webcast 2q11
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TRANSCRIPT
2Q11 Results
August, 2011
2
2Q11 Highlights
FinancialFinancial • Ebitda amounted R$ 525.2 million, 4.2% higher than 2Q10, disregarding one-off effect of financial liquidation of AES Eletropaulo Telecom sale to Brasiliana in Jun/10
• Financial result 64.3% higher than 2Q10 excluding one-off effect of the end of litigation concerning the agreement with Banco Santos in 2Q10
• Net Income of R$ 255.4 million, 6.1% increase compared to 2Q10, disregarding one-off effects mentioned above
OperationalOperational • Higher energy consumption: captive market 2.7% and free market 4.9%
• Losses: reduction of 0.7 p.p. when compared to 2Q10
• SAIDI was reduced by 17% and SAIFI by 14% in the last 12 months (June basis)
• Investments with own resources of R$ 153.6 million, 23.3% higher than 2Q10
RegulatoryRegulatory • According to ratifying resolution 1174, AES Eletropaulo tariff reset was postponed from July 4th
2011 due to 3rd cycle undefined methodology
DividendsDividends • Interim dividends distribution totaling R$ 291 million, representing 50% of 1H11 results, in the amounts of R$ 1.64 per common share and R$ 1.80 per preferred share
31 – Own consumption not considered
Market growth driven by the performance of residential and commercial clients
Consumption Evolution (GWh)¹
Residential Industrial Commercial Public Sector and Others
Captive Market Free Clientes Total Market
3,917
1,541
2,753
683
8,894
2,010
10,904
4,053
1,513
2,879
694
9,138
2,109
11,246
2Q10 2Q11
+3.5% -1.8% +4.6% +1.6% +2.7% +4.9% +3.1%
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Losses - (%)
1 – Current technical losses used retroactively as a reference
Losses and collection rate levels reflect the continuous efforts for internal processes improvements
Collection Rate (% over Gross Revenues)
2008 2009 2010 2Q10 2Q11
6.5 6.5 6.5 6.5 6.5
5.1 5.3 4.4 4.8 4.1
11.6 11.810.9 11.3 10.6
Technical Losses¹ Commercial Losses
2008 2009 2010 2Q10 2Q11
98.5101.1 102.4 101.6 102.2
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SAIDI level reflects Company’s continuous investments. Excluding the effect of the cyclone, the
SAIDI would be 9.87 hours
SAIDI – System Average Interruption Duration Index
Source: ANEEL and AES Eletropaulo
8.909.20
11.9012.45 12.74 12.66 12.72 12.39 12.22 12.09 11.79 11.65
11.2510.84 10.60
10.13 10.309.91 9.90 9.88
10.40
16.0816.63
18.70 19.00 19.00 19.00 19.00
20.00
22.00
21.00 21.00 21.00 21.00
18.00 18.00
19.00 19.00
18.00 18.00 18.00
11.34 10.92
10.099.32 9.32 9.32 9.32 9.32 9.32 9.32 9.32 9.32 9.32 9.32 9.32
8.68 8.68 8.68 8.68 8.68 8.68
AES Eletropaulo Brazil Aneel Reference - AES Eletropaulo
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Pruning plan contributed to the good performance of SAIFI
Source: ANEEL and AES Eletropaulo
SAIFI – System Average Interruption Frequency Index
5.655.20
6.17 6.34 6.41 6.29 6.29 6.16 6.12 6.12 5.96 5.855.61 5.52 5.42 5.29
5.57 5.44 5.51 5.51 5.48
11.7211.34
11.7412.00 12.00 12.00 12.00 12.00 12.00 12.00 12.00 12.00 12.00
11.00 11.00 11.00 11.00 11.00 11.00 11.00
8.49 8.41
7.877.39 7.39 7.39 7.39 7.39 7.39 7.39 7.39 7.39 7.39 7.39 7.39
6.93 6.93 6.93 6.93 6.93 6.93
AES Eletropaulo Brazil Aneel Reference - AES Eletropaulo
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Extra tropical Cyclone - June 7 to 9 Action Plan: R$ 120 million
¹ Equipment purchase and increase in maintenance and construction teams
Action Plan 2011 – 2012: Action Details
• 2011: R$ 39 million as operational expenses and R$ 36 million as investments
• Expand capacity on clients attendance:– increase 38% call center positions (150 positions)– contract 300 positions for call center in stand by condition – automated attendance increase from 2 thousand call / hour to 50 thousand call hour– double SMS capacity to 100 thousand day
• Deployment of mobile agency and field actions to receive indemnifications requests
• Increase on pruning, maintenance and construction teams (580 electricians)
