Companhia Paranaense De Energia · BMFBOVESPA:CPLE3
Companhia Paranaense De Energia — Energy Co of Parana — Q4 2017 Earnings Presentation
80 slides from Companhia Paranaense De Energia's earnings presentation, Jun 26, 2018
Slide 1: 4Q17 Results Conference Call
4Q17 Results Conference Call 04.17.2018 — 10:00 a.m (Brasilia time) Telephone (+1516) 300 1066 Code: COPEL Growth of 4.8% in Copel Distribuicgao's grid market; Reduction of 5.1% in PMSO; Increase of 42.4% in electricity purchase costs; RS$270.5 million in provisions for litigation; RS2.5 billion of
Slide 2: 4Q17 Key Results and Indicators
4017 3017 4ai6 Var.%6 2017 2016 Var. % w @ @) (3) @ 6) (4/5) Net Operating Revenues (RS million) 39107) 3643.7] 32974 186] 140246| 13,1018 79 Operating Costs and Expenses (RS milion) 36181 3159.7) 3,396.1 65, 119849) 11,2793 63 Operating Income (R$ million) 109.0 3560 (241.0) -| 13929] 1,394.2 (0.1)
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Slide 4: Reversal of Provision for Estimated Losses with Impairment
* A mounts Reversal of Provision for Estimated Losses with Impairment In 4Q17, the amount of R$128.2 million was related to the reversal of provision for estimated losses with impairment of credit arising from the gas purchase agreement signed by the compagas with Petrobras, wich contains a clause f
Slide 5: Startup – Estreito – Fernão Dias TL
* A mounts Startup – Estreito – Fernão Dias TL On February 03, 2018, we’ve started the commercial operations of the Estreito - Fernão Dias transmission line (500 kV), project owned by SPE Cantareira (49% Copel GeT and 51% Celeo Redes). The line, which goes through the states of São Paulo and Minas G
Slide 6: 2017 Net Operating Revenue
* A mounts In the 2017, Copel's net operating revenue increased by 7.0%, mainly due to the result of sectorial financial assets and liabilities and the incresase of 18.7% in the revenue of electricity sales to distributors, mainly due to the registration of R$275.1 million in revenue at Copel Comerc
Slide 7: Also noteworthy are the following variations
Also noteworthy are the following variations: (i) the 754.4% increase in materials and supplies for power electricity due to the generation of 195.2 GWh by TPP Araucária; (ii) the 24.4% increase in charges for the main distribution and transmission grid, reflecting the higher costs for the use of th
Slide 8: Decrease in PMSO
(iii) the 5.1% decrease in PMSO (Personnel and management, pension and health plans, materials, third party services, provisions and reversals and others), excluding estimated losses, provisions and reversals, reflecting the lower costs with personnel and management, pension and health plans, third-
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Slide 10: 2017 Operating Costs and Expenses
* A mounts In 2017, operating costs and expenses totaled R$11,894.9 million (6.3% up). This result was mostly impacted by (a) the 31.6% increase in “electricity purchased for resale”, caused by the higher hydrological deficit (18.4% in 2017 and 11.8% in 2016) and the higher PLD (PLD médio de R$ 318,
Slide 11: 2.4 EBITDA
* A mounts 2.4 EBITDA In 4Q17, earnings before interest, taxes, depreciation and amortization reached R$521.7 million, 346.9% higher than the R$116.7 million reported in 4Q16. While in 2017, EBITDA reached R$2,873.0 million, 6.5% more than in the same period of 2016 (R$2,697.1 million). Excluding ex
Slide 12: 2.5 Financial Result
* A mounts 2.5 Financial Result In 4Q17, financial revenues totaled R$152.7 million, a 26.2% decrease over the R$207.0 million recorded in 4Q16, mainly due to judicial deposit update. The financial expenses totaled R$383.2 million, a 1.4% decrease over 4Q16, mainly due to the lower exchange variatio
Slide 13: 2.6 Consolidated Net Income
* A mounts 2.6 Consolidated Net Income In 4Q17, Copel recorded net income of R$133.3 million against a loss of R$108.4 million registered in the same period of 2016. In 2017, the net income was R$1,118.3 million, higher 27.9% from R$874.5 million accumulated in 2016. subject to rounding.
