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Name | Symbol | Market | Type |
---|---|---|---|
CPFL Energia SA | NYSE:CPL | NYSE | Depository Receipt |
Price Change | % Change | Price | High Price | Low Price | Open Price | Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 17.36 | 0 | 01:00:00 |
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes _______ No ___X____.
MESSAGE FROM THE CEO
The first quarter of 2020 was marked by the outbreak of the new coronavirus in Brazil. Early in March, the Company set up a Crisis Committee, which held daily meetings and relied on strong engagement from the entire Management, thereby ensuring quick decision-making. All the actions taken always gave priority to the health and safety of our more than 12,000 employees, though they also focused on the Group's financial health, the full continuity of our business, the preservation of business partners and society in general.
As for the operating results of the 1st quarter, electricity sales in the concession area of distributors totaled 17,442 GWh, decreasing 1.6%. The residential and commercial segments declined 2.9% and 2.0%, respectively, essentially due to milder temperatures during the period compared to the same period in 2019. The industrial segment registered a decline of 1.4%, mainly due to the migration of two major clients to the basic network and also due to the continued weak industrial production in Brazil during the quarter.
However, I wish to highlight the economic and financial performance, given that we once again achieved significant results. EBITDA reached R$1,696 million and Net Income was R$904 million in 1Q20, respectively 10.8% and 58.5% higher than in the same period in 2019. The Distribution segment reported strong performance, with EBITDA of R$1,137 million in 1Q20 (+16.0%), mainly reflecting the results of tariff adjustments at CPFL Paulista (April 2019) and RGE (June 2019) and the tariff review at CPFL Piratininga (October 2019).
We continue to work on value-creation initiatives and on our investment plan in 1Q20 with the same financial discipline, engagement and commitment of our teams. We invested R$516 million during this period, an increase of 15.9%.
CPFL Energia's net debt reached 2.21 times its EBITDA at the end of March, as per the measurement criterion of our financial covenants, maintaining the consolidated leverage of the group at adequate levels. Our cash position also deserves mention: in line with our funding plan for 2020, we raised R$ 2.9 billion through new funding operations in the 1st quarter at an average cost of CDI + 0.8% p.a. and for a term of 4 years.
I also wish to highlight the return of “CPFE3” this quarter to the Ibovespa index, the flagship index of the São Paulo stock exchange (B3), less than one year after our re-IPO. We also won two awards: the first was “Equities deal of the year 2020 - America” from The Banker, a Financial Times publication, for our Re-IPO operation; and the second one was received by CPFL Santa Cruz from the Brazilian Electricity Regulatory Agency (Aneel) as the best distributor in the country for Global Continuity Performance (DGC) in 2019.
Finally, I wish to state that CPFL Energia acted and continues to act in a timely manner to safeguard its employees and its operations during the pandemic and is now working simultaneously on a robust plan for the post-crisis period. To this end, I reaffirm our trust and commitment to shareholders, clients, partners, society and other stakeholders, while remaining optimistic about the advances in the Brazilian electricity sector despite this difficult moment that we are going through, and am confident about our business platform, backed by operational efficiency, corporate governance, sustainability, financial discipline and synergistic growth, as we are increasingly prepared to face the emerging challenges and opportunities in the country.
1
Gustavo Estrella
CEO of CPFL Energia
Indicators (R$ Million) |
1Q20 |
1Q19 |
Var. |
Load in the Concession Area - GWh |
18,040 |
18,071 |
-0.2% |
Sales within the Concession Area - GWh |
17,442 |
17,731 |
-1.6% |
Captive Market |
11,901 |
12,407 |
-4.1% |
Free Client |
5,541 |
5,324 |
4.1% |
Gross Operating Revenue |
10,879 |
10,788 |
0.8% |
Net Operating Revenue |
7,282 |
7,127 |
2.2% |
EBITDA(1) |
1,696 |
1,531 |
10.8% |
Distribution |
1,137 |
980 |
16.0% |
Conventional generation |
323 |
304 |
6.3% |
Renewable generation |
223 |
192 |
16.0% |
Commercialization, Services & Others |
14 |
56 |
-75.4% |
Net Income |
904 |
570 |
58.5% |
Net Debt(2) |
15,114 |
14,902 |
1.4% |
Net Debt / EBITDA(2) |
2.21x |
2.70x |
-18.3% |
Investments(3) |
516 |
445 |
15.9% |
Notes:
(1) EBITDA is calculated from the sum of net income, taxes, financial result, depreciation/amortization, as CVM Instruction no. 527/12. See the calculation in item 3.1 of this report;
(2) In covenants criteria, which considers CPFL Energia stake in each project;
(3) Does not include special obligations.
2
CONTENTS
3
Company Operation
CPFL Energia operates in the Generation, Transmission, Distribution, Commercialization and Services segments, with presence in 11 states in all regions of the country.
CPFL is the second largest distributor in volume of energy sales, with 14% of the national market, serving approximately 9.8 million customers in 687 municipalities. With 4,304 MW of installed capacity, it is the third largest private generator in the country, being the leader in renewable generation, operating in hydroelectric, solar, wind and biomass sources. It also has investments in Transmission, with the acquisition of three new projects in 2018, and a national operation of CPFL Soluções, providing integrated solutions in energy management and commercialization, energy efficiency, distributed generation, energy infrastructure and consulting services.
Shareholders Structure
CPFL Energia is a holding company that owns stake in other companies. State Grid Corporation of China (SGCC) controls CPFL Energia through its subsidiaries State Grid International Development Co., Ltd, State Grid International Development Limited (SGID), International Grid Holdings Limited, State Grid Brazil Power Participações S.A. (SGBP) and ESC Energia S.A.
4
Reference date: 03/31/2020
Notes:
(1) RGE is held by CPFL Energia (89.0107%) and CPFL Brasil (10.9893%).
(2) CPFL Soluções = CPFL Brasil + CPFL Serviços + CPFL Eficiência;
(3) 51.54% stake of the availability of power and energy of Serra da Mesa HPP
(4) CPFL Renováveis is controlled by CPFL Energia (46.7609%) and CPFL Geração (53.1831%)
Corporate Governance
The corporate governance model adopted by CPFL Energia and its subsidiaries is based on the principles of transparency, equity, accountability and corporate responsibility.
CPFL’s Management is composed of the Board of Directors, its decision-making authority, and the Board of Executive Officers, its executive body. CPFL also has five advisory committees to the Board of Directors, which support the Board in its decisions and monitor relevant and strategic themes, and a permanent Fiscal Council, composed of three members, that also exercises the duties of Audit Committee, in line with Sarbanes-Oxley Law (SOX), applicable to foreign companies with registration in Securities and Exchange Commision (SEC) from the United States.
The guidelines and documents on corporate governance are available at the Investor Relations website http://www.cpfl.com.br/ir.
5
Dividend Policy
On May 21, 2019, CPFL Energia announced to its shareholders and to the market that its Board of Directors approved, at the meeting held on that date, the adoption of a dividend distribution policy, which determines that the Company should distribute annually, as dividends, at least 50% of the adjusted net income, in accordance with the Brazilian Corporate Law. Furthermore, the Dividend Policy sets out the factors that will influence the amount of the distributions, as well as other issues considered relevant by the Board of Directors and the shareholders. The Dividend Policy also highlights that certain obligations contained in the Company’s financial contracts may limit the amount of dividends and/or interest on own capital that may be distributed.
The approved Dividend Policy is merely indicative, with the purpose of signaling to the market the treatment that the Company intends to give to the distribution of dividends to its shareholders, having, therefore, a programmatic character, not binding upon the Company or its governing bodies.
The Dividend Policy is available at the Investor Relations website http://www.cpfl.com.br/ir.
Load in the Concession Area - GWh |
|||
|
1Q20 |
1Q19 |
Var. |
Captive Market |
12,071 |
12,346 |
-2.2% |
Free Client |
5,969 |
5,725 |
4.3% |
Total |
18,040 |
18,071 |
-0.2% |
Note: If excluding the migration of large consumers, the load within the concession area would have a variation of +0.7% in the quarter.
In 1Q20, sales in the concession area, made through the distribution segment, totaled 17,442 GWh, a reduction of 1.6%. If we disregard the migration of large consumers to the basic network and the significant reduction in the amount of energy contracted by two permissionaires1, sales in the concession area in 1Q20 would have changed by -0.8%.
1 RGE, acting as Supplying Agent, accepted a reduction in the contracted energy amount, requested by two permissionaires according to the PRORET (Tariff Regulation Procedures) - Submodule 11.1.
6
Note: The tables with sales within the concession area by distributor are attached to this report in item 6.10.
Concession area in 1T20:
· Residential and Commercial segments (31.2% and 17.4% of total sales, respectively): decrease of 2.9% and 2.0%, respectively, due to higher temperatures in 1Q19, a fact that was not repeated in 1Q20;
· Industrial segment (33.6% of total sales): decrease of 1.4%. Disregarding the migration of large customers to the National Grid, the industrial class would have reduced by just 0.2%, reflecting the performance of industrial production, which has not yet shown a more consistent recovery at the beginning of the year.
Sales to the Captive Market - GWh |
|||
|
1Q20 |
1Q19 |
Var. |
Residential |
5,444 |
5,604 |
-2.9% |
Industrial |
1,224 |
1,402 |
-12.7% |
Commercial |
2,264 |
2,398 |
-5.6% |
Others |
2,968 |
3,004 |
-1.2% |
Total |
11,901 |
12,407 |
-4.1% |
Note: item 6.11. The tables with sales within the captive market by distributor are attached to this report in item 6.11.
Free Client - GWh |
|||
|
1Q20 |
1Q19 |
Var. |
Industrial |
4,638 |
4,541 |
2.1% |
Commercial |
767 |
697 |
10.1% |
Others |
136 |
86 |
58.2% |
Total |
5,541 |
5,324 |
4.1% |
Free Client by Distributor - GWh |
|||
|
1Q20 |
1Q19 |
Var. |
CPFL Paulista |
2,590 |
2,515 |
3.0% |
CPFL Piratininga |
1,577 |
1,479 |
6.7% |
RGE |
1,182 |
1,153 |
2.5% |
CPFL Santa Cruz |
192 |
177 |
8.5% |
Total |
5,541 |
5,324 |
4.1% |
The consolidated losses index of CPFL Energia was of 9.14% in the 12 months ended in Mar-20, compared to 8.84% in Mar-19, an increase of 0.30 p.p.. The increase in losses is associated to an unfavorable billing calendar in the quarter (365.1 days in the 12 months ended in Mar-20 compared to 365.6 days in the 12 months ended in Mar-19).
7
12M Accumulated Losses1 |
|
|||||
Mar-19 |
Jun-19 |
Sept-19 |
Dec-19 |
Mar-20 |
ANEEL |
|
CPFL Energia |
8.84% |
9.01% |
9.31% |
8.89% |
9.14% |
8.19% |
CPFL Paulista |
8.86% |
9.13% |
9.63% |
9.12% |
9.30% |
8.37% |
CPFL Piratininga |
7.69% |
7.88% |
7.99% |
7.59% |
7.58% |
6.53% |
RGE |
9.78% |
9.74% |
9.86% |
9.62% |
10.08% |
9.14% |
CPFL Santa Cruz |
7.82% |
8.10% |
8.34% |
7.69% |
8.45% |
7.57% |
Note: According to the criteria defined by the Regulatory Agency (ANEEL). In CPFL Piratininga and RGE, high-voltage customers (A1) were disregarded.
