Download - 1Q06 Results
AntAntóónio Martins da Costa nio Martins da Costa
CEOCEO
Antonio JosAntonio Joséé SellareSellare
CFO CFO andand Vice Vice PresidentPresident ofof InvestorInvestor
RelationsRelations
Vasco BarcellosVasco Barcellos
InvestorInvestor RelationsRelations OfficerOfficer
1Q06 Earnings Result 1Q06 Earnings Result –– Conference CallConference CallApril, 2006April, 2006
2
Disclaimer
This presentation may include forwardThis presentation may include forward--looking statements of future events or results according to looking statements of future events or results according to regulations of the Brazilian and international securities and exregulations of the Brazilian and international securities and exchange commissions. These statements are change commissions. These statements are based on certain assumptions and analysis by the company that rebased on certain assumptions and analysis by the company that reflect its experience, the economic flect its experience, the economic environment and future market conditions and expected events, maenvironment and future market conditions and expected events, many of which are beyond the control ny of which are beyond the control of the company. Important factors that may lead to significant of the company. Important factors that may lead to significant differences between the actual results differences between the actual results and the statements of expectations about future events or resultand the statements of expectations about future events or results include the companys include the company’’s business s business strategy, Brazilian and international economic conditions, technstrategy, Brazilian and international economic conditions, technology, financial strategy, public service ology, financial strategy, public service industry developments, hydrological conditions, financial marketindustry developments, hydrological conditions, financial market conditions, uncertainty of the results of conditions, uncertainty of the results of future operations, plans, objectives, expectations and intentionfuture operations, plans, objectives, expectations and intentions, among others. Considering these s, among others. Considering these factors, the actual results of the company may be significantly factors, the actual results of the company may be significantly different from those shown or implicit in different from those shown or implicit in the statement of expectations about future events or results.the statement of expectations about future events or results.
The information and opinions contained in this presentation shouThe information and opinions contained in this presentation should not be understood as a ld not be understood as a recommendation to potential investors and no investment decisionrecommendation to potential investors and no investment decision is to be based on the veracity, is to be based on the veracity, current events or completeness of this information or these opincurrent events or completeness of this information or these opinions. No advisors to the company or ions. No advisors to the company or parties related to them or their representatives shall have any parties related to them or their representatives shall have any responsibility for whatever losses that may responsibility for whatever losses that may result from the use or contents of this presentation.result from the use or contents of this presentation.
This material includes forwardThis material includes forward--looking statements subject to risks and uncertainties, which arelooking statements subject to risks and uncertainties, which are based on based on current expectations and projections about future events and trecurrent expectations and projections about future events and trends that may affect the companynds that may affect the company’’s s business. These statements include projections of economic growtbusiness. These statements include projections of economic growth and energy demand and supply, as h and energy demand and supply, as well as information about the competitive position, the regulatowell as information about the competitive position, the regulatory environment, potential opportunities ry environment, potential opportunities for growth and other matters. Several factors may adversely afffor growth and other matters. Several factors may adversely affect the estimates and assumptions on ect the estimates and assumptions on which these statements are based.which these statements are based.
Operating Performance
4
456
776
1,0711,135
502
654
890 900
462
585
762 769
Bandeirante Escelsa Enersul
1998 2001 2005 1Q06
456
776
1,0711,135
502
654
890 900
462
585
762 769
Bandeirante Escelsa Enersul
1998 2001 2005 1Q06
DistributionGrowth with productivity improvement
Energy Distributed (Energy Distributed (GWhGWh)) ProductivityProductivity (Client/Employee)(Client/Employee)
2,998
1,876
795
3,136
2,037
793
Bandeirante Escelsa Enersul
2,998
1,876
795
3,136
2,037
793
Bandeirante Escelsa Enersul
5,6695,6695,9665,966
5.2%
1Q051Q05 1Q061Q06
149% 79%66%
5
DistributionMigration of final customers to free changes the market profile
Energy Distributed (Energy Distributed (GWhGWh)) Net Net RevenuesRevenues (R$MM)(R$MM)
Final Customers Energy in Transit OthersFinal Customers Energy in Transit Others
5,6695,669 5,9665,966
5.2%
1Q051Q05 1Q061Q06
71%71%
28%
1%1%
64%64%
35%
1%1%
Final Customers Energy in Transit OthersFinal Customers Energy in Transit Others
91%91%
8%
1%1%1%1%
12%
87%87%
1Q051Q05 1Q061Q06
991991 1,0761,076
8.6%
6
DistributionProgram to contain losses
In the 1Q06, Energias do Brasil invested R$9.4 million in prograIn the 1Q06, Energias do Brasil invested R$9.4 million in programs geared to contain ms geared to contain growth in the level of technical and commercial losses. These igrowth in the level of technical and commercial losses. These investments are nvestments are intended to provide a gradual reduction starting in 2006.intended to provide a gradual reduction starting in 2006.
