EDP obtains the best result in its history for the third consecutive year | EDP Brasil

EDP, a company that operates in all segments of the Brazilian electricity sector, registered the best result in its history for the third consecutive year. The Company achieved Net Income of R$1.5 billion in 2020, an increase of 12.7% compared to 2019. EBITDA (earnings before taxes, taxes, depreciation and amortization) totaled R$3.4 billion, up 16% from the previous year. Considering only the fourth quarter, net income was R$700 million, an increase of 40.2% over the same period in 2019, and EBITDA reached R$1.4 billion, an increase of 60%.

The performance, which marks the end of Miguel Setas' term as CEO of EDP in Brazil and the beginning of his activities as Chairman of the Company's Board and member of the EDP Group's global Board, reflects the success of the strategy adopted in 2020 to mitigate the economic effects resulting from the pandemic – the so-called 3R Plan (React, Recover and Reformulate). This work involved, in the first phase, an agenda for the protection of employees, continuity of operation and assistance to society; the subsequent adoption of more than 50 revenue recovery measures; and, finally, the search for new business opportunities and alternatives in view of the new scenario. In 2020, the Company invested R$1.9 billion in the country, with an emphasis on the Distribution segment, which received R$752 million for improvements and expansion of the network – an increase of 16.2% compared to 2019. It was the third consecutive year that the Company's Capex in Brazil surpassed the R$1 billion mark, or about twice the historical average of EDP in previous years.

“We are very proud to end this seven-year cycle dedicated to the presidency of EDP in Brazil with a historic result. And we do so after a remarkable year, which required from the Company enormous capacity for planning, reaction and adaptation. Here I leave my deep thanks to the entire team and business partners who contributed to making this performance possible”, says Miguel Setas, chairman of the Board of Directors of EDP in Brazil.

Growth in Transmission

Despite restrictions on the movement of people and the temporary suspension of some work activities in 2020, EDP completed the works of its Lot 11 of power transmission lines, located in the state of Maranhão and 203 kilometers long. As a result, it anticipated the start of operation of the project by 12 months. The first stretch, the LT SE Coelho Neto/SE Chapadinha II, was already in commercial operation since January, 19 months ahead of the schedule of the National Agency of Electrical Energy (Aneel). 

And the Company continues to increase its share in the segment. Last week, EDP announced the signing of a contract to acquire in the secondary market Mata Grande Transmissora de Energia LTDA, from the IG group and, consequently, the concession contract for Lot 18, located in Maranhão. The investment is R$ 88.5 million, an amount that includes all the costs of carrying out the work. The project already has an installation license and is ready to build. With this operation, EDP Brasil now has seven lots, totaling 1,554 kilometers of transmission lines in its portfolio.

EDP has already invested R$3.3 billion in Transmission works and projects since 2016, representing 80% of total CAPEX execution. It will be R$ 4.1 billion by the end of 2021 for the construction of more than 1.5 thousand kilometers of lines and six substations in the states of Santa Catarina, Rio Grande do Sul, São Paulo, Minas Gerais, Maranhão and Espírito Santo.

New business

 In 2020, EDP completed nine Energy Solutions initiatives and ended the year with 65.3 MWp of solar energy in its portfolio – 34.5 MWp in projects already delivered to clients such as Banco do Brasil, TIM, Claro, and Johnson & Johnson, and 30.8 MWp in projects under development. In December, the Company signed an investment agreement in Blue Sol Participações S.A., with the objective of acquiring a stake of up to 40% in the company, which operates in the B2C photovoltaic solar generation segment, with a model that includes complete solutions from the conception of the project, equipment supply, installation and documentation procedures to enable the connection with the local energy concessionaire. Blue Sol has a network of 34 franchises spread across 16 states. With the completion of the deal, EDP seeks to achieve greater sales capillarity in the B2C solar energy segment.

 The Company's pioneering posture – reflected in actions such as the partnership with Embraer in researching the electric plane, and the inauguration of the first charging station for electric vehicles in Brazil – led EDP to be recognized last year as the most innovative company in the sector with the Valor Inovação Brasil award.

