EDP registers a 70% increase in Net Income in the third quarter
EBITDA reached R$1.1 billion, an increase of 60.7% over the same period last year. Distribution and Transmission were highlights
EDP, a company that operates in all segments of the Brazilian electricity sector, registered a net income of R$ 510 million in the third quarter of the year, an increase of 70.3% compared to the same period of 2020. On the other hand, EBITDA (earnings before taxes, depreciation and amortization) reached R$ 1.1 billion, an increase of 60.7% over the same period of the previous year. In 2021, net income reached R$ 1.3 billion, an increase of 67.2% compared to the same period of the previous year. Accumulated EBITDA, in turn, totaled R$2.9 billion, an increase of 49.8% compared to the first nine months of 2020.
The Distribution and Transmission segments were the main highlights. Due to the recovery of economic activity and expansion in the number of customers, in the third quarter the volume of distributed energy increased by 4.2% compared to the same period in 2020. At the same time, the tariff adjustment process at EDP Espírito Santo resulted in a 9.75% increase in the average consumer tariff and in a 46% increase in Parcel B. At EDP São Paulo, in turn, the approved tariff adjustment promoted an increase of 12.4% in the average tariff for the consumer and a 32.6% increase in Parcel B. Given that this event occurred after the end of the third quarter, this last adjustment does not impact this quarter's results.
At Transmission, the projects in operation presented a Net RAP of R$45.8 million in the quarter and a regulatory EBITDA of R$39.8 million. In the year, these indicators reach R$ 89.9 million and R$ 74.7 million, respectively. Furthermore, in October, EDP implemented a successful asset rotation strategy. On October 14, the Company acquired the state-owned Celg-T for R$1.9 billion. Five days later, it announced the sale of three transmission projects: lots 24, 7 and 11, located in the states of Espírito Santo and Maranhão, respectively. As a result, the Company exchanged the 439 km of lines and three substations sold for 756 km of lines and 14 substations in Celg-T's portfolio, increasing its presence in the Transmission segment.
Also in line with its Business Plan, EDP approved the investment in its first large-scale solar energy project – the development of a photovoltaic plant with an installed capacity of 209 MW in Rio Grande do Norte. The project, carried out in partnership with EDP Renováveis, is already granted and connected to the transmission system and has a 15-year PPA (power purchase agreement) with EDP Comercializadora, which, in turn, has already allocated this energy in contracts with same duration. The plant is expected to start operating in 2024.
“With the investments made, we obtained significant results in Distribution. Regarding the recent transactions carried out with the market, we were able to anticipate and crystallize value through the divestment of the three lots sold and, even so, increase EDP Brasil's share in the Transmission segment, since we acquired CELG-T, which has four times as many substations and nearly twice as many kilometers as the lots we sell. It is an acquisition that marks the entry of EDP in the State of Goiás, the great breadbasket of Brazil", says João Marques da Cruz, CEO of EDP in Brazil. "Last, but not least, we approved EDP's first investment in the Solar utility scale segment, an important step in our proposal to replace hydro generation by solar, mitigating the effect of hydrological risk on our portfolio. These are important moves that, in just five months since the announcement of our strategic plan, demonstrate our commitment to creating additional value for our shareholders”, he adds.
European market and ESG
This month, EDP received authorization from the Latibex Board, a Latin American securities market linked to the Spanish stock exchange, for its shares to be traded on the European market. The Company's shares will be traded on Latibex from October 27th through the XENBR ticket. With this movement, the Company seeks to obtain greater exposure to foreign investors, something that can enable new forms of financing activities and contribute to the appreciation of shares. The Company's listing in the European market was possible thanks to its high standards of governance, in practice with the best international practices.
In this sense, EDP was named, also this month, as one of the most transparent companies in disclosing information on sustainability. The Company was selected to compose a select list of 14 organizations after a study carried out by the Transparency Observatory, an initiative of the Global Report Initiative (GRI) advisory board in Brazil. The choice took into account criteria such as disclosure of the sustainability report at an opportune time, evaluation by an independent institution and consistency of information in relation to what is disclosed in press releases or in the Reference Form sent to the Brazilian Securities and Exchange Commission (CVM).
Note: 1 Recurrent PMSO excludes B2C, Solar, Transmission, EDP Varejista, EDP Ventures, EDP GRID and Solutions. 2 Capex considers consolidated assets. 3 Balance of net debt regarding 09/30/2021 and 12/31/2020. Caixa considers availability, share and transferable securities regarding the financing of the transmission.
About EDP in Brazil
Present in the country for over 20 years, EDP is one of the largest private companies in the electricity sector operating throughout the value chain. With more than 10,000 direct and outsourced employees, the Company has businesses in Generation, Transmission, and Energy Services Solutions aimed at the B2B market, such as solar generation, electric mobility and the free energy market. 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 ESG, being on the B3 Corporate Sustainability Index (ISE) for 15 consecutive years.