Evolution of commercial losses (% of the electric power distributed in the last 12 months)
2.2 2.4
5.9 6.3
4.14.13.93.9
6.05.2
Jun/05 Mar/06 Jun/05 Mar/06 Jun/05 Mar/06
Jun/05 Mar/06
•• ~ 177 ~ 177 thousandthousand inspectionsinspectionsmademade in in thethe 1Q06 1Q06
•• + + thanthan 600 600 thousandthousand inspectionsinspectionsscheduledscheduled for 2006for 2006
•• TechnicalTechnical lossloss growthgrowth duedue to to thethechangechange in in thethe measuremeasure pointpoint atatEnersulEnersul
8.58.59.39.3
Jun/05 Mar/06
Commercial Technical
7
527
1,043
Total
527
1,043
Total
GenerationInvestments resume: Peixe Angical Power Plant
– 98% of the construction concluded
– April 06 – reservoir flooding conclusion and start of the tests
– May 06 – start up
(Installed Capacity MW)(Installed Capacity MW)
20062006
2006200620062006
100% of contracted energy through PPA
100% contracted in
auctions
– Location: Rio Tocantins
– Installed Capacity: 452 MW
– Assured annual power supply: 2,374 GWh
– Reservoir area: 294 Km2
– Investment: R$1.6 Bi (89% expended)
531
Current
Capacity
531
Current
Capacity
452452
2525
5050
AHE Peixe
Angical
PCH São João 4th
Mascarenhas
engine
AHE Peixe
Angical
PCH São João 4th
Mascarenhas
engine
1
8
34
54
1Q05 1Q06
34
54
1Q05 1Q06
CommercializationReduction of self-dealing offset by the increase of customers
EnergyEnergy CommercializedCommercialized ((GWhGWh)) EnertradeEnertrade –– NumberNumber ofof CustomersCustomers
58.8%
921
683
1,354
303
1Q05 1Q06
Others Energias do Brasil's Discos
921
683
1,354
303
1Q05 1Q06
Others Energias do Brasil's Discos
3.3% 1,6571,6571,6041,604
47.0%
Financial Performance
10
Apr/04-Mar/05 Apr/05-Mar/06
Distribution Generation Commercialization
Apr/04-Mar/05 Apr/05-Mar/06
Distribution Generation Commercialization
1Q05 1Q06
Distribution Generation Commercialization
1Q05 1Q06
Distribution Generation Commercialization
Revenues and EbitdaSustained growth
EbitdaEbitda (R$MM) (R$MM) –– QuarterQuarter
Net Revenues (Net Revenues (R$MM) R$MM) –– QuarterQuarter
4%
1,0941,094 1,1201,1202.4%
2%
89%
9%
86%
10%
1Q05 1Q06
Distribution Generation Commercialization
1Q05 1Q06
Distribution Generation Commercialization
15%
280280 2822820.7%
5%
87%
8%
79%
6%
Net Revenues (R$MM) Net Revenues (R$MM) –– Last 12 monthsLast 12 months
5%
3,8383,838
4,3474,34713.3%
2%
89%
9%
86%
9%
Apr/04-Mar/05 Apr/05-Mar/06
Distribution Generation Commercialization
Apr/04-Mar/05 Apr/05-Mar/06
Distribution Generation Commercialization
EbitdaEbitda (R$MM) (R$MM) –– Last 12 monthsLast 12 months
12%
818818
91591511.8%
5%
88%
7%
83%
5%
11
Costs and Expenses Breakdown1
Manageable costs have the potential to be significantly reduced Manageable costs have the potential to be significantly reduced with the recent with the recent corporate restructuring and synergy programscorporate restructuring and synergy programs
Costs and Expenses BreakdownCosts and Expenses Breakdown11 –– 1Q061Q06Costs and Manageable Expenses Breakdown Costs and Manageable Expenses Breakdown ––1Q061Q06
R$839 R$839 millionmillion
NonNon--manageable manageable
costscosts
R$651 R$651 millionmillion
(78%)(78%)
Manageable Manageable costs costs
R$188 R$188 millionmillion
(22%)(22%)
Note:
1 Excludes depreciation and amortization
Manageable Expenses
R$ Million 1Q06 1Q05 Var.%
Personnel 71 64 10.3%
Material 8 9 -9.7%
Third-part Services 67 48 39.1%
Provisions 22 18 17.0%
Others 20 22 -10.5%
Total 188 162 15.7%
Accumulated
Third-part Services (Corporate Programs)
- Program to Contain Losses – R$ 6,0 million
- Consultancy and IT: R$ 4,9 million
12
Financial Result
Financial Result Financial Result –– R$MMR$MM
1Q06 1Q05 Var.%
Financial Revenues 55 79 -31.2%
Financial Expenses (84) (103) -19.3%
Net Foreign Exchange Result (9) (32) -77.8%
SWAP - net result (55) (24) 129.6%
Foreign exchange gains (loss) 46 (8) n.a.