The CPFL group has intensified the actions against non-technical losses in recent years. The main achievements of the semester were:
i. Recovery of 200.7 GWh of energy, 158.5 GWh of which related to the increase in revenue and 42.2 GWh of retroactive energy;
ii. 136,900 fraud inspections at consumer units;
iii. Actions with the police in 35 cases, culminating in leading people to the police station for prison or indictments for energy theft;
iv. Cut out of 37,000 inactivated consumer units;
v. Telemetry installation with inspection and meter replacement for 1,000 group A customers;
vi. Implementation of armored measuring boxes for 1,100 customers;
vii. Regularization of 400 clandestine consumers;
viii. Replacing obsolete / defective meters with new electronic meters;
ix. Disclosure of CPFL Energia's balance of energy fraud and theft in the media, intensifying communication that energy theft is a crime and subject to penalties. In the first quarter of 2020, more than 13 press releases were recorded, totaling 115 articles on the topic mentioning CPFL group.
The SAIDI (System Average Interruption Duration Index) measures the average duration, in hours, of interruption per consumer per year and the SAIFI (System Average Interruption Frequency Index) measures the average number of interruptions per consumer per year. Such indicators measure the quality and reliability of the electricity supply.
8
SAIDI Indicators |
||||||||
Distributor |
SAIDI (hours) |
|||||||
2016 |
2017 |
2018 |
2019 |
1Q19 |
1Q20 |
Var. % |
ANEEL¹ |
|
CPFL Energia |
10.63 |
9.40 |
8.62 |
8.83 |
9.01 |
8.14 |
-9.6% |
n.d |
CPFL Paulista |
7.62 |
7.14 |
6.17 |
6.72 |
6.46 |
6.39 |
-1.1% |
7.38 |
CPFL Piratininga |
8,44 |
6.97 |
5.92 |
6.48 |
6.40 |
5.92 |
-7.5% |
6.41 |
RGE ² |
16.82 |
14.83 |
14.44 |
14.01 |
14.95 |
12.68 |
-15.2% |
11.08 |
CPFL Santa Cruz |
8.47 |
6.22 |
6.01 |
5.56 |
6.21 |
4.97 |
-20.0% |
8.46 |
SAIFI Indicators |
||||||||
Distributor |
|
SAIFI (interruptions) |
||||||
2016 |
2017 |
2018 |
2019 |
1Q19 |
1Q20 |
Var. % |
ANEEL1 |
|
CPFL Energia |
5.91 |
5.69 |
4.68 |
4.93 |
4.87 |
4.64 |
-4.7% |
n.d |
CPFL Paulista |
5.00 |
4.94 |
4.03 |
4.38 |
4.16 |
4.15 |
-0.2% |
6.32 |
CPFL Piratininga |
3.97 |
4.45 |
3.87 |
4.34 |
4.31 |
3.93 |
-8.8% |
5.68 |
RGE ² |
8.44 |
7.68 |
6.10 |
6.25 |
6.27 |
5.93 |
-5.4% |
8.35 |
CPFL Santa Cruz |
6.25 |
5.13 |
5.09 |
4.25 |
4.84 |
3.85 |
-20.5% |
7.64 |
Notes:
1) ANEEL limit;
2) Since 2019, the RGE and RGE Sul concessions have been unified, becoming a single distributor for the purpose of calculating technical indicators
The annualized figures of SAIDI and SAIFI in 1Q20 were lower than in 1Q19 (-9.6% in SAIDI and -4.7% in SAIFI) for the consolidated of the distributors. These results reflect maintenance actions and investments in improvements in the CPFL Energia group's distributors. Furthermore, the concession areas had a lower number of occurrences and bad weather if compared to 2019.
The ADA decreased by R$ 10 million (15.0%) in 1Q20 compared to 1Q19. In comparison to 4Q19, there was an increase of 46.4% (R$ 18 million). This increase was mainly due to the lower volume of negotiations, which totaled R$ 3 million in 1Q20 versus an amount of R$ 18 million in 4Q19.
In order to combat the advance in the level of defaults accentuated by the economic situation in the country in recent years, CPFL has intensified collection actions, highlighting:
9
In 1Q20, the Generation installed capacity of CPFL Energia group, considering the proportional stake in each project, is of 4,304 MW.
Since the IPO in 2004, CPFL Energia has been expanding its portfolio and today has a capacity 4 times higher.
Installed Capacity (MW)
Note: Take into account CPFL Energia’s 99.94% stake in CPFL Renováveis. Source breakdown graphic does not consider 1 MW of Solar Generation of Tanquinho Plant.
CPFL Geração's project portfolio of conventional generation segment (considering CPFL Energia's participation in each project) totals 2,173 MW of installed capacity in operation. The plants in operation comprise 8 HPPs (1,966 MW), 2 TPPs (182 MW), and 9 SHPPs (24 MW).
CPFL Geração - Portfolio |
||||
Em MW |
HPP |
TPP |
SHPP |
Total |
In Operation |
1,966 |
182 |
24 |
2,173 |
10
CPFL Renováveis' project portfolio (100% Stake) totals 2,133 MW of installed capacity in operation and 110 MW of capacity under construction. The plants in operation comprise 40 SHPPs (453 MW), 45 wind farms (1,309 MW), 8 biomass thermoelectric plants (370 MW) e 1 solar plant (1 MW). Still under construction 1 SHPP (28 MW) and 4 wind farms (82 MW).
Additionally, CPFL Renováveis has wind, solar and SHPP projects under development totaling 3,350 MW.
The table below illustrates the overall portfolio of assets (100% stake) in operation, construction and development, and their installed capacity:
Note: 1) Changes in the installed capacity of the projects in development from 2,904 MW to 3,350 MW were due to an increase in the capacity of existing projects.
SHPP Lucia Cherobim
SHPP Lucia Cherobim, a project located in the state of Paraná, is scheduled to start operating in 2024. Installed capacity is 28.0 MW and physical guarantee is 16.6 average MW. The energy was sold under a long-term contract at the 2018 new energy auction (A-6). (Price: R $ 200.92 / MWh - March 2020).
Gameleira Complex Wind Farms
The Gameleira Complex Wind Farms (Costa das Dunas, Figueira Branca, Farol de Touros and Gameleira), located in the state of Rio Grande do Norte, is scheduled to start operating in 2024. The installed capacity is 81.7 MW and the physical guarantee is 41.0 average MW. Part of the energy (12.0 average MW) was sold under a long-term contract at the 2018 new energy auction (A-6). (Price: R$ 95.07 / MWh – March 2020) and the rest was sold on the free market.
Number of Commercialization Consumer Units
In Mar-20, CPFL Brasil consumer units reached a total of 2,114, an increase of 27.4%.
11
Operational Portfolio |
||||||
Project |
Location |
RAP
|
Capex
|
Operation Start |
Substation # |
Lines (Km) |
Piracicaba |
SP |
8.9 |
100 |
Apr/16 |
1 |
6.5 |
Morro Agudo |
SP |
10.8 |
100 |
Jun/17 |
1 |
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In Construction Portolio |
||||||
Project |
Location |
RAP
|
Estimated Capex by Aneel
|
Operation Start |
Substation # |
Lines (Km) |
Maracanaú |
CE |
7.9 |
102 |
Mar/22 |
1 |
2 |
Sul I |
SC |
26.4 |
366 |
Mar/24 |
1 |
320 |
Sul II |
RS |
33.9 |
349 |
Mar/24 |
3 |
85 |
Notes: Base Date - Piracicaba (12/19/12) – Morro Agudo (06/01/14) – Maracanaú (06/28/18) – Sul I and II (12/20/18). RAP stands for Allowed Annual Revenue.
Note: (1) EBITDA is calculated from the sum of net income, taxes, financial result and depreciation/amortization, according to CVM Instruction no. 527/12.
12
Notes: (1) The analysis by business segment is presented in chapter 5; (2) The breakdown of economic-financial performance by business segment is presented in annex 6.4.
Non-cash effects, extraordinary items and others
We highlight below the non-cash effects, extraordinary items and others of greater relevance observed in the periods analyzed, as a way to facilitate the understanding of the variations in Company's results.
EBITDA effects - R$ million |
1Q20 |
1Q19 |
Adjustments in the concession financial assets (VNR) |
139 |
64 |
Legal and judicial expenses |
(38) |
(32) |
Assets write-off |
(30) |
(18) |
Other extraordinary items: |
||
CPFL Santa Cruz - PIS/Cofins over ICMS |
- |
34 |
|
|
|
Financial results effects - R$ million |
1Q20 |
1Q19 |
Mark-to-market (MTM) |
257 |
(3) |
Operating Revenue
In 1Q20, gross operating revenue reached R$ 10,879 million, representing an increase of 0.8% (R$ 91 million). Net operating revenue reached R$ 7,282 million in 1Q20, registering an increase of 2.2% (R$ 155 million).
The breakdown of net operating revenue by business segment is presented in the table below:
13
For further details about the revenue variation by segment, see chapter 5 – Performance of Business Segments.
Cost of Electric Energy
Cost of Electric Energy (R$ Million) |
|||
|
1Q20 |
1Q19 |
Var. |
Cost of Electric Power Purchased for Resale |
|||
Energy from Itaipu Binacional |
910 |
657 |
38.4% |
PROINFA |
69 |
105 |
-34.1% |
Energy Purchased through Auction in the Regulated Environment, Bilateral Contracts and Energy Purchased in the Spot Market |
3,083 |
3,572 |
-13.7% |
PIS and COFINS Tax Credit |
(358) |
(382) |
-6.3% |
Total |
3,704 |
3,953 |
-6.3% |
|
|
||
Charges for the Use of the Transmission and Distribution System |
|
|
|
Basic Network Charges |
563 |
498 |
12.9% |
Itaipu Transmission Charges |
70 |
67 |
4.8% |
Connection Charges |
40 |
47 |
-14.8% |
Charges for the Use of the Distribution System |
11 |
13 |
-17.8% |
ESS / EER |
18 |
(41) |
- |
PIS and COFINS Tax Credit |
(64) |
(53) |
20.3% |
Total |
637 |
531 |
20.0% |
|
|
||
Cost of Electric Energy |
4,341 |
4,484 |
-3.2% |
Cost of Electric Power Purchased for Resale
In 1Q20, the cost of electric power purchased for resale reached R$ 3,704 million, an increase of 6.3% (R$ 249 million), mainly due to:
(i) Decrease of 13.7% in energy purchased in auctions, bilateral contracts and spot market (R$ 490 million), due to the lower volume of purchased energy (-2.8%) and the decrease in the average purchase price (-11.2%);
Partially offset by the:
(ii) Increase of 38.4% in Itaipu cost (R$ 253 million), due to exchange variation, which raised the average purchase price in 38.4%.
