Santander - 14th annual latin American CEO Conference

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<ul><li> 1. Institutional November, 2009 </li></ul><p> 2. AES Brasil Group7 million clients... with a 2008 result: Market Share 6 thousand AES People R$ 3.2 billion (Ebitda) R$ 1.7 billion (net income)Discos 14,6% 85,4%Gencos 3,0% 97,0% Investments 1998-2008:R$ 5 billion after privatizationAES Brasil Disco GencoTrading Co. Telecom Others2 3. Shareholding structureAES Corp BNDES C 50.00% + 1 share C 50.00% - 1 share O = Common SharesP 0.00%T 46.15%P = Preferred SharesT = TotalCia. Brasiliana de EnergiaC 76.46% C 71.35% C 99.99% C 100.00%C 98.26% P 7.43%P 32.34%C 99.99 % T 99.76%T 99.99% T 100.00%T 98.26% T 34.80% T 52.55%T 99.99 %AES AESAESAES AESAES AES EP Sul InfoenergyUruguaiana Com RJ EletropauloTiet Telecom 3 4. Shareholding composition FederalGovernment orFree Float Eletrobras116.1%19.7% 8.0%56.2% 24.2%28.3% 7.9%39.5% 1 Federal Government and Eletrobrs correspond to AES Eletropaulo and AES Tiet, respectively4 5. Energy sector agents in BrazilMinistry of Mines and Energy (MME)(Set Guidelines and Policies) National Council ofEnergy Policy (CNPE) (Formulates Policies) Electricity Sector Brazilian ElectricityEnergy Research Surveillance Regulatory AgencyEnterprise (EPE)Committee (CMSE) (ANEEL) (Monitors energy supply) (Ruling, Inspection &amp; Auditing,(Generation &amp; TransmissionMonitoring, and Mediation)Planning)Distribution companiesElectric Energy TransmissionSystem OperatorCommercializationcompanies (ONS) Chamber (CCEE) GenerationGenerator resources Pricing and clearing of scheduling and dispatchenergy transactionscompaniesTrading companies 5 6. Energy sector in Brazil(Contracting Environment) Regulated Market Free MarketAuctions Spot MarketPPAs1 Distribution Companies Trading Companies Trading Companies Free ClientsFree Clients Main auctions (reverse auctions): Distribution New Energy (A-5): Delivery in 5 years, 15-30 Companiesyears regulated PPA New Energy (A-3): Delivery in 3 years, 15-30years regulated PPA Existing Energy (A-1): Delivery in 1 year, 5-15years PPA6 1 Power Purchase Agreement 7. Discos regulatory methodology (Tariff Reset and Adjustment) Tariff Readjustment and Reset Tariff Reset is applied each 3 to 5 years Parcel A Costs AES Eletropaulo: each 4 years Non-manageable costs that totallyEnergy pass- through to the tariff AES Sul: each 5 years Purchase Losses reduction improve the pass- Parcel A costs pass trough the tariff Transmissionthrough effectiveness Parcel B costs are set by ANEELSector Charges Tariff Adjustment: annually Reference Reference Company: Parcel A costs pass trough the tariffCompany Efficient cost structure, determined by(PMSO) Parcel B cost are adjusted by IGPM +/- X(1)ANEEL (National Electricity Agency)FactorX WACCInvestment Remuneration Remuneration Asset Base:Remuneration Asset Applicable investments used to Basecalculate the Investment RemunerationX DepreciationDepreciation (applying WACC) and DepreciationRegulatory Parcel A Non-Manageable CostsEbitda(1) X Factor: index that capture productivity gainsParcel B Manageable Costs 7 8. AES Eletropaulo overviewConcession Area Largest electricity distribution company in Latin America Serving 24 municipalities in the So Paulo Metropolitan areaSo Paulo Metropolitan Area Concession area with the highest GDP in Brazil: 17.1% of the Brazilian GDP and 50.3% of So Paulos state GDP 46 thousand kilometers of lines 4,526 km2 of concession area 1.1 million electricity poles 4,143 employees Regional West Regional North Regional SouthRegional ABC 5.9 million of consumption units Regional East Total distributed volume of 41 TWh in 2008Note Data as of Sept. 2009, except GDP which is 20069 9. Ranking for energy distributors8.000 7.000 Net Revenue - R$ MM6.000 5.000 2007 2008 4.000 3.000 2.000 Net Revenue1st 1st 1.000CPFL PAULISTABANDEIRANTEPIRATININGAELETROPAULOAMPLACOELBAELEKTROCOELCE CELESCCOPEL CELPECEMIG CELGLIGHT CPFLAES1.8001.600 Ebitda - R$ MM1.4001.2001.000800Ebitda 2nd1st600 400200CPFL PAULISTAELETROPAULOPIRATININGA AMAZONASCOELBAELEKTROAMPLA CEMAR COELCE COPELCEMIG CELPELIGHT RGE CPFL AES 10 1 Source: ABRADEE (Brazilian Association of Energy Distributors); research among 48 energy distributors in Brazil. 