geti 2 t10_call_final_english
TRANSCRIPT
2Q10 ResultsAugust, 2010
2
FinancialFinancial Ebitda reached R$ 299 million, with margin of 74%, in 2Q10
Provision in the amount of R$ 9 million related to administrative lawsuit regarding federal tax compensation
Net income of R$ 172 million in 2Q10
1st debenture issuance in the amount of R$ 900 million and pre-payment of the only outstanding debt on May 4, 2010. Exchange of debt brought savings of approximately R$ 14 million in the quarter.
OperationalOperational Energy Generation 33% higher than physical guarantee in 2Q10
Subsequent EventSubsequent Event
Annual readjustment of bilateral contract with AES Eletropaulo by IGP-M at 5.17%; the energy price increased from R$ 152.00/MWh to R$ 159.85/MWh
The Board decided to: (i) not file an autonomous claim against Aneel; and, (ii) summon an Extraordinary General Meeting to deliberate on the matter
Dividend distribution in the amount of R$ 172 million related to 2Q10, representing R$ 0.43 for ordinary shares and R$ 0.47 for preferred shares.DividendsDividends
3
Reservoirs Level- (%) Risk Aversion Curve – Southeast Submarket
AES Tietê reservoirs levels closed at 89% and the stored energy in the southeast region was kept well above the Risk Aversion Curve in 2Q10
72.6 79
.0 73.3
97.2
40.9
90.2
65.5
70.0
54.5
94.3
2009 2Q09 2Q10
94.2
91.0
-
2009 2010 CAR
20
40
60
80
Jan Apr Out
-
2009 2010 CAR
20
40
60
80
Southeast South Northeast North Jul% o
f M
axim
um S
tore
d En
ergy
Source: National Electric System Operator – ONS
4
Maintaining high operational availability. Generated energy 38% higher than physical guarantee in 1H10
Energy Generation – MW Avg.1
130%
1,467 1,4251,545 1,512
115%112%
121% 119%
1,665
2005 2006 2007 2008 2009
1,809
1H10
138%
Generation – MW Avg. Generation / Physical Guarantee
1- Generated energy divided by the amount of period hours
5
Billed Energy – GWh
Billed energy was 5% higher due to greater volume of secondary energy in 2Q10
MRE1
AES Eletropaulo
Spot Market
Other Bilateral Contracts
1H10
10 %
2Q10
3,6055 %
5,653
7,880
132
5,653
1,1461,146
19
2Q09
3,438239
433
2,7472,639
306
580 80
1H09
33
7,135
5,534
1,105
463
949
1 – Energy Reallocation Mechanism
6
2008
59
39
20
2009
13
57
44
2010(e)
58
9
67
2Q09 2Q10
54 15
916
Investments – R$ million
Investments of R$ 16 million in maintenance and modernization of power plants and R$ 1 million in Jaguari Mirim SHPPs1 in 2Q10
Investments 2Q10
1%1%
1
New SHPPs
Investments
Equip. and Maint.
EnvironmentIT
New SHPPs
1 – Small Hydro Power Plants
91%
7%
7
Concluded(PPA1)Concluded(PPA1)
Opportunities to increase installed capacity:
UnderConstructionUnderConstruction
UnderDevelopmentUnderDevelopment
6 MW of co-generation through biomass, contracted for 15 years from 2010
7 MW of hydro generation through SHPPs2 in Jaguari Mirim River– São José SHPP (4 MW) has an estimated start-up in 1H11– São Joaquim SHPP (3 MW) has an estimated start-up in 1H11
550 MW of thermo generation through natural gas– Location has been defined in Nov/2009– Environmental licensing process initiated in March 2010– Technical feasibility study in advanced stage
22 MW of hydro generation through one SHPP, in stage of technical and economic feasibility studies
1 – Power Purchase Agreement 2 – Small Hydro Power Plants
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2000 - 2003 2005 - 2007
2000– Aneel1 approved the bilateral
contract signed by the Company and AES Eletropaulo valid until the end of 2015
2005– Aneel denied approval to the
amendment– AES Eletropaulo placed a request
for an administrative remedy appeal at Aneel and filed a lawsuit against Aneel
2007– Aneel dismissed AES
Eletropaulo’s administrative remedy appeal and upheld its decision of denying the amendment