14
Volume of purchased energy (GWh) |
1Q20 |
1Q19 |
Var. |
Energy from Itaipu Binacional |
2,721 |
2,720 |
0.0% |
PROINFA |
252 |
257 |
-1.7% |
Energy Purchased through Auction in the Regulated Environment, Bilateral Contracts and Energy Purchased in the Spot Market |
16,446 |
16,915 |
-2.8% |
Total |
19,419 |
19,892 |
-2.4% |
Average price (R$/MWh) |
1Q20 |
1Q19 |
Var. |
Energy from Itaipu Binacional |
334.39 |
241.63 |
38.4% |
PROINFA |
274.14 |
408.60 |
-32.9% |
Energy Purchased through Auction in the Regulated Environment, Bilateral Contracts and Energy Purchased in the Spot Market |
187.44 |
211.18 |
-11.2% |
Total |
190.73 |
198.70 |
-4.0% |
Charges for the Use of the Transmission and Distribution System
In 1Q20, charges for the use of the transmission and distribution system reached R$ 637 million, an increase of 20.0% (R$ 106 million), of which R$ 59 million in sector charges (ESS/EER) and R$ 58 million in connection and transmission charges (national grid, Itaipu transmission, connection and usage of the distribution system), partially offset by PIS/Cofins tax credit (R$ 11 million).
Contribution margin
In 1Q20, contribution margin reached R$ 2,445 million, an increase of 9.7% (R$ 217 million). This result mainly reflects the good performance of the Distribution segment.
PMSO
PMSO (R$ million) |
||||
|
1Q20 |
1Q19 |
Variation |
|
|
R$ MM |
% |
||
Personnel |
(354) |
(348) |
(6) |
1.8% |
Material |
(74) |
(67) |
(7) |
10.8% |
Outsourced Services |
(171) |
(165) |
(6) |
3.5% |
Other Operating Costs/Expenses |
(190) |
(175) |
(15) |
8.6% |
Allowance for doubtful accounts |
(58) |
(69) |
11 |
-15.7% |
Legal and judicial expenses |
(38) |
(32) |
(5) |
17.1% |
Others |
(95) |
(75) |
(20) |
27.3% |
Total Reported PMSO |
(789) |
(755) |
(34) |
4.5% |
PMSO reached R$ 789 million in 1Q20, an increase of 4.5% (R$ 34 million), due to the following factors:
(i) Increase of 68.4% (R$ 12 million) in assets write-off, mainly in RGE, due to an increase in maintenance jobs in the grid of RGE Sul, which was also favored by the lower volume of rain, which it enabled an intensification in the pace of these works;
15
(ii) Increase of 26.4% (R$ 6 million) in expenses with grid and substation maintenance, related to Capex efforts;
(iii) Decrease of 17.1% (R$ 5 million) in legal and judicial expenses;
Partially offset by:
(iv) Decrease of 15.7% (R$ 17 million) in allowance for doubtful accounts, reflecting the efforts to fight delinquency, with the increase in power cuts, in addition to negotiations with hospitals and other public institutions, which were combined to energy efficiency projects, aiming to avoid future defaults;
(v) Other items with a variation of 3.5% (R$ 21 million), in line with inflation (IPCA of 3.30% and IGP-M of 6.81%).
Other operating costs and expenses
Other operating costs and expenses |
|||
|
1Q20 |
1Q19 |
Var. |
Costs of Building the Infrastructure |
495 |
415 |
19.2% |
Private Pension Fund |
45 |
28 |
61.4% |
Depreciation and Amortization |
427 |
404 |
5.6% |
Total |
968 |
848 |
14.1% |
In 1Q20, EBITDA reached R$ 1,696 million, registering an increase of 10.8% (R$ 165 million), mainly reflecting the good performance of the Distribution segment; the segments of conventional and renewable generation also presented positive variations.
EBITDA is calculated according to CVM Instruction no. 527/12 and showed in the table below:
16
Financial Result
Financial Result (R$ Million) |
|||
|
1Q20 |
1Q19 |
Var. |
Revenues |
438 |
207 |
112.2% |
Expenses |
(317) |
(427) |
-25.6% |
Financial Result |
121 |
(220) |
- |
In 1Q20, net financial revenue was of R$ 121 million, a variation of R$ 341 million if compared to the net financial expense observed in 1Q19. The items explaining this variation are as follows:
(i) Variation of R$ 260 million in the mark-to-market (non-cash effect). This significant variation was mainly due to the high level of new funds raised (R$ 2.9 billion) in foreign currency, with swap to CDI, in the beginning of the year, at an average cost of CDI + 0.80%, right before a relevant deterioration of credit market conditions as a result of the economic crisis generated by covid-19;
(ii) Reduction of 21.7% (R$ 67 million) in the expenses with the net debt (debt charges net of income from financial investments), reflecting the reduction in interest rate (CDI) and the lower net indebtedness (for further details, see item 3.2.1 – Debt IFRS).
(iii) Positive variation of R$ 14 million in other financial revenues/expenses.
Income Tax and Social Contribution
In 1Q20, Income Tax and Social Contribution recorded an increase of 44.6% (R$ 150 million), mainly explained by the variation on Income before Taxes. The effective tax rate, that was 37.1% in 1Q19, went to 35.0% in 1Q20.
Net income was of R$ 904 million in 1Q20, registering an increase of 58.5% (R$ 334 million). In addition to a good EBITDA performance, the gain recorded in financial results due to the mark-to-market of debts also contributed to this result.
17
On March 31st, 2020, the financial debt of the CPFL Group was R$ 22.6 billion, a variation of +7.1% compared to the last quarter; the total financial debt was of R$ 20.3 billion.
Note: includes the mark-to-market (MTM) effect and borrowing costs.
Debt Profile – IFRS
The CPFL Group constantly seek to mitigate any possibility of market fluctuations risk and, because of these, a share of its debts portfolio, around R$ 7 billion, have hedge operations. Considering, for instance, foreign loans, which represents almost 34% of the total debts (IFRS criteria), it was contracted swap operations, aiming foreign exchange protection as well as the rate linked to the contract.
18
Indexation After Hedge
1Q19 vs. 1Q20
Note: Considering the foreign loan debts (34.4% in the 1Q120), it is contracted swap operations, aiming the protection of the foreign exchange and the rate fluctuations linked to the contract.
IFRS | R$ Million |
1Q20 |
1Q19 |
Var. % |
Financial Debt (including hedge) |
(20,252) |
(19,891) |
1.8% |
(+) Available Funds |
5,570 |
3,441 |
61.9% |
(=) Net Debt |
(14,682) |
(16,450) |
-10.7% |
Debt by segment (R$ Million – IFRS)
Notes:
1) The Generation segment considers CPFL Geração, Ceran and CPFL Transmissão Piracicaba; Service segment considers CPFL Serviços and CPFL Eficiência Energética.
2) Considers only the debt’s notional and derivatives.
19
Debt Amortization Schedule in IFRS (Mar-20)
The Group CPFL constantly evaluates market opportunities to close deals that goes along with the company’s strategies and policies. Thus, due to CPFL's broad access to several kinds of fundraising in the market, both national and international, the group's debt portfolio is composed by different modalities and instruments.
The cash position at the end of 1Q20 had a coverage ratio of 1.78x the amortizations of the next 12 months, which allows the CPFL Group to honor the amortization commitments until Mar-21. The average amortization term based on this schedule is of 3.15 years.
The debt amortization schedule of the financial debt below considers only the notional of the debts and derivatives.
Note: Considers only the notional and hedge of the debt. In order to reach the financial result of R$ 20,252 million, should be included charges and the mark-to-market (MTM) effect and cost with funding.
Gross Debt Cost¹ in IFRS criteria
Note: the calculation considers the average cost in the end of the period, since it better reflects the interest rate variations.
20
Ratings
The following table shows the corporate ratings of CPFL Energia.
Ratings of CPFL Energia - Corporate Credit |
|||
Agency |
Scale |
Rating |
Perspective |
Standard & Poor's |
Brazilian |
brAAA |
Stable |
Fitch Ratings |
Brazilian |
AAA(bra) |
Stable |
Moody's |
Brazilian |
Aaa.br |
Stable |
Global |
Ba1 |
Indexation and Debt Cost in Financial Covenants Criteria
Indexation¹ after Hedge²
1Q19 vs. 1Q20
1) The total amount considers a proportional consolidation of CPFL Renováveis, CERAN, ENERCAN, Foz do Chapecó and EPASA.
2) For debts contracted in foreign currency (33.4% of total), swap operations were contracted, aiming the protection of the foreign exchange and the rate fluctuations linked to the contract.
Net Debt in Financial Covenants Criteria and Leverage
In the end of the 1Q20, the Proforma Net Debt totaled R$ 15,114 million, an increase of 1.4% compared to net debt position at the end of 1Q19, of R$ 14,902 million.
21
1) The total amount considers a proportional consolidation of CPFL Renováveis, CERAN, ENERCAN, Foz do Chapecó and EPASA. 2) Proforma EBITDA in the financial covenants criteria: adjusted according CPFL Energia’s stake in each of its subsidiaries.
In line with the criteria for calculation of financial covenants of loan agreements with financial institutions, net debt and the EBITDA are adjusted according to the equivalent stake of CPFL Energia in each of its subsidiaries.
Considering that, the Proforma Net Debt totaled R$ 15,114 million and Proforma EBITDA in the last 12 months reached R$ 6,846 million, the ratio Proforma Net Debt / EBITDA at the end of 1Q20 reached 2.21x.
Leverage in Financial covenants criteria - R$ billion
Investments (R$ Million) |
|||
Segment |
1Q20 |
1Q19 |
Var. |
Distribution |
454 |
404 |
12.5% |
Generation - Conventional |
1 |
1 |
-29.5% |
Generation - Renewable |
30 |
33 |
-8.7% |
Commercialization |
6 |
1 |
955.4% |
Services and Others2 |
18 |
7 |
135.8% |
Transmission1 |
8 |
0 |
14210.6% |
Total |
516 |
445 |
15.9% |
Note:
1) Transmission – Transmission assets do not have fixed assets, the figures in this table is the addition of concession financial assets.
2) Others – basically refers to assets and transactions that are not related to the listed segments.
In 1Q20, the investments were R$ 516 million, an increase of 15.9%, compared to R$ 445 million registered in 1Q19. We highlight investments made by CPFL Energia in the Distribution segment, in the amount of R$ 454 million, mainly intended for expansion, modernization and maintenance of electrical system.
22
On November 29, 2019, CPFL Energia’s Board of Directors approved Board of Executive Officers’ proposal for 2020 Annual Budget and 2021/2024 Multiannual Plan for the Company, which was previously discussed by the Budget and Corporate Finance Committee.
Investments Guidance (R$ million)1
Notes:
1) Constant currency;
2) Disregard investments in Special Obligations (among other items financed by consumers);
3) Conventional + Renewable.
CPFL Energia is listed in B3 (Novo Mercado), segment with the highest levels of corporate governance.
