EDP Brasil reports EBITDA of R$448.1 million in 2Q16 | EDP Brasil

EDP Brasil, a company engaged in energy generation, trading, services and supply, has reported an EBITDA (earnings before interest, taxes, depreciation, and amortization) of R$448.1 million in the second quarter of this year.

Compared to R$1.2 billion in the same period of the previous year, these figures represent a decrease of 63.3%, when there was a positive effect of R$884.7 million resulting from the accounting gain on the acquisition of the remaining 50% of PecŽm I TPP. Disregarding this non-recurring impact on the previous year and the accounting of the generating unit in both periods, the EBITDA has increased by 11% in 2Q16.

"When we look at the numbers on a comparable basis, disregarding the effects of PecŽm on the balance sheet, we can observe a positive evolution given the current market context," says EDP Brasil CEO Miguel Setas.

In the second quarter, the company net income amounted to R$97.8 million, whereas net operating revenues, excluding construction revenues, stood at R$2.0 billion. Considering the accumulated results in the first six months of 2016, the company has accumulated an EBITDA of R$1.3 billion and net profits of R$399.9 million. Net operating revenues were R$4.1 billion.

In the period ranging from April to June there was a capital increase of R$1.5 billion resulting from the issuance of new shares. Part of the amount was allocated to debt payments, resulting in a 30.3% net debt drop, from R$4.9 billion to R$3.4 billion. "The improvement of our capital structure adequately positions us for the present market context," Miguel Setas points out. The Net Debt/EBITDA ratio, which represents the company payment capacity, has improved from 1.8 at the end of June 2015 to 1.3 in the same month this year.

*Generation doubles EBITDA

The main contribution to the second quarter EBITDA comes from the generation area, which has increased from R$183.3 million in 2Q15 to R$368.4 million in the same period of this year, a 101% growth. Generation has also reversed losses amounting to R$13.5 million in the same period last year to a R$137.8 million net income in the second quarter of this year.

This performance improvement is mostly due to two factors: PecŽm full accounting, starting in mid-May 2015, and the improvement of the hydrological scenario, confirmed by the GSF average increase to 89.9% in the second quarter and the drop in PLD (Settlement Price of Differences) values.

Trading and Supply results in the second quarter were impacted by the market downturn and low-price context. Against this backdrop, the Supply area reported an EBITDA of R$114.1 million and net income of R$30.8 million. As for Trading, the EBITDA and net income had negative results of R$9.4 million and R$12.9 million, respectively.

Plant brought forward by eight months

In line with one of the company strategic mainstays - commitment to superior execution - the first turbine of the Cachoeira Caldeir‹o HPP, located in the state of Amap‡, started operating commercially in May, approximately eight months before schedule. The second unit started operating in June, and the third is in its final testing stages. Thus, the plant started generating revenue in the second quarter, reporting revenues of R$3.6 million.

The construction of the S‹o Manoel HPP, a power plant between the states of Mato Grosso and Par‡, is completed by 64.4%. Commercial operations are expected to start in May 2018.