1 Rio de Janeiro, May 15, 2014. Distribution Company’s consumption grew 7.8% in 1Q14 Consolidated net income increased 129.5% Total energy consumption came to 7,374 GWh in 1Q14, 7.8% up from 1Q13 driven by increased consumption in the residential and commercial segments, which rised by 13.6% and 8.3%, respectively; Consolidated net revenue, excluding revenue from construction, totaled R$2,118.7 million in 1Q14, 20.1% up from 1Q13. Despite the growth in all segments, the comercialization and generation activities stood out in the quarter, posting revenue growth of 87.1% and 45.4%, respectively, when compared with the same period last year; Consolidated EBITDA 1 amounted to R$452.9 million in the quarter, 27.5% higher than in 1Q13, impacted by spot market energy sales by the generation company. When adjusted for the CVA, EBITDA came to R$434.7 million in 1Q14, 4.7% down from 1Q13 Adjusted EBITDA . Net income totaled R$180.5 million in the quarter, 129.5% up from 1Q13, due to the operational performace in the generation segment and the improved financial result. When adjusted for the CVA, net income totaled R$168.5 million, 15.9% above the figure reported in 1Q13. Non-technical energy losses in the last 12 months, as a percentage of billed energy in the low-voltage market (ANEEL criterion), due to high temperatures in the quarter, recorded a slight increase of 0.2 p.p. in relation to the previous quarter, reaching 42.4% in March 2014. Collections stood at 94.6% of billed consumption in 1Q14, 6.4 p.p. down on the same quarter last year. Provisions for Past Due Accounts (PCLD) represented 1.0% of gross billed energy, totaling R$25.3 million, an improvement of 12.8% over 1Q13. The Company closed 1Q14 with net debt of R$5,341.8 million, 1.8% up from December 2013 net debt, adjusted by the pension fund, which was fully settled in February 2014. The net debt/EBITDA ratio stood at 2.90x. BM&FBOVESPA: LIGT3 Conference Call: IR Contacts: OTC: LGSXY Date: 16/05/2014 Phone: +55 (21) 2211-2828/7392 Total shares: 203,934,060 shares Time: 3:00 p.m. (Brazil) // 2:00 p.m.( US ET) Fax: +55 (21) 2211-2787 Free Float: 76,264,255 shares (37.57%) Phone numbers: +55 (11) 2188 0155 // +1 (646) 843 6054 Email: [email protected]Market Cap (05/14/14): R$ 4.079 million Webcast: ri.light.com.br Website: ri.light.com.br 1 EBITDA is calculated in accordance with CVM Instruction 527/2012 and represents net income +income and social contribution tax + net financial expenses + depreciation and amortization. 1Q14 1Q13 Var. % Grid Load* 10,944 9,910 10.4% Billed Energy - Captive Market 6,117 5,572 9.8% Consumption in the concession area 7,374 6,841 7.8% Transported Energy - TUSD 1,257 1,269 -0.9% Sold Energy - Generation 1,264 1,267 -0.2% Commercializated Energy (Esco) 1,338 1,031 29.8% 1Q14 1Q13 Var. % Net Revenue** 2,119 1,765 20.1% EBITDA 453 355 27.5% EBITDA Margin** 21.4% 20.1% 1,3 p.p. Net Income 181 79 129.5% Net Debt 5,342 4,031 32.5% Capex 176 163 7.9% * Own Load + network use ** Does not consider construction revenue Operational Highlights (GWh) Financial Highlights (R$ MN)
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
1
Rio de Janeiro, May 15, 2014.
