Companhia Paranaense De Energia · BMFBOVESPA:CPLE3
Companhia Paranaense De Energia — Energy Co of Parana — Q2 2018 Earnings Presentation
63 slides from Companhia Paranaense De Energia's earnings presentation, Aug 20, 2018
Slide 1: Copel records EBITDA of R$833.3 million in the second quarter
Copel records EBITDA of R$833.3 million in the second quarter 2018 Results 3 Growth of 3.7% in Copel Distribuico s grid market; core ee) $ R$603.5 million of capex carried in 2Q18; 08.16.2018 10:00 a.m (Brazilian time) FE Issue of R$1.0 billion in Debentures - Copel GeT; Telephone (+1516) 300 1066 Z
Slide 2: CPLE3 | R$19.21
CPLE3 | R$19.21 CPLE6 | R$21.92 ELP | US$ 5.58 XCOP | € 4.78 Market value | R$5.6 bi * Quotes 06.30.2018
Slide 3: In the first half of 2018, the net operating revenue
In the first half of 2018, the net operating revenue increased by 7.5%, mainly due to the 17.7% growth in the revenue of “electricity sales to final customers” resulting from the growth in free clients at Copel Comercialização and the tariff adjustment of Copel Distribuição valid as of June 24, 2017
Slide 4: Operating costs and expenses
Operating costs and expenses were also affected by the 10.4% increase in the costs with “electricity purchased for resale”, mainly due to the purchase of 782 GWh in 2Q18 (over 210 GWh in 2Q17) by Copel Comercialização.
Slide 5: The following changes are also noteworthy
The following changes are also noteworthy:
Slide 6: Operating costs and expenses table
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Slide 7: EBITDA
2.4 EBITDA In 2Q18, earnings before interest, taxes, depreciation and amortization reached R$833.3 million, 17.8% higher than the R$707.2 million recorded in 2Q17, mainly explained by the higher volume of energy sold to final consumers, which increased the revenues from “electricity sales to final c
Slide 8: 2.5 Financial Result
2.5 Financial Result In 2Q18, the financial income totaled R$255.0 million, an 88.6% increase, against the R$135.2 million recorded in 2Q17, mainly due to the reimbursement from suppliers of wind farm assets of Complex Brisa Potiguar in the amount of R$53.2 million and CRC’s largest monetary variati
Slide 9: Consolidated Net Income
2.6 Consolidated Net Income In 2Q18, Copel recorded net income of R$352.6 million, 133.5% amount higher than the R$151.0 million registered in the same period of 2017. Already in the first half of 2018, net income increased by 21.8%, closing the period by R$692.2 million.
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Slide 11: Assets
“asst an Deca? tant? Var% Var a) @ @) (ay (4/3) ‘CURRENT 6,072,795] $,701,834| 5,132,471 co 183 ‘Cash and cash equivalents 1,708,148 | 1,040,075) 1,423,948 og 197 Bonds and securities, 4381 1341 57,316 30 (97.6) Collaterals and escrow accounts 42,200 59,372 1,656 (283) . Customers 2624021) 2,733,200
Slide 12: Copel's 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 13: Lawsuits classified as possible losses
The lawsuits classified as possible losses, as estimated by the Company and its controlled companies at the end 2Q18, totaled R$3,283.1 million, 5.1% higher than in December 2017 (R$3,123.5 million), distributed in lawsuits of the following natures: civil (R$1,178.8 million), fiscal (R$951.7 million
Slide 14: Liabilities
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Slide 15: Copel GeT EBITDA excluding extraordinary events
Excluding the extraordinary events of Copel GeT, EBITDA in 2Q18 decrease 7.4% over 2Q17.
Slide 16: Personnel costs excluding PDI provision effect
Disregarding the effect of the provision for indemnification related to PDI (reversal of R$0.9 million in 2Q18 and provision of R$5.6 million in 2Q17), personnel costs decreased by 3.6% over 2Q17.