B3 |
|||
Date |
CPFE3 (R$) |
IEE |
IBOV |
03/31/2019 |
R$ 26.87 |
57,651 |
73,020 |
12/31/2019 |
R$ 35.55 |
76,627 |
115,645 |
03/31/2018 |
R$ 30.48 |
57,449 |
95,415 |
QoQ |
-24.4% |
-24.8% |
-36.9% |
YoY |
-11.8% |
0.4% |
-23.5% |
On March 31st 2020, CPFL Energia’s shares were at R$ 26.87, a depreciation of 24.4% in the quarter. Considering the variation in the last 12 months, shares presented a devaluation of 11.8%. This devaluation reflects the greater risk aversion observed in the worldwide due to the progress of the Covid-19 pandemic. This is shown by the variation in IEE and IBOV, which were -24.8% and -36.9%, respectively, in the same period.
23
4.2) Daily Average Volume
The daily average volume trading in 1Q20 was R$ 105.4 million, representing an increase of 367.4% if compared to 1Q20. The number of deals performed in B3 increased by 411.0%.
Note: For the NYSE daily average trading volume, it was considered the volume until 01/27/2020, the date on which the ADR were suspended in NYSE, as a result of the process of delisting in this stock exchange.
Consolidated Income Statement - Distribution (R$ Million) |
|||
|
1Q20 |
1Q19 |
Var. |
Gross Operating Revenue |
9,549 |
9,446 |
1.1% |
Net Operating Revenue |
6,103 |
5,936 |
2.8% |
Cost of Electric Power |
(3,788) |
(3,877) |
-2.3% |
Operating Costs & Expenses |
(1,389) |
(1,271) |
9.2% |
EBIT |
926 |
788 |
17.6% |
EBITDA(1) |
1,137 |
980 |
16.0% |
Financial Income (Expense) |
206 |
(60) |
- |
Income Before Taxes |
1,132 |
728 |
55.5% |
Net Income |
728 |
465 |
56.6% |
Note:
(1) EBITDA (IFRS) is calculated from the sum of net income, taxes, financial result and depreciation/amortization, as CVM Instruction no. 527/12.
24
Sectoral Financial Assets and Liabilities
On March 31st, 2020, the balance of sectoral financial assets and liabilities was positive in R$ 538 million. If compared to December 31st, 2019, there was a reduction of R$ 456 million, as demonstrated in the chart below:
The variation in this balance was due to the constitution of a liability of R$ 141 million, mainly due to lower costs with electric power and a reduction in sector charges. Furthermore, there was an amortization of R$ 322 million, mainly favored by the tariff readjustments. The monetary adjustment of assets and liabilities totaled R$ 8 million.
Operating Revenue
Operating Revenue |
|||
|
1Q20 |
1Q19 |
Var. |
Gross Operating Revenue |
|||
Revenue with Energy Sales (Captive + TUSD) |
8,713 |
8,567 |
1.7% |
Short-term Electric Energy |
228 |
243 |
-6.2% |
Revenue from Building the Infrastructure of the Concession |
488 |
415 |
17.5% |
Sectoral Financial Assets and Liabilities |
(463) |
(324) |
43.1% |
CDE Resources - Low-income and Other Tariff Subsidies |
376 |
429 |
-12.4% |
Adjustments to the Concession's Financial Asset |
139 |
64 |
114.9% |
Other Revenues and Income |
102 |
84 |
22.5% |
Compensatory Fines (DIC/FIC) |
(32) |
(32) |
2.4% |
Total |
9,549 |
9,446 |
1.1% |
Deductions from the Gross Operating Revenue |
|
|
|
ICMS Tax |
(1,775) |
(1,740) |
2.0% |
PIS and COFINS Taxes |
(819) |
(794) |
3.2% |
CDE Sector Charge |
(941) |
(998) |
-5.7% |
R&D and Energy Efficiency Program |
(55) |
(55) |
-0.6% |
PROINFA |
(47) |
(39) |
21.1% |
Tariff Flags and Others |
198 |
122 |
61.9% |
Others |
(7) |
(7) |
11.9% |
Total |
(3,447) |
(3,510) |
-1.8% |
|
|
|
|
Net Operating Revenue |
6,103 |
5,936 |
2.8% |
25
In 1Q20, gross operating revenue amounted to R$ 9,549 million, an increase of 1.1% (R$ 103 million), due to the following factors:
· Increase of 1.7% (R$ 146 million) in the revenue with energy sales (captive + free clients), due to: (i) the positive average tariff adjustment in the distribution companies in the period between 1Q19 and 1Q20 (average increase of 8.66% in CPFL Paulista in in April-19, of 8.63% in RGE and 1.72% in RGE Sul in June-19); (ii) the increase of 0.7% in the load in the concession area; on the other hand there was (iii) a tariff review with negative average readjustment in the consumer perception of 7.80% at CPFL Piratininga;
· Increase of 114,9% (74 million) in the adjustments to the Concession´s Financial Asset;
· Increase of 17.5% (R$ 73 million) in revenue from building the infrastructure of the concession, which has its counterpart in the same amount in operational costs;
· Increase of 34.7% (R$ 18 million) in the others items of Revenue;
Partially offset by:
· Increase of 43.1% (R$ 139 million) in the accounting of Sectoral Financial Assets/Liabilities;
· Decrease of 12.4% (R$ 53 million) in tariff subsidies (CDE);
· Decrease of R$ 6.2% (R$ 15 million) in Short-term Electric Energy due to a lower spot price (PLD).
Deductions from the gross operating revenue were R$ 3,447 million in 1Q20, representing a decrease of 1.8% (R$ 63 million), due to the following factors:
· Increase of 61.9% (R$ 76 million) in tariff flags approved by CCEE;
· Decrease of 5.7% (R$ 57 million) at CDE due to the reduction of the CDE quota, mainly due to the termination of ACR account loans;
Partially offset by the following factors:
· Increase of 2.4% (R$ 61 million) in taxes (ICMS and PIS/Cofins);
· Increase of 8.6% (R$ 9 million) in the others items.
Net operating revenue reached R$ 6,103 million in 1Q20, representing an increase of 2.8% (R$ 166 million).
26
Cost of Electric Energy (R$ Million) |
|||
|
1Q20 |
1Q19 |
Var. |
Cost of Electric Power Purchased for Resale |
|||
Energy from Itaipu Binacional |
910 |
657 |
38.4% |
PROINFA |
69 |
105 |
-34.1% |
Energy Purchased through Auction in the Regulated Environment, Bilateral Contracts and Energy Purchased in the Spot Market |
2,504 |
2,932 |
-14.6% |
PIS and COFINS Tax Credit |
(307) |
(324) |
-5.1% |
Total |
3,176 |
3,370 |
-5.8% |
|
|
||
Charges for the Use of the Transmission and Distribution System |
|
|
|
Basic Network Charges |
542 |
479 |
13.1% |
Itaipu Transmission Charges |
70 |
67 |
4.8% |
Connection Charges |
39 |
45 |
-14.8% |
Charges for the Use of the Distribution System |
6 |
9 |
-26.1% |
ESS / EER |
18 |
(41) |
- |
PIS and COFINS Tax Credit |
(62) |
(52) |
20.7% |
Total |
612 |
507 |
20.7% |
|
|
|
|
Cost of Electric Energy |
3,788 |
3,877 |
-2.3% |
Cost of Electric Power Purchased for Resale
In 1Q20, the cost of electric Power Purchased for Resale amounted to R$ 3,176 million, representing a decrease of 5.8% (R$ 194 million), due to a:
· Decrease of 14.6% (R$ 428 million) in cost of energy purchased in the regulated environment, bilateral contracts and short term, due to a decrease in the volume of purchased energy and in the average purchase price;
· Decrease of 34.1% (R$ 36 million) in Proinfa, due to a decrease in the volume of purchased energy and in the average purchase price;
Partially offset by:
· Increase of 38.4% (R$ 253 million) in Itaipu cost, due to the increase in the average purchase price due to the exchange rate variation;
· Decrease of 5.1% (R$ 16 million) in PIS and COFINS tax credit.
Volume of purchased energy (GWh) |
1Q20 |
1Q19 |
Var. |
Energy from Itaipu Binacional |
2,721 |
2,720 |
0.0% |
PROINFA |
252 |
257 |
-1.7% |
Energy Purchased through Auction in the Regulated Environment, Bilateral Contracts and Energy Purchased in the Spot Market |
11,976 |
12,435 |
-3.7% |
Total |
14,950 |
15,412 |
-3.0% |
Average price (R$/MWh) |
1Q20 |
1Q19 |
Var. |
Energy from Itaipu Binacional |
334.39 |
241.63 |
38.4% |
PROINFA |
274.14 |
408.60 |
-32.9% |
Energy Purchased through Auction in the Regulated Environment, Bilateral Contracts and Energy Purchased in the Spot Market |
209.12 |
235.78 |
-11.3% |
Total |
212.46 |
218.67 |
-2.8% |
27
Charges for the Use if the Transmission and Distribution System
In 1Q20, the charges for the use of the transmission and distribution system reached R$ 612 million, representing an increase 20.7% (R$ 105 million). The variation was mainly due to the increase of R$ 59 million in sector charges (ESS/EER) and R$ 57 million in connection and transmission charges (Basic Network Charges, Itaipu Transmission Charges, Connection and Use of the Distribution System) partially offset by PIS and COFINS tax credit (R$ 11 million).
Operating Costs and Expenses
Operating costs and expenses reached R$ 1,389 million in 1Q20, an increase of 9.2% (R$ 117 million).
The factors that explain these variations follow below:
PMSO
Reported PMSO (R$ million) |
||||
|
1Q20 |
1Q19 |
Variation |
|
|
R$ MM |
% |
||
Personnel |
(229) |
(226) |
(3) |
1.1% |
Material |
(45) |
(46) |
1 |
-1.9% |
Outsourced Services |
(200) |
(207) |
6 |
-3.1% |
Other Operating Costs/Expenses |
(171) |
(158) |
(13) |
8.4% |
Allowance for doubtful accounts |
(58) |
(68) |
10 |
-15.0% |
Legal and judicial expenses |
(33) |
(31) |
(2) |
7.9% |
Others |
(80) |
(59) |
(21) |
36.0% |
Total Reported PMSO |
(645) |
(637) |
(9) |
1.3% |
In 1Q20, PMSO reached R$ 645 million, a decrease of 1.3% (R$ 9 million) due to:
(i) Increase of 79.4% (R$ 13 million) in assets write-off, mainly in RGE, due to the increase in maintenance jobs in the grid of RGE Sul, which was also favored by lower volume of rain, which it enabled an intensification in the pace of these works;
(ii) Increase of 26.4% (R$ 6 million) in expenses with grid and substation maintenance, related to Capex efforts;
(iii) Increase of 7.9% (R$ 2 million) in legal and judicial expenses;
Partially offset by:
(i) Decrease of 15.0% (R$ 10 million) in allowance for doubtful accounts, reflecting the efforts to fight delinquency, with the increase in power cuts, in addition to negotiations with hospitals and other public institutions, which were combined to energy efficiency projects, aiming to avoid future defaults;
(ii) Others items with a negative variation of -0.6% (R$ 3 million), below the inflation for the period.
