Bradespar S.A. 3Q08 Results

Transcription

1 São Paulo, November 14, 2008 Bradespar [BOVESPA: BRAP3 (ON), BRAP4 (PN); LATIBEX: XBRPO (ON), XBRPP (PN)] announces its results for the third quarter of 2008 (3Q08). The following financial information, unless otherwise indicated, consolidates the results of Bradespar s non-operating subsidiaries, thus providing a better understanding of its results. All figures are presented in Brazilian Reais, pursuant to Brazilian Corporate Law. CORPORATE STRUCTURE BASE DATE: SEPTEMBER 30, % V/T 1

2 COMMENTS ON THE COMPANY S PERFORMANCE In order to provide a better understanding of its results, Bradespar has included its financial information consolidating the results of its non-operating subsidiaries only. The Company believes this gives a more accurate picture of its financial position, since it clearly separates its own rights and obligations from those of its investees. All figures are presented in thousands of Brazilian Reais, pursuant to Brazilian Corporate Law. The following comments refer to such statements. OPERATING REVENUE R$ thousand Operating Revenue 9M08 9M07 % Chg 3Q08 3Q07 % Chg Equity Income - Vale/Valepar 1,028, , % 678, , % Dividends from CPFL Energia 118, , % 53,962 75, % Total 1,146, , % 732, , % As an investment company, Bradespar s operating revenue is generated by equity income, which includes dividends and interest on equity from Valepar/VALE and CPFL Energia. In the 3Q08, operating revenue totaled R$ million, 204.6% up year-on-year, due to (i) Vale s outstanding performance, which increased Valepar s equity income by 311.5% and (ii) dividends from CPFL Energia in the amount of R$ 54 million. In the first nine months, operating revenue came to R$ 1.1 billion, 28.4% up on the same period in PAYROLL, GENERAL AND ADMINISTRATIVE EXPENSES Payroll, general and administrative expenses amounted to R$ 3.8 million in the 3Q08, 80.2% up year-onyear, due to higher expenses from the hiring of banks and consulting firms for Bradespar s R$ 1.4 billion Promissory Notes issue and the subscription of new redeemable shares issued by Valepar as part of Vale's capital increase. In the first nine months, these expenses totaled R$ 8 million, in line with the 9M07, reflecting the Company s administrative restructuring that began in February FINANCIAL RESULT The 3Q08 net financial expense came to R$ 26.7 million, due to R$ 11.2 million in revenue from shortterm investments and a R$ 37.9 million expense from provisions for the payment of interest on Bradespar s first Promissory Notes Issue, corresponding to the accrued variation of 106% of the average 2

3 one-day interbank deposit rate (DI), on a 252-day basis. In the 3Q07, the net financial result totaled R$ 8.1 million. OTHER OPERATING EXPENSES Other operating expenses, consisting primarily of tax expenses, totaled R$ 1.6 million in the 3Q08. NET INCOME Bradespar posted net income of R$ million in the 3Q08 and R$ 1.1 billion in the 9M08, 201.5% and 29.7% up year-on-year respectively, both of which period records. COMMENTS ON OPERATING INVESTEES VALE Vale s 3Q08 net income totaled R$ 12.4 billion, its highest ever quarterly figure, thanks to recordbreaking operating revenue, operating income and cash flow, as well as a solid financial position. The result was also favored by the period depreciation of the Real, given that Vale has substantially more foreign-currency assets than liabilities. Another contributing factor was the income tax line, which generated revenue of R$ 111 million. The company s main consolidated results in the 3Q08, compared to the previous year, were: Gross Revenue of R$ 21.4 billion (+33.4%); EBITDA of R$ 11.3 billion (+41.9%); Net Income of R$ 12.4 billion (+167%). On September 30, 2008, the Company had a cash position of US$ 15.3 billion, due to the proceeds from the share issue in August On the same date, net debt totaled US$ 3.9 billion. CPFL ENERGIA The company s main consolidated results in the 3Q08, compared to the previous year, were: Gross Revenue of R$ 3,521 million (-2.9%); 3

4 EBITDA of R$ 745 million (-15.4%); Net Income of R$ 339 million (-21%). SUBSEQUENT EVENTS PAYMENT OF DIVIDENDS AND INTEREST ON EQUITY As disclosed to the market on October 31, 2008, the Board of Directors of Bradespar, at a meeting held on that date, approved the Board of Executive Officers' proposal, registered at a meeting held on February 29, 2008, to pay to the Company shareholders the 2 nd Installment of the Minimum Annual Remuneration. Payment Date Dividend / Interest on Equity , , , , , , R$ thousand Amount Cash Effect Year Reference Year 81, ,200 Payment of Dividends / Interest on Equity 57,315 84,932 41, (27,811) (27,811) 2005 (180,000) 2006 (212,957) 2007 (385,111) 2004 (80,000) 2005 (227,445) 2006 (262,827) 2007 (379,996) , , (383,710) 2008 (211,510) 4