10. Consumption evolutionTotal Market - (GWh)19M09 Consumption Share - (GWh)1+ 8%8%6%17%41,243 37% 39,932 38,183 7,383 7,35530,73014%6,527 30,3774105,6255,024 26% 31,656 32,577 33,860 25,105 25,353CAGR 2006-08Residential+7% 20062007 20089M089M09 Commercial+2% Free ClientsCaptive marketFree Clients +6% Industrial+0%Others +2% 1 Own consumption not considered 11 11. Most important consumption classesResidential - (GWh)Commercial - (GWh)+ 5%+ 3%3,97811,2147,850 3,742 10,708 2,657 2,6257,6033,4942,5671Q09 2Q09 3Q09 9M08 9M09 1Q09 2Q09 3Q099M08 9M09Industrial - (GWh) Captive Market - (GWh)- 11% + 1% 4,87825,3534,33725,104 1,546 8,742 1,4658,4931,3278,1181Q09 2Q09 3Q09 9M08 9M09 1Q09 2Q09 3Q099M08 9M09 1 Own consumption not considered 12 12. Investments amounted up to R$ 324 million in 9M09 Investments Breakdown R$ million Investments 9M09 523 8% 4%4% 45755 433 16% 45%47378 6932477 30526 46822% 36 27% 410 364301269298Customer Service andMaintenanceSystem Expansion Customer Financed IT2006 2007 2008 2009e 9M08 9M09 Loss Recovery OthersCapexPaid by customers 13 13. SAIDI &amp; SAIFI SAIDI - System Average Interruption Duration IndexSAIFI - System Average Interruption Frequency Index11.81 11.3410.92 8.618.498.41 8.909.2011.017.87 5.52 5.64 5.78 5.20 2006 2007 20089M092006 2007 20089M09 3rd 3rd5th3rd 1st1stSAIDI (hours)SAIDI Aneel TargetSAIFI (times) SAIFI Aneel TargetABRADEE ranking position between 28 distributors withover 500 thousand consumers1 Last twelve months Source: ABRADEE, ANEEL e AES Eletropaulo 14 14. Operational indexesCollection Rate % over gross revenueLosses %- 1.3 b.p. - 0.4 b.p.101.4 99.1 99.5 97.8 97.7 12.011.611.611.8 11.5 5.55.0 5.15.25.36.56.5 6.56.56.52006 2007 20089M089M09 20062007 2008 9M0819M091 Commercial Losses Technical Losses Disconnections and Reconnection Monthly Average (9M08 XFraud and Illegal Connections (9M09) 9M09) 271,000 inspections e 32,000 frauds detected Disconnections: increase from 233 thousand to 733 thousand 57,000 illegal connections regularized Reconnection: increase from 248 thousand to 488 thousand Past due bill credit report (9M09 average): 190 thousand1 Last 12 months 2 - Current Technical Losses used retroactively as reference15 15. Net revenue of R$ 5.9 billion in 9M09 Net Revenue R$ million Ebitda R$ million 2003 2007 EMBI+ BR 4.63% 2.21%Regulatory WACC (%)Selic target 16.50% 11.25%+ 10% 17.115.1 7,5297,1936,8521,766 1,566 1,6965,8555,5401,1401,14320062007 2008 9M089M09 200620072008 9M08 9M0916 16. Net income of R$ 538 million in 9M09Net Income R$ millionDividend payout1 R$ million DividendsPay-outYield2 PNB+ 175%100.3% 101.5% 1,027 34.9%14.4%20.3%7133.2%5381,043 496373 715323 130 2006 2007 2008 9M08 9M092006 200720089M09 25% of minimum pay-out according to bylaw Practice on semi-annual basis of maximum permitteddividend distribution, since 2006 results Yield2 of 6.3% and pay-out of 106.7% 1 Gross amount 2 Considered 1st semester data 17 17. R$ 663 million paid as dividends in 2009 Managerial Cash Flow R$ million 3Q084Q081Q092Q09 3Q09Initial Cash1,454 1,373 1,536 1,258989Operating Cash Flow 613 491 301448 798Investments (107) (126) (104)(113) (116)Net Financial Expenses(107) (37)(113)(45)(98)Net Amortizations (21)(40)(184)(54)(35)CESP