AES Tietê records 14% growth in 1Q05 EBITDA

Transcription

1 AES Tietê records 14% growth in 1Q05 EBITDA 1Q05 Net Income: R$ 97.1 million São Paulo, May 10, 2005 AES Tietê S.A. (Bovespa: GETI3 and GETI4; OTC: CDEEY and CDOY), today announced its results for the first quarter of All operating and financial information, except where otherwise specified, is based on the Company s consolidated figures in Reais pursuant to Brazilian Corporate Law. All comparisons in this release have been made in relation to the first quarter of 2004, unless otherwise stated. AES Tietê is one of the most efficient electricity generators in Brazil, committed to generating clean, reliable and safe sources of energy. The Company s generation assets are made up of ten hydroelectric plants in the central and northeastern regions of São Paulo State, with an installed capacity of 2,651 megawatts (MW). This corresponds to 21% of the electricity generated in the state according to the State Secretariat for Energy, Water Resources and Sanitation. Net Margin: 36.0% EBITDA: R$ million EBITDA Margin: 75.7% AES Tietê s net income totaled R$ 97.1 million in the first quarter of 2005, representing a 53% increase in comparison with the same period in In January 2005, part of the volume of energy sold through initial contracts inherited when the company was privatized was once again reduced and automatically contracted by the bilateral contract and the volume of energy under such contract now accounts for 75% of the overall volume. Thus, gross revenue showed a 20% growth. The operating cash flow (EBITDA) amounted to R$ million, up 14% from 1Q04, while EBITDA margin over net revenue rose to 76%, reflecting not only the growth in revenue but also the operating stability, stemming from the priority given to maintenance and training of personnel, as well as to a tight control of costs and expenses, commented Andrea Ruschmann, AES Tietê s Director of Finance and Investor Relations. FINANCIAL HIGHLIGHTS R$ million 1Q05 1Q04 Chg (%) Gross Revenues % Net Revenues % Operat. Expenses % EBITDA % EBITDA % 75.7% 75.3% - Net Income % Net Margin % 36.0% 26.6% - S'holders Equity % Net Debt , % 13.9% reduction in Net Debt LAST PRICE (May 9, 2005): GETI3=R$ 38,90 GETI4=R$ 40,99 NUMBER OF SHARES: 95,313,373,337 MARKET CAPITALIZATION: R$ 3,8 billion US$ 1,6 billion CONTACTS: Juliana R. Penna De Zagottis Investor Relations Manager Tel: (5511) juliana.penna@aes.com Thiago Bovolenta Batista Investor Relations Analyst Tel: (5511) thiago.batista@aes.com Page 1 of 9

2 OPERATIONAL PERFORMANCE AES Tietê s operational stability results from its commercial planning All the Company s assured energy is sold in its entirety, under a long-term bilateral purchase agreement with AES Eletropaulo (Bovespa: ELPL3 / ELPL4), which was signed in 2000 for a 15-year term. This agreement entails the automatic hiring as from 2003 of all the volume of energy released from the initial contracts at an annual rate of 25%, as determined by the Electricity Sector Law (ANEEL Resolution No. 450/98). Therefore, as from 2003, once a year in January, 25% of the power generated for the initial contracts is transferred and sold under the bilateral contract. In 2006, all AES Tietê s sales will be made through this contract. In January 2005, as expected, 25% of the energy contracted through the initial contracts was released and automatically transferred to the bilateral contract with AES Eletropaulo, causing the share of this contract in the company s overall sales volume move up to 75%. At present, tariffs performed under the bilateral contract between AES Tietê and AES Eletropaulo are higher when compared with those established by the initial contracts, because since it was signed in 2000, the legislation in place at that time established that the price that should serve as a parameter for bilateral contracts would be the Normative Value (NV) and the tariffs would be adjusted according to the IGP-M (General Price Index Market). In 1Q05, the bilateral contract contributed 78.3% of AES Tietê s overall gross revenues. 100% 80% 60% 40% 20% 0% Elpa - BI Elpa - CI CPFL Elektro Band Brag Nac Pirat Tariff Adjustment The initial contracts are readjusted on a yearly basis according to the following formula, in accordance with the Electricity Sector Law: Rate for Tariff Readjustment = VPA + VPB x IGP-M Revenue In 1Q05, the tariffs of the initial contracts with the distributing companies Bragantina and Nacional were readjusted by 12.4%, resulting in new tariffs of R$ 65.3 / MWh and R$ 69.4 / MWh, respectively. In April, there was a 10.6% readjustment in the tariff of the initial contract with CPFL, resulting in a new tariff of R$ 73.8 / MWh. The bilateral contract is readjusted in July of each year, according to the variation of the IGP-M index. Page 2 of 9