August, 2010– The administration of AES
Eletropaulo has chosen to withdraw the lawsuit
– The administration of AES Tietêdecided not to file an autonomous claim against Aneelregarding the extension of the contract due to the remote chance of obtaining a final decision before 2015; and (ii) summon an Extraordinary General Meeting to deliberate on the matter
2010
2003— AES Tietê and AES Eletropaulo
signed an amendment to the bilateral contract, submitted to Aneel for approval, which extended its duration to June 14, 2028
Bilateral Contract with AES Eletropaulo
1 – Brazilian Electric Energy Agency (Regulator)
9
Allocation to 1Q10 of part of annual volume to be sold to AES Eletropaulo contributed for 3% reduction in net revenues
Net revenues – R$ million
1H101H09
4%
2Q102Q09
4033%
819791
517
862
36
832 26
AES Eletropaulo Other Bilateral Contracts CCEE / MRE
392 383
10
4141020
2
10
Costs were impacted by provision related to administrative lawsuit regarding federal tax compensation, increase on energy purchased for resale and spending on equipment and third parties
1 – Do not include depreciation and amortization 2 - Personnel, Material, Third Party Services and Other Costs and Expenses
Costs and operational expenses1 – R$ million
Energy Purchase, Transmission and Connection Charges, and Water Resources
Other Costs and Expenses2
Operational Provisions
1H101H09
108 103
165186
10%
2Q102Q09
55
37
9010312%57 67
11
16
60
30
11
Ebitda – R$ million
Ebitda Margin
8% reduction on Ebitda, with 74% margin
1H101H09
677667
80% 78%
2%
2Q102Q09
299325
78%74%
8%
12
Financial Result – R$ million
Negative impact due to 1,24 b.p. increase in IGP-M from April to May, 4th 2010. Disregarding debt exchange, the financial result would be reduced in R$ 14 million
(7)
1H09 1H10
(21)
(4)
2Q09 2Q10
378%
(22)
217%
13
Company registered a net income of R$ 172 million in 2Q10 and will distribute 100% of the result
Pay-out
1H101H09
172199
100% 100%
1%
2Q102Q09
411414
13%
100% 100%
Net Income – R$ million
14
Net Debt 2Q10
Cost of debt was reduced from IGP-M + 10% p.a. to CDI + 1,20% p.a.
2Q102008 2009
0.40.4
0.3x0.3x
Net Debt/ EbitdaNet Debt
2Q09
0.40.4
0.4x0.3x
Characteristic of 1st debenture issuance
R$ 900 million
Period of 5 years
CDI + 1,20% p.a. Biannual basis interest payment
Annual amortization and equal installments in the 3rd, 4th and 5th years
Purpose: Pre-payment of Eletrobrás Debt
15
Consolidated Managerial Cash Flow – R$ million
2Q09
814332(9)
(13)
(55)
(20)
236(409)
641
2Q10
615368(8)
(12)
(60)
(328)
(41)0
574
1Q10
574346(16)
(4)
(34)
(33)
(259)(379)
455
Growth of 4% in operational cash flow generation
Initial CashOperational Cash GenerationInvestmentsNet Financial ExpensesNet AmortizationIncome TaxFree Cash FlowDividends and Interest on EquityFinal Cash
16
40% growth in daily average volume traded in 2Q10
1 – Index: 06/30/09= 100 2 - Index: 03/31/10 =100
AES Tietê X Ibovespa X IEE Daily Avg. Volume - R$ thousand
IBOV
IEE
GETI4
12 months
+ 18%
+ 18%
-
+ 2%
8090
100110120
130140
Jun-091 Sep-09 Dec-09 Mar-09 Jun-10
Mar-102 Apr-10 May -10 Jun-10
2Q10
- 1%
-13%
+ 8%
80859095100105110
Preferred Common
2008 2009
2,101
10,187
8,160
14,231
2Q10
2,692
5,468
4,648
8,0869,583
2Q10 ResultsThe statements contained in this document with regard to the business prospects, projected operating and financial results, and growth potential are merely forecasts based on the expectations of the Company’s Management in relation to its future performance.Such estimates are highly dependent on market behavior and on the conditions affecting Brazil’s macroeconomic performance as well as the electric sector and international market, and they are therefore subject to changes..