EDP sets record in Marketing and strengthens investments in distribution | EDP Brasil

São Paulo, February 28, 2018 - Adjusted Net Income of EDP, a company that operates in all segments of the energy chain, earned R$ 570 million in 2017, up 89.4% over that registered in 2016. EBITDA (earnings before taxes, taxes, depreciation and amortization) Adjusted, in turn, reported an increase of 21.7%, reaching R$ 2.1 billion.

In the fourth quarter, the Company Adjusted EBITDA totaled R$ 551,4 million, 37.9% more than in the same period in 2016. Profit Adjusted Net Income reached R$ 188.2 million, 380% higher year on year.

With regard to income, commercialization also contributed to the record figures. The volume of energy sold grew 37.2% in relation to the previous year, with an increase in the Gross Margin in the amount of R$ 141.7 million.

Last year, EDP also reached important milestones in the control of costs and the maintenance of manageable expenses. The annual balance presented a reduction of 0.4% in Personnel, Material, Provisions and Others (PMSO), below inflation.

"The year 2017 was marked by the expansion of our business to new geographies regions and new segments with the development of pioneer technologies. The results we have recorded are solid and lead us to to face the 2018 with optimism ", the president of EDP Brasil, Miguel Setas, estimates.

For this year, EDP expects investments of R$1.4 billion, an increase of 27.8% in relation to the same period. Of the total amount, R$ 630 million will be invested in the Group Distribution segment.

Reinforcement of distribution investments

EDP maintained its commitment to the quality of energy in the concession areas, investing about R$ 570 million in network improvements, a volume 18.3% higher than in 2016. Most of the resources were allocated to the works plan for lines and substations, in addition to a program to combat losses.

At the Company also invested in its recovery action related to defaulters, reporting a reduction of R$ 17.9 million in its Provision for Doubtful Accounts (PDD) year on year. The renegotiation of consumers, aiming at the recovery of customers and avoiding possible losses, and initiatives to improve billing were crucial to the outcome.

Recently, EDP signed a contract to acquire a stake in Celesc (Centrais Elétricas de Santa Catarina). At the conclusion of this transaction and the Voluntary Public Share Offering (OPA), the Company may reach 33.6% of the total capital of the distributor.

New profitable growth cycle

For EDP, 2017 represented the beginning of a new cycle of growth in operations, which expanded its geographical presence from nine to 12 Brazilian states. The biggest winner of the Transmission Sale organized by Aneel (National Agency of Electric Energy) in April, the Group committed to invest R$ 3.1 billion by 2023 in the construction of 1.3 thousand kilometers of lines and four substations in Santa Catarina, São Paulo, Minas Gerais, Espírito Santo and Maranhão.

In the state of Espírito Santo, the project is seven months ahead of the licensing schedule. In February of 2018, the Company obtained an Installation License and the works have already been started, further reducing by 10 months the construction schedule compared to the contractual term of August of 2020.

At the project is comprised of 113 kilometers of lines between Linhares and São Mateus and a 150 MVA substation in São Mateus. The total investment estimated for the deployment of the assets is R \ $ 116 million, with the generation of about 300 direct jobs in the peak period.

Top run

In a year marked by an adverse hydrological backdrop, EDP mitigated part of the risks related to the energy management of its hydroelectric plants. Predicting a worsening impact caused by the high prices of the Free Market, the Company adopted a strategy of expansion of its share of supply without fixed contracts, freeing part of its generated energy to cover any needs and to avoid possible losses. In addition, with the results of the supplier, the Company was able to reduce by R $ 627 million the effects of the challenging hydrological backdrop.

Another important achievement was attained at the UTE Pecém I, which registered improvements and had the highest annual Net Income in its history in the amount of R$ 74 million. Average plant availability reached a 92% historical high in 2017, surpassing the regulatory goal of 90%.

In the fourth quarter, similar to what was reached in the Santo Antônio do Jari and Cachoeira Caldeirão plants, there was also the entrance of the the first generating unit of the São Manoel HPP (a partnership between EDP, Furnas and CTG Brasil), anticipated in four months in relation to the contract signed at auction. In January of 2018, the second turbine started its commercial operation. The third unit is already being tested and the fourth is in the final stage of assembly.

Leadership in Sustainability and Innovation

EDP was a pioneer in one of its most innovative projects in the sector of Utilities in Brazil: the implementation of automation and robotization of administrative procedures. The Group anticipated having 40 robots by the end of 2017, but exceeded the goal and today has 46 systems that help internal activities and promote qualitative gains in efficiency. For 2018, the goal is to achieve more than 100 robotized processes.

Another highlight is the Company investment since 2015 in the "Culture Project", EDP engagement in Brazil rose for the third consecutive year to 84%, comparable to the 75% that represents the average of the best study sample groups. In addition, it was chosen for the second consecutive year as one of the 150 best companies to work for by Você SA magazine.

In addition, there is the commitment to socio-environmental responsibility. EDP, for the twelfth consecutive year, was selected to be a part of the 13th Corporate Sustainability Index portfolio (ISE) of B3, formerly BM & FBovespa, with a maximum score of five out of seven dimensions considered by the listing.

At the Company will continue to invest in culture, as it has already done with the recovery of the Museum of the Portuguese Language. The Company has expanded its support of language appreciation with the sponsorship of the International Literary Festival of Paraty - FLIP and the traveling exhibition "The Energy of the Portuguese Language. "