Preventivemaintenance¹
Customer Attendance
Tree trimming
Other process improvements
42
35
7
26
9
68
43
7
2
InvestmentsOperational expenses
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CAPEX (R$ million)
Increasing capex: R$ 159 million in 2Q11, 21% higher than 2Q10
2Q11 Investments (R$ million)
0
100
200
300
400
500
600
700
800
2009 2010 2011(e) 2Q10 2Q11
478654
759
125 154
37
28
26
6 5
516
682
784
131 159
Capex Paid by Customers
+21%
51
41
34 11
5 5
11
Maitenance
Client Service
System Expansion
Losses Recovery
IT
Paid by the Clients
Others
9
Gross Revenue (R$ million)
Revenues increased 5% due to residential and commercial classes expansion (+3.5% and +4.6%)
and tariff readjustment (+1,6%)
+5%
+7%
1H10 1H11 2Q10 2Q11
4,344 4,490
2,193 2,231
240 324
131 160
2,406 2,651
1,234 1,342
6,990 7,466
3,558 3,732
Net revenue ex-construction revenue
Construction revenues
Deduction to gross revenue
10
Energy purchase cost kept at the same level benefited by exchange rate impact
Operating Costs and Expenses ¹ (R$ million)
1 - Depreciation and other operating income and expenses are not included 2 - Personnel, Material and Services
+3%
+3%
1H10 1H11 2Q10 2Q11
2,644 2,700
1,321 1,341
670 710
329 363
3,315 3,410
1,650 1,704
Energy Supply and Transmission ChargesPMS² and Others Expenses
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PMS and Other Expenses (R$ million)
Increase on operating expenses impacted by non- recurring items aiming at operational improvements
¹ ADA, write-off, provisions for contingencies, losses and agreements and others operational expenses.
2Q10 Personnel and payroll
FCesp Others SAIDI andSAIFI
improv.
One-off:consulting, IT proj. and
public lighting
2Q11
329 329 336 336 336 346 363
21 (14) 3 7
16
¹
12
Ebitda (R$ million)
Market growth and lower expenses with pension fund positively contributed to Ebitda
2Q10 One-off: Eletropaulo
Telecom sale liquidation
2Q10ex
one-off
Net Revenues En. purchaseand trans.
usagerate exp.
Salary adjustment
Fcesp SAIDI/ SAIFI, IT, consulting
and public light.
Others¹ 2Q11
770
504 504 504 551 529 529 520 520 525
(265)
66 (20) (21) 14 (23) 5
¹ Others: ADA, provisions for conitingencies, losses and agreements and other operational revenues/expenses.
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Financial Results (R$ million)
Financial results positively impacted by exchange rate (Itaipu) and higher investments income
Financial Results (R$ million) – ex one-offs1
¹ One-off regarding the receipt of Banco Santos bankruptcy agreement in 2Q10.
(60)
(11) (10)
(28)
+82% +64%
(11) (10)
78
46
1H10 1H11 2Q10 2Q11
1H10 1H11 2Q10 2Q11
14
1H10 1H11 2Q10 2Q11
346 376
194 185
117 162
47 70
245
245
709
537 486
255
2Q11 recurring net income in line with the same period of the previous year
Net Income (R$ million)
- 5%+9%
0 Q 0 QNet Income - ex one-off and regulatory assets and liabilitiesRegulatory assets and liabilitiesOne-off
Net Income ‐ June 30, 2011 537.3 Realization of equity valuation adjustments 44.7
Legal reserve ‐Distribution basis 582.0
Distribution basis proposal 291.0
R$ 1.64 per common share and R$ 1.80 per preferred share
Dividends 1H11 (R$ Million)
Ex-dividends date: 08/11/11; Payment date: 09/22/11
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Operational cash generation reflects market and collection rate growth
Operational Cash Generation (R$ million) Final Cash Balance (R$ million)
2Q10 2Q11
584654
2Q10 2Q11
1,786
1,043
+12%-42%
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7.1 6.8
Average term - Years
2Q10 2Q11
106.4% 108.9%
% of CDI²
Average Cost and Average Term (Principal)Net Debt
Net debt increase reflects reduction in cash balance
1
1 - EBITDA Adjusted in last 12 months 2 – Brazil’s Interbank Interest Rate
13.0% 13.6%Efective rate
0.9x
1.3x
Net Debt/Ebitda Adjusted with Fcesp
2Q10 2Q11
2.4 3.0
Net Debt (R$ billion)
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.
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2Q11 Results