EDP Brasil BM&FBovespa: ENBR3. 3Q17 Results Presentation (Teleconference on November 01 st, 2017)

Transcription

1 EDP Brasil BM&FBovespa: ENBR3 3Q17 Results Presentation (Teleconference on November 01 st, 2017)

2 Disclaimer This presentation may include forward-looking statements of future events or results according to regulations of the Brazilian and international securities and exchange commissions. These statements are based on certain assumptions and analysis by the company that reflect its experience, the economic environment and future market conditions and expected events, many of which are beyond the control of the company. Important factors that may lead to significant differences between the actual results and the statements of expectations about future events or results include the company s business strategy, Brazilian and international economic conditions, technology, financial strategy, public service industry developments, hydrological conditions, financial market conditions, uncertainty of the results of future operations, plans, objectives, expectations and intentions, among others. Considering these factors, the actual results of the company may be significantly different from those shown or implicit in the statement of expectations about future events or results. The information and opinions contained in this presentation should not be understood as a recommendation to potential investors and no investment decision is to be based on the veracity, current events or completeness of this information or these opinions. No advisors to the company or parties related to them or their representatives shall have any responsibility for whatever losses that may result from the use or contents of this presentation. This material includes forward-looking statements subject to risks and uncertainties, which are based on current expectations and projections about future events and trends that may affect the company s business. These statements include projections of economic growth and energy demand and supply, as well as information about the competitive position, the regulatory environment, potential opportunities for growth and other matters. Several factors may adversely affect the estimates and assumptions on which these statements are based. 2

3 Transmission Distribution Generation 3Q17 Operational Highlights Energetic Risk Protection Total energy hedge of 18% (184 average MW) Impact of +R$ 278 Million (Hydro+Com.) and +R$ 29 Million (Pecém) Construction of São Manoel 97.2% of physical work completion and the Operation License granted Uptime of Pecém 91% (9M17) higher than contracted (90%) Volume increase Total distributed energy growth of 2.3%, with highlight to EDP SP (+4.4%) Reduction of Total Losses p.p. at EDP ES and p.p. at EDP SP compared to Sep/16 (positive impact of R$ 25.2 million/year) Effectiveness in bad debt control R$ 21 million reduction compared to 2Q17 Bad Debt Provision/Gross Revenue of 0.6%, in 3Q17 (vs. 1.4% in 2Q17) CAPEX % compared to 9M16 Environmental Licensing Early delivery of the licensing schedule for Lot 24 (Auction of Oct/16) 3

4 Sold Energy Generation Volume (GWh) Commercialization Volume (GWh) -2.9% 3,608 3,505 5, ,358 1,358 3, % 1,899 1,811 3Q16 3Q17 3Q16 Total Hydro Total Thermal 3Q17 Jari and Cachoeira Caldeirão HPPs Total Volume Distribution Volume (GWh) EDP São Paulo EDP Espírito Santo +4.4% 3,552 3,708 1,474 1,750 2,066 1, % 2,326 2, ,383 1,249 Increase of 1.5% in industrial production in the state of São Paulo; Extraction industries; Auto-vehicles. 3Q16 3Q17 3Q16 3Q17 Captive Market Free Market Supply/Own Consumption 4

5 GENERATION São Manoel HPP 5

6 2017 PLD* e GSF Scenario Average PLD 1 - Southeast R$ R$ R$ R$ R$ % Growth vs 3Q16 3Q16 4Q16 1Q17 2Q17 3Q17 GSF PLD Southeast 110% 83% 88% 84% - 21 p.p. Decrease 62% vs 3Q16 3Q16 4Q16 1Q17 2Q17 3Q17 GSF 1) Price of Settlement of Differences Spot Price 6

7 Risk Management of the Generation Portfolio Initial Hedge Acquisition of 70 avg. MW Decont. on MCSD¹ + Reduction of Bilateral Contracts % hedge 9% 16% +92% % Optimized long position for hydro and spot prices scenarios risk mitigation Hedged Energy Average MW Q17 2Q17 3Q17 MCSD + Reduction of Bilateral contracts Additional Hedge Initial Hedge ² 1) Leveraging and Deficit Compensation Mechanism MSCD 2) Considering the proportion in Santo Antonio do Jari (50%) and Cachoeira Caldeirão (50%) HPPs. 7

8 Result of Energy Management in Gross Margin (3Q17) Hydro and Commercialization (R$ Million) 3Q17 Positive Impact of R$ 278 Million GSF/PLD Impact Reimbursement Referring to GSF Renegotiation Additional Hedge Margin Revenue - Uncontracted Energy Settlement Commerc. Gross Margin Net impact of GSF 8

9 Pecém I TPP Uptime (%) GU01 Scheduled Maintenance GU02 Scheduled Maintenance Accumulated Uptime Above to the Auction Parameter 64% 76% 88% 89% 94% 94% 98% 81% 94% 99% 81% 89% 90% 91% 91% 91% Q17 2Q17 3Q17 9M17 GU01 GU02 Average TPP ADOMP Hedge MWm PLD - CVU Savings of R$ 29.3 Million in 3Q17 9

10 DISTRIBUTION 10

11 Quality Indicators EDP São Paulo DEC (hours) FEC (times) Q Q Q Q Q Q Q Q Q Q 1 7 EDP Aneel EDP Aneel EDP Espírito Santo DEC (hours) FEC (times) Q Q Q Q Q Q Q Q Q Q 1 7 EDP Aneel EDP Aneel 11

12 Reduction of the gap between Real and Regulatory Losses Total Losses EDP Espírito Santo (%) 14,00% 13,68% 13,88% 13,50% 13,50% 13,11% 14,21% 13,09% 13,71% 13,62% 13,58% 13,18% 11,77% 11,75% 11,75% 9,99% Var. 3Q17 vs 3Q p.p. Gain of + R$ 24.0 Million per year 9,63% 9,63% Aneel Target EDP ES Aneel's Target Total Losses EDP São Paulo (%) 9,48% 9,35% 8,96% 8,95% 8,40% 8,40% 9,35% 9,16% 8,97% 8,77% 8,89% 8,75% 8,73% 8,73% 7,86% 7,86% 7,88% 7,88% Var. 3Q17 vs 3Q p.p. Gain of + R$ 1.2 Million per year EDP SP Aneel's Target 12

13 EBITDA vs Regulatory EBITDA 9M17 Consolidated Distribution (R$ Million) 4% Regulatory¹ EBITDA Losses Market Variation Over Cont. (105%) OPEX PDD Others EBITDA Reduction of the Losses gap 2 Reduction of R$ 3 Million versus 6M17 PDD of 0.6% in 3Q and 1% in 9M 1) Regulatory EBITDA = Remuneration of Capital + Reintegration Quota (QRR) Informations from 9M17, consolidated EDP São Paulo and EDP Espírito Santo 2) Total of Losses in 1H17 = R$ 48 million 13

14 Change in Investment Profile 1.7x Capex Breakdown (R$ Million) Capex/QRR 1 +58% % % % 24% % Increase in Recurring Investments above Depreciation 23% 13% 24% 13% 19% 16% 15% 24% 13% 10% 11% M17 Network Expansion Network Improvement Losses Reduction Strategies Others 1) Consolidated Reintegration Quota (EDP São Paulo and EDP Espírito Santo) 14

15 TRANSMISSION 15

16 Early Delivery of the Environmental Licensing Schedule Lot 24* Schedule of the Concession Contract Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Step 1 Step 3 Step 1 Area Study and Basic Engineering Project Early Delivery 6 Months Area Study and Basic Engineering Project DPU - Declaration of Public Utility Step 3 DPU - Declaration of Public Utility Step 2 Early Delivery 13 Months Step 2 Submission of EIA/RIMA¹ and Preliminary License Request *Lot 24 Auction n13/2015 Submission of EIA/RIMA¹ and Preliminary License Request Early Delivery 8 Months 16

17 FINANCIAL PERFORMANCE Cachoeira Caldeirão HPP 17

18 3Q17 vs 3Q16 Financial Highlights 43.5 Million Gross Margin of R$ Million Growth of 264.0% compared to 3Q16 Growth of 74.2% compared to 3Q16 PMTO Evolution Below Inflation +0.2% compared to 9M16 Adjusted EBITDA 1 of R$ Million Increase of 14.3% compared to 3Q16 Adjusted Net Income of R$ Million Increase of 2.4% compared to 3Q16 Controlled Leverage 1.9x (Net Debt/EBITDA) in September, ) Excluding non-recurring effects: Non-indemnified Financial Asset (VNR), Provision for the Reimbursement of the Water Charge, Sale of Pantanal Energética, Insurance Recoveries at Pecém 18

19 Hydro Generation Pecém Distribution Commercialization+ GRID Elimination Gross Margin 3Q17 Gross Margin Breakdown (R$ Million) % Margin 3Q16 Margin 3Q17 1) R$ 158 million refers to Non-indemnified Financial Asset (VNR) 2) R$ 7.4 million refers to Non-indemnified Financial Asset (VNR) 19

20 Results Adjusted EBITDA 1 (R$ Million) PMTO (R$ Million) % Growth % Growth Q16 Hydro Generation Thermal Generation Others/Eliminations 3Q17 Distribution Commerc. + GRID 3Q16 3Q17 Third Party Services Personnel Provisions Others Material Adjusted Net Income (R$ Million) % Growth Note 1: Excluding non-recurring effects: Nonindemnified Financial Asset (VNR), Provision for the Reimbursement of the Water Charge, Sale of Pantanal Energética, Insurance Recoveries at Pecém Q16 3Q17 Non-indemnified Financial Asset (VNR) (-) TPP Pecém Insurance Reimbursement Income 20

21 Debt Net Debt/EBITDA (R$ Million) Net Debt/EBITDA (X) 1.3 3,397 3,553 3,582 3,563 3,908 Covenant: Up to 3.5x Net Debt Sep/16 Dec/16 Mar/17 Jun/17 Sep/17 Debt Maturity Schedule (R$ Million) Gross Debt per Indexer 1,454 1,015 1,436 1,512 IPCA; 13.0% Fixed Rate; 4.7% US$; 4.3% TJLP; 22.8% CDI; 55.1% Availabilities After

22 2018 Preparation Generation Anticipation of São Manoel Operation Active management of energy risk Cost with coal logistics reduction Distribution Narrowing the gap for regulatory losses Strengthening the Regulatory Remuneration Base Transmission Beginning of Lot 24 construction works (Auction nº 013/2015) Obtaining the Installation License for Lots 7,11,18 and 21 (Auction # 05/2016) Commercialization and Services Consistent presentation of Commercialization results Expand market participation in Distributed Solar Energy and Efficiency Services Finance Cost Control through the continuity of ZBB* Continuity of the digitalization agenda Optimization of the Company's Capital Structure Fundraising for Transmission (Lots 7,11,18 and 21) *ZBB = Zero Base Budget 22

23 Investor Relations Phone: +55 (11)