Distribution Company’s consumption grew 7.8% in 1Q14
Consolidated net income increased 129.5%
Total energy consumption came to 7,374 GWh in 1Q14, 7.8% up from 1Q13 driven by increased consumption in
the residential and commercial segments, which rised by 13.6% and 8.3%, respectively;
Consolidated net revenue, excluding revenue from construction, totaled R$2,118.7 million in 1Q14, 20.1% up from
1Q13. Despite the growth in all segments, the comercialization and generation activities stood out in the quarter,
posting revenue growth of 87.1% and 45.4%, respectively, when compared with the same period last year;
Consolidated EBITDA1 amounted to R$452.9 million in the quarter, 27.5% higher than in 1Q13, impacted by spot
market energy sales by the generation company. When adjusted for the CVA, EBITDA came to R$434.7 million in
1Q14, 4.7% down from 1Q13 Adjusted EBITDA .
Net income totaled R$180.5 million in the quarter, 129.5% up from 1Q13, due to the operational performace in the
generation segment and the improved financial result. When adjusted for the CVA, net income totaled R$168.5
million, 15.9% above the figure reported in
1Q13.
Non-technical energy losses in the last 12
months, as a percentage of billed energy in the
low-voltage market (ANEEL criterion), due to
high temperatures in the quarter, recorded a
slight increase of 0.2 p.p. in relation to the
previous quarter, reaching 42.4% in March 2014.
Collections stood at 94.6% of billed consumption
in 1Q14, 6.4 p.p. down on the same quarter last
year. Provisions for Past Due Accounts (PCLD)
represented 1.0% of gross billed energy, totaling
R$25.3 million, an improvement of 12.8% over
1Q13.
The Company closed 1Q14 with net debt of
R$5,341.8 million, 1.8% up from December 2013
net debt, adjusted by the pension fund, which was fully settled in February 2014. The net debt/EBITDA ratio stood
The Company’s 1Q13 results were reclassified due to the decision of the Management to present PIS and COFINS tax
credits on purchased energy as a reduction factor for purchased energy costs instead of presenting them as a
reduction in PIS and COFINS on revenue. The purpose of this reclassification was to align the presentation criterion
with the best practices of companies in the same sector.
The reclassification affected net revenue and non-manageable costs, but it did not affect EBITDA and net income.
The Administration also reviewed the criteria for the presentation of contractual debt amortization with the pension
plan in the statement of cash flows, providing only a reclassification for the period of 2013 for comparison purposes.
For further information, see Exhibit VI attached to this release.
3
Table of Contents
1. The Company............................................................................................................................................... 4
2.1 Distribution ........................................................................................................................................ 5
Energy Balance .................................................................................................................... 6
Energy Losses ...................................................................................................................... 7
3.1 Net Revenue .................................................................................................................................... 13
3.6 Net Income ...................................................................................................................................... 24
6. Capital Markets ......................................................................................................................................... 31
8. Disclosure Program ................................................................................................................................... 35
4
1. The Company
Light S.A. is a holding company that controls subsidiaries and affiliated companies in three main business segments:
energy distribution, generation and commercialization/services. In order to increase the transparency of its results
and provide investors with a better basis for evaluation, Light also presents its results by business segment. The
Company’s corporate structure in March 2014 is shown below:
OPERATING INDICATORS - DISTRIBUTION 1Q14 1Q13 Var. %
Nº of Consumers (thousand) 4,155 4,082 1.8%
Nº of Employees 4,258 4,209 1.2%
Average provision tariff - R$/MWh 430 393 9.5%
Average provision tariff - R$/MWh (w/out taxes) 296 279 6.2%
Average energy purchase cost¹ - R$/MWh 151 136 10.9%
OPERATING INDICATORS - GENERATION 1Q14 1Q13 Var. %
Installed generation capacity (MW)* 961 942 2.0%
Assured energy (MW)* 698 687 1.7%
Pumping and internal losses (MW) 87 87 -
Available energy (Average MW)* 611 600 1.9%
Net Generation (GWh) 1,101 1,404 -21.6%
Load Factor 61.9% 62.3% - 0,4 p.p.
¹Does not include purchase on spot.
* Includes proportionate share of associates
5
2. Operating Performance
2.1 Distribution
Total energy consumption in Light SESA’s concession area (captive clients + transport of free clients2) came to 7,374
GWh in 1Q14, 7.8% up from the same period in 2013, mainly due to the increases of 13.6% and 8.3% in residential
and commercial consumption, respectively. Residential consumption totaled 2,752 GWh in the quarter, accounting
for 37.3% of the total market, 13.6% up from 1Q13, driven by the 1.3ºC year-on-year increase in the average
temperature. Note that, in 1Q14, the residential segment recorded its highest consumption in the last ten years.
Commercial clients consumed 2,267 GWh in 1Q14, equivalent to 30.7% of the total market, an upturn of 8.3% over
1Q13. In the first quarter of 2014, the free market received 11 migrations from the captive market, which
corresponded to an increase of 15 GWh in the quarter.
2 In view of ANEEL’s ratification of the market during the tariff revision process, consumption by the free client CSN is included as of the fourth
quarter of 2013.
6
Industrial consumption amounted to 1,330 GWh in 1Q14, representing 18.0% of the total market, a decline of 2.1%
in relation to the same period last year, due to weaker performance of electro-intensive industries, with activities of
manufacture of steel/alumnium and in the chemical sector. Excluding this effect, industrial consumption posted an
increase of 4.4% over 1Q13.
In the “others” category, which accounted for 13.9% of the total market, consumption increased by 6.1% in 1Q14
over 1Q13. The rural, government and public utility categories reported respective increases of 42.9%, 7,1% and
5.0% over 1Q13, representing 0.3%, 6.2% and 4.8%, respectively, of the total market.
Energy Balance
117.2 2,752.0
CCEAR Captive Billed Industrial
Light Energia Energy 360.2
1,294.2 6,116.8
Commercial9,045.6 2,034.3
Losses + Non Billed1,915.0 Energy (**) Others
9,210.3 2,928.9 970.2
1,566.7
2,003.4
SHARES
2,094.8
218.9
(*) Others = Purchase in Spot - Sale in Spot.(**) Includes unbilled energy.
Note: 1) At Light S.A., there is intercompany power purchase/sale elimination
2) Power purchase data as of 04/07/2014 (subject to change)
DISTRIBUTION ENERGETIC BALANCE - GWh
PROINFA
ITAIPU
(CCEE) Required E.
(CCEE)
Residential
Position: January - March 2014
ANGRA I & II
NORTE FLU
(CCEE)
OTHERS(*)
(CCEE)
Own load
Light
Basic netw. Losses 147.4
Adjustment 17.3
7
Energy Losses
In the last 12 months, non-technical energy losses totaled 5,955 GWh, accounting for 42.4% of billed energy in the
low-voltage market (ANEEL criterion). There was a slight increase of 0.2 p.p. in relation to the twelve-month period
ending in December 2013, as a result of the hot weather in 1Q14. Compared to the 12-month period ending in March
2013, there was a reduction of 2.5 p.p., when the non-technical losses amounted to 44.9% of the low voltage market.
Light SESA’s total energy losses amounted to 8,748 GWh, or 23.2% of the grid load, in the 12 months ended March
2014.
In order to improve the reduction in non-technical energy losses, Light has been continuously investing in initiatives
that include conventional fraud inspection procedures, the upgrading of network and measurement systems, and the
Zero Loss Area program (APZ). These initiatives include:
Regularization of consumer units: The Company
conducted, in the low, medium and high-voltage
segments, 14,495 regularization procedures in 1Q14,
15.7% up from the 12,525 recorded in 1Q13,
Energy Balance (GWh) 1Q14 1Q13 Var. %
= Grid Load 10,944 9,910 10.4%
- Energy transported to utilities 614 633 -2.9%
- Energy transported to free customers 1,284 1,323 -3.0%
= Own Load 9,046 7,954 13.7%
- Captive market consumption 6,117 5,572 9.8%
Low Voltage Market 4,230 3,796 11.4%
Medium Voltage Market 1,887 1,776 6.2%
= Losses + Non Billed Energy 2,929 2,382 23.0%
Normalizations 1Q14 1Q13 Var.%
= Total 14,495 12,525 15.7%
-High / Medium Voltage 234 272 -14.0%
- Low Voltage 14,261 12,253 16.4%
Direct low voltage 12,037 11,205 7.4%
Indirect low voltage 2,224 1,048 112.2%
8
resulting in the incorporation of 33.9 GWh, versus 23.9 GWh in 1Q13 (up 41.8%). Recovered energy was 37.7
GWh in 1Q14, 4.6% down on the 39.5 GWh reported in 1Q13.
Installation of remote electronic metering devices: SMC
(centralized metering system) devices are installed in areas with
high loss rates, with or without the support of Pacifying Police
Units (UPPs). The UPPs give Light more room for maneuver in
regard to combating default or energy theft. The Company
installed 7,356 such devices in UPP-protected areas in 1Q14,
resulting in the incorporation of 8.2 GWh. In areas outside the
sphere of the UPPs, Light installed 27,217 devices, with the
incorporation of 6.5 GWh. As a result, the Company closed 1Q14
with 467,000 installed electronic meters, 31.5% more than in
1Q13. The goal is to have 203,000 installed electronic meters in 2014, of which 55,500 in the communities
and 147,500 outside the communities, so that the Company will close 2014 with 635,000 installed electronic
meters.
Zero Loss Areas (APZ): In August 2012, the Company created the APZ Project, based on a combination of
electronic metering and a shielded network, supported by dedicated teams of technicians and customer
relations personnel with clearly defined targets, whose compensation is tied to improving loss and default
indicators in their respective areas. A typical APZ has around 17,000 clients. The project, known commercially
as Light Legal, which receives support from SEBRAE in regard to the training of partnering micro-
entrepreneurs, closed March 2014 with 27 operational APZs and 446,000 clients in the Baixada Fluminense
region, and the city’s south, west and north sides.
9
By March 2014, 109,000 electronic meters had already been installed in the communities, and since the
beginning of the project, the APZs in place have already resulted in an average 29.5 p.p. reduction in non-
technical energy losses on the grid load and an average revenue increase of 6.7 p.p. The table below shows
the results per installed APZ through March 2014 in the 22 areas where the results have been determined:
Complementing the 22 areas with ascertained results, the table below shows the 5 APZ's areas under
implementation and still no calculated results, totaling 27 areas in operation.
Consolidated net operating revenue totaled R$2,282.2 million in 1Q14, 18.8% up from 1Q13. Excluding revenue from
construction, which has a neutral effect on net income, consolidated net revenue moved up by 20.1% to R$2,118.7
million in 1Q14.
Distribution
Net revenue from distribution totaled R$1,910.2 million in 1Q14, 9.3% more than in 1Q13. Excluding revenue from
construction, first-quarter net revenue from distribution amounted to R$1,746.7 million, 9.9% up from 1Q13.
Net Revenue (R$ MN) 1Q14 1Q13 Var.%
Distribution
Billed consumption 1,601.2 1,516.7 5.6%
Non billed energy 16.1 (75.9) -121.2%
Network use (TUSD) 115.2 132.1 -12.8%
Short-Term (Spot)¹ - - -
Others 14.2 16.7 -15.4%
Subtotal (a) 1,746.7 1,589.6 9.9%
Construction Revenue² 163.5 157.3 4.0%
Subtotal (a') 1,910.2 1,746.9 9.3%- -
Generation
Generation Sale (ACR+ACL) 130.3 143.6 -9.2%
Short-Term¹ 78.4 - -
Others 2.5 1.7 47.0%
Subtotal (b) 211.2 145.3 45.4%- -
Commercialization and Services
Energy Sales 285.6 159.8 78.8%
Services 8.4 (2.7) -414.6%
Subtotal (c) 294.0 157.1 87.1%- -
Others and Eliminations (d) (133.2) (127.5) 4.5%
Total w/out construction revenue (a+b+c+d) 2,118.7 1,764.5 20.1%
Total (a'+b+c+d) 2,282.2 1,921.8 18.8%
¹ Balance of the settlement on the CCEE
² The subsidiary Light SESA counts revenues and costs, with zero margin, related to services
of construction or improvement in infrastructure used in services of electricity distribution.
14
The increase was primarily due to the 7.8% market growth and the 1.3% increase in the average energy tariff
(excluding the special obligations effect), as of November 7, 2013, ratified by the Tariff Revision process.
The distribution market consists mostly of the residential and commercial segments, which together represent 64.9%
of consumption, and account for 76.8% of energy sales revenue.
Additionally, this quarter the Distributor obtained revenue of R$17.1 million from surplus demand and reactivations
and R$46.8 million from the differential tariff related to the special treatment of non-technical losses in the
concession area which have been treated as Special Obligations. Although billed in gross revenue, it does not
compound the net revenue since the last tariff revision in November 2013.
Generation
Net revenue from generation totaled R$211.2 million, 45.4% more than in 1Q13, due to the availability of energy
sold on the spot market at an avarage price of R$ 658,3/MWh.
In 1Q14, the average sale price of energy contracts traded on the free market (ACL), net of taxes, was R$115.2/MWh,
in line with the R$115.8/MWh, weighted by both markets (ACL and ACR), in 1Q13.
Commercialization and Services
Net revenue from commercialization and services stood at R$294.0 million in 1Q14, 87.1% up from 1Q13, reflecting
the substantial period increase in energy prices and sales volume, primarily as a result of the reallocation of Light
Energia’s captive market contracts terminated to the free market.
The average sales price, net of taxes, totaled R$213.5/MWh in 1Q14, 37.7% up from the R$155.0/MWh recorded in
the same period in 2013.
15
3.2 Costs and Expenses
Consolidated
In the first quarter of 2014, operating costs and expenses totaled R$1,925.6 million, 16.0% up year-on-year.
Excluding construction costs, consolidated costs and expenses climbed by 17.2% in relation to 1Q13, due to the
higher volume of energy for resale purchased both by the distribution and commercialization businesses.
Distribution
In 1Q14, distribution costs and expenses increased by 8.8% over the same period in 2013. Excluding construction
costs, total costs and expenses increased by 9.4% in relation to 1Q13.
Costs and Expenses (R$ MN) 1Q14 1Q13 Var.%
Distribution (1,740.8) (1,599.4) 8.8%Distribution w/out Construction Revenue (1,577.3) (1,442.2) 9.4%
Generation (38.4) (38.1) 0.7%
Commercialization (276.5) (147.3) 87.7%
Others and Eliminations 130.2 124.4 4.6%
Consolidated w/out Construction Revenue (1,762.1) (1,503.2) 17.2%
Consolidated (1,925.6) (1,660.5) 16.0%
Costs and Expenses (R$ MN) 1Q14 1Q13 Var.%
Non-Manageable Costs and Expenses (1,226.7) (1,125.0) 9.0%
Energy Purchase costs (1,189.1) (1,045.7) 13.7%
Costs with Charges and Transmission (129.4) (171.7) -24.6%
Others (Mandatory Costs) (3.1) (4.3) -26.5%
Credit PIS/COFINS on purchase 94.8 96.5 -1.8%
Manageable Costs and Expenses (350.6) (317.1) 10.6%
PMSO (187.8) (184.0) 2.1%
Personnel (69.0) (73.1) -5.6%
Material (5.2) (3.7) 42.3%
Outsourced Services (90.8) (88.6) 2.6%
Others (22.7) (18.6) 21.9%
Provisions - Contingencies (40.0) (16.2) 146.6%
Provisions - PCLD (25.3) (29.0) -12.8%
Depreciation and Amortization (85.4) (80.6) 6.0%
Other Operacional/Revenues Expenses (12.1) (7.3) 66.3%
Total costs w/out Construction Revenue (1,577.3) (1,442.2) 9.4%
Construction Revenue (163.5) (157.3) 4.0%
Total Costs (1,740.8) (1,599.4) 8.8%
16
Non-Manageable Costs and Expenses
In 1Q14, non-manageable costs and expenses came to R$1,226.7 million, 9.0%
up from the same period in 2013, chiefly due to the 13.7% upturn in
purchased energy costs. This result already includes the transfer of CDE and
ACR funds totaling R$1,161.0 million in 1Q14, in accordance with Decree
8203/14 and Decree 8221/14.
The increase in purchased energy costs was a reflection of: (i) contracting
through the Auction A-1, held in December 2013, priced at R$ 177,22 reais,
higher than the average price of contracts in force before; (iii) yearly
contractual adjustments, such as with the Norte Fluminense which take place
in November, and Itaipu, which occurred in January; and (iv) by the growth of
purchased energy, considering the 7.8% increase of consumption in the
concession area.
Costs with charges and transmission felt by 24.6%, mainly due to the
reduction in the network usage charge, as a result of the renewal of certain
transmission companies’ contracts.
The following table gives a breakdown of non-manageable costs:
Non-Manageable Costs and Expenses (R$ MN) 1Q14 1Q13 Var. %
Energy Purchase costs (1,189.1) (1,045.7) 13.7%
Itaipu (168.0) (144.9) 15.9%
TPP Norte Fluminense (277.3) (267.1) 3.8%
Short-Term Energy (Spot) (1,245.7) (362.2) 243.9%
Energy auction (650.8) (563.3) 15.5%
Availabilities Contracts (218.9) (225.7) -3.0%
Others (432.0) (337.7) 27.9%
CDE Funds* 1,161.0 291.9 297.8%
Hydrological risk (42.9) 131.4 -
Quotas Exposure 1,083.3 160.4 575.3%
Availabilities Contracts 133.4 - -
CONER (Power Reserve) (12.8) - -
Other Credits** (8.2) - -
Costs with Charges and Transmission (129.4) (171.7) -24.6%
System Service Charge (ESS) (26.7) (215.3) -87.6%
CDE - ESS - 136.3 -
Transported Energy (62.5) (52.8) 18.4%
Other Charges (40.2) (39.8) 0.9%
Others (Mandatory Costs) (3.1) (4.3) -26.5%
Credit PIS / COFINS on purchase 94.8 96.5 -1.8%
Total (1,226.7) (1,125.0) 9.0%
*According to Decree No. 8203/14 and Decree 8221/14 (including Order 1256/14 and Order 1443/14).
** Adjust the input of Hydrologica l ri sk for the month of Dec/13
17
Non-manageable costs are passed on to consumer tariffs and any increase or reduction in such costs in relation to
the regulatory level constitutes a regulatory asset or liability (CVA) balance, to be taken into account in the next tariff
readjustment, but which is not recorded in the income statement in accordance with International Financial
Reporting Standards (IFRS). In 1Q14, regulatory liabilities totaled R$18.3 million, versus regulatory assets of R$101.2
million in 1Q13.
The average purchased energy cost, excluding spot market purchases, amounted to R$150.7/MWh in 1Q14, 10.9%
up from the R$136.0/MWh recorded in 1Q13.
Manageable Costs and Expenses
In the first quarter of 2014, manageable operating costs and expenses, comprising personnel, materials, outsourced
services, provisions, depreciation and others, totaled R$350.6 million, 10.6% up from 1Q13.
Costs and expenses from personnel, materials, outsourced services and others (PMSO) totaled R$187.8 million in the
first quarter, 2.1% up from the same period in 2013, chiefly due to the 42.3%, 21.9% and 2.6% increases in materials,
others and outsourced services, respectively.
The decline in the personnel line was due to higher volume invested in labor capitalization, totaling R$8.2 million,
compared 1Q13. The upturn in the materials and outsourced services lines was primarily a reflection of higher
investments in the Zero Loss Area program (APZ), in view of the progress made in the projects, totaling
approximately R$7.4 million.
In 1Q14, the others line recorded an increase in relation to the same period in 2013, as a result of: (i) the R$2.3
million referring to anticipation of software maintenance; and (ii) the R$3.1 million spent on advertising campaign
for raising awareness of the efficient use of energy.
The provisions line totaled R$65.3 million, 44.3% up from the first quarter of 2013, due to the constitution of the
following provisions in the 1Q14: (i) R$26.9 million for contingencies, mainly related to labor suits and judicial
deposits, and (ii) R$5,9 million in judicial deposits. In 1Q14, provisions for past due accounts (PCLD) came to R$25.3
million, 12.8% below the R$29.0 million recorded in 1Q13.
The depreciation and amortization line increased by 6.0% over 1Q13, due to the higher volume of investments, with
more assets incorporated to the network in 2013.
The Other Operating Revenue/Expenses line totaled R$12.1 million in the quarter, 66.3% up from the R$7.3 million
recorded in 1Q13, resulting from write-offs in view of deactivation of assets to intangible assets.
18
Generation
In 1Q14, Light Energia’s costs and expenses amounted to R$38.4 million, an increase of 0.7% over 1Q13.
First-quarter costs and expenses were broken down as follows: personnel (14.8%), materials and outsourced services
(9.5%), CUSD/CUST — distribution/transmission system usage/Purchased Energy (20.4%), depreciation and others
(55.2%). PMSO per MWh in the quarter came to R$14.4/MWh, versus R$14.1/MWh in 1Q13.
Commercialization and Services
Costs and expenses totaled R$276.5 million in 1Q14, 87.7% higher than in the first quarter of 2013. The increase was
mainly due to the 84.0% surge in purchased energy costs in relation to the figure reported in 1Q13, resulting from
the higher volume of energy purchased for commercialization and spot market prices. The 326.1% increase in the
materials and outsourced services line was mainly due to the partial start-up of a co-generation project for a large
beverage company.
Operating Costs and Expenses (R$ MN) 1Q14 1Q13 Var.%
Personnel (5.7) (5.3) 7.6%
Material and Outsourced Services (3.7) (3.6) 3.0%
Purchased Energy (CUSD) (7.8) (7.6) 3.6%
Depreciation (13.5) (13.8) -1.9%
Others (includes provisions) (7.7) (8.0) -3.2%
Total (38.4) (38.1) 0.7%
Operating Costs and Expenses (R$ MN) 1Q14 1Q13 Var. %
Personnel (2.6) (2.0) 32.2%
Material and Outsourced Services (11.9) (2.8) 326.1%
Purchased Energy (261.5) (142.1) 84.0%
Others (includes provisions) (0.4) (0.4) 10.1%
Total (276.5) (147.3) 87.7%
19
3.3 EBITDA3
Consolidated
Consolidated EBITDA totaled R$452.9 million in 1Q14, 27.5% up from 1Q13, while the EBITDA margin4 incresead
from 20.1% to 21.4% in the same period. The distribution, generation and commercialization segments grew by
11.7%, 53.2% and 76.9%, respectively.
The first-quarter increase can be explained by two factors: (i) increase in generation revenue due to energy sale on
the spot market; and (ii) the 9.3% increase in net revenue from distribution, driven by the 7.8% growth of the captive
market.
All the Company’s business segments recorded EBITDA growth, however the distribution segment decreased its
period share of consolidated EBITDA from 63.8% in 1Q13 to 56,0% in 1Q14, while the share of the generation and
commercialization segments climbed from 36.2% in 1Q13 to 44.0% in 1Q14.
3 EBITDA is calculated in accordance with CVM Instruction 527/2012 and refers to net income + income and social contribution taxes + net financial expenses + depreciation and amortization. 4Revenue from construction was not considered in the calculation of the consolidated and distribution EBITDA margins, due to the booking of revenues and costs with a zero margin.
Consolidated EBITDA (R$ MN) 1Q14 1Q14 1Q13 Var.%
Distribution 254.8 228.1 11.7%
Generation 182.8 119.3 53.2%
Commercialization 17.5 9.9 76.9%
Others and eliminations (2.2) (2.2) 0.4%
Total 452.9 355.1 27.5%
EBITDA Margin (%) 21.4% 20.1% 1,2 p.p
Regulatory Assets and Liabilities (18.3) 101.2 -
Adjusted EBITDA 434.7 456.3 -4.7%
20
When adjusted for the CVA, i.e. regulatory assets and liabilities that will be taken into account in the distributor’s
next tariff adjustment, reflecting, therefore, gross cash flow potential, adjusted EBITDA came to R$434.7 million in
1Q14, a decrease of 4.7% compared to Adjusted EBITDA for the same quarter of 2013.
Distribution
In 1Q14, the distribution company’s EBITDA totaled R$254.8 million, 11.7% up from 1Q13, driven by the 7.8% growth
of the market in the quarter. The EBITDA margin5 stood at 14.6%, 0.3 p.p. higher than in 1Q13. When adjusted for
the CVA, distribution EBITDA came to R$236.5 million, 28.2% down year-on-year.
Generation
Light Energia recorded 1Q14 EBITDA of R$182.8 million, 53.2% up from the same quarter in 2013, due to the volume
of energy sold on the spot market.The EBITDA margin achieved 86.5%, 4.4 p.p. up from 1Q13.
Commercialization and Services
EBITDA from commercialization and services totaled R$17.5 million in 1Q14, 76.9% more than in 1Q13, reflecting the
substantial period increase in energy prices and sales volume, primarily as a result of the reallocation of Light
Energia’s captive market contracts terminated to the free market. First-quarter EBITDA margin stood at 6.0%, 0.3
p.p. lower than in 1Q13.
5 Revenue from construction was not considered in the calculation of the consolidated and distribution EBITDA margins, due to the booking of
revenues and costs with a zero margin.
21
3.4 Consolidated Financial Result
The 1Q14 financial result was a negative R$78.8 million, an improvement of 43.3% in relation to the negative
R$138.9 million recorded in the first quarter of 2013.
Financial revenue totaled R$97.0 million, 152.1% up from the same period in 2013. The main variation occoured in
the result of other financial revenues, whose increase was 323.2% due to the restatement of the New Repositioning
Value (VNR), recurring since the implemantation of the Law 12783/2013, totaling R$ 46.6 milion. Another significant
impact on financial revenues was in line income from financial investments, which increased by 400.5% due to the
Company’s higher cash position and the upturn in the benchmark interest rate (Selic).
First-quarter financial expenses came to R$175.8 million, flat in relation to the same period in 2013. In 1Q14, there
was a reduction of 91.0% in charges and the monetary variation of Braslight’s liabilities, due to the settlement of
debt in February 2014. The funds obtained for this settlement, combined with the rise in the benchmark interest rate
(Selic), increased expenditure on debt charges.
Financial Result (R$ MN) 1Q14 1Q13 Var. %
Financial Revenues 97.0 38.5 152.1%
Income from financial investments 16.5 3.3 400.5%
Moratory Increase / Debts Penalty 21.4 21.2 0.9%
Others Financial Revenues 59.2 14.0 323.2%
Financial Expenses (175.8) (177.3) -0.9%
Debt Expenses (116.4) (72.5) 60.6%
Monetary and Exchange variation 24.3 8.8 176.3%
Net Swap Operations (47.3) (22.5) 110.6%
Restatement of provision for contingencies (5.8) (19.0) -69.2%
Restatement of R&D/PEE/FNDCT (2.1) (1.1) 93.1%
Interest and fines on taxes (0.0) (1.7) -97.4%
Installment payment - fines and interest rates Law 11.941/09 (REFIS) (3.7) (2.7) 38.4%
Present value adjustment 1.3 0.3 339.2%
DIC/FIC Compensation (19.3) (25.0) -22.9%
Other Financial Expenses (Includes IOF) (3.1) (2.6) 21.4%