,0% 4Q08 4Q09 4Q08 4Q09 4Q08 4Q09** CEMAR Light CEMAR Light CEMAR Light Holdings (*) (*) Holdings: Equatorial, RME and Light S.A. (**) In the 4Q09, CEMAR’s net result was negative. 15
- 16. 4Q09 Consolidated Performance Breakdown by Segment Net Operating Revenues EBITDA Net Income 1.2% 1.2% -3.2% 6.3% 2.7% 6.5% 27.1% 66.6% 95.4% 96.0% Distribution Generation Distribution Generation Distribution Generation Trading Trading Holdings (*) Trading (*) Holdings: Equatorial, RME and Light S.A 16
- 17. 4Q09 Adjusted EBITDA Adjusted EBITDA 26.9 24.5 232.0 33.5 9.3% 187.6 212.1 171.6 4Q08 Fin. Additional Provision Reversal 4Q08 4Q09 REFIS' Fine 4Q09 EBITDA Light Braslight EBITDA EBITDA Reduction EBITDA Light Adjust. Adjust. CEMAR ► Financial Additional: Positive non-recurring effect in the 4Q08 of R$26.9 million, due to the accounting of financial additional from prior years arising from Light’s Tariff Review Process. ► Braslight Provision Reversal: Positive non-recurring effect of R$33.5 million, arising from the provision reversal of Braslight pension fund in the 4Q08. ► REFIS’ Fine Reduction: R$24.5 million positive effect in the 4Q09, due to the reduction of interest and fines through CEMAR’s adherence to the federal program. 17
- 18. 4Q09 Consolidated Performance Adjusted Net Income 9.2 17.5 -7.8% 19.8 76.9 59.0 50.2 46.3 7.1 4Q08 Fin. Additional Braslight 4Q08 4Q09 Refis Refis 4Q09 Net Income Light Effect Adj. Net Adj. Net Light CEMAR Net Income Light Income Income ► Financial Additional: Net effect of R$9.2 million due to the accounting of financial additional from prior years arising from Light’s Tariff Review Process. ► Braslight Provision Reversal: Net effect of R$17.5 million from the provision reversal of Braslight pension fund in the 4Q08. ► Adherence to REFIS (Light): The net effect of Light’s adherence to REFIS amounted to a positive R$19.8 million. ► Adherence to REFIS (CEMAR): Regarding CEMAR’s adherence to REFIS, the net effect was negative in R$59.0 million. 18
- 19. 4Q09 Debt: Schedule of Gross Debt Maturities Consolidated Gross Debt (100% CEMAR + 25% Light + 25% Geranorte) 83.3 83.3 Geranorte 73.4 148.3 Light 616.3 119.1 170.3 97.6 166.7 114.3 278.0 CEMAR 1,217.2 125.0 101.9 86.9 352.0 TOTAL Short Term 2011 2012 2013 2014 After 2014 19
- 20. 4Q09 Net Debt - Consolidated 100% CEMAR + 25% Light +25% Geranorte Net Debt (R$MM)(*) and Net Debt/ EBITDA Net Debt Reconciliation (R$MM) (Last 12 months) 1.5 1.4 1.5 1,199.7 1.0 1.0 1,112.9 1,130.0 139.0 805.5 648.0 777.6 1,917.0 1,130.0 4Q08 1Q09 2Q09 3Q09 4Q09 Gross Debt Regulatory Cash Net Debt Assets (*) Not considering debt with Braslight 20
- 21. 4Q09 Net Debt – Pro-Rata 65.12% CEMAR + 13.03% Light + 25% Geranorte Net Debt (R$MM)(*) and Net Debt/ EBITDA Net Debt Reconciliation (R$MM) (Last 12 months) 1.7 1.4 1.6 0.9 0.9 719.9 84.3 680.0 688.9 424.1 403.1 425.4 1,197.3 688.9 4Q08 1Q09 2Q09 3Q09 4Q09 Gross Debt Regulatory Cash Net Debt Assets (*) Not considering debt with Braslight 21
- 22. 4Q09 Capex - Equatorial ► CEMAR: In the 4Q09, total capex reached R$132.8 million, of which R$63.6 million are own capex and R$69.2 million regarding the Light for All Program (PLPT). ► In the 4Q09, Light invested R$52.8 million, amount 23.4% higher when compared to the 4Q08 figure. ► At the final steps in the plants’ construction, Geranorte invested R$13.5 million. Currently, the plants are in commercial operation CAPEX (R$MM) 4Q08 3Q09 4Q09 Chg. 2008 2009 Chg. CEMAR Own (*) 105.6 62.2 63.6 -39.8% 278.3 239.2 -14.1% PLPT 66.0 46.1 69.2 4.8% 187.0 179.8 -3.9% Total 171.6 108.4 132.8 -22.6% 465.3 418.9 -10.0% Light Distribution 30.2 31.9 37.5 24.4% 113.9 112.6 -1.1% Generation 7.4 2.3 7.8 5.1% 12.0 13.0 8.4% Energy Trading 0.2 0.1 0.5 0.0% 0.2 1.1 425.0% Administration 5.1 3.0 7.1 38.2% 10.7 14.4 35.2% Total 42.8 37.2 52.8 23.4% 136.7 141.0 3.2% Geranorte Generation 24.2 63.6 13.5 -44.2% 24.2 106.9 340.9% TOTAL EQUATORIAL 238.7 209.2 199.1 -16.6% 626.2 666.8 6.5% (*) Including the indirect PLPT investments 22
- 23. 4Q09 Agenda ► Introduction ► Highlights ► Operating Results ► Financial Results ► Adherence to REFIS ► Recent Events 23
- 24. 4Q09 Adherence to REFIS ► In 2009, CEMAR and Light entered into the New REFIS, which consists of a Federal Government program to refinance fiscal debts. The cash outlay of the installments, already net of the discounts obtained and tax credits used for compensation, stands at R$38.5 million to CEMAR and R$80.8 million for Light (already considering the 25% stake consolidated in Equatorial). ► It is worth noting that from the R$52.0 million of tax credits used by CEMAR R$18.0 million were considered in the 2009 results. REFIS Impact CEMAR Light* Debit entered into REFIS 115.3 178.6 Interest and Fines Reduction (24.8) (32.2) Net Total 90.5 146.4 Tax Credits Offsetting (52.0) (65.6) REFIS - Cash Outlay 38.5 80.8 * Considering the 25% consolidated by Equatorial 24
- 25. 4Q09 Agenda ► Introduction ► Highlights ►Operating Results ► Financial Results ► Adherence to REFIS ► Recent Events 25
- 26. 4Q09 Recent Events ► On December 30, 2009, FIP PCP (Equatorial’s controlling shareholder), announced the sale of its indirect stake in Light for R$785 million. ► As from February 2010, the 2 power plants in the Geranorte Project had their start up authorized by ANEEL and, thus, are entitled to receive the annual fixed revenue according to the Y-3 energy auction held in 2007. ► In February 2010, CEMAR and Light entered into an Addendum to the Concession Agreement with ANEEL, in which the effects of the energy market growth on sector charges are neutralized. ► Proposal of changes in the Company’s Management: Mr. Carlos Piani intends to resign to the Chief Executive Officer (CEO) position and will be nominated to the Presidency of the Board of Directors. Meanwhile, Mr. Firmino Sampaio, currently President of the Board of Directors, will resign, being nominated as the Company’s CEO. ► The Board of Directors approved the distribution proposal of minimum dividends, amounting to R$ 50.8 million (or R$0.47/share) in order to maintain the Company’s financial flexibility to possible deal opportunities in the energy sector. 26
- 27. 4Q09 Contacts Eduardo Haiama CFO and IRO Thomas Newlands Investor Relations Telephone 1: +0 55 (21) 3206-6635 Telephone 2: +0 55 (21) 3217-6607 Email: ir@equatorialenergia.com.br Website: http://www.equatorialenergia.com.br/ir 27
- 28. 4Q09 Disclaimer • This presentation may contain forward-looking statements, which are subject to risks and uncertainties, as they were based on the expectations of Company’s management and on available information. These prospects include statements concerning the Company’s current intentions or expectations for our clients; this presentation will also be available at our website www.equatorialenergia.com.br/ir and in the IPE system of the Brazilian Securities and Exchange Commission (CVM). • Forward-looking statements refer to future events which may or may not occur. Our future financial situation, operating results, market share and competitive positioning may differ substantially from those expressed or suggested by said forward-looking statements. Many factors and values that can establish these results are outside Company’s control or expectation. The reader/investor is advised not to completely rely on the information above. • The words “believe", “can", “predict", “estimate", “continue", “anticipate", “intend", “forecast" and similar words, are intended to identify estimates, which refer only to the date on which they were expressed. Hence, the Company has no obligation to update said statements. • This presentation does not constitute any offering, invitation or request of subscription offer or purchase of any marketable securities. And, this statement or any other information herein, does not constitute the basis for any contract or commitment of any kind. 28