28
Other operating costs and expenses
Other operating costs and expenses |
|||
|
1Q20 |
1Q19 |
Var. |
Costs of Building the Infrastructure |
488 |
415 |
17.5% |
Private Pension Fund |
45 |
28 |
61.0% |
Depreciation and Amortization |
197 |
178 |
10.6% |
Total |
729 |
621 |
17.5% |
EBITDA
EBITDA totaled R$ 1,137 million in 1Q20, an increase of 16.0% (R$ 157 million), mainly favored by the positive effects of: (i) tariff adjustments between 1Q19 and 1Q20 combined with a good market performance in the period; (ii) increase in the Adjustments to the Concession's Financial Asset; (iii) gain of PIS/Cofins on ICMS at CPFL Santa Cruz in 1Q19; and (iv) a lower ADA.
Financial Result
Financial Result (R$ Million) |
|||
|
1Q20 |
1Q19 |
Var. |
Revenues |
388 |
145 |
167.0% |
Expenses |
(182) |
(205) |
-11.3% |
Financial Result |
206 |
(60) |
- |
In 1Q20, the net financial result recorded a net financial expense of R$ 206 million, compared to a net financial expense of R$ 60 million in 1Q19. The items that explain this variation are:
(i) Variation of R$ 259 million in market to market (non-cash effect). This significant variation was mainly due to the high level of new funds raised (R$ 2.6 billion) in foreign currency, with swap to CDI, in the beginning of the year, at an average cost of CDI + 0.80%, right before a relevant deterioration of credit market conditions as a result of the economic crisis generated by covid-19;
29
(ii) Increase of 23.9% (R$ 21 million) in late payment interest and fines;
(iii) Decrease of 12.5% (R$ 20 million) in the expenses with net debt due to the fall in the interest rate (CDI);
Partially offset by:
(i) Increase of 72.4% (R$ 20 million) in sectoral financial assets update;
(ii) Variation of R$ 14 million in others items of financial revenues and expenses.
Net Income
Net Income totaled R$ 728 million in 1Q20, an increase of 56.6% (R$ 263 million). In addition to the good performance of EBITDA, the gain recorded in the financial result due to the mark-to-market of debts also contributed to this result.
Tariff Revision |
||||
Distributor |
Periodicity |
Next Revision |
Cycle |
Tariff Process Dates |
CPFL Piratininga |
Every 4 years |
October 2023 |
6th PTRC |
October 23rd |
CPFL Santa Cruz |
Every 5 years |
March 2021 |
5th PTRC |
March 22nd |
CPFL Paulista |
Every 5 years |
April 2023 |
5th PTRC |
April 8th |
RGE |
Every 5 years |
June 2023 |
5th PTRC |
June 19th |
Annual tariff adjustments and periodic tariff reviews in 2019 and 2020
30
Economic-Financial Performance
Consolidated Income Statement - Commercialization (R$ Million) |
|||
|
1Q20 |
1Q19 |
Var. |
Net Operating Revenue |
718 |
760 |
-5.6% |
EBITDA(1) |
0 |
31 |
-98.6% |
Net Income |
6 |
15 |
-61.1% |
Consolidated Income Statement - Services (R$ Million) |
|||
|
1Q20 |
1Q19 |
Var. |
Net Operating Revenue |
152 |
146 |
4.4% |
EBITDA(1) |
28 |
36 |
-20.6% |
Net Income |
17 |
23 |
-27.8% |
Note:
(1) EBITDA is calculated from the sum of net income, taxes, financial result and depreciation/amortization.
Economic-Financial Performance
Consolidated Income Statement - Conventional Generation (R$ Million) |
|||
|
1Q19 |
1Q18 |
Var. |
Gross Operating Revenue |
332 |
301 |
10.4% |
Net Operating Revenue |
300 |
269 |
11.3% |
Cost of Electric Power |
(29) |
(29) |
0.0% |
Operating Costs & Expenses |
(63) |
(52) |
20.7% |
EBITDA(1) |
296 |
304 |
-2.7% |
Equity Income |
85 |
86 |
-0.7% |
Net Income |
208 |
184 |
12.8% |
Note (1): EBITDA is calculated from the sum of net income, taxes, financial result and depreciation/amortization.
Operating Revenue
In 1Q20, the Gross Operating Revenue reached R$ 332 million, an increase of 10.4% (R$ 31 million). The Net Operating Revenue was of R$ 300 million, an increase of 11.3% (R$ 31 million).
The main factors that affected the net operating revenue were:
31
These effects were partially offset by:
Cost of Electric Power
In 1Q20, the cost of electricity reached R$ 29 million, maintaining the level of the same period in 2019.
Operating Costs and Expenses
The Operating Costs and Expenses were R$ 63 million in the 1Q20, a 20.7% change (R$ 11 million).
The factors that explain these costs were:
PMSO
PMSO (R$ million) |
||||
|
1Q20 |
1Q19 |
Variation |
|
|
R$ MM |
% |
||
PMSO |
|
|
|
|
Personnel |
11 |
8 |
3 |
39.1% |
Material |
1 |
1 |
(0) |
-7.3% |
Outsourced Services |
6 |
6 |
0 |
8.0% |
Other Operating Costs/Expenses |
7 |
7 |
(0) |
-3.3% |
GSF Risk Premium |
2 |
2 |
0 |
2.6% |
Others |
5 |
5 |
(0) |
-6.1% |
Total PMSO |
25 |
22 |
3 |
36.5% |
The PMSO reached R$ 25 million in the 1Q20, registering an increase of 36.5% compared to the 1Q19. This result is essentially explained by the increase in Personnel (R$ 3 million), due to a higher headcount and the effects of the collective bargaining agreement.
32
Other operating costs and expenses
Equity Income
Equity Income (R$ Million) |
|||
|
1Q20 |
1Q19 |
Var. % |
Projects |
|||
Barra Grande HPP |
(0) |
3 |
- |
Campos Novos HPP |
35 |
30 |
13.4% |
Foz do Chapecó HPP |
33 |
30 |
10.7% |
Epasa TPP |
18 |
22 |
-18.8% |
Total |
85 |
86 |
-0.7% |
Note: Disclosure of interest in subsidiaries is made in accordance with IFRS 12 and CPC 45.
In 1Q20, the result of the Equity Income was R$ 85 million, a reduction of 0.7% (R$ 1 million).
33
The main factors that explain these variations:
Barra Grande:
In 1Q20, the net revenue remained stable (-2.8%), while there was also an increase in operational costs (26.2%) due to the higher short-term energy purchased. The decrease in the financial result was due to higher expenses with UBP, impacted by IGP-M variation.
Campos Novos:
In 1Q20, there was an increase of 16.3% in net revenue, mainly due to seasonality of the contracts and annual readjustments, partially offset by the increase of 53.2% in operating costs and expenses, due to higher short-term energy purchased. In the financial result, there was a decrease of 34.7% due to lower expenses with debt, partially offset by higher expenses with UBP (IGP-M variation).
Foz do Chapecó:
In 1Q20, there was an increase of 8.2% in the net revenue, mainly due to the seasonality of the contracts and annual readjustments. In the financial result, there was an increase of 23.9% due to higher expanses with UBP reflecting IGP-M and IPCA variations in the period, partially offset by of lower expenses with debt.
Epasa:
In 1Q20, there was a lower volume of generation, affecting net revenues and operating costs, partially offset by the overhaul in 1Q19.
EBITDA
In 1Q20, the EBITDA was of R$ 323 million, a decrease of 6.3% (R$ 19 million), largely explained by contracts readjustment and partially offset by the Epasa’s performance.
34
Financial Result
Financial Result (IFRS - R$ Million) |
|||
|
1Q20 |
1Q19 |
Var. |
Financial Revenues |
11 |
10 |
13.6% |
Financial Expenses |
(39) |
(54) |
-28.7% |
Financial Result |
(27) |
(44) |
-38.4% |
In 1Q20, the financial result was a net financial expense of R$ 27 million, a reduction of 38.4% (R$ 17 million) compared to 1Q19. This variation was due to lower expenses with net debt (R$ 16 million) and other items (R$ 1 million).
Net Income
In 1Q20, the net income was R$ 208 million, an increase of 12.8% (R$ 24 million).
Economic-Financial Performance
Consolidated Income Statement - CPFL RENOVÁVEIS (R$ Million) |
|||
|
1Q20 |
1Q19 |
Var. |
Gross Operating Revenue |
410 |
354 |
16.0% |
Net Operating Revenue |
385 |
334 |
15.1% |
Cost of Electric Power |
(72) |
(53) |
35.3% |
Operating Costs & Expenses |
(252) |
(249) |
1.2% |
EBIT |
60 |
31 |
90.8% |
EBITDA1 |
223 |
192 |
16.0% |
Financial Income (Expense) |
(73) |
(112) |
-34.9% |
Income Before Taxes |
(13) |
(80) |
-84.2% |
Net Income |
(29) |
(93) |
-68.3% |
Note:
(1) EBITDA is calculated from the sum of net income, taxes, financial result and depreciation/amortization.
35
Operating Revenue
In 1Q20, Gross Operating Revenue reached R$ 410 million, representing an increase of 16.0% (R$ 56 million). Net Operating Revenue reached R$ 385 million, representing an increase of 15.1% (R$ 50 million). These variations are mainly explained by the following factors:
SHPPs Source:
· Increase of R$ 47 million in revenue from SHPPs, mainly due to the different strategy of seasonal adjustment of physical guarantee in the agreements between the periods, partially offset by the GSF exposure.
Biomass Source:
· Increase of R$ 17 million in biomass revenue, mainly due to the strategy of contract seasonalization (higher in 1Q20) and the higher generation.
Wind Source and Holding Company:
· Reduction of R$ 14 million in revenue from wind farms and the Holding Company, mainly due to the lower generation of wind complexes, partially offset by hedge operations settled at the PLD price.
Cost of Electric Power
Cost of Electric Energy (R$ Million) |
|||
|
1Q20 |
1Q19 |
Var. |
Cost of Electric Power Purchased for Resale |
(46) |
(29) |
58.8% |
Charges for the Use of the Transmission and Distribution System |
(26) |
(24) |
6.8% |
Financial Result |
(72) |
(53) |
35.3% |
In 1Q20, Cost of Electric Energy totaled R$ 72 million, representing an increase of 35.3% (R$ 19 million). Energy purchase cost totaled R$ 46 million in 1Q20, an increase of 58.8% (R$ 17 million), mainly due to the higher energy volume purchased for hedge operations. Cost of charges for the use of the system totaled R$ 26 million in 1Q20, an increase of 6.8% (R$ 2 million), mainly due to the price adjustments in connection charges, as well as the distribution and transmission system use and connection tariffs.
