Geti 1 q10_call_final
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Operational highlights include energy generation 55% higher than guaranteed levels and an 8% raise in billed energy. Financially, EBITDA reached R$378 million with an 82% margin and net income was R$239 million, an 11% increase over 1Q09. Subsequent events included a R$900 million debenture issuance and debt repayment. Reservoir levels closed at 97% of capacity and above risk thresholds.
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Geti 1 q10_call_final
- 2. 1Q10 Main highlights Operational Operational Energy generation 55% higher than physical guarantee Raise of 8% on billed energy with AES Eletropaulo due to bilateral contract seasonality, to be offset throughout this year Financial Financial Ebitda reached R$ 378 million, with margin of 82% Decision favorable to the Company on legal dispute with Furnas created a positive impact of R$ 43 million in financial result Net income of R$ 239 million, presenting an increase of 11% compared to 1Q09 (R$ 211 million without considering the non-recurring event abovementioned) Subsequent Subsequent 1st debenture issuance of the Company, amounting R$ 900 million and pre-payment of the Event Event only existing debt on May, 4th 2010 2
- 3. Reservoirs level and CAR1 • AES Tietê reservoirs levels closed the quarter with an average of 97% and the stored energy in the Southeast Submarket stayed well above the CAR¹ throughout 1Q10 Reservoirs Level - (%) Risk Aversion Curve – Southeast Submarket 80 % of Maximum Stored Energy 60 98.9 97.2 92.0 92.4 85.3 83.0 40 80.8 72.9 65.5 72.6 54.5 47.3 20 - Southeast South Northeast North Jan Apr Jul Oct 2009 2010 CAR 2009 1Q09 1Q10 1 – Risk Aversion Curve Source: National Electric System Operator – ONS 3
- 4. Operational availability • Maintaining high operational availability with a level of generated energy 55% higher than the physical guarantee Energy Generation – MW Avg.1 155% 130% 121% 119% 115% 1,979 112% 1,665 1,545 1,512 1,467 1,425 2005 2006 2007 2008 2009 1Q10 Generation – MW Avg. Generation / Physical Guarantee 1- Generated energy divided by the amount of period hours 4
- 5. Billed energy Billed energy was 12% higher due to seasonality of bilateral contract with AES Eletropaulo and greater volume of secondary energy in 1Q10 Billed Energy – GWh1 Spot Market2 12 % 4,164 3,705 589 MRE2 335 511 49 563 Other Bilateral Contracts 19 2,787 3,015 AES Eletropaulo 1Q09 1Q10 1 - Including energy purchased 2 – Considers the difference between the sale and purchase volume 5
- 6. Investments Investments of R$ 6 million in maintenance and modernization of power plants and R$ 1 million in environmental projects in 1Q10 Investments – R$ million Investments 1Q10 New SHPPs 67 Investments 6% 2% 9 59 57 18% 20 13 75% 58 44 39 1 1 Equip. and Maint. New SHPPs 8 7 IT Environment 2008 2009 2010(e) 1Q09 1Q10 6
- 7. Projects to comply with the expansion obligation Opportunities to increase installed capacity Concluded Concluded 6 MW of co-generation through biomass, contracted for 15 years (as of 2010) (PPA1) (PPA1) Under 7 MW of hydro generation through SHPPs2 in Jaguari Mirim River Under Construction Construction – São José SHPP (4 MW) has an estimated start-up in 2H10 – São Joaquim SHPP (3 MW) has an estimated start-up in 2H10 Under Under 500 MW of thermo generation through natural gas Development Development – Location has been defined in Nov/2009 – Initiation of the environmental licensing process, with entry on CETESB in March/2010 22 MW of hydro generation through SHPPs, in stage of technical and economic feasibility studies 1 – Power Purchase Agreement 2 – Small Hydro Power Plant 7
- 8. Net Revenue Increase of 8% in volume and 1.53% in the energy price sold to AES Eletropaulo contributed to raise of 10%in net revenue Net Revenue – R$ million 460 10% 417 1Q09 1Q10 8
- 9. Costs and expenses Costs were impacted by biannual lock maintenance, increase in head counting and salary, and a complement on the provision regarding lawsuit with AES Sul Depreciation and Amortization - 7% 98 92 16 Operational Provisions 16 5 Other Costs and Expenses1 27 30 Energy Purchase, Transmission 48 48 and Connection Charges, and Water Resources 1Q09 1Q10 1 - Personnel, Material, Third Party Services and Other Costs and Expenses 9
- 10. Ebitda change 11% raise in Ebitda, with 82% of margin Ebitda – R$ million 82% 82% 11% Ebitda Margin 378 342 1Q09 1Q10 10
- 11. Financial result Positive impact of R$ 43 million in financial result due to Company’s favorable decision in a lawsuit with Furnas and a negative impact of the IGP-M of R$ 39 million in the Company’s debt Financial Result – R$ million - 66% 3 1 1Q09 1Q10 11
- 12. Net income Company registered a net income of R$ 239 million in 1Q10 and will distribute 100% of the result 100 % 100 % 11 % 239 Pay-out 215 1Q09 1Q10 12
- 13. Cash flow generation Growth of 24% in operating cash flow generation Consolidated Managerial Cash Flow – R$ million 1Q09 4Q09 1Q10 Initial Cash 840 652 615 Operational Cash Generation 297 297 368 Investments (11) (24) (8) Net Financial Expenses (6) (14) (12) Net Amortization (53) (59) (60) Income Tax (253) (18) (328) Free Cash Flow (25) (183) (41) Dividends and Interest on Equity 0 221 0 Final Cash 814 615 574 13
- 14. Debt Reduction of the debt cost from IGP-M + 10% p.a. to CDI + 1.20% p.a. Net Debt – R$ billion Overlook on the 1st debenture issuance R$ 900 million 0.3x 0.3x 0.3x 0.3x 5 years term CDI + 1.20% a.a. Payment on semiannual basis 0.4 0.4 0.4 0.3 Fixed amortization on the 3rd, 4th, and 5th years Objective: pre-payment of Eletrobras debt 2008 2009 1Q09 1Q10 Net Debt Net Debt / Ebitda 14
- 15. Capital market 37% growth in daily average volume traded in 1Q10 AES Tietê X Ibovespa X IEE Daily Avg. Volume - R$ thousand Last 12 Months 13,708 10,187 190 170 + 72% 8,160 150 + 45% 8,086 9,756 130 + 10% 110 5,468 90 70 2,692 3,952 Mar-092 Jun-09 Sep-09 Dec-09 Mar-10 2,101 1Q10 110 2008 2009 1Q10 + 3% Preferred Common 100 0% - 3% GETI4 90 IBOV IEE Dec-093 Jan-10 Feb -10 Mar-10 15 1 – Index: 03/31/09= 100 2 - Index: 12/31/09 =100
- 16. 1Q10 Results The statements contained in this document with regard to the business prospects, projected operating and financial results, and growth potential are merely forecasts based on the expectations of the Company’s Management in relation to its future performance. Such estimates are highly dependent on market behavior and on the conditions affecting Brazil’s macroeconomic performance as well as the electric sector and international market, and they are therefore subject to changes. .