EDP records net income of R$496 million in the first quarter of 2021 | EDP Brasil

EDP, a company that operates in all segments of the Brazilian electricity sector, recorded net income of R$496 million in the first quarter of 2021, an increase of 82.9% compared to the same period of the previous year. EBITDA (earnings before interest taxes, depreciation and amortization) was R$ 1 billion, an increase of 50.1% compared to the first months of 2020.

Even with the effects of the pandemic still evident, the Company dedicated efforts to mitigate its impacts and record the positive result. The period was marked by the beginning of João Marques da Cruz's term as CEO of EDP in Brazil. The executive has served as the Company's board member since 2015.

The Company announced a structured strategic plan with a 2021-2025 vision, which provides for an investment of R$ 10 billion in the Company's main operating segments in Brazil. In total, around 90% will be allocated to the Distribution and Solar Generation areas, being complemented by the Transmission segment.

“We live in a moment of transformation in the electricity sector, a big change, with new forms of energy production and market liberalization. To accompany this movement and lead the sector's energy transition, we are aligned with the EDP Group's global vision. The quarter's results are very good for a complicated year like 2021, which clearly shows the resilience of our company,” highlights João Marques da Cruz, president of EDP in Brazil.

Advances for the growth of the Solar portfolio

The first quarter marked the acquisition of AES Inova, an investment platform in distributed solar generation, with a total investment of R$177 million. With the operation, EDP expanded the size of its project portfolio by 50% and continued its growth strategy in the solar energy segment. The closing of the deal adds almost 34 MWp to EDP's portfolio through assets located in Rio Grande do Sul, São Paulo and Minas Gerais.

The Company also concluded in the period, the investment agreement for the acquisition of up to 40% of the voting capital of Blue Sol Participações S.A., through its subsidiary EDP Ventures Brasil S.A.

Transmission portfolio increase

The Company acquired, in the secondary market, Mata Grande Transmissora de Energia LTDA, from the IG group and, therefore, the concession contract for Lot 18, located in Maranhão and auctioned at the ANEEL Transmission Auction No. 002/2018, held in April 2018. The Company's investment was R$88.5 million, an amount that includes all construction costs. With this operation, EDP Brasil now has seven lots, totaling 1,554 kilometers of transmission lines in its portfolio.

Following with excellence the planning to complete works in advance, EDP registered the partial entry into operation of the Transmission Lot MA I (lot 7), in the state of Maranhão, 17 months in advance of the schedule of the National Agency of Electrical Energy (ANEEL). The company is following the construction of the other lots at an accelerated pace, reinforcing its commitment to early delivery and crystallization of value.

Expansion of substations and distribution networks

In the quarter, investments in Distribution totaled R$224.5 million, an increase of 34.3%, due to the reinforcement of investments in EDP's concession areas in Espírito Santo and São Paulo. With the objective of increasing efficiency through the use of technology, investments were made in expansion works (substations and distribution networks for new customer connections), network improvement (replacement of equipment), telecommunications and information technology, in addition to projects related to combating losses.

Completion of the Share Buyback Program

In order to optimize its capital structure, EDP has a consolidated leverage of 2.5x Net Debt/Adjusted EBITDA, disregarding the non-recurring effects of the last 12 months. Following its Dividend Policy, leverage levels should be around 2.5 to 3.0x, either through increased investment in the business or via share buyback. On April 6, the Company concluded its first Share Buyback Program. Over the past few months, EDP acquired 24.2 million shares, equivalent to 8.10% of the shares in circulation.

Fighting the second wave of the pandemic

Amidst the increase in the number of cases and the second wave of the pandemic that hit Brazil, the Company allocated an additional R$4 million through initiatives in the fields of health and fighting hunger in the states of São Paulo and Espírito Santo.

The first of them was the support to the Hospital das Clínicas of the Faculty of Medicine of USP (HCFMUSP) in hiring health professionals who are reinforcing the care provided to patients with Covid-19. For this, EDP joined forces with BTG Pactual bank, Cosan and Eurofarma to make it possible to hire 386 professionals, including doctors, nurses, physiotherapists and nursing assistants. This donation enabled the opening of 56 new ICU beds and 75 in the infirmary.

On another front, still in the State of São Paulo, EDP is supporting the Solidarity Food Program with the donation of 3,400 food goods baskets. Delivery to families took place in April. The program is a benefit of the Government of São Paulo, which serves extremely vulnerable families enrolled in the CadÚnico (Single Registry for Social Programs), with a per capita income of up to R$ 89.

In Espírito Santo, EDP worked together with the companies Suzano and Águia Branca, for the acquisition of 60 beds for semi-intensive treatment in public hospitals in the state. In addition to installation costs, the Company purchased all the equipment, which is owned by the Government. The initiative, coordinated by the Espírito Santo in Action business movement, delivered the beds to Greater Vitória and the city of São Mateus.