3 Company Month of Adjustment % of adjustment Results for the 1 st quarter 2005 Tariff after adjustment (R$ / MWh) Initial Contracts Bragantina February 12.4% Nacional February 12.4% CPFL April 10.6% AES Eletropaulo July Elektro August Bandeirante Energia October Piratininga October Bilateral Contract AES Eletropaulo July Reservoirs The chart shows energy storage levels over the last five years for each of the country s regions. Until April 2005, the reservoirs in the southeastern region, where AES Tietê s reservoirs are located, showed comfortable storage levels, the highest since Taking into account the present level of the reservoirs, the risk of energy shortages is forecasted to be very low for the southeastern submarket over the short and medium term Southeast South Northeast North Source: Operador Nacional do Sistema (National System Operator) April/2005 Page 3 of 9

4 ECONOMIC AND FINANCIAL PERFORMANCE Gross Revenues In 1Q05, AES Tietê s gross revenues amounted to R$ million, a year-over-year increase of 19.7%. This increase can be attributed not only to the increase on the volume sold under the bilateral contract but also to the tariff readjustments carried out during 2004 and 1Q05. PIS and Cofins Deductions over the Company s gross revenues amounted to R$ 28.0 million in 1Q05, a year-over-year increase of 160.8%. This growth results from the higher PIS/Cofins tax rates applied since last year. In February 2004, new rates of PIS and Cofins were put into effect, moving up from 0.65% to 1.65% and from 3.0% to 7.60%, respectively. As it was understood by all energy-related parties, the new rates would not apply to long-term, pre-fixed priced contracts signed before October , as is the case of the majority of contracts within this industry. However, in November, the Brazilian IRS (Receita Federal) released Normative Instruction No. 468/04, containing clarifications that long-term contracts as those described above should implement the new rates, provided their prices were adjusted by inflation. Thus, AES Tietê started paying these taxes by using the new rates. The recognition of the new rates in the tariffs of the initial contracts has already been requested to ANEEL, which has partially recognized in the readjustments that were carried out in The bilateral contract entails the passing of tax variations onto tariffs. Thus, the Company began to invoice the amounts that contemplate the new tax rates to AES Eletropaulo. However, since the AES Eletropaulo has not yet had this fact recognized in its selling tariff to consumers, AES Tietê decided to make a provision of the difference in invoices that carry such increase until the effective receipt of this amount. Net Revenues AES Tietê registered net revenue of R$ million in the first quarter of 2005, 13.3% more than in 1Q04. This growth is a result of the tariff readjustments carried out during the course of 2004 and the transfer of 25% of the energy sold under initial contracts to bilateral contracts. Costs R$ thousand 1Q05 1Q04 Chg (%) Personnel 6,892 6, % Material % Outsourced Services 5,301 5, % Financ. Comp. for Use of Water Res. 13,157 8, % Power Purchased for Resale 19,001 28, % Depreciation and Amortization 15,994 15, % Operational Provisions 16,415 2, % Other expenses 4,341 5, % Cost of Goods and/or Services Sold 81,517 74, % Operating costs totaled R$ 81.5 million in 1Q05, representing a year-over-year increase of 9.2%. The main changes in costs occurred in the following accounts: Page 4 of 9

