Results Presentation 1Q18. May, 2018

Transcription

1 Results Presentation May, 2018

2 Disclaimer The statements in this report with respect to the outlook for ISA CTEEP s businesses ( ISA CTEEP, CTEEP, Company ), the estimates and result and potential for growth constitute mere forecasts and were based on management expectations in relation to the Company s future. These expectations are highly dependent on changes in the market, the economic performance of Brazil, the sector and international markets, all of which are subject to change. The financial information has been prepared in accordance with Brazilian Securities and Exchange Commission (CVM) standards and the applicable Accounting Statements Committee announcements (CPCs), and is in accordance with international accounting standards (IFRS) as published by the International Accounting Standard Board (IASB). The Regulatory Results are presented in accordance with the accounting practices accepted in Brazil. The main difference from corporate statements lies in the non-application of ICPC 01 (IFRIC 12). ICPC 01 has material impact on the Financial Statements of the Company and its Subsidiaries, particularly in terms of entries associated with investments in transmission assets, with reflections on the Financial Assets and Fixed Asset lines, and changes in the structure and presentation of Earnings Statements. The purpose of the disclosure of Regulatory Results is merely to assist in understanding ISA CTEEP s business. Operational and financial information is provided in Brazilian Reais (BRL). Their grand totals may vary because of rounding. Regulatory Results are audited by independent auditors only at the end of each fiscal year. 2

3 Highlights Financial Strong cash generation from RBSE receivables Regulatory Result: Net Revenue of BRL732 million, Adjusted EBITDA of BRL684 million, with 93.4% margin, and Net Income of BRL305 million Projects Organic growth from reinforcements and improvements investment, with capex of BRL18 million in Sustainable growth with adequate profitability Operational Subsidiaries Regulation Legal Result in regulatory equity income of BRL19 million (+10% vs. 1Q17) CAPEX of BRL6 million in New proposal of RBSE payment with remuneration of financial asset to cost of capital (WACC) in 8 years Periodic tariff reset (O&M, WACC and Regulatory Asset Base RAB ): possibility to postpone to 2019, with retroactive effects Evolution in main cases with favorable decisions In, ISA CTEEP was excluded from the Eletrobras/Eletropaulo case in the approval of the deal between the two companies Growth Execution of 8 new projects acquired in the 2016 and 2017 auctions is on time and on budget Capex in new subsidiaries totaled BRL 72 million in, 3

4 Regulatory Consolidated Net Revenue Raise in Net Revenue from RBSE receivables +174% RBSE: BRL448 million in 59 O&M: +5% vs. 1Q17 due to the consolidation of IENNE and monetary variation on the RAP cycle 2017/ NI (New Investments): +26% vs. 1Q17 with the start up of new projects of reinforcements and improvements and the inflation adjustment Q17 O&M NI 7 RBSE Others 4

5 Consolidated O&M Costs and General Expenses ex-depreciation Growth of 4% in recurring costs and expenses, due to lower capitalization in personnel -5% Personnel: +3% vs. 1Q17, in line with the inflation in the period and with lower capitalization of personnel in projects Services: +13% vs. 1Q17, expenses with legal fees increase Others: -76% vs. 1Q17 due to the non recurring tax compensation ( IPTU of BRL11 million) Q17 Personnel Material Services Contingencies Others 5

6 Regulatory Equity Income IE Madeira boosted the results +10% IE Madeira: increase in net revenue due to inflation (IPCA variation) in RAP cycle 2017/2018 and reduction of costs and expenses IE Garanhuns: reduction in net revenue due to negative impact of tariff review that dropped the cost of capital (WACC) from 6.61% to 4.62%, applicable for cycle 2017/ Subsidiaries under construction: results reflect administrative expenses in the current phase of projects Aimorés, Paraguaçú e ERB Q17 IE Madeira IE Garanhuns IENNE/IESUL Aimorés/Paraguaçú/ERB 1 6

7 Regulatory Consolidated EBITDA Strong cash generation from RBSE receivables EBITDA Consolidated () 1Q17 Chg (%) Net income (losses) % Income and Social Contribution Taxes (tax over income) Net financial result Depreciation and amortization EBITDA ICVM 527/ Affiliates EBITDA (weighted by ISA CTEEP's share) Equity Income (19.3) (17.5) Others¹ (9.8) 0.8 Adjusted EBITDA % 20.6% 764.3% 288.9% 1.8% 10.7% % 214.6% Adjusted EBITDA Margin 93.4% 81.2% 12.2 p.p. RBSE (448.4) 0.0 Adjusted EBITDA Ex-RBSE % Adjusted EBITDA Ex-RBSE Margin 83.0% 81.2% 1.7 p.p. ¹ includes tax compensation (from "IPTU"), expenses with auctions and contingencies success fees 7