Operating Costs and Expenses
Operating Costs and Expenses reached R$ 252 million in 1Q20, compared to R$ 249 million in 1Q19, representing an increase of 1.2% (R$ 3 million). The factors that explain these variations follow:
36
PMSO
Reported PMSO (R$ million) |
||||
|
1Q20 |
1Q19 |
Variation |
|
|
R$ MM |
% |
||
Reported PMSO |
|
|
|
|
Personnel |
(26) |
(26) |
0 |
-1.6% |
Material |
(8) |
(4) |
(4) |
94.4% |
Outsourced Services |
(45) |
(45) |
0 |
-0.5% |
Other Operating Costs/Expenses |
(10) |
(13) |
2 |
-19.0% |
Total Reported PMSO |
(90) |
(89) |
(1) |
1.0% |
The PMSO item reached R$ 90 million in 1Q20, compared to R$ 89 million in 1Q19, an increase of 1.0% (R$ 1 million).
Other operating costs and expenses
Other operating costs and expenses, represented by Depreciation and Amortization accounts, reached R$ 163 million in 1Q20, increase of 1.3% (R$ 2 million).
EBITDA
In 1Q20, EBITDA was of R$ 223 million, compared to R$ 192 million in 1Q19, an increase of 16.0% (R$ 31 million). This result is mainly due to: (i) the different strategy of seasonal adjustment of physical guarantee in the agreements, between the periods, in the SHPPs (R$ 54 million); (ii) the strategy of contract seasonalization (higher in 1Q20) and the higher generation in biomass plants (R$ 15 million); and (iii) inflation over energy contracts (R$ 12 million). These items were partially offset by the GSF exposure (SHPPs) (R$ 29 million) and the lower generation of wind complexes (R$ 25 million).
37
Financial Result
Financial Result (R$ Million) |
|||
|
1Q20 |
1Q19 |
Var. |
Revenues |
28 |
49 |
-42.8% |
Expenses |
(101) |
(160) |
-37.3% |
Financial Result |
(73) |
(112) |
-34.9% |
In 1Q20, net financial result registered a net financial expense of R$ 73 million, a reduction of 34.9% (R$ 39 million). This variation is basically explained by the reductions: (i) of 35.8% (R$ 36 million) in expenses with the net debt (debt charges, net of income from financial investments), due to the reduction in interest rates (CDI and TJLP) and lower indebtedness; and (ii) of 26.3% (R$ 3 million) in other effects.
In 1Q20, net loss was of R$ 29 million, compared to the net loss of R$ 93 million in 1Q19, a reduction of 68.3% (R$ 64 million). This performance reflects the improvement in EBITDA and financial result, partially offset by the worsening of the income tax and social contribution item.
38
(R$ thousands)
Consolidated |
|||
ASSETS |
03/31/2020 |
12/31/2019 |
03/31/2019 |
CURRENT |
|||
Cash and Cash Equivalents |
5,569,505 |
1,937,163 |
3,440,809 |
Bonds and securities |
946 |
851,004 |
|
Consumers, Concessionaries and Licensees |
4,805,590 |
4,985,578 |
4,704,583 |
Dividend and Interest on Equity |
122,552 |
100,297 |
100,182 |
Recoverable Taxes |
463,614 |
419,126 |
421,109 |
Derivatives |
696,721 |
281,326 |
260,847 |
Sectoral Financial Assets |
899,766 |
1,093,588 |
1,402,757 |
Contractual Assets |
24,657 |
24,387 |
23,685 |
Other assets |
689,497 |
648,161 |
681,831 |
TOTAL CURRENT |
13,272,848 |
10,340,630 |
11,035,803 |
NON-CURRENT |
|||
Consumers, Concessionaries and Licensees |
756,717 |
713,068 |
687,826 |
Judicial Deposits |
769,694 |
757,370 |
859,842 |
Recoverable Taxes |
409,730 |
472,123 |
423,610 |
Sectoral Financial Assets |
5,441 |
2,748 |
27,093 |
Derivatives |
1,748,408 |
369,767 |
349,932 |
Deferred Taxes |
562,406 |
1,064,716 |
932,673 |
Concession Financial Assets |
9,162,557 |
8,779,717 |
7,677,726 |
Investments at Cost |
116,654 |
116,654 |
116,654 |
Other assets |
761,827 |
736,019 |
710,930 |
Investments |
1,060,902 |
997,997 |
1,066,138 |
Property, Plant and Equipment |
8,975,244 |
9,083,710 |
9,351,350 |
Contractual Assets |
1,357,441 |
1,322,822 |
1,329,593 |
Intangible Assets |
9,222,291 |
9,320,953 |
9,376,904 |
TOTAL NON-CURRENT |
34,909,313 |
33,737,664 |
32,910,270 |
TOTAL ASSETS |
48,182,161 |
44,078,293 |
43,946,073 |
39
(R$ thousands)
|
Consolidated |
||
LIABILITIES AND SHAREHOLDERS' EQUITY |
03/31/2020 |
12/31/2019 |
03/31/2019 |
CURRENT |
|||
Trade payables |
2,743,239 |
3,260,180 |
3,159,696 |
Borrowings |
3,082,710 |
2,776,193 |
2,764,095 |
Debentures |
843,880 |
682,582 |
1,116,111 |
Private pension plan |
136,441 |
224,851 |
109,611 |
Regulatory liabilities |
25,387 |
232,251 |
125,274 |
Taxes, Fees and Contributions |
734,977 |
960,497 |
724,688 |
Dividends |
669,011 |
668,859 |
532,790 |
Estimated payroll |
132,781 |
125,057 |
129,141 |
Derivatives |
3,545 |
29,400 |
4,863 |
Use of public asset |
11,771 |
11,771 |
11,771 |
Other payables |
1,341,894 |
1,094,269 |
1,048,916 |
TOTAL CURRENT |
9,725,636 |
10,065,908 |
9,726,955 |
NON-CURRENT |
|||
Trade payables |
364,051 |
359,944 |
320,024 |
Borrowings |
11,216,917 |
7,587,102 |
8,588,747 |
Debentures |
7,549,688 |
7,863,696 |
8,007,720 |
Private pension plan |
1,864,574 |
2,153,327 |
1,135,215 |
Taxes, Fees and Contributions |
157,770 |
157,003 |
7,053 |
Deferred tax liabilities |
1,120,840 |
1,048,069 |
1,130,097 |
Provision for tax, civil and labor risks |
554,096 |
600,775 |
979,335 |
Derivatives |
- |
6,157 |
20,135 |
Sectoral financial liabilities |
367,181 |
102,561 |
218,038 |
Use of public asset |
93,084 |
91,181 |
88,957 |
Other payables |
627,339 |
759,331 |
623,054 |
TOTAL NON-CURRENT |
23,915,541 |
20,729,147 |
21,118,375 |
SHAREHOLDERS' EQUITY |
|||
Issued capital |
9,388,080 |
9,388,081 |
5,741,284 |
Capital Reserves |
(1,640,962) |
(1,640,962) |
469,257 |
Legal Reserve |
1,036,125 |
900,992 |
3,527,510 |
Statutory reserve - working capital improvement |
4,046,305 |
4,046,305 |
900,992 |
Dividend |
1,433,295 |
1,433,295 |
- |
Accumulated comprehensive income |
(917,876) |
(1,268,465) |
(380,790) |
Retained earnings |
897,294 |
135,134 |
609,873 |
14,242,262 |
12,994,381 |
10,868,126 |
|
Equity attributable to noncontrolling interests |
298,721 |
288,857 |
2,232,617 |
TOTAL SHAREHOLDERS' EQUITY |
14,540,984 |
13,283,238 |
13,100,742 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
48,182,160 |
44,078,293 |
43,946,073 |
40
(R$ thousands)
Consolidated |
||||
|
|
1Q20 |
1Q19 |
Variation |
OPERATING REVENUES |
||||
Electricity Sales to Final Customers |
8,150,474 |
8,009,894 |
1.8% |
|
Electricity Sales to Distributors |
1,127,496 |
1,352,491 |
-16.6% |
|
Revenue from building the infrastructure |
495,804 |
415,213 |
19.4% |
|
Update of concession's financial asset |
138,572 |
64,491 |
114.9% |
|
Sectorial financial assets and liabilities |
(463,343) |
(323,880) |
43.1% |
|
Other Operating Revenues |
1,429,726 |
1,269,547 |
12.6% |
|
|
10,878,728 |
10,787,756 |
0.8% |
|
|
||||
DEDUCTIONS FROM OPERATING REVENUES |
(3,596,461) |
(3,660,309) |
-1.7% |
|
NET OPERATING REVENUES |
7,282,267 |
7,127,446 |
2.2% |
|
|
||||
COST OF ELECTRIC ENERGY SERVICES |
||||
Electricity Purchased for Resale |
(3,703,952) |
(3,952,543) |
-6.3% |
|
Electricity Network Usage Charges |
(637,466) |
(531,221) |
20.0% |
|
|
(4,341,419) |
(4,483,763) |
-3.2% |
|
OPERATING COSTS AND EXPENSES |
||||
Personnel |
(354,219) |
(348,018) |
1.8% |
|
Material |
(74,108) |
(66,856) |
10.8% |
|
Outsourced Services |
(170,786) |
(165,010) |
3.5% |
|
Other Operating Costs/Expenses |
(190,296) |
(175,260) |
8.6% |
|
Allowance for Doubtful Accounts |
(57,844) |
(68,615) |
-15.7% |
|
Legal and judicial expenses |
(37,510) |
(32,038) |
17.1% |
|
Others |
(94,942) |
(74,607) |
27.3% |
|
Cost of building the infrastructure |
(495,091) |
(415,211) |
19.2% |
|
Employee Pension Plans |
(45,440) |
(28,150) |
61.4% |
|
Depreciation and Amortization |
(370,396) |
(332,331) |
11.5% |
|
Amortization of Concession's Intangible |
(56,431) |
(72,109) |
-21.7% |
|
|
(1,756,767) |
(1,602,946) |
9.6% |
|
|
||||
EBITDA1 |
|
1,696,213 |
1,531,097 |
10.8% |
|
||||
INCOME FROM ELECTRIC ENERGY SERVICE |
1,184,081 |
1,040,736 |
13.8% |
|
|
||||
FINANCIAL REVENUES (EXPENSES) |
||||
Financial Revenues |
438,292 |
206,595 |
112.2% |
|
Financial Expenses |
(317,285) |
(426,635) |
-25.6% |
|
|
121,007 |
(220,040) |
- |
|
|
||||
EQUITY ACCOUNTING |
||||
Equity Accounting |
85,305 |
85,920 |
-0.7% |
|
Assets Surplus Value Amortization |
(145) |
(145) |
0.0% |
|
|
85,160 |
85,775 |
-0.7% |
|
|
||||
INCOME BEFORE TAXES |
1,390,248 |
906,472 |
53.4% |
|
|
||||
Social Contribution |
(129,908) |
(90,050) |
44.3% |
|
Income Tax |
(356,214) |
(246,064) |
44.8% |
|
|
||||
NET INCOME |
|
904,126 |
570,358 |
58.5% |
Controlling Shareholders' Interest |
|
890,041 |
603,451 |
47.5% |
Non-Controlling Shareholders' Interest |
|
14,085 |
(33,093) |
- |
Note:
(1) EBITDA is calculated from the sum of net income, taxes, financial result and depreciation/amortization, according to CVM Instruction no. 527/12.
41
(R$ thousands)
42
(R$ thousands)
Consolidated |
||||
1Q20 |
Last 12 months |
|||
Beginning Balance |
1,937,164 |
3,440,810 |
||
Net Income Before Taxes |
1,390,248 |
4,470,069 |
||
Depreciation and Amortization |
426,826 |
1,703,439 |
||
Interest on Debts and Monetary and Foreign Exchange Restatements |
(142,459) |
520,510 |
||
Consumers, Concessionaries and Licensees |
78,384 |
(392,639) |
||
Sectoral Financial Assets |
222,325 |
655,878 |
||
Accounts Receivable - Resources Provided by the CDE/CCEE |
7,635 |
39,557 |
||
Suppliers |
(512,834) |
(372,431) |
||
Sectoral Financial Liabilities |
241,018 |
86,046 |
||
Accounts Payable - CDE |
(24,948) |
(51,304) |
||
Interest on Debts and Debentures Paid |
(196,360) |
(1,041,953) |
||
Income Tax and Social Contribution Paid |
(300,722) |
(947,228) |
||
Others |
(141,282) |
268,100 |
||
(342,417) |
467,973 |
|||
Total Operating Activities |
1,047,831 |
4,938,042 |
||
Investment Activities |
||||
Purchases of Contract Asset, Property, Plant and Equipment and Intangible Assets |
(516,287) |
(2,333,168) |
||
Others |
832,289 |
3,945 |
||
Total Investment Activities |
316,002 |
(2,329,223) |
||
Financing Activities |
||||
Capital Increase of Noncontrolling Shareholder |
- |
3,622,305 |
||
Capital increase in existing equity interest |
- |
(4,107,555) |
||
Loans and Debentures |
2,866,989 |
7,323,963 |
||
Principal Amortization of Loans and Debentures, Net of Derivatives |
(595,267) |
(6,791,157) |
||
Dividend and Interest on Equity Paid |
(3,211) |
(527,680) |
||
Others |
(2) |
10 |
||
Total Financing Activities |
2,268,509 |
(480,114) |
||
Cash Flow Generation |
3,632,342 |
2,128,706 |
||
Ending Balance - 12/31/2019 |
|
5,569,506 |
|
5,569,516 |
43
(R$ thousands)
Conventional Generation |
|||
|
1Q20 |
1Q19 |
Var. |
OPERATING REVENUE |
|
|
|
Eletricity Sales to Distributors |
309,874 |
288,273 |
7.5% |
Revenue from construction of concession infrastructure |
7,825 |
55 |
- |
Other Operating Revenues |
14,483 |
12,488 |
16.0% |
|
332,182 |
300,816 |
10.4% |
|
|
|
|
DEDUCTIONS FROM OPERATING REVENUE |
(32,237) |
(31,356) |
2.8% |
NET OPERATING REVENUE |
299,945 |
269,460 |
11.3% |
|
|
|
|
COST OF ELETRIC ENERGY SERVICES |
|
|
|
Eletricity Purchased for Resale |
(21,960) |
(22,411) |
-2.0% |
Eletricity Network Usage Charges |
(7,251) |
(6,789) |
6.8% |
|
(29,211) |
(29,200) |
0.0% |
OPERATING COSTS AND EXPENSES |
|
|
|
Personnel |
(10,960) |
(7,879) |
39.1% |
Material |
(824) |
(889) |
-7.3% |
Outsourced Services |
(6,088) |
(5,637) |
8.0% |
Other Operating Costs/Expenses |
(7,119) |
(7,360) |
-3.3% |
Costs of infrastructure construction |
(7,112) |
(53) |
- |
Employee Pension Plans |
(869) |
(473) |
83.8% |
Depreciation and Amortization |
(27,272) |
(27,211) |
0.2% |
Amortization of Concession's Intangible |
(2,492) |
(2,492) |
0.0% |
|
(62,735) |
(51,992) |
20.7% |
|
|
|
|
EBITDA1 |
295,650 |
303,890 |
-2.7% |
|
|
|
|
EBIT |
207,999 |
188,267 |
10.5% |
|
|
|
|
FINANCIAL INCOME (EXPENSE) |
|
|
|
Financial Income |
11,459 |
10,087 |
13.6% |
Financial Expenses |
(38,588) |
(54,127) |
-28.7% |
|
(27,130) |
(44,040) |
-38.4% |
|
|
|
|
EQUITY ACCOUNTING |
|
|
|
Equity Accounting |
85,305 |
85,920 |
-0.7% |
Assets Surplus Value Amortization |
(145) |
(145) |
0.0% |
|
85,160 |
85,775 |
-0.7% |
|
|
|
|
INCOME BEFORE TAXES ON INCOME |
266,029 |
230,003 |
15.7% |
|
|
|
|
Social Contribution |
(15,446) |
(12,113) |
- |
Income Tax |
(42,677) |
(33,521) |
- |
|
|||
NET INCOME |
207,907 |
184,369 |
12.8% |
Note:
(1) EBITDA (IFRS) is calculated from the sum of net income, taxes, financial result and depreciation/amortization, as CVM Instruction no. 527/12.
44
(R$ thousands)
Consolidated |
||||
|
|
1Q20 |
1Q19 |
Variation |
OPERATING REVENUES |
|
|||
Electricity Sales to Final Customers |
|
6,188 |
5,824 |
6.3% |
Electricity Sales to Distributors |
|
401,788 |
344,976 |
16.5% |
Other Operating Revenues |
|
2,122 |
2,811 |
-24.5% |
|
410,098 |
353,611 |
16.0% |
|
|
||||
DEDUCTIONS FROM OPERATING REVENUES |
|
(25,556) |
(19,422) |
31.6% |
NET OPERATING REVENUES |
|
384,542 |
334,189 |
15.1% |
|
||||
COST OF ELECTRIC ENERGY SERVICES |
|
|||
Electricity Purchased for Resale |
|
(46,429) |
(29,243) |
58.8% |
Electricity Network Usage Charges |
|
(25,664) |
(24,027) |
6.8% |
|
(72,093) |
(53,271) |
35.3% |
|
OPERATING COSTS AND EXPENSES |
|
|||
Personnel |
|
(25,950) |
(26,374) |
-1.6% |
Material |
|
(8,138) |
(4,185) |
94.4% |
Outsourced Services |
|
(45,260) |
(45,471) |
-0.5% |
Other Operating Costs/Expenses |
|
(10,403) |
(12,847) |
-19.0% |
Depreciation and Amortization |
|
(122,850) |
(120,774) |
1.7% |
Amortization of Concession's Intangible |
|
(39,807) |
(39,807) |
0.0% |
|
(252,408) |
(249,458) |
1.2% |
|
|
||||
EBITDA1 |
|
222,697 |
192,040 |
16.0% |
|
||||
INCOME FROM ELECTRIC ENERGY SERVICE |
|
60,041 |
31,460 |
90.8% |
|
||||
FINANCIAL REVENUES (EXPENSES) |
|
|||
Financial Revenues |
|
27,793 |
48,590 |
-42.8% |
Financial Expenses |
|
(100,502) |
(160,296) |
-37.3% |
|
(72,709) |
(111,706) |
-34.9% |
|
|
||||
INCOME BEFORE TAXES ON INCOME |
|
(12,668) |
(80,246) |
-84.2% |
|
||||
Social Contribution |
|
(6,178) |
(4,278) |
44.4% |
Income Tax |
(10,636) |
(8,499) |
25.1% |
|
|
||||
NET INCOME |
|
(29,482) |
(93,023) |
-68.3% |
Note:
(1) EBITDA is calculated from the sum of net income, taxes, financial result and depreciation/amortization, according to CVM Instruction no. 527/12.
45
(R$ thousand)
Consolidated |
||||
|
|
1Q20 |
1Q19 |
Variation |
OPERATING REVENUE |
||||
Electricity Sales to Final Customers |
7,599,057 |
7,506,525 |
1.2% |
|
Electricity Sales to Distributors |
411,613 |
560,114 |
-26.5% |
|
Revenue from building the infrastructure |
487,979 |
415,159 |
17.5% |
|
Adjustments to the concession´s financial asset |
138,572 |
64,491 |
114.9% |
|
Sectoral financial assets and liabilities |
(463,343) |
(323,880) |
43.1% |
|
Other Operating Revenues |
1,375,424 |
1,223,786 |
12.4% |
|
|
9,549,301 |
9,446,194 |
1.1% |
|
|
|
|
|
|
Deductions From Operating Revenue |
(3,446,798) |
(3,509,968) |
-1.8% |
|
NET OPERATING REVENUE |
6,102,502 |
5,936,226 |
2.8% |
|
|
||||
COST OF ELECTRIC ENERGY SERVICES |
||||
Electricity Purchased for Resale |
(3,176,136) |
(3,370,234) |
-5.8% |
|
Electricity Network Usage Charges |
(611,888) |
(506,967) |
20.7% |
|
|
(3,788,024) |
(3,877,202) |
-2.3% |
|
OPERATING COSTS AND EXPENSES |
|
|||
Personnel |
|
(228,908) |
(226,346) |
1.1% |
Material |
|
(44,825) |
(45,710) |
-1.9% |
Outsourced Services |
|
(200,204) |
(206,688) |
-3.1% |
Other Operating Costs/Expenses |
|
(171,189) |
(157,859) |
8.4% |
Allowance for Doubtful Accounts |
|
(57,894) |
(68,124) |
-15.0% |
Legal and Judicial Expenses |
|
(33,489) |
(31,036) |
7.9% |
Others |
|
(79,806) |
(58,700) |
36.0% |
Cost of building the infrastructure |
|
(487,979) |
(415,159) |
17.5% |
Employee Pension Plans |
|
(44,571) |
(27,678) |
61.0% |
Depreciation and Amortization |
|
(196,753) |
(177,871) |
10.6% |
Amortization of Concession's Intangible |
|
(14,133) |
(14,133) |
0.0% |
|
(1,388,562) |
(1,271,444) |
9.2% |
|
|
||||
EBITDA1 |
|
1,136,803 |
979,585 |
16.0% |
|
||||
EBIT |
|
925,917 |
787,581 |
17.6% |
|
||||
FINANCIAL INCOME (EXPENSE) |
|
|||
Financial Income |
|
387,632 |
145,176 |
167.0% |
Financial Expenses |
|
(181,629) |
(204,707) |
-11.3% |
Interest on Equity |
|
|||
|
206,004 |
(59,531) |
- |
|
|
||||
INCOME BEFORE TAXES ON INCOME |
|
1,131,920 |
728,049 |
55.5% |
|
||||
Social Contribution |
|
(106,749) |
(70,451) |
51.5% |
Income Tax |
|
(296,867) |
(192,518) |
54.2% |
|
|
|
|
|
NET INCOME |
|
728,305 |
465,081 |
56.6% |
Note:
(1) EBITDA (IFRS) is calculated from the sum of net income, taxes, financial result and depreciation/amortization, as CVM Instruction no. 527/12.
46
(R$ thousand)
CPFL PAULISTA |
|||
|
1Q20 |
1Q19 |
Var. |
Gross Operating Revenue |
4,075,927 |
3,982,393 |
2.3% |
Net Operating Revenue |
2,636,237 |
2,525,566 |
4.4% |
Cost of Electric Power |
(1,705,045) |
(1,701,886) |
0.2% |
Operating Costs & Expenses |
(544,585) |
(512,970) |
6.2% |
EBIT |
386,607 |
310,710 |
24.4% |
EBITDA(1) |
457,138 |
374,250 |
22.1% |
Financial Income (Expense) |
91,627 |
(18,649) |
- |
Income Before Taxes |
478,234 |
292,061 |
63.7% |
Net Income |
308,659 |
187,465 |
64.6% |
CPFL PIRATININGA |
|||
|
1Q20 |
1Q19 |
Var. |
Gross Operating Revenue |
1,703,100 |
1,792,358 |
-5.0% |
Net Operating Revenue |
1,093,384 |
1,097,619 |
-0.4% |
Cost of Electric Power |
(738,289) |
(760,342) |
-2.9% |
Operating Costs & Expenses |
(198,597) |
(221,127) |
-10.2% |
EBIT |
156,498 |
116,151 |
34.7% |
EBITDA(1) |
185,022 |
143,060 |
29.3% |
Financial Income (Expense) |
46,553 |
(9,948) |
- |
Income Before Taxes |
203,051 |
106,203 |
91.2% |
Net Income |
131,154 |
67,491 |
94.3% |
RGE |
|||
|
1Q20 |
1Q19 |
Var. |
Gross Operating Revenue |
3,334,884 |
3,254,520 |
2.5% |
Net Operating Revenue |
2,068,802 |
2,000,662 |
3.4% |
Cost of Electric Power |
(1,175,253) |
(1,245,620) |
-5.6% |
Operating Costs & Expenses |
(554,360) |
(462,376) |
19.9% |
EBIT |
339,189 |
292,665 |
15.9% |
EBITDA(1) |
437,374 |
382,181 |
14.4% |
Financial Income (Expense) |
62,424 |
(27,594) |
- |
Income Before Taxes |
401,614 |
265,071 |
51.5% |
Net Income |
257,339 |
168,303 |
52.9% |
CPFL SANTA CRUZ |
|||
|
1Q20 |
1Q19 |
Var. |
Gross Operating Revenue |
435,389 |
416,922 |
4.4% |
Net Operating Revenue |
304,078 |
312,379 |
-2.7% |
Cost of Electric Power |
(169,437) |
(169,354) |
0.0% |
Operating Costs & Expenses |
(91,019) |
(74,971) |
21.4% |
EBIT |
43,623 |
68,055 |
-35.9% |
EBITDA(1) |
57,268 |
80,094 |
-28.5% |
Financial Income (Expense) |
5,399 |
(3,340) |
- |
Income Before Taxes |
49,022 |
64,714 |
-24.2% |
Net Income |
31,152 |
41,823 |
-25.5% |
Note:
(1) EBITDA (IFRS) is calculated from the sum of net income, taxes, financial result and depreciation/amortization, as CVM Instruction no. 527/12.
47
(In GWh)
48
(in GWh)
49
Energy distribution |
Company Type |
Equity Interest |
Location (State) |
Number of municipalities |
Approximate number of consumers
|
Concession term |
End of the concession |
Companhia Paulista de Força e Luz ("CPFL Paulista") |
Publicly-quoted corporation |
Direct
|
Countryside of São Paulo |
234 |
4,605 |
30 years |
November 2027 |
Companhia Piratininga de Força e Luz ("CPFL Piratininga") |
Publicly-quoted corporation |
Direct
|
Countryside and seaside of São Paulo |
27 |
1,797 |
30 years |
October 2028 |
RGE Sul Distribuidora de Energia S.A. ("RGE") (a) |
Publicly-quoted corporation |
Direct and Indirect
|
Countryside of Rio Grande do Sul |
381 |
2,932 |
30 years |
November 2027 |
Companhia Jaguari de Energia ("CPFL Santa Cruz") |
Private corporation |
Direct
|
Countryside of São Paulo, Paraná and Minas Gerais |
45 |
468 |
30 years |
July 2045 |
Note:
(a) On December 31, 2018, was approved the grouping of the concessions of the distribution companies RGE Sul Distribuidora de Energia S.A. (“RGE Sul”) and Rio Grande Energia S.A. (“RGE”), considering RGE Sul as the Merging Company and RGE as the Merged Company;
Energy generation (conventional and renewable sources) |
Company Type |
Equity Interest |
Location (State) |
Number of plants / type of energy |
Installed capacity |
|
Total |
CPFL participation |
|||||
CPFL Geração de Energia S.A. ("CPFL Geração") |
Publicly-quoted corporation |
Direct
|
São Paulo and Goiás |
3 Hydroelectric (b) |
1,295 |
678 |
CERAN - Companhia Energética Rio das Antas ("CERAN") |
Private corporation |
Indirect
|
Rio Grande do Sul |
3 Hydroelectric |
360 |
234 |
Foz do Chapecó Energia S.A. ("Foz do Chapecó") |
Private corporation |
Indirect
|
Santa Catarina and
|
1 Hydroelectric |
855 |
436 |
Campos Novos Energia S.A. ("ENERCAN") |
Private corporation |
Indirect
|
Santa Catarina |
1 Hydroelectric |
880 |
429 |
BAESA - Energética Barra Grande S.A. ("BAESA") |
Private corporation |
Indirect
|
Santa Catarina and
|
1 Hydroelectric |
690 |
173 |
Centrais Elétricas da Paraíba S.A. ("EPASA") |
Private corporation |
Indirect
|
Paraíba |
2 Thermoelectric |
342 |
182 |
Paulista Lajeado Energia S.A. ("Paulista Lajeado") |
Private corporation |
Indirect
|
Tocantins |
1 Hydroelectric |
903 |
38 |
CPFL Energias Renováveis S.A. ("CPFL Renováveis") |
Publicly-quoted corporation |
Direct and Indirect
|
See chapter 2.2.2 |
See chapter 2.2.2 |
See chapter 2.2.2 |
See chapter 2.2.2 |
CPFL Centrais Geradoras Ltda. ("CPFL Centrais Geradoras") |
Limited company |
Direct
|
São Paulo and Minas Gerais |
6 MHPPs |
4 |
4 |
Transmission |
Company Type |
Core activity |
Equity Interest |
|||
CPFL Transmissão Piracicaba S.A. ("CPFL Piracicaba") |
Private corporation |
Electric energy transmission services |
Indirect 100% |
|||
CPFL Transmissão Morro Agudo S.A. ("CPFL Morro Agudo") |
Private corporation |
Electric energy transmission services |
Indirect 100% |
|||
CPFL Transmissão Maracanaú S.A. ("CPFL Maracanaú") |
Private corporation |
Electric energy transmission services |
Indirect 100% |
|||
CPFL Transmissão Sul I S.A. ("CPFL Sul I") |
Private corporation |
Electric energy transmission services |
Indirect 100% |
|||
CPFL Transmissão Sul II S.A. ("CPFL Sul II") |
Private corporation |
Electric energy transmission services |
Indirect 100% |
Notes:
(b) CPFL Geração holds 51.54% of the assured power and power of the Serra da Mesa HPP, whose concession belongs to Furnas. The Cariobinha HPP and the Carioba TPP projects are deactivated pending the position of the Ministry of Mines and Energy on the anticipated closure of its concession and are not included in the table;
(c) The joint venture Chapecoense fully consolidates the interim financial statements of its direct subsidiary, Foz de Chapecó;
(d) Paulista Lajeado has a 7% participation in the installed power of Investco S.A. (5.94% share of its capital).
50
Energy commercialization |
Company Type |
Core activity |
Equity Interest |
CPFL Comercialização Brasil S.A. ("CPFL Brasil") |
Private corporation |
Energy commercialization |
Direct
|
Clion Assessoria e Comercialização de Energia Elétrica Ltda. ("CPFL Meridional") |
Limited company |
Commercialization and provision of energy services |
Indirect
|
CPFL Comercialização Cone Sul S.A. ("CPFL Cone Sul") |
Private corporation |
Energy commercialization |
Indirect
|
CPFL Planalto Ltda. ("CPFL Planalto") |
Limited company |
Energy commercialization |
Direct
|
CPFL Brasil Varejista S.A. ("CPFL Brasil Varejista") |
Private corporation |
Energy commercialization |
Indirect
|
Services |
Company Type |
Core activity |
Equity Interest |
CPFL Serviços, Equipamentos, Industria e Comércio S.A. ("CPFL Serviços") |
Private corporation |
Manufacturing, commercialization, rental and maintenance of electro-mechanical equipment and service provision |
Direct
|
Nect Serviços Administrativos de Infraestrutura Ltda ("CPFL Infra") (g) |
Limited company |
Infrastructure and Fleet Services |
Direct
|
Nect Servicos Administrativos de Recursos Humanos Ltda ("CPFL Pessoas") (g) |
Limited company |
Human Resources Services |
Direct
|
Nect Servicos Administrativos Financeiros Ltda ("CPFL Finanças") (g) |
Limited company |
Financial services |
Direct
|
Nect Servicos Adm de Suprimentos e Logistica Ltda ("CPFL Supre") (g) |
Limited company |
Supply & Logistics Services |
Direct
|
CPFL Atende Centro de Contatos e Atendimento Ltda. ("CPFL Atende") |
Limited company |
Provision of telephone answering services |
Direct
|
CPFL Total Serviços Administrativos Ltda. ("CPFL Total") |
Limited company |
Billing and collection services |
Direct
|
CPFL Eficiência Energética S.A. ("CPFL Eficiência") |
Private corporation |
Management in Energy Efficiency |
Direct
|
TI Nect Serviços de Informática Ltda. ("Authi") |
Limited company |
IT services |
Direct
|
CPFL GD S.A. ("CPFL GD") |
Private corporation |
Electric energy generation services |
Indirect
|
51
Others |
Company Type |
Core activity |
Equity Interest |
CPFL Jaguari de Geração de Energia Ltda. ("Jaguari Geração") |
Limited company |
Venture capital company |
Direct
|
Chapecoense Geração S.A. ("Chapecoense") |
Private corporation |
Venture capital company |
Indirect
|
Sul Geradora Participações S.A. ("Sul Geradora") |
Private corporation |
Venture capital company |
Indirect
|
CPFL Telecom S.A. ("CPFL Telecom") |
Limited company |
Telecommunication services |
Direct
|
52
Note: in accordance with financial covenants calculation in cases of assets acquired by the Company.
53
CPFL ENERGIA S.A.
|
||
|
By: |
/S/ YueHui Pan
|
Name:
Title: |
YueHui Pan
Chief Financial Officer and Head of Investor Relations |
This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates of future economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.
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