Slide 17: Main indicators
R000 Main indicators ais —iais.——«2aa7 Var% porey THT Var.%6 a @ @ a) @ (6) (4/5) Net Operating Revenue (RS million) 24768 | 22077) 2,160.7 146 4.6846] 4,265.0 125 ‘Operating Costs and Expenses (RS million) (2,320.4), (2,149.5) (2,098.1) 106 (44698)) (3,980.1) 123 ‘Operating incame (RS million) 1260
Slide 18: Copel Telecom EBITDA and accounting information
Up to June 2018, Copel Telecom's EBITDA reached R$70.7 million, 3.5% higher compared to the same period in 2017. While net income fell 16.9%, totaling R$22.6 million. 4.4 Accounting Information Accounting information concerning Copel’s interests in other companies in 2Q18 is shown in the following t
Slide 19: 5. Investment Program
<0} 5. Investment Program The following chart shows the investment program carried in 2Q18 and schedule 2018, which was reviewed at the 175th Extraordinary Meeting of the Board of Directors, contemplating a reduction of R$50.0 million in the amount initially forecast for Copel Telecom:
Slide 20: 6. Power Market and Tariffs
6. Power Market and Tariffs 6.1 Captive Market – Copel Distribuição Copel Distribuição’s captive market energy sales totaled 4,970 GWh in the 2Q18, which represents a increase of 3.3%. This result was mainly influenced by the performance of the residential and commercial segments. The following tabl
Slide 21: Notice to the Market IR 14/18
For more details visit the Notice to the Market - IR 14/18 ( link ).
Slide 22: Electricity Sales
The result was mainly due to the 3.3% increase in the total consumption of the captive market in 2Q18, particularly in the residencial and commercial segment (as detailed below), and the 4.7% growth in consumption from free consumers, in particular, industrial customers in the pulp and paper, food a
Slide 23: Energy Sold (GWh)
Energy Sold (6Wh) Segment Market 2018 2017 Var. % aH aHI7 var.% Residential 1,828 1,710 69 3,077 3,608 19 Total 2,083 1,918 86 4,106 3,764 on Industrial Captive 744 328 (10.2) 1,453, 1,725 (35.8) Free 1,339 1,090 2.8 2,653, 2,039 301 Total 1,256 3151 Ex 2,546 2,486 24 Commercial Captive 1,180 4,106
Slide 24: Balance differs from Notice to the Market 14/18
1 This item presents a balance different from what was published in the Notice to the Market 14/18, as a result of CCEE's re-balances, which impacted Copel Distribuição's MCP line in 2018.
Slide 25: Energy Flow - Copel Distribuição
Energy Flow - Copel Dis, ttaipu 2,840 2,945 CCEAR — Copel Geragao e Transmiss80 43 42 24 CCEAR — Other 5,264 5.614 (6.2) CEE (MCP) 18 - - Angra 501 508 (4) ccar 3,266 3,613 (9.6) Proinfa 233, 245 (9) Elejor S.A sa 588 - ‘Available Power 12753-13555 ©) Captive market 9.979 | 10,149 (17) Concessionari
Slide 26: Energy Flow - Copel GeT
own Energy Flow - Copel GeT 1H18 1H17_—Var. % ‘Own Generation 9,496 9,846 (3.6) MRE 581 838 (30.7) Dona Francisca 70 70 - Total Available Power 10,147 10,754 (5.6) Bilateral Agreements 2,743, 3,964 (30.8) Bilateral Agreements - Copel Comercializacao 1,359 - - CCEAR - COPEL Distribuicao 43 a2 24 CCEA
Slide 27: Energy Flow – Copel Comercialização
Energy Flow – Copel Comercialização
Slide 28: 6.6 Tariffs
6.6 Tariffs Sales to Distributors Average Tariff (CCEARs) – Copel Geração e Transmissão
Slide 29: Average tariff - Sales to distributors
RS /Mwh _ Amount Jund8 Marl jun-17_——~Var.% ~——‘Var. % Average MW___(1) 2) (3) (172) (2/3) Copel Geracao e Transmissiio 99 214.19 | 212.22 208.36 0.9 2.8 ‘Auction CCEAR 2011 - 2040 (HPP Maud) 92 212.99) 210.87 207.14 10 28 ‘Auction CCEAR 2013 - 2042 (Cavernoso Il) 7 229.96) 229.28 223.66