8 Regulatory Consolidated Financial Result Higher debt level, going from BRL1.3 billion on March 31 st,2017 to BRL1.9 billion on March 31 st, % Interest and charges on debt: raise in expenses due to the Company s higher level of debt, mainly due to the consolidation of IENNE and other funding contracted in the period Passive interest: reduction of interest on parceled taxes (REFIS) due to PERT joining in 3Q SWAP operation: hedge operation regarding the Law 4,131 loan Monetary variations: raise reflects new acquisitions -4 1Q17 Return on financial investments Net monetary variations Passive interest Interest and charges on loans Swap operation Others 8

9 Regulatory Net Inome Growth reflects RBSE receivables +228% 305 RBSE: impact of BRL216 million in Reduction of costs and expenses due to tax ( IPTU ) compensation (non recurring) 93 Raise in financial expenses due to the Company s higher level of debt 1Q17 9

10 Cash Flow¹ Strong Cash Generation Consolidated Initial Cash Balance (December/2017) 617 Operational activities RAP receivables 812 Payment of State Law 4,819/58-50 PMTO -171 Charges -31 Taxes and fees -297 Others 13 Cash generation in operational activities 276 Investment activities Infrastructure investments -85 Growth projects investments -14 Use of cash flow in investment activities -99 Financing activities Additional loans 1 Settlement of loans (principal + interest) -53 Transactions of non controlling shareholders -14 Use of cash flow in financing activities -66 Final Cash Balance (March/2018) 728 Note: ¹Managerial Cash Flow RAP receivables: considers RAP RBSE of BRL490 million SEFAZ Law 4,819: non reimbursed difference by the São Paulo Estate Treasury Office ( SEFAZ ) PMTO: expenses with personnel, MTO, executions and court deposits Charges: CDE, Proinfa, R&D and inspections fees Taxes: Income and Social Contribution Taxes (IR/CSLL), PIS / COFINS and others Others: rendering of services and sharing of infrastructure Investments: reinforcements and improvements capex Growth capex: investments on subsidiaries under construction Financings: addition of vehicle commercial leasing Non controlling shareholders transactions: jointly-owned subsidiaries that participate in investment funds (IE Madeira, IE Garanhuns, ERB1, Aimorés e Paraguaçú) 10

11 Income Statement: Regulatory vs. IFRS Consolidated DRE Regulatory IFRS IFRS vs. Regulatory Change Gross Revenue Revenue on Use of Electric Network - RAP Infrastructure Revenue O&M Revenue Concession Asset Revenue RBSE Revenue Other Revenue Deductions Net Revenue Infrastructure Costs Costs of O&M and General Expenses Depreciation EBIT Equity Income Other Opertional Revenues (expenses) Result Before Financial Result and Taxes Financial Result Profit before Income and Social Contribution Taxes IR & CSLL Net Income before Participation of Non Controlling Shareholder Participation of Non Controlling Shareholder Consolidated Income/Losses Revenue: IFRS considers infrastructure and concession assets revenue. Regulatory considers RAP invoice Costs: IFRS considers infrastructure costs, that are in line with the infrastructure revenue level Depreciation: In IFRS there is no more fixed asset. Regulatory results consider the depreciation of RBSE assets Equity income: IFRS accounts infrastructure and concession assets revenues Income and Social Contribution Taxes (IR/CSLL): IFRS is the basis for collection. Regulatory results accounts deferred IR/CSLL on IFRS adjustments 11

12 Consolidated Debt Solid debt profile with competitive cost Debt 03/31/ /31/2017 Chg (%) Gross Debt 1, , % Short-term Debt % Long-term Debt 1, , % Consolidated Availabilities % Availabilities of ISA CTEEP and Subsidiaries % Availabilities of Partially Owned Subsidiaries* % Consolidated Net Debt 1, , % Net debt reduction Raise in availabilities from the RBSE cash flow Reduction on average cost of debt from 8.3% per year in December/2017 to 7.9% per year in March/2018 Fully compliant with all covenants and requirements Maintenance of Fitch Investment Grade: AAA (bra) *The Company's resources are concentrated in exclusive investment funds, which are also used for the investments of the subsidiaries and partially owned subsidiaries, and refer to quotes of the investment funds with high liquidity, conversible in cash, regardless of the expiration of the assets in which they are allocated. Infrastructure Debenture issuance of BRL621 million concluded in IPCA rate + 4.7% per year, and expiration in

13 INVESTOR RELATIONS phone: