Presentation ? 4Q14 Results

8/9/2019 Presentation ? 4Q14 Results

1/21

Conference Call

4rd Quarter 2014


2/21

FINANCIAL

OPERATING

Highlights Energy consumption in the distribution company grew by 3.0% between 2014 and 2013;

Non-technical losses (12 months) stood at 40.9%, 0.4 p.p. down quarter-over-quarter with a drop of 1.3 p.p. year-over-year;

Collection fee reached 98.6% in 2014;

Allowance for doubtful accounts (PCLD) of 1.3% of revenue from energy billing in 2014, compared to 1.8% in 2013;

DEC and FEC (12 months) improved by 33% and 21%, respectively over Dec/2013;

Net revenue, excluding construction revenue, grew by 25.6% year-over-year, totaling R$8,289.9 million; net

revenue, excluding construction revenue and CVA (compensation of Portion A variation) would total R$7,270.0

million in 2014, 10.1% up on 2013;

Consolidated EBITDA in 2014 of R$1,809.7 million, 6.7% up on 2013. Adjusted by CVA balance and equity

accounting, EBITDA would total R$1,332.4 million in 2014, a 14.1% decrease in relation to EBITDA in 2013 of

R$1,551.1 million (adjusted by CVA and VNR – new replacement value);

Net income of R$662.8 million in 2014, 12.9% up on 2013. Adjusted by CVA balance and equity income gain, the

net income would total R$299.1 million in 2014, a 39.1% decrease compared to the net income in 2013 of R$491.1

million (adjusted by CVA and VNR);

Consolidated net debt of R$6,076.5 million, 4.7% up on 3Q14;

REGULATORY

Extraordinary tariff review of Light SESA had an average increase of 22.48% as of March 2, 2015;

Increase in flags tariff. The red flag will increase from R$30.00 to R$55.00/MWh and the yellow flag from R$15.00 to

R$25.00/MWh;

2

Recognition of CVA balance, in the amount of R$1,019.8 million, which now is recorded under net revenue as of

December 2014;

R$143.2 million gain on equity income due to Light Energia’s dilution of interest in Renova, from 21.9% to 15.9%.ACCOUNTING


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Energy ConsumptionDistribution – 2014

TOTAL MARKET (GWh) ¹

4

1Note: To preserve comparability in the market approved by Aneel in the tariff adjustment process.the billed energy of the free customer CSN has been considered back.

2011

26,493

20142013

3.0%

2012

+4.9%

25,71723,38422,932

24.1ºC

24.7ºC

4.7ºC

23.9ºC


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TOTAL MARKETElectricity consumption (GWh)

Total market – Quarter

RESIDENTIAL INDUSTRIALCOMMERCIAL OTHERS TOTAL

1.348

1.241

5

972959

53

4Q13

961

912

49

4Q14

2,153

1,938

216

4Q13

2,031

1,815

5,453

4Q14

1,326

354

+2.5%

+5.3%

+6.0%

4Q13

1,439

356

1,083

4Q14

2,203

2,203

-7.9%2,099

2,099

+4.9%

4Q14

6,694

1,241

216

4Q13

6,530

5,182

1,348

4Q14

1,012

4Q13

Free Captive


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TOTAL MARKET

6

Electricity Consumption (GWh)

Total Market - Year

TOTAL

853

2014

5,296

1,396

3,900

2013

5,668

1,395

4,273

20142013

8,312

879

3,798

3,598

200

2014

8,328

7,449

8,950

+3.0%

+3.2%

+4.9%

-6.6%

7.7%

20142013

7,939

7,086

26,493

21,500

4,993

2013

25,717

20,391

5,326

2014

3,919

3,705

214

2013

CaptiveFree

RESIDENTIAL INDUSTRIALCOMMERCIAL OTHERS


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8/218

-21.1%

-33.4%

FEC

6.56

8.31

DEC

12.25

18.40

20142013

Operating Quality Indicators

DEC e FEC - 12 MONTHS

(WITH PURGE)

INDICATOR RegulatoryTARGET 2014

Overall DEC 8.96

Overall FEC 6.84 -30.1%

2014

33.9

2013

48.6

Dic/Fic Compensation

* DIC – Individual Length of Interruption / FIC – Individual Frequency of Interruption


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Loss Prevention

INSTALLED METERS

(Thousand Units)

LOSS (12 MONTHS)

40.9%

% Non-technical losses/ LV Market

41.3%

41.9%

- 1.3 p.p.

42.2%

42.4%

9

79

102

142+190

2014

480

2013

330

2012

272

2011

197

30

2010

1157

44.0%

dec-14

8,847

2,920

5,927

sep-14

8,754

2,850

5,904

jun-14

8,815

2,843

5,972

mar-14

8,748

2,793

5,955

dec-13

8,352

2,614

5,738

Tec. Losses GWhComercial Losses GWh

Out of Communities

Communities

AneelTARGET

august/15

39.92%


10/2110

37

26

13

2014

624

2013

416

2012

200

Number of Clients (Thousand Units)

Number of APZs

Losses Combat Actions - APZ ResultsUntil December, the program covered 624 thousand customers in 37 APZs,

of which 26 had the results calculated:

APZ EVOLUTION

dec-14

20.0

sep-14

20.3

jun-14

16.4

mar-14

19.2

dec-13

22.2

sep-13

22.0

BEFORE

50.2%

dec-13

91.2

sep-13

93.9

BEFORE

89.20

dec-14

97.1

sep-14

98.2

jun-14

100.2

mar-14

95.5

APZ LOSSES

APZ COLLECTION


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Losses Combat Actions - APZ Results

11

• 11 APZ's under phase of implementation and still without recorded results, totaling155,000 customers.

Before Current Before Current

Curicica 2010 13.505 38% 10% 95% 98% N

Realengo/Batan 2010/2013 20.474 38% 10% 94% 97% N/Y

Cosmos 1 2012 22.271 49% 14% 92% 97% N

Cosmos 2 2012 20.422 46% 13% 92% 105% N

Sepetiba 2012 21.172 57% 31% 88% 96% N

Caxias 1 e 2 2012 14.579 59% 34% 83% 93% N

Belford Roxo 1 e 2 2013 22.089 63% 24% 88% 95% N

Vigário Geral 2012 18.142 35% 12% 94% 99% N

Caxias 3 2013 17.762 43% 16% 96% 96% N

Nova Iguaçu 1 2013 20.456 49% 27% 90% 97% NNova Iguaçu 2 2013 22.335 46% 19% 88% 98% N

Nilópolis 2013 10.882 42% 27% 90% 96% N

Mesquita + Nilópolis Convencional 2010 20.119 51% 16% 84% 98% N

Ricardo de Albuquerque 2013 26.224 35% 11% 94% 96% N

Cabritos/Tabajaras/Chapéu

Mangueira/Babilônia/Santa Marta2012 8.517 68% 32% 62% 97% Y

Coelho da Rocha 2013 18.913 41% 11% 92% 99% N

Caxias 4 2013 19.984 42% 14% 90% 99% N

Alemão 2014 13.062 63% 31% 91% 93% Y

Cidade de Deus 2011 20.585 52% 31% 84% 91% Y

Tomazinho 2013 12.787 43% 16% 87% 96% N

Formiga/Borel/Macaco/Salgueiro/Andaraí 2012 18.216 51% 26% 50% 91% YMonte Líbano 2013 11.506 36% 15% 92% 97% N

Caxias 5 2014 22.298 49% 30% 94% 92% N

Cordovil 2014 12.735 28% 15% 93% 96% N

Éden 2014 18.007 55% 14% 86% 96% N

Nova Iguaçu 3 2014 22.243 49% 30% 89% 96% N

Total 469.285 50% 20% 90% 97%

UPP Area

* Reflects the accumulated results until Dec/14, since the beggining of the implementation of each APZ

Subtitl e: N = No / Y = Yes

Ne ighborhood Imple mentati on Y ear Number of

clients

Non-Technical Losses /

Grid Load* Collection Rate


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Net Revenue

12

2013

6,602

820

4Q14

3,295

306

4Q13

2,066

1,701

365

1,969

24.4%

9,230

10.1%7,422

15.7%

+59.5%

2014

7,270

1,020

941

1,020

Revenue w/out construction and CVA

Booking of CVA

Construction Revenue

Generation

6.8%

Distribution

83.0%**

NET REVENUE BY SEGMENT (2014)*

Commercialization and

service

10.2%

R$ MN

128

NET REVENUE (R$MN)

* Eliminations not considered

** Construction revenue not considered


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Operating Costs and Expenses

* Eliminations not considered

** Construction revenue not considered

DISTRIBUTION PMSO COSTS (R$MN)

R$ MN 4Q13 4Q14 Var. 2013 2014 Var.

PMSO (214.1) (191.2) -10.7% (782.9) (761.4) -2.7%

Provisions (57.2) (83.8) 46.5% (210.0) (213.3) 1.5%

PCLD (43.3) (33.8) -22.1% (157.9) (125.0) -20.8%

Contingencies (13.9) (50.0) 260.6% (52.1) (88.3) 69.4%

Depreciation (84.7) (93.5) 10.4% (335.2) (356.6) 6.4%

Other operational/revenues expenses

102.2 (24.0) - 87.3 (40.7) -

Total (253.8) (392.6) 54.7% (1,240.8) (1,372.0) 10.6%

Manageable(distribution):

(18.2%)

Non manageable(distribution**):

(66.9%)

Generation andCommercialization:

(14.9%)

COSTS (R$MN)*

2014

5,052

1,372

1,123

13

761783

191214

-2.7%

-10.7%

201420134Q144Q13


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RTE e FLAGS TARIFF

14

COLOR OF FLAGLast Value(Per MWh)

New Value(Per MWh)

GREEN - -

YELLOW R$ 15.00 R$ 25.00RED R$ 30.00 R$ 55.00

RTE (extraordinary tariff review) of Light SESA with an average increase of 22.48% as of March

2, 2015. Low-tension consumer will perceive a 21.06% increase;

6.37

P&D

0.22

CDE Energy

3.47

CDE Tusd

14.54

Tariff

Readjustment

22.48

CCEARs

2.12

Itaipu

Voltage Level (Consumption segment)

AverageIncrease

A2 25.14% A3a 27.30% A4 26.07% AS 20.91% B1 (Residential) 21.06%

B2 (Rural) 21.05%

B3 (Commercial/Industrial) 21.05%

B4 (Il. Public) 21.05% High Voltage 25.68%

Low Voltage 21.06%

Average Readjustment 22.48%

ANEEL increased flags tariff as of March 2, 2015.


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EBITDA

EBITDA e Adjusted EBITDA2013 / 2014 – (R$ MN)

16

334

Non-

Manageable

Costs

-1,600

Net

Revenue

1.688

1,020

CVA

Adjusted

EBITDA

2014

EBITDA

2013

1,697

VNR

125

Regulatory

Assets and

Liabilities

21

Adjusted

EBITDA

2013

1,551

-14.1%

6.6%

1,332

Renova

Equity

Pikup

143

Regulatory

Assets and

Liabilities

EBITDA

2014

1,810

Equity

Pikup

140

668

Provisions

-5

Other

Operational

Revenues

-130

Manageable

Costs

(PMSO)

20


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Net Income2014

ADJUSTED NET INCOME

2013 / 2014 (R$ MN)

221

-6

EBITDA

113

Net Income

2013

587

143

299

Renova

Equity

Pikup

-39.1%

+12.9%

Adjusted

Net Income

2014

491

VNR

82

-24

14

Adjusted

Net Income

2013

-8

Financial

Result

Taxes Depreciation

663

Net Income

2014

Regulatory

Assets and

Liabilities

Regulatory

Assets and

Liabilities

17


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Indebtedness

Average Term: 4.4 years

NET DEBT

* Just principal

18

424

188

504

794779

501

2015 After 202220222021202020192018

1,301

2017

1,002

2016

1,016

dec/14

6,077

sep/14

5,544

dec/13

5,250

3.39

2.84

3.70

Nominal Cost Real Cost

COST OF DEBT

2012

011

2014

2.24%

8.21%

4.46%

11.31%

4.25%

11.03%

2013

9.68%

3.55%

* ConsideringHedge

TJLP

14.2%

CDI

69.0%

IPCA

9.9%

Others

6.4%

U /Euro *

0.5%

Loan of R$ 2 Billion in 2014 for investments and working capital needs

AMORTIZATION SCHEDULE* (R$ MN)

Net Debt / EBITDA


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Investments

19

182

154103

132

202 122

746

1,054

2014 Actual

187

2014 Budget

1,055

698

155

2013

845

713

2012

797

694

2011

929

775

2010

701

519

Investments in Electric Assets (Distribution)

Others Investiments

Special Obligations - Losses

CAPEX BREAKDOWN (R MN)

2014

Generation49.2Administration

57.0

Other23.4

Develop. ofDistribution

System548.9

LossesCombat

359.7

Commerc./Energy

Eficiency15.8

CAPEX (R MN)


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Important Notice

This presentation may include declarations that represent forward-looking statements according to Brazilian regulations and

international movable values. These declarations are based on certain assumptions and analyses made by the Company in

accordance with its experience. the economic environment. market conditions and future events expected. many of which

are out of the Company’s control. Important factors that can lead to significant differences between the real results and the

future declarations of expectations on events or business-oriented results include the Company’s strategy. the Brazilian and

international economic conditions. technology. financial strategy. developments of the public service industry. hydrological

conditions. conditions of the financial market. uncertainty regarding the results of its future operations. plain. goals.expectations and intentions. among others. Because of these factors. the Company’s actual results may significantly differ

from those indicated or implicit in the declarations of expectations on events or future results.

The information and opinions herein do not have to be understood as recommendation to potential investors. and no

investment decision must be based on the veracity. the updated or completeness of this information or opinions. None of the

Company’s assessors or parts related to them or its representatives will have any responsibility for any losses that can

elapse from the use or the contents of this presentation.

This material includes declarations on future events submitted to risks and uncertainties. which are based on current

expectations and projections on future events and trends that can affect the Company’s businesses. These declarations

include projections of economic growth and demand and supply of energy. in addition to information on competitive position.

regulatory environment. potential growth opportunities and other subjects. Various factors can adversely affect the estimates

and assumptions on which these declarations are based on.

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Contacts

João Batista Zolini CarneiroCFO and IRO

Gustavo WerneckSuperintendent of Finance and Investor Relations

+55 21 2211 [email protected]

Mariana da Silva Rocha

IR Manager+ 55 21 2211 [email protected]

ri.light.com.br www.facebook.com/lightri twitter.com/LightRI

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Presentation ? 4Q14 Results

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