Leverage

Finally, EDP ended the year with consolidated leverage, excluding non-cash effects, at 2.4 times Net Debt/EBITDA, in line with the adjustment of its Dividend Policy and Capital Structure announced in the last quarter, which provides for payment minimum of R$1.00 per share and leverage between 2.5 and 3 times, with a minimum limit of 2 times. In addition, the Company proposed the payment of R$598.6 million in Dividends and Interest on Equity.

Fighting the pandemic

Even before the confirmation of the first Covid-19 case in Brazil, EDP put in place a contingency plan whose priorities were: protecting employees, ensuring the continuity of the operation and helping society. On the first and second fronts, as it provides an essential service, the Company implemented the home office for the entire administrative staff, but needed to keep professionals in the field such as electricians and meter readers for its energy distributors. To ensure their safety, these employees were decentralized to various operational bases throughout the concession area, with demands being sent by smartphone and radio. In the power generation plants, extraordinary measures were adopted, with the so-called operational isolation, in which the teams were divided and began to take turns between 15 days of work in confinement in accommodation at the plants or in nearby inns, and 15 days of rest in home.

On the aid to society front, EDP allocated more than R$ 10 million to the purchase of respirators and PPE for the public health network, the electrical works of field hospitals and the donation of 350 tons of food and hygiene kits personnel to needy communities, the elderly and indigenous peoples through the EDP Solidária Covid-19 notice, benefiting more than 400 thousand people in nine Brazilian states.  

After this reaction stage, EDP started the Results Recovery Plan, comprising 57 initiatives aimed at neutralizing the effects of the coronavirus crisis in its operations. These measures made it possible to recover a total of R$745 million.

ESG Schedule

Throughout 2020, EDP intensified its ESG commitments agenda. In June, it became one of 13 Brazilian companies adhering to the UN's Business Ambition for 1.5ºC – Our Only Future pact, through which it pledged to ensure that, by 2020, 100% of the energy it generates comes from renewable sources, making its contribution to the control of Global Warming. The Company was also the first in the energy sector in Latin America and a large company in Brazil to have its goal of reducing CO₂ emissions approved by Science Based Targets (SBTi), an initiative composed of composed by the international entities Carbon Disclosure Project (CDP), United Nations Global Compact, World Resources Institute (WRI) and World Wildlife Fund (WWF). Miguel Setas, in turn, became a spokesperson for the Brazil Network of the Global Compact for SDG 11 – Sustainable Cities and Communities.

In addition, through its Inclusion and Diversity Program, the Company signed a series of commitments. The Internship Program now has a racial equity goal, with 50% of the places reserved for black students, and the Company has committed to ensure that, by 2022, 50% of all new hires come from groups underrepresented in the overall workforce, there are 20% women in the leadership, and at least 30% women in the overall workforce.

In this sense, EDP takes a new and important step with the creation of an ESG vice-presidency, focused on reinforcing the integration of sustainability, social responsibility and governance guidelines into the business, increasing its representation in decision-making processes. “The creation of this chair signals the relevance that we dedicate to this agenda and demonstrates our commitment to building an increasingly sustainable company”, says Miguel Setas.

About EDP in Brazil

With over 20 years of experience, EDP is one of the largest private companies in the electricity sector operating throughout the value chain. The Company, which has more than 10,000 direct and outsourced employees, has six hydroelectric and one thermoelectric generation units, in addition to operating in Transmission, Commercialization and Energy Services. In Distribution, it serves about 3.5 million customers in São Paulo and Espírito Santo, in addition to being the main shareholder of Celesc, in Santa Catarina. In 2020, it was elected the most innovative company in the electricity sector by the Valor Inovação ranking, of the Valor Econômico newspaper, and is a reference in Governance and Sustainability, having been on the B3 Corporate Sustainability Index (ISE) for 15 consecutive years. Follow EDP at: Website | LinkedIn