5 Financial compensation for use of water resources: registered an increase of R$ 4.5 million resulting from the 19.2% hike in the Updated Reference Tariff (TAR) established by ANEEL. The financial compensation for the use of water resources is calculated by multiplying the TAR (R$ / MWh) by 6.75% of the generated energy. Power purchased for resale: registered a R$ 10.0 million decrease, or 34.5%, due to the disruption in purchases of energy from Itaipu, resulting from the establishment of new quotas for resale and the declining purchases of free energy. Moreover, in February 2004, the Company incurred in an extraordinary expense related to a Financial Surplus that was generated within the scope of MAE (Electric Energy Wholesale Market). Operational provisions: taking into account the Central Bank s intervention in Banco Santos and the recent news published with regard to the financial institution s situation, the Company decided to make a provision for the rest of financial investments that were held back in that bank and were registered as long-term credits. The provision made amounted to approximately R$ 16,4 million. EBITDA In 1Q05, EBITDA amounted to R$ million, with a R$ 24.9 million increase or 13.9%. Due to this increase, the Company showed a slight improvement in the EBITDA margin, which moved up from 75.3% in 1Q04 to 75.7% in 1Q05. Net Financial Expenses The Company s principal debt liability - with Eletrobrás - is monetary readjusted according to the IGP-M index. The financial expenses are thus accrued according to the monthly variation in that index, although the debt is only effectively readjusted on an annual basis every May. The financial expense in 1Q05 amounted to R$ 59.7 million, significantly lower than the figure registered for the same period in 2004, of R$ 78.0 million. This reduction results from the lower monthly IGP-M rates, which decreased from 2.7% in 1Q04 to 1.5% in 1Q05. AES Tietê has a comfortable cash position. At the end of 1Q05, the balance of financial investments amounted to R$ million, which consists of short-term operations (with maturity terms that are lower than 90 days, with daily liquidity). From the balance of cash and cash equivalents, 82.3% is invested in marketable securities with an average yield of approximately 100% of interbank certificate rates (CDI) and 17.7% with an average yield equivalent to the foreign exchange variation. In 1Q05, the Company posted a financial income of R$ 18.3 million, versus R$ 10.5 million in 1Q04. This 74.3% increase results from the growth in financial investments and from the increase in interbank certificate (CDI) rates. Net Income The Company posted a net income of R$ 97.1 million in 1Q05, representing a 53.5% increase when compared with the same period in This growth results from the transfer of energy volumes from initial contracts to bilateral contracts and from an efficient control over operating costs. The net margin grew 9.4 percentage points, moving up from 26.6% in 1Q04 to 36.0% in 1Q05. Debt AES Tietê carries no bank financing on its books. Its principal debt is a loan agreement with Eletrobrás - Centrais Elétricas Brasileiras - inherited from the pre-privatization period. Debt service on this debt runs at 10% annually, the principal being restated according to the variation in the IGP-M, maturing in At the end of 1Q05, the Company s gross debt amounted to R$ 1.6 billion, the major portion of it (91.5%) maturing in the long term. Taking into account the financial investments of R$ million at the end of 1Q05, AES Tietê s net debt totaled R$ million. Page 5 of 9

6 Financial Investments Breakdown Results for the 1 st quarter 2005 Prived Bonds (A3)- 1% Foregn Bonds - US$ - (Aa1)- 9% Foreign Bonds - US$ - (Aa3) -10% Federal T Bonds (Ba3) 80% CAPITAL EXPENDITURES (CAPEX) Capital expenditures made in 1Q05, in the amount of R$ 2.5 million, were largely dedicated to modernization of power plant equipment and the improvement of navigable waterways and environmental issues. Page 6 of 9

7 CAPITAL MARKETS Results for the 1 st quarter 2005 In 1Q05, AES Tietê (GETI3) common shares reported an appreciation of 14.3% and the preferred shares (GETI4), 21.7%, versus a 1.6% increase in the Bovespa Index for the quarter. In the case of the common shares, which are the most liquid among the securities issued by the Company, the total transaction volume involved approximately 2.7 billion shares. The daily average volume traded was R$ 1.8 million, representing a 240% increase over 1Q04. AES Tietê s common shares were traded in 100% of all Bovespa s trading sessions during the period. Stock Market Performance GETI3 Average Daily Trading Vol(R$ thousand)-1q05 1,814 Average Daily Trading Vol(R$ thousand)-1q Closing Price - Mar/ Closing Price - Dec/ Closing Price - Sep/ Closing Price - Jun/ Closing Price - Mar/ Stock Performance - 1Q % Stock Performance - 12 months 113.7% Ibovespa Performance - 1Q05 1.6% Ibovespa Performance - 12 months 20.2% AES TIETÊ vs IBOVESPA (Base 100 = 03/31/04) 50 mar abr mai jun jul ago set out nov dez jan fev mar GETI3 GETI4 Ibovespa All statements contained herein with regard to the Company s business prospects, projected results and the potential growth of its business are mere forecasts, based on local management expectations in relation to the Company s future performance. Dependent as they are on market shifts and on the overall performance of the Brazilian economy and the sector and international markets, such estimates are subject to change. Page 7 of 9