TOTAL (39) (56) -30.6%
Accumulated
Efficient management of foreign currency debt contributed to a Efficient management of foreign currency debt contributed to a better financial better financial performanceperformance
SELIC SELIC andand US$ US$ Evolution (jan/05Evolution (jan/05))
12%
14%
16%
18%
20%
22%
jan-05 apr-05 aug-05 dec-05
1.5
1.7
1.9
2.1
2.3
2.5
2.7
2.9
Average SELIC Dollar end period
13
ProfitabilityBetter operational and financial performance
103104
1Q05 1Q06
103104
1Q05 1Q06
31
99
1Q05 1Q06
31
99
1Q05 1Q06
Net Net ProfitProfit (R$MM)(R$MM)Net Net profitprofit beforebefore thethe participationparticipation ofofminorityminority shareholdersshareholders (R$MM)(R$MM)
1.2%216.2%
In 1Q05, it is included theeffect from the Enersul’s RAB
of R$74.8 million
14
3,037
(551)
(754)
1,731 1,710
Gross Debt
Mar.06
(-) Cash &
Marketable
Securities
(-) Regulatory
Assets
Net Debt Mar.06 Net Debt Dec. 05
IndebtednessLow leverage level and low currency exposure
Capital structure was strengthened by the IPO and the capitalizaCapital structure was strengthened by the IPO and the capitalization of tion of EscelsaEscelsa’’sssenior notes creating financial capacity for the companysenior notes creating financial capacity for the company’’s growths growth
IndebtednessIndebtedness –– 1Q061Q06 (R$MM)(R$MM)
(Mar/06)(Mar/06)
Gross Debt Gross Debt –– Index BreakdownIndex Breakdown
4%
32%
4%
60%
US$ TJLP
Fixed rate Floating rates
4%
32%
4%
60%
US$ TJLP
Fixed rate Floating rates
1.9x1.9x**
* * Ratio:Ratio: Net Debt Net Debt / EBITDA 12 / EBITDA 12 monthsmonths
* ** *
** ** IncludesIncludes Selic, CDI, IGPSelic, CDI, IGP--M M andand INPCINPC
1.9x1.9x**
15
551
965
737
301
209168
657
Cash & Mkt.
Securities
Mar-Dec/06 2007 2008 2009 2010 After 2010
Indebtedness Extending maturities at lower costs
Debt Amortization Schedule Debt Amortization Schedule –– Mar/06 (R$MM)Mar/06 (R$MM)
32%32%
24%24%
10%10%7%7% 5%5%
22%22%
Transactions in progressTransactions in progress–– StandStand--byby FacilitiesFacilities (R$700 (R$700 Million)Million)
–– Issuance of debentures:Issuance of debentures:
–– Bandeirante (R$250 Bandeirante (R$250 MillionMillion / / concluded)concluded)
–– EnersulEnersul (R$250 (R$250 MillionMillion / / in progress)in progress)
-- Reduction of shortReduction of short--term debt: from 32% to 9% of the total debtterm debt: from 32% to 9% of the total debt
-- Extension of the Extension of the ““durationduration”” from 3.4 years to 4.3 yearsfrom 3.4 years to 4.3 years
-- Reduction of the debt average cost from 17.4% to 14.9%Reduction of the debt average cost from 17.4% to 14.9%
Benefits from the operations in progress:Benefits from the operations in progress:
16
335
612
125
343
182126
2005 2006E
Distribution Generation Universalization
335
612
125
343
182126
2005 2006E
Distribution Generation Universalization
Current Investment PlanOver R$ 2.5 billion invested last 3 years
Investment Breakdown (Excludes New Generation Projects) Investment Breakdown (Excludes New Generation Projects) –– R$ MMR$ MM
* * PreliminaryPreliminary
*
1,0721,072
651651
504226
1Q06
504226
1Q06
118118
17
90
110
130
150
170
190
210
230
7/12/2005 8/3/2005 8/25/2005 9/19/2005 10/11/2005 11/4/2005 11/29/200512/21/2005 1/13/2006 2/7/2006 3/3/2006 3/27/2006 4/19/2006
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
Volume R$ ENBR3 ENBR3 Ibovespa IEE
Performance of the Shares
Updated until April Updated until April 26,26, 20062006
+71%+71%
+59%+59%
+58%+58%
Volume Volume
R$thR$th
18
Financial Strength / Investment Capacity
Self-sustentability
Competitive Organizational
Structure
Operational Efficiency
Strategic Consistency
Superior Corporate Governance
ConclusionA value focused business model
AntAntóónio Martins da Costa nio Martins da Costa
CEOCEO
Antonio JosAntonio Joséé SellareSellare
CFO CFO andand Vice Vice PresidentPresident ofof InvestorInvestor
RelationsRelations
Vasco BarcellosVasco Barcellos
InvestorInvestor RelationsRelations OfficerOfficer
1Q06 Earnings Result 1Q06 Earnings Result –– Conference CallConference Call
April, 2006April, 2006