Download - Conference call presentation 4 q10 28.03
4Q10 Results &
Perspective for 2011
11-30-10
Disclaimer
The material that follows is a presentation of general background information about MPX Energia S.A. and its subsidiaries
(collectively, “MPX” or the “Company”) as of the date of the presentation. It is information in summary form and does not purport
to be complete. No representation or warranty, express or implied, is made concerning, and no reliance should be placed on, the
accuracy, fairness, or completeness of this information.
This presentation may contain certain forward-looking statements and information relating to MPX that reflect the current views
and/or expectations of the Company and its management with respect to its performance, business and future events. Forward
looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results,
performance or achievements, and may contain words like “may”, “plan”, “believe”, “anticipate”, “expect”, “envisages”, “will likely
result”, or any other words or phrases of similar meaning. Such statements are subject to a number of risks, uncertainties and
assumptions. We caution you that a number of important factors could cause actual results to differ materially from the plans,
objectives, expectations, estimates and intentions expressed in this presentation. In no event, neither the Company, any of its
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in this presentation or for any consequential, special or similar damages.
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in this presentation or for any consequential, special or similar damages.
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Agenda
Mining
Highlights & Subsequent Events
Financial Performance
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Mining
Natural Gas
Ventures
MPX to raise up to R$ 1,3 billion to fund development of key ventures MPX Parnaíba and
MPX Colombia.
In Colombia, potential resources surpass 4 billion tons of coal - annual production expected
to reach 35 million tons.
Environmental Licensing process for infrastructure in Colombia advanced with DAA for the
port approved and exemption from DAA requirement for 150 km railroad confirmed.
Exceptional success in the exploration of the Parnaíba Basin – in one well alone, test results
MPX Highlights
Exceptional success in the exploration of the Parnaíba Basin – in one well alone, test results
indicate potential daily production of up to 3.4 million m3 (AOF – absolute open flow).
Strategically positioned to capture the growth in gas-based generation: only private-sector
utility with integration of power generation to gas supply.
Largest growth portfolio in South America: reached 11GW in licensed projects with the
granting of environmental licenses to a 3,300 MW gas-fired plant at the Superporto do Açu
and a 2,100 MW coal-fired plant in Chile.
Construction of Energia Pecém, MPX Pecém II and MPX Itaqui power plants 90% complete.
Approximately 10 thousand jobs created.
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Financial Performance
Cash balance in Dec/2010, including balance in scrow accounts
Parent: R$ 566.0 million
Consolidated: R$ 854.2 million
Equity for Pecém I, II and Itaqui
R$ 193 million in 2010
Parent Company Consolidated
R$ million dec/10 sep/10 dec/10 sep/10
Current Assets 668.6 565.5 1,661.5 1,131.1
Noncurrent Assets 297.2 274.5 1,006.4 306.4
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Gross Debt in Dec/2010
R$ 2,607.1 million
89% Long-term
R$ 193 million in 2010Fixed Assets 1,074.3 982.0 3,611.7 3,115.8
Total Assets 2,040.1 1,822.0 6,279.6 4,553.2
Current Liabilities 322.5 71.9 1,395.7 862.4
Non-current Liabilities 4.3 21.6 3,182.3 1,919.2
Minority Interests - - 43.4 43.1
Shareholders’ Equity 1,713.3 1,728.5 1,658.2 1,728.5
Total Liabilities 2,040.1 1,822.0 6,279.6 4,553.2
Operating expenses Parent
(In thousands Reais) 4Q10 4Q09 % Var
Expenses
Personnel and managers (45,634) (31,634) 44.3%
Material (45) (44) 3.6%
Outsourced services (10,027) (12,254) -18.2%
Leases and Rentals (2,674) (693) 285.9%
Insurance (83) (198) -57.8%
Parent Company’s G&A Expenses
� Fair Value of Stock Options (IFRS):
R$ 16,1 million
� Reclassification of R$ 6.5 million
previously booked as Deferred Assets
(IFRS)
� R$ 4.3 million due to annual pay
adjustment of 6.63%. Insurance (83) (198) -57.8%
Taxes (102) (72) 41.2%
Other expenses (1,351) (2,397) -43.6%
Total (59,915) (47,291) 26.7%
Depreciation and amortization (203) (148) 37.9%
Total (60,119) (47,439) 26.7%
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� R$ 1.9 million in rent expenses
relative to new headquartes
Structure Convertible Debentures
Volume R$ 1.0 Bi – R$ 1.3* Bi (R$ 600M BNDES + R$ 200M EB + R$ 200M Gávea)
Capitalization of up to R$ 1.3 billion
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Volume R$ 1.0 Bi – R$ 1.3* Bi (R$ 600M BNDES + R$ 200M EB + R$ 200M Gávea)
Tenure 3 years
Rate IPC-A + 4.00% aa
Conversion Price R$ 43.0/share
* Considering 0% and 100%, respectively of free float subscription
Principal escalated by IPC-A + 4% spread payable annually
CCX: The “Carajás” of Compliance Coal
Unique geology within
MPX’s leases
In excess of 100 seams
22 seams >1.5m thick
8 coal seams >3m
Potential of >1.6 billion
mineable tonnes
8
mineable tonnes
Fully-integrated logistics
Heavy-haul 150km
railway: flat route,
parallel to existing road
Port: best combination
of deepest water &
flatter area in Guajira
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PRODUCTION Ramp-up
A Low-Cost, Large Scale Coal Production System
Large production scale: 35 million tonnes per year
Competitive mining costs: estimated cost for underground mines US$25/t
Low cost logitics: 150km railway + private deep water port
0
5
10
15
20
25
30
35
40
MT
PY
PHASE 1 PHASE 2
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Unique Onshore Natural Gas Portfolio with 15 Tcf
Discoveries
Portfolio Potential
Block % MPX Well Prospect Status
PN-T-6823,3%
(33.3% * 70%)
OGX-16 Califórnia Concluded
OGX-22 Fazenda São
JoséConcluded
OGX-23 Bom JesusIn progress
since 13/02
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Year 2010 2011 2012 Total
Number of wells 3 9 3 15
Pressure of 1,900
psi
Flames approx.