Foundation (32)(46)(58) (56)(53)Income Tax(68)(80)(119)(83)(45)Dividends (359) - -(366) (297)Free Cash Flow(81)162 (278)(269) 155Final Cash1,373 1,536 1,258989 1,143 18 18. Debt profileNet Debt Amortization Schedule R$ million 2.1x 1.3x 1.4x1.2x 1,5323.7 3.0 78 2.52.7 1062 6670524 80 41 75375250 250 250125 35020062007 20089M092009 2010 2011 20122013 2014 20152016-2028 Net Debt (R$ billion) Local Currency (w/out Pension Fund) Pension Fund Foreign Currency2Net Debt / Adjusted Ebitda1 September, 2009: Average debt cost is 116.5% of CDI3 per year which means an effective rate of 13.9% per year Average debt maturity is 7.3 years 1 - Last 12 months of adjusted Ebitda 2 Exchange rate in 09/30/2009 US$ 1.00 = R$ 1.7781 3 - Brazils Interbank Interest Rate19 19. Capital market AES Eletropaulo1 X Ibovespa X IEEAverage Daily Volume3 - R$ thousandYTD 09 17064% C64% 26,06625,677 150 B46%21,187A 130 7,508 11090dec-082 jan-09 feb-09 mar-09 apr-09 may-09 jun-09 jul-09 aug-09 sep-09 2006 2007 2008 9M09 ELPL6IEEIBOV A) 25/02/2009 Finsocial and So Paulo municipality agreement B) 16/04/2009 - Public Consultation of Tariff Reset C) 16/06/2009 Conclusion of Second Periodic Tariff Reset1 Shares were adjusted by declared dividend of the period under analysis 2 Data Base: 12/28/07 = 100 20 20. AES Tiet overview Concession Area 30 year concession, expires in 2029, renewable foranother 30 years 10 hydroelectric plants in the State of So Paulo at Tiet,Pardo and Mogi Guau rivers Atlantic Ocean Installed capacity of 2,657 MW, with assured energy1 of1,280 MW Name and Installed Capacity of AES Tiets Plants:gua Vermelha (1,396 MW) Ibitinga (132 MW) 100% of assured energy contracted with AES Nova Avanhandava (347 MW)Euclides da Cunha (109 MW) Eletropaulo until the end of 2015 Promisso (264 MW) Caconde (80 MW)Barra Bonita (141 MW)Limoeiro (32 MW) 310 employeesBariri (143 MW)Mogi-Guau (7 MW)1 - Amount of energy allowed to be long term contracted 22 21. Operational PerformanceEnergy Generation MW averageBilled Energy GWh2 September 09 Prices (R$ / MWh)129%AES Eletropaulo 152.00 MRE 8.18121%118% Spot (9M09 avg.) 39.68 112% 1,646 13,421 1,543 12,774 13,148 1,424 1,510573 330 10,728 536 10,3361,740 1,680 6071,130 327 1,571 1,66311,10811,108 11,138 8,346 8,550 2006 200720089M092006 2007 2008 9M08 9M09Generation MW averageGeneration / Assured Energy2AES Eletropaulo MRE1Spot Market1 - Energy Reallocation Mechanism 2 - Amount of energy allowed to be long term contracted23 22. Investments Investments R$ million9M09 Investments New SHPPs1 Investments6359 1451 4733% 8201233 493% 45%11433919%3522 2006 200720082009(e)9M09 Equip. and Maint.New SHPPs 9M09 x 9M08: higher reforestation expending, due toIT EnvironmentCarbon Credit Project, partially offset by lower investmentson Piabanha SHPP 1- Small Hydro Power Plant Jaguari Mirim and Piabanha24 23. Expansion requirement of 15% Increase installed capacity in Sao Paulo State by 15% (400 MW), either in greenfield projects or through long term purchase agreement with new plants The obligation was supposed to be accomplished by December 2007, however AES Tiet was not able to comply with this requirement due to the following restrictions: Insufficient remaining hydro resources within the State of So Paulo Environmental restrictions Insufficiency of gas supply / timing issue More restricted regulation on energy sale established by the New Model of Electric Sector (Law # 10,848/2004)which eliminated the self dealing In August 2008, Aneel informed that the issue is not linked to the concession Popular law action against Federal Government, Aneel, AES Tiet, and Duke Status: Defense filed on first instance in October 2008 by AES Tiet. In December, 2008, the author replied AESTiet defense