EDP, a company that operates across all segments of the country’s electricity industry, registered a net profit of R$ 295.6 million for the first quarter of 2019, up 38% compared with the same period last year. The Company’s EBITDA (earnings before interest, taxes, depreciation and amortization) was R$ 705.6 million, a 9.4% increase on the first quarter of 2018.

Highlights include accelerated Transmission line works, such as the Espírito Santo unit delivered 20 months ahead of schedule and progress on work at units 11 (Maranhão) and 21 (Santa Catarina). Unit 07, also located in Maranhão, received a pre-construction license in April, while unit 18 (on the border between  Minas Gerais and São Paulo) is still awaiting licensing with construction works scheduled for the second half of the year.

“We are committed to reproducing the model of excellence we have implemented in the Generation in the Transmission segment as well, with early deliveries of three hydroelectric power plants several months ahead of schedule”, said Miguel Setas, President of EDP in Brazil.

Investments in 2019

This year, EDP expects to invest R$ 2.9 billion, twice the amount invested in 2018. R$ 2 billion will be allocated to Transmission works. Another R$ 600 million will be invested in the Distribution segment to continue achieving the best service quality indicators. Another R$ 100 million will be invested in solar power distribution projects, an area EDP is heavily investing in. Remaining funds will go to asset operation and maintenance.

Investments reached R$ 457.7 million this quarter, more than triple the company’s investments in the same period in 2018. R$ 271.7 million were invested in Transmission as works accelerated, particularly on the Santa Catarina (R$ 102.3 million) and São Paulo/Minas Gerais (R$ 106.9 million) lines. Distribution investments totaled R$ 162.2 million, a 55.1% increase over the first quarter of 2018.

Increase in distributed energy volumes

During this period, distributed energy volume rose 5.1% because of high temperatures. Losses figures improved and continue to fall as the company focuses on efforts to curb losses and invest in network expansion and improvements.

Improved Generation performance

At the Generation department announced net revenues of R$ 390.5 million. The 20.6% increase on the same quarter of last year was boosted by increased energy sales volumes, the result of more bilateral contracts with the company, as well as the seasonal and hedge (protection against price fluctuation) strategies.

In February, EDP’s Luís Eduardo Magalhães Hydroelectric Plant, also known as UHE Lajeado, was ranked as the best in Brazil from over 100 plants evaluated by the National Electrical Energy Agency (Aneel). The assessment looked at three phases: monitoring, remote inspection and on-site inspection. The power plant obtained a score of 99.55 in the overall power plant ranking after achieving a perfect score of 100 points in the Security, Environment, Operational Management and Maintenance Management categories.

Solar Power and Retail Market Growth

EDP Grid, which manages solar power distribution projects, recorded net revenues of R$ 13 million for the quarter, up 4.5%. The Company announced a project to build a solar power plant for Brametal, which owns one of the world’s largest hot-dip galvanized metal structure factories for power generation and transmission in Espírito Santo.  It will be the biggest solar power plant in the state, reducing CO₂ emissions by 186.93 tons, equivalent to planting 1,378 trees.  “Our investments in solar power distribution, smart grids and electrical mobility reflect our goal of driving change in the energy industry”.

At the retail market grew 8.8%. The number of customers increased 19.8% with the switch from the captive market to the free market.

Focus on innovation

EDP maintains its digital transformation ambitions, with 142 automated administrative processes. More than 70 thousand man hours were spent digitizing these processes, saving the equivalent of R$ 6 million annually.

O w, EDP will deploy its first robots using artificial intelligence - so-called third and fourth generation robots (equipped with advance analysis functions that can recommend the best decision in situations that are difficult to set parameters for).

Debt and Cost Controls

At the company continues to move ahead with its cost control plan, called Orçamento Base Zero (OBZ, or Zero Base Budget), currently in version 4.0. Since the OBZ began back in 2015, EDP has saved over R$ 260 million through efficiency and reduced personnel, material and third-party services costs.

As part of efforts to streamline its capital structure, EDP’s consolidated leverage reached a ratio of 2.1 x net debt/EBITDA by the end of the quarter, ignoring non-recurring events in the past 12 months. EDP’s improved credit rating, alongside lower interest rates, helped improve the company’s financial results.

Commitment to Brazilian heritage

O ne of the strategic aspects of EDP’s social campaigns is its focus on Portuguese-Brazilian culture. That is why the Company, the main sponsor of the Portuguese Language Museum restoration works, announced it had become master sponsor of the Ipiranga Museum renovation works during this first quarter of 2019. The company will invest R$ 12 million in the works, which are expected to take 30 months. The Museum is scheduled to reopen in 2022.

Main quarterly indicators

1 Excluding the following effects: Updates on indemnified financial assets (VNR) and Transmission IFRS accounting. 2 Capex includes consolidated assets 3 Net debt referring to 31/03/2019. Cash includes cash and banks, securities and collateral for transmission loans.

About EDP Brazil

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 Generation, Distribution, Transmission, Sales and Services. The company has six hydro power plants and one thermal power station that serve around 3.4 million people in the states of São 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.