15m high
Production potential of
3.4M m3/day in
Absolute Open Flow
Pressure of 1,950 psi
Flames approx. 20m
high
Portfolio Potential
Potential resources of approx. 15 Tcf
Production potential of approx. 15M m3 / day
Approx. 20 mapped prospects
Drilling schedule
OGX-16 OGX-22
2 onshore rigs secured
Ownership StructureOwnership Structure
OGX
OGXMaranhão
PETRA
Blocos Exploratórios
UTE
70% 30% 30% 70%
2/31/3
Integrated to a 4,000 MW Generation Complex
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Exploratórios
Largest Licensed Greenfiled Power Generation
Portfolio in South America
� 11 GW in licensed greenfield power projects
Natural Gas
MPX Parnaíba (1863 MW)
MPX Açu (3300 MW)
Coal
MPX Açu (2100 MW)
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MPX Açu (2100 MW)
MPX Sul (727 MW)
MPX Seival (600 MW)
MPX Castilla (2100 MW)
Renewables
Solar: MPX Tauá (1 MW)
MPX Castilla is the Largest Licensed Greenfield
Power Plant in Chile
Integrated Project: Power Plant + Deep-Water Port + Desalination Plant
Strategic location:
SIC: Central Interconnected System (90% of GDP & 92% of population)
Large pent-up demand for energy and water
Port concession and environmental license granted
MPX Castilla: robust license for 2,100 MW obtained after a 4-year licensing process
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The Largest Licensed Greenfield Generation
Complex in Southeast Brazil
Strategic Location at the Açu Superport
Close to natural gas accumulations discovered in the Campos Basin
Potential supplier for industries located within the Açu Superport
Highly competitive energy supplier due to benefit from auto production sharing
Environmental License to 5,400 MW (3,300 MW gas + 2,100 MW coal)
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Contracted Power Plants Start-up in 2H11
2Q09
Spot¹
Spot¹ Fixed Gross Revenue: R$ 242.2 MM/y²
4Q07
3Q08
1Q09
2012 20134Q11 3Q123Q11
Fixed Gross Revenue: R$ 255.1 MM/y²
Fixed Gross Revenue: R$ 269.7 MM/y²
Construction works at Energia Pecem
Construction works at MPX Pecem II
Spot ¹
*Energia Pecém is a 50/50 partnership between MPX and EDP
**PPA – Power Purchase Agreement
¹ Energy sold in spot market before PPA start date
² As of Dec/2010
Energy sold in A-5
auction 2007
• Energia Pecém
• MPX Itaqui
Energy sold in A-5 auction 2008:
• MPX Pecém II
Construction works at MPX Itaqui
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² As of Dec/2010
90% of construction completed.
10 thousand jobs created.
Operation teams hired and in training.
Minimum guarenteed revenues of approximately R$ 500 million in 2012 and over R$ 750 million
from 2013 on.
Long-term financial fully contracted and 73% disbursed.
Energia Pecém: 720 MW starting up in 2H11
Energia Pecém
(720 MW)
EPC 87%
Energia Pecém
(720 MW)
EPC 87%
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MPX Pecém II
(365 MW)
EPC 80%
MPX Pecém II
(365 MW)
EPC 80%
MPX Pecém II: 365 MW starting up in 1H12
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MPX Itaqui
(360 MW)
EPC 85%
MPX Itaqui: 360 MW starting up in 2H11
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All the rights reserved to MPX
March/2011
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