and, since this, both parties are waiting judge movement about the necessity of proves production On July 27, 2009, AES Tiet was notified by the State Government Attorneys Office to present arguments on compliance with the expansion obligation The Company filed a response on July, 29th, which exhausts the procedure for notification. Possible deploymentdepends on new manifestation of the Prosecution 25 24. Projects expansion requirement AES Tiet has been seeking opportunities to increase its installed capacity to comply with the 15% increase requirement in the State of So Paulo 6MW of co-generation by biomass contracted for 15 years (initiating in 2010)ConcludedConcluded(PPA1))(PPA1 7 MW of hydropower generation through SHPPs2 in Jaguari Mirim riverIn Progress In Progress SHPP So Jos (4 MW) is expected to begin the operation in 1H10 SHPP So Joaquim (3 MW) is expected to begin the operation in 1H10 UnderUnder 500 MW of natural gas fired thermo plantEvaluationEvaluation In stage of defining plant location 32 MW of hydropower generation through SHPPs under technical and economic viability study26 1 - Power Purchase Agreement2 - Small Hydro Power Plant 25. Net revenue ofR$ 1.3 billion in 9M09Net Revenue R$ million Ebitda R$ million+ 17%+ 14% 1,621 1,2541,464 1,3871,0971,0991,2771,0281,186 936 2006 200720089M089M092006 2007 20089M08 9M09 27 26. Sustainable profitability and dividend paymentNet Income R$ millionDividend Payout1 R$ millionDividendsPay-outYield PN2+ 13% 100 %100 % 100 %12% 10% 12%692614609636 636 692495614 6092006 200720089M089M09 20062007 20089M09 25% of minimum pay-out according to bylaw Practice on quarterly basis of maximum permitted dividend distribution, since 2006 results Yield2 of 9.4% and pay-out of 100% in 9M09 1 - Gross amount 2 - Average Weighted Price during the Period28 27. Strong cash flow Managerial Cash Flow R$ million 3T084T08 1T09 2T093T09Initial Cash673 783836 812639Operating Cash Flow 340 337297 332316Investments(14)(22) (9) (8)(14)Net Financial Expenses (13)(7)(6) (13) (15)Net Amortization (50)(52) (53)(55) (58)Income Tax (19)(17)(252)(20) (19)Dividends and IoE (134) (188)0 (409)(199)Free Cash Flow11053 (24) (173) 12Final Cash Parent Company 783 836812 639651Final Cash of Subs. And Assoc. Comp 552 2 1Final Cash788 840814 64165229 28. Debt Net Debt 0.6x 0.6x 0.3x0.3x Eletrobras Debt0.70.7 Balance: R$ 1,029 million0.4 0.4 Monthly amortization Maturity: May 15, 2013 Interest of 10% p.a. and monetary adjustment of IGP-M 2006 2007 20089M09Net Debt (R$ billion)Net Debt / Ebitda30 29. Capital marketAES Tiet1 X Ibovespa X IEE Daily Average Volume - R$ thousand 10,109 9M092 1909,0678,160+ 64% 160 8,106+ 46% 5,760 5,531+ 40% 5,468 1304,188 100 3,5662,692 2,0031,57270 Dec-08 Mar-09 Jun-09Sep-09 2006200720089M09GETI4 IBOVIEE Preferred Common 1 Shares were adjusted by declared dividend of the period under analysis 2 Data Base: 12/30/08 =100 31 30. Social Responsibility and Environmental Actions 31. Social Responsibility Volunteering ProgramdistributingActing toEnterprising inEnergy ofTransformthe Community Good Specific social mobilization or Opportunities for volunteering inAcknowledgement and emergency campaign.social organizations, which are support of projects for thepartners of AES Brazildevelopment of social organizations.Winter clothes, ChristmasCo-workers can enroll incampaign, among others. volunteer activities available atVolunteers may submitAES Brazil volunteering portalprojects to help other since September/09 organizations develop. Launch www.energiadobem.com.brscheduled for January/10. Launched in December,2008; Objective: to get the co-workers committed to the transformation of low income...</p>

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