5 CAPITAL MARKET In the first 9 months of 2008, Bradespar s preferred shares (BRAP4) underperformed its investees VALE (VALE3) and CPFL Energia (CPFE3). Adjusting prices for shareholder payments, including dividends and interest on equity, BRAP4, VALE3 and CPFE3 recorded respective period variations of -43.3%, % and +13.7%, respectively, versus a 22.5% period reduction for the Ibovespa. SHARE PRICE TREND IN THE 9M08 (BOVESPA) 60% 40% BRAP3: -48.1% BRAP4: -43.3% VALE3: -37.9% IBOV: -22.5% CPFE3: 13.7% 20% 00% -20% -40% -60% 12/28/07 03/06/08 05/14/08 07/22/08 09/29/08 Source: Economática. Prices adjusted for shareholder payments, including dividends and interest on equity. 5

6 BRAP4 s daily traded volume averaged R$ 45.8 million in the 3Q08. Average Daily Traded Volume Trend - Bovespa ( R$ million) BRAP3 BRAP Q08 2Q08 3Q08 Source: Economática 6

7 DISCOUNT The market value of Bradespar s holdings, excluding the control premium in its stake in VALE, came to approximately R$ 9.7 billion on November 10, 2008, 87.0% of which represented by its investment in VALE and 13.0% by its investment in CPFL Energia. The market value of Bradespar in relation to that of its investees, plus net debt, represented a discount of 24.9% on that date. Bradespar's Net Asset Value X Bradespar's Market Capitalization (closing prices of November 10, 2008) Bradespar's Stake Companies Price (R$/share) Number of Shares % of Total Capital Market Value (R$ thousand) Market Value (US$ thousand) Market Value (EURO thousand) VALE ON (1) ,381, % 8,352,742 3,948,727 2,972,929 VALE PNA (1) ,547, % 89,580 42,349 31,884 CPFL-E ON ,049, % 1,261, , ,938 Bradespar's Total Assets Value ( A ) 9,703,658 4,587,368 3,453,751 Bradespar's Net Debt ( B ) (2) (818,000) (386,706) (291,145) Bradespar's Net Asset Value ( C ) = ( A ) + ( B ) 8,885,658 4,200,662 3,162,606 Bradespar's Market Capitalization ( D ) 6,673,648 3,154,942 2,375,302 Common Shares (BRAP3) ,664,504 2,391,958 1,130, ,352 Preferred Shares (BRAP4) ,024,896 4,281,690 2,024,153 1,523,950 Difference between net asset value and market capitalization ( C ) - ( D ) 2,212,010 1,045, ,304 DISCOUNT (3) 24.9% (1) The number of VALE shares were calculated by considering the indirectly owned stakes in Valepar. (2) Net Debt 10/31/08. (3) ((Bradespar's Market Cap.)/(Asset Value + Net Cash)) - 1 7

8 The chart below shows the discount between Bradespar s net asset value and its market capitalization. Discount between Bradespar's Net Asset Value and its Market Capitalization 30% 25% 25.5% 24.9% 20% 15% 15.2% 12.9% 19.4% 15.7% 17.3% 14.2% 13.9% 13.5% 10% 10.4% 8.8% 10.5% 10.5% 10.9% 10.5% 05% 6.5% 5.5% 4.0% 3.3% 2.6% 4.1% 3.3% 4.8% 00% Note: Discount in the last business day of each month, except for November 2008, whcih refers to November 10 8

9 IR CONTACT For further information, please contact the Investor Relations Department: Renato da Cruz Gomes Luis Mauricio Leuzinger Gustavo Bonetti Daniel Picerni Tel: +55 (11) Fax: +55 (11) Site: 9

10 APPENDIX FINANCIAL INFORMATION R$ thousand Assets CURRENT ASSETS 481, ,035 Cash and Cash Equivalents 436, ,942 Redeemable Shares - Interest 45,313 - Others LONG TERM ASSETS 91,282 90,582 Deferred and Receivable Taxes 56,280 55,580 Tax Credits 35,002 35,002 PERMANENT ASSETS 5,952,120 3,951,224 Investments 4,586,668 3,951,095 Investments - Redeemable Shares 1,365,339 - PP&E & Deferred Charges TOTAL 6,525,391 4,385,841 R$ thousand Liabilities CURRENT LIABILITIES 1,466,894 28,990 Interest on Equity and Dividends 2,131 2,152 Promissory Notes Payable 1,437,875 - Other Obligations 26,888 26,838 LONG TERM LIABILITIES 81,638 79,720 Others 81,638 79,720 SHAREHOLDERS' EQUITY 4,976,859 4,277,131 TOTAL 6,525,391 4,385,841 R$ thousand Income Statement 9M08 9M07 % Chg 3Q08 3Q07 % Chg Equity Income Revenue 982, , % 633, , % Equity Income - Redeemable Shares 45,313 - n.m. 45,313 - n.m. Dividends from CPFL Energia 118, , % 53,962 75, % Gross Operating Revenue 1,146, , % 732, , % Payroll, General and Administrative Expenses (8,048) (8,199) -1.8% (3,818) (2,119) 80.2% Amortization of Goodwill - (38,704) n.m. - (12,902) n.m. Net Financial Income (Expenses) (9,349) 25,552 n.m. (26,717) 8,112 n.m. Other Operating Revenue (Expenses) (7,744) (4,775) 62.2% (1,633) (12) % Operating Result 1,121, , % 700, , % Income Taxes/Social Contributions (929) (3,525) -73.6% (519) (1,501) -65.4% Net Income 1,120, , % 699, , % 10