8 ANNEX I QUARTERLY INCOME STATEMENT (Consolidated) R$ th. 1Q05 1Q04 GROSS REVENUES FROM SALES AND/OR SERVICES 297, ,857 Supply and transmission of energy 297, ,368 Other revenues DEDUCTIONS FROM GROSS REVENUES (28,046) (10,752) NET REVENUES FROM GOODS AND/OR SERVICES SOLD 269, ,105 COST OF GOODS AND/OR SERVICES SOLD (81,517) (74,629) Payroll (6,892) (6,351) Material (416) (300) Third party services (5,301) (5,816) Financial compensation for use of water resources (13,157) (8,667) Electric power purchased for resale (19,001) (28,994) Depreciation and amortization (15,994) (15,901) Operating provisions (16,415) (2,683) Other expenses (4,341) (5,917) GROSS RESULT 188, ,476 FINANCIAL (41,407) (67,480) Financial income 18,264 10,477 Financial expenses (59,671) (77,957) OPERATING INCOME 146,869 95,996 NON-OPERATING INCOME 496 INCOME BEFORE TAXES/PARTICIPATIONS 147,365 95,996 PROVISION FOR I.T. AND SOCIAL CONTRIBUTION (39,685) (20,442) DEFERRED I.T. (10,543) (12,283) PROFIT/LOSS FOR THE PERIOD 97,137 63,271 Page 8 of 9

9 ANNEX II BALANCE SHEET (Consolidated) ASSETS 3/31/ /31/2004 LIABILITIES 3/31/ /31/2004 TOTAL ASSETS 2,415,756 2,333,895 TOTAL LIABILITIES 2,415,756 2,333,895 CURRENT ASSETS 857, ,198 CURRENT LIABILITIES 348, ,585 CASH/CASH EQUIVALENTS 577, ,463 LOANS AND FINANCING 134, ,552 Cash and banks 38, Loans and financing 128, ,481 Financial investments 538, ,966 Debt servicing 5,955 6,071 ACCOUNTS RECEIVABLE 188, ,977 SUPPLIERS 46,065 47,413 Distributors 65,750 76,419 TAXES, FEES AND CONTRIBUTIONS 50,302 47,986 Accounts receivable from related parties 122,820 90,558 DIVIDENDS PAYABLE 77,941 77,945 INVENTORY 1,170 1,185 PROVISIONS 25,814 30,908 OTHERS 90,066 85,573 Payroll and related charges 799 1,115 Taxes and social contribution 70,173 65,512 Estimated liabilities 5,869 10,817 Taxes recoverable 11,643 11,427 Provision for lawsuits and contingencies 19,146 18,976 Other credits 7,477 6,311 OTHERS 13,636 13,781 Pre-paid Expenses 773 2,323 Liabilities with Fundação CESP 4,700 6,241 LONG TERM ASSETS 263, ,295 Consumer charges payable 8,936 7,540 VARIOUS CREDITS 263, ,295 LONG-TERM LIABILITIES 1,512,183 1,527,990 Deferred taxes and social contributions 4,724 4,724 LOANS AND FINANCING 1,438,721 1,449,930 Taxes recoverable 158, ,938 Liabilities with Fundação CESP 19,094 18,914 Distributors 90,036 89,677 Loans and financing 1,419,627 1,431,016 Escrow deposits 7,950 7,868 PROVISIONS 16,171 16,268 Other credits 1,477 18,088 OTHERS 57,291 61,792 PERMANENT ASSETS 1,295,432 1,308,402 Suppliers 57,291 61,792 INVESTMENTS 1,520 1,520 Others PROPERTY, PLANT & EQUIPMENT 1,269,491 1,282,729 SHAREHOLDERS EQUITY 555, ,320 DEFERRED ASSETS 24,421 24,153 PAID UP CAPITAL 207, ,416 CAPITAL RESERVES 226, ,557 Contributions and subventions - CMC90 2,204 2,204 Remuneration of fixed assets in progress 17,613 17,613 Special Reserve for Goodwill 206, ,740 REVENUE RESERVES 24,347 24,347 RETAINED PROFITS 97,137 Page 9 of 9