ENGIE Brasil Energia reports third quarter 2020 earnings of R$ 490 million
ENGIE Brasil Energia reported a net operating revenue of R$ 3.208 billion in the third quarter 2020, a growth of 28.7% (R$ 714.7 million) compared with the amount recorded in the same period for 2019. In the energy generation and sales segment, the increase in revenue reflected a 3.8% higher sales price, an improved result for short-term operations conducted across the CCEE (Electric Energy Trade Board) and thirdly energy exports. These factors were partially attenuated by reduced sales volume, mainly, due to lower consumption by clients. In the transmission segment, revenue recorded a significant increase due to the application of the specific accounting rule involving the construction of transmission assets in the light of progress of work on the Gralha Azul and Novo Estado transmission systems
“In the third quarter of 2020, ENGIE Brasil Energia continued apace with its operations, reaping the rewards of business diverisifcation, without however losing sight of concern for the impacts of the Covid-19 pandemic which is still having having repercussions on the world economy” Eduardo Sattamini, the Company’s Chief Executive and Investor Relations Officer points out.
Ebitda reported R$ 1.432 billion in 3Q20, a reduction of 9.4% (R$ 148.6 million) compared with 3Q19, driven in large part by a non-recurring gain of R$ 321 million booked to the accounts in the third quarter of 2019. Excluding this gain, EBITDA would have increased by R$ 172 million, that is a 13.7% rise. Net income reached R$ 490 million in the third quarter of 2020 (R$ 0.6002/share), 34% (R$ 252.7 million) down on the same quarter in 2019, again in part an effect of the non-recurring item mentioned above of R$ 211.8 million. Excluding this effect, net income would have been R$ 41 million lower. This decline was due to the variation in monetary restatement on concessions payable, in turn a reflection of the variation in the IGPM of 9.3% in 3Q20.
The average contract selling price, net of tax on revenue and from the trading operations, was R$ 196.5/MWh in the period, 3.8% higher than reported for 3Q19. Price increases were largely driven by the updating of monetary restatement on existing agreements and the effect of favorable energy export prices in 3Q20.
“Energy volumes sold in 3Q20 posted a reduction of 4.3% compared with the same period in 2019, the consequence of the reduction in energy consumption in the light of the Covid-19 outbreak. When comparing 2Q20, energy sales rose by 6.9%, underscoring the tendency towards a market recovery from the impacts of the pandemic ”, says Sattamini.
Electric enregy output from the plants operated by ENGIE Brasil Energia was 12,274 GWh (5,559 average MW) from July to September 2020, a 6.7% increase in relation to the same time interval in 2019. The increase in total generation from the hydroelectric plants is due partially to more favorable meteorological conditions in the hydrographic basins where the Company’s plants are sited with a greater impact coming from the southern subsystem in addition to the full resumption of total load in the National Interconnected System (SIN) following the peak of the Covid-19 sanitary crisis.
Investments
ENGIE Brasil Energia’s investments amounted to R$ 1.147 billion from July to September 2020, of which R$ 327.2 million relates to the acquisition of a corporate stake in Transportadora Associada de Gás S.A. (TAG), and R$ 797.7 million allocated to the construction of the new projects: R$ 343.3 million to the Novo Estado Transmissora de Energia transmission line, R$ 299.6 million to the Gralha Azul Transmission Line with a further R$ 136.5 million expended on the Campo Largo Wind Complex– Phase II, and R$ 17.3 million injected into the Pampa Sul Thermoelectric Plant.
Other 3rd quarter highlights
The indirect subsidiaries, Novo Estado Participações S.A. (NEP) and Novo Estado Transmissora de Energia S.A. signed an Investment Agreement with Itaú Unibanco, via a NEP preferred share subscription of R$ 500 million for investments in transmission line construction in the states of Pará and Tocantins.
On September 8, the Law recognizing the right to compensation of the hydroelectric generators for the financial effects arising from exogenous factors which had worsened the effects of the GSF (hydrological risk) over the past few years. The final amounts of compensation involved have still to be published by the National Electric Energy Agency (Aneel).
ENGIE Brasil Energia, for the 11th time, was awarded the Transparency Trophy organized by Anefac, Fipecafi and Serasa Experian. The award evaluates transparency practices and quality of the financial statements. ENGIE was also elected champion in the best company in the energy sector category in the 2020 edition of the Época Negócios 360º year book.
The Company’s investment in efforts to tackle the effects of Covid-19 on society since the beginning of the pandemic has totaled R$ 6.2 million. The key initiatives were dedicated to the support of the “Stimulus 2020” Program, a movement which offers training and financial backing so that small entrepreneurs are able to maintain their activities during the pandemic. Support was also given to the BNDES’ “Saving Lives” campaign for providing help in the acquisition of materials, inputs and equipment for protecting the doctors, nurses and other healthcare professionals in hospitals. ENGIE also made donations to rest homes and hospitals as well as for acquisition of tests and basic basket of goods for the communities surrounding its operational assets.
ABOUT ENGIE
ENGIE is a global reference in low-carbon energy and services. With its 97,000 employees, its customers, partners and stakeholders, the Group is committed to accelerate the transition towards a carbon-neutral world, through reduced energy consumption and more environmentally-friendly solutions. Inspired by its purpose (“raison d’être”), ENGIE reconciles economic performance with a positive impact on people and the planet, building on its key businesses (gas, renewable energy, services) to offer competitive solutions to its customers. Turnover in 2022: 82.6 billion Euros.
In Brazil, ENGIE, leader in 100% renewable power generation in the country, operates in generation, commercialization and transmission of electric power, gas transport and energy solutions. The Company
has in the country an installed capacity of 12,5 GW, originated from renewable sources and with low GHG emissions, such as hydro, solar and biomass power plants, and windfarms.
With the acquisition of Transportadora Associada de Gás – TAG, ENGIE now also owns the largest natural gas transportation network in the country, at 4,500 km and transecting 10 states and 191 cities.
The Group has a complete portfolio of integrated solutions focused on reducing costs and improving the infrastructure for companies and cities, such as energy efficiency, public lighting, energy monitoring and management.
With 2,800 employees, ENGIE’s turnover in Brazil in 2023 was of R$ 11.7 billion. ENGIE trades on the B3 through its energy generation and trading company, ENGIE Brasil Energia, under the ticker EGIE3. In addition to being a B3 Novo Mercado component, the Company is one of the very few companies that have been listed in the Business Sustainability Index since its creation in 2005. In 2021, ENGIE Brasil Energia was included in the Carbon-Efficient Index (ICO2), made up of IBrX 100 companies that are most transparent in terms of GHG emissions reporting and how they are preparing for a low-carbon economy.
The company also received in May 2024 the certification Great Place to Work, a recognition which validates the continuous commitment of the company to create a positive and inclusive work environment for all.
The Group is listed on the Paris and Brussels stock exchanges (ENGI) and is represented in the main financial indices (CAC 40, Euronext 100, FTSE Euro 100, MSCI Europe) and non-financial indices (DJSI World, Euronext Vigeo Eiris – Europe 120/France 20, MSCI EMU ESG screened, MSCI EUROPE ESG Universal Select, Stoxx Europe 600 ESG-X).