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Slide 16: Loans, financing and debentures maturities
Loans, financing and debentures maturities are presented below:
Slide 17: Endorsements and Guarantees
* A mounts Endorsements and Guarantees At the end of December 31, 2017, the Company had R$1,538.1 million in guarantees and endorsements, as shown below. subject to rounding.
Slide 18: Consolidated net debt and net debt/EBITDA
Copel’s consolidated net debt (loans, financing and debentures less cash and cash equivalents) and the net debt/EBITDA ratio are shown in the following chart:
Slide 19: Net Debt by Subsidiary
¹EBITDA 12 months. Net Debt by Subsidiary The following table shows the gross debt and net debt of the subsidiaries:
Slide 20: Lawsuits classified as possible losses
* A mounts The lawsuits classified as possible losses, as estimated by the Company and its controlled companies at the end 2017, totaled R$3,113.3 million, 21.6% higher than in December 2016 (R$2,559.9 million), distributed in lawsuits of the following natures: fiscal (R$858.1 million), regulatory (
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Slide 22: Personnel and administrators costs
Excluding the provisions with indemnities for the Incentive Dismissal Program, the costs with personnel and administrators increased by 0.8% (compared to 2.94% inflation of the last 12 months), reflecting the adjustment applied to salaries as of October 2017 and the organizational restructuring of C
Slide 23: Copel GeT 4Q17 EBITDA
Excluding non-recurring events, Copel GeT’s EBITDA decrease 24.5%, totaling R$313.0 million, mainly reflecting the higher cost of the electric energy purchased for resale (R$147.5 million in 4Q17 versus R$11.8 million in 4Q16) due to the lower GSF (69.3% in 4Q17 versus 88.3% in 4Q16). The 4Q17 net p
Slide 24: Copel GeT 2017 EBITDA and Copel Distribuição
* A mounts In 2017, Copel GeT recorded an EBITDA of R$1,632.7 million, a 19.5% decrease when compared to the same period of the previous year, mainly reflecting the non-recurring events related to the recognition of the RBSE reameasurement, which improved the result by R$809.7 million in 2016, the r
Slide 25: Copel Distribuição personnel costs
It should be noted that the costs with personnel and management decreased by 6.5%, mainly as a result of lower costs with compensation due to the salary policy applied as from October 2017, and the lower provision for indemnities is due to the Incentive Dismissal Plan. Up to December 31, 2017, there
Slide 26: Copel Distribuição 2017 EBITDA
In 2017, Copel Distribuição recorded an EBITDA of R$573.1 million, 5 times higher than 2016 (EBITDA of R$116.6 million). This performance was mainly affected by (i) the 3.4% increase in 2017 grid market, (ii) the average adjustment of 5.85% on the tariffs as of June 24, 2017, and (iii) the 15.81% re
Slide 27: 4.3 Copel Telecomunicações
* A mounts 4.3 Copel Telecomunicações Copel Telecom reported an EBITDA of R$23.9 million in 4Q17, a 2.5% decrease when compared to R$24.5 million verified in 4Q16. This result reflects higher costs with third-party services and advertising and marketing, partially offset by 13.6% growth in telecom r
Slide 28: Copel Telecom personnel costs
It should be noted that the costs with personnel and administrators decreased by 3.6% in 4Q17, mainly due to the salary policy applied as from October 2017 and the reduction of the staff resulting from the Incentive Dismissal Plan. Throughout 2017, 25 employees left the company, totaling an indemnit
Slide 29: Copel Telecom net profit and UEG Araucária
* A mounts The net profit totaled R$8.1 million, down 58.8% versus R$19.7 million in 4Q16, reflecting the higher cost with debt charges due to the higher balance of debentures. In 2017, Copel Telecom’s EBITDA reached R$133.7 million, a 13.4% decrease over 2016 performance, while the net profit decre
Slide 30: UEG Araucária adjustment and Accounting Information
It should be noted that on December 31, 2017 an adjustment was made to the balances of the result presented by UEG Araucária in 2016 and 2015, related to the provision registration in the amount of R$52.2 million and R$104.0 million respectively for devaluation of investment held in Multimarket Inve
Slide 31: 5. Investment Program
* A mounts 5. Investment Program The following chart shows the investment program carried in 2017 and schedule 2018: subject to rounding.
Slide 32: 6. Power Market and Tariffs
6. Power Market and Tariffs 6.1 Captive Market – Copel Distribuição Copel Distribuição’s captive market energy sales totaled 4,865 GWh in the 4Q17, which represents a reduction of 6.5%. This result was influenced by the reduction in consumption of industrial and commercial classes, mainly due to the
Slide 33: Notice to the Market reference
* A mounts For more details visit the Notice to the Market - IR 04/18 ( link ). subject to rounding.
Slide 34: Industrial consumption and electricity sales
The result was mainly due to the 5.4% increase in the total consumption of the industrial class in 4Q17, as a result of the improvement in industrial production in the state of Paraná, which closed 2017 with a growth of 4.4% compared to 2016. The sectors that contributed most to the increase in ener
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Slide 36: TPP Araucária activation
* A mounts In addition, in November 2017 the TPP Araucária was activated by the Operador Nacional do Sistema - ONS, and generated power energy for two weeks, totaling 195.2 GWh, while in 2016 the plant was not activated. subject to rounding. 1 This item presents a balance different from what was pub
Slide 37: Energy Flow - Copel
Energy Flow - Copel 2017 2016 Var. % Itaipu 5,934 5,958 (0.4) CCEAR Copel Geracdo e Transmissao 87 157 (44.6) CCEAR — Other 9,860 13,387 (26.3) CCEE (MCP) 215 * = Angra 1,023 1,026 (0.3) CCGF 7,271 7,553 (3.7) Proinfa 514 593 (13.3) Elejor S.A. 1,186 1,189 (0.3) Available Power 26,090 29,863 (12.6)
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Slide 39: Energy Flow – Copel Comercialização
Energy Flow – Copel Comercialização
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Slide 41: 6.6 Tariffs
6.6 Tariffs Sales to Distributors Average Tariff (CCEARs) – Copel Geração e Transmissão
Slide 42: Power Purchase Average Tariff – Copel Distribuição
* A mounts Power Purchase Average Tariff – Copel Distribuição subject to rounding.
Slide 43: Sales to Final Customers Average Tariff
Sales to Final Customers Average Tariff Copel Distribuição
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Slide 45: Shareholder structure
Thousand shares Shareholders ‘Common % Preferred "A" % Preferred "B" % TOTAL % State of Parané 85,029 58.6 : : : : 85,029 31.0 BNDESPAR 38,299 26.4 : : 27,282 213 65,581 24.0 Eletrobras 1,531 1a : : : : 1531 06 Free Floating 19,836 13.7 ” 23.4 100,965 7387 120,878 442 B3 18,692 129 7 23.4 68,879 537
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Slide 47: Share trading and performance in 2017
* A mounts From January to December 2017, Copel’s common shares (ON - CPLE3) and class B preferred shares (PNB - CPLE6) were traded in 100% of the trading sessions of the B3 S.A. - Brasil, Bolsa, Balcão (B3). The free float accounted for 45.0% of the Company’s capital. At the end of December 2017, t
Slide 48: 7.3 Dividends and Interest on Own Capital
7.3 Dividends and Interest on Own Capital The table below presents the payments of dividends and interest on own capital as of 2011:
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Slide 50: TPP Figueira and quota system plants
* A mounts On March 24, 2017 Copel GeT filed an agreement with Aneel with its intention to extend the granting of the TPP Figueira, noting, however, that it will sign the necessary contracts and/or additives only after knowing and accepting the contractual terms and the rules that will govern any pr
Slide 51: Rio dos Patos plant and Wind Farms Complex
Copel was designated as the interim operator of the Rio dos Patos plant (1.7 average MW of installed capacity and 1 average MW of assured power) after the final term of the concession, awaiting the MME's decision on ANEEL's recommendation for the extinction of the plant without the reversal of the a
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Slide 53: Interest in Wind Farms
Interest in Wind Farms Copel has 49% interest in the Voltalia São Miguel do Gostoso I Participações S.A. wind farm complex, in the State of Rio Grande do Norte. Whose energy was sold in the Fourth Reserve Energy Auction by under twenty-year contracts, with supply beginning in July, 2015, according t
Slide 54: São Miguel do Gostoso I Wind Complex
* A mounts On June 17, 2017, the four wind farms comprising the São Miguel do Gostoso I Wind Complex were connected to the National Interconnected System (SIN). The Complex was able to start its operations in June 2015, when the construction of the complex was completed. Since then, the complex has
Slide 55: Colíder Hydroelectric Power Plant
* A mounts Colíder Hydroelectric Power Plant On July 30, 2010, under Aneel New Energy Auction no. 003/2010, Copel GeT was awarded the concession to explore the Colíder HPP for a term of 35 years, commencing January 17, 2011, the signing date of MME - Colíder HPP Concession Agreement no. 001/11. The
Slide 56: Cutia wind farm under construction
* A mounts The largest Copel wind farm called Cutia is under construction, and is divided into two large complexes: subject to rounding.
Slide 57: Assets under Construction
* A mounts Assets under Construction Copel GeT is substantially increasing its share of the transmission segment through own investments and partnerships in SPCs. The projects have a joint total of 1,408 km of transmission lines and 4 substations and will generate APR of R$251.3 million of which ref
Slide 58: 8.3 Distribution
8.3 Distribution Concession agreement In December 2015, the Company signed the fifth amendment to the Public Electricity Distribution Concession Agreement no. 46/1999 of Copel Distribuição S.A., extending the concession term to July 7, 2045. The concession agreement imposes economic and financial ef
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Slide 60: Compact-Design Distribution Lines
* A mounts Compact-Design Distribution Lines Copel Distribuição has continued to implement compact-design distribution lines in urban areas with a high concentration of trees surrounding the distribution grids. This technology reduces the number of trees cut down or trimmed, and improves the quality
Slide 61: 8.4 Telecommunications
8.4 Telecommunications Copel Telecomunicações has an optical backbone, a high capacity intermunicipal transmission network, and the access, a customer service network. The access network can be multi-point (GPON) or point-to-point (conventional), thus connecting the customer to the network's transmi
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Slide 63: Sanepar Units Program
* A mounts On November 17, 2017, Copel requested the conversion of shares and for joining Sanepar’s Units Program, which occurred on November 21, 2017. The units held by Copel and Copel Energia are represented by one common share and four preferred shares issued by Sanepar. Copel, holder of 36,343,2
Slide 64: New hydro and wind project studies
* A mounts Copel, in partnership with the companies Brennand, Minas PCH and Silea, is also developing studies in the lower reaches of the Rio Chopim that will lead to the feasibility of another four (4) hydroelectric projects. As for wind power generation, there are studies for the feasibility of ne
Slide 65: Oil and Gas Exploration and Production
Oil and Gas Exploration and Production (Paraná Gás Exploração e Produção S.A)
Slide 66: Oil and gas blocks and fracking suspension
* A mounts On November 28, 2013, in the 12th round of Bids of the National Petroleum Agency (ANP), the consortium formed by Copel (30%), Bayar Participações (30%), Tucumann Engenharia (10%) and Petra Energia (30%) (the latter acting as operator) won the right to explore, develop and produce oil and
Slide 67: Customers and employees
* A mounts At the end of December, Copel Distribuição had 4,560,493 customers, representing a consumer-to-employee ratio of 793. Compagas, Elejor and UEG Araucária, companies in which Copel holds a majority interest, had 163, 7 and 17 employees, respectively. subject to rounding.
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Slide 73: Assets by segment
‘Assets-Deca7 Tene ® Distibuiso Telecom Compagas—‘Elejor “EG Araucria Comerilizagbo Other" Holding —_Eliminations Consolidated ‘CURRENT syosa.ise] 3.600663] ozo | sige! 77ais| 99401 swrs6s[ —amesz| 998.204] (000,05, 701834 {ash and cash equivalents zo9.24| m7gass|—angr7| ears | a7s05 | stabs 97068)
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Slide 80: Signature and forward-looking statements
A mounts s ubject to rounding. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date June 19, 2018 COMPANHIA PARANAENSE DE ENERGIA – COPEL By: / S / Jone