EDP, a company that operates in all segments of the country’s electricity industry, posted record net profits of R$ 1.3 billion in 2018, a 108% increase compared with the same period in 2017. This is the Company’s best result after 23 years in Brazil. In 2018, the Company’s EBITDA (earnings before interest, taxes, depreciation and amortization) was R$ 2.768 billion, a 26.6% increase on 2017. EBITDA was R$ 847.3 million in the 4th quarter alone, up more than 50% compared with the same period the previous year. 

In 2018, EDP partnered with CTG Brasil and Furnas to begin operations at the São Manoel power plant, in Brazil’s Northern region, with the first turbines coming on line four months ahead of the regulatory deadline. At the end of the year, the Company concluded construction of Transmission lot 24, in Espírito Santo, 20 months ahead of schedule.

At the joint efforts by the Group’s Generating and Supplier units to protect the energy portfolio and minimize hydrological risks are also worthy of note, as are the company investments to tackle non-technical Distribution losses. The Company also consolidated the Energy Solution department, becoming a major player in an agreement with Banco do Brasil to build a 5.6 MWp solar power plant that will supply 88 of the bank’s branches in Minas Gerais with 100% renewable energy.

At the company’s results were also supported by record equity recycling for reinvestment in strategic segments after it concluded the sale of EDP Pequenas Centrais Hidroelétricas S.A. (EDP PCH) and the Costa Rica and Santa Fé SHPs, generating R$ 374.7 million in revenue. 

 “2018 was the beginning of a new phase for the Company, with faster growth supported by three new hydroelectric power plants and investments in the Energy Transmission and Distribution networks. EDP achieved its best ever results as the Brazilian economy starts out on its path to recovery”, said Miguel Setas, President of EDP.

Energy management efficiency

At the country’s hydrological outlook remains below historical records, directly influencing power plant performance across Brazil and leaving generators exposed to a hydrological risk of 81.6%, in line with previous years. As a result, EDP has been taking steps to protect its and mitigate the impacts of GSF (Generation Scaling Factor) and PLD (Liquidation Price Differences) since 2017.

At these initiatives include price rescheduling, which works like an insurance policy, where the premium is the reduction in energy prices; short-term hedging (which protects against major price fluctuations); and energy sales on the free market, which generated R$ 545 million in 2018, counteracting the effect of the Company’s hydrological risk.

Distribution and Transmission Investment

At the Company invested R$ 654.5 million in the Distribution segment in 2018, up 15.1% year on year. These funds were used to adjust the construction timetable as part of effort to tackle losses and expand and refurbish the electrical system.

This meant that for the first time in their history, both Distributors recording technical losses below regulatory guidelines. The Espírito Santo operation recorded its lowest losses in the past 16 years. These steps helped recover revenues of R$ 94.1 million in 2018.

R$ 153.8 million was invested in Transmission during the fourth quarter of 2018, concluding the Espírito Santo lot and advancing the timetable for the Santa Catarina lot. Total company investments in 2018 came to R$ 316.1 million.

Expanding into a new region

In 2018, the strategic decision to partner with Santa Catarina-based distributor Celesc was an important step forward. EDP purchased PREVI’s stake in the company and acquired blocks of preferred stock, becoming the company’s largest shareholder with a 23.56% interest. This decision marks another chapter for EDP’s history in Santa Catarina, where the group already owns the rights to build one Transmission lot in partnership with Celesc. 

Innovation and sustainability leadership

EDP has an ambitious digital transformation plan to become an industry pioneer in robotics, with 130 administrative business processes already roboticized. In 2018, the Company took its first step to support Brazil’s digital transformation, inaugurating the Digital Brazil Movement alongside other major Brazilian companies, as part of efforts to transform Brazil into a digital innovation and inclusion hub.

EDP is also a pioneer in the electrical mobility industry, where it partnered with BMW last July to build a corridor of electrical charging stations between São Paulo and Rio de Janeiro, enabling electrical cars to complete journeys between the two cities.

At the EDP Institute celebrated its 10th anniversary in 2018, addressing social issues that go beyond its operations and outside its concession areas, investing R$ 100 million in a variety of social projects that have helped 3 million people.

At the Institute’s flagship initiatives include promoting Brazilian and Portuguese heritage. This is why EDP is the largest sponsor of the Portuguese Language Museum refurbishment in São Paulo and recently became the first master sponsor of the renovation works at the Ipiranga Museum.

As a result of its focus on social and sustainable responsibilities, the Company was included on the B3 Business Sustainability Index (ISE) for the 13th consecutive year and was voted the Best Company in Brazil for Community Relations by the EXAME Sustainability Guide.

About EDP

EDP has over 20 years’ experience and is one of the biggest private-sector companies operating across the entire value chain. The Company has over 10,000 direct and indirect staff and is involved in Energy Transmission, Sales and Services. It also operates 6 hydro power plants and one thermal power station. Its Distribution area serves around 3.4 million customers in Sao Paulo and Espírito Santo. The Company recently acquired a majority stake in CELESC, from Santa Catarina. In Brazil, the company is noted for its Innovation, Governance and Sustainability and has been included in the B3 Business Sustainability Index (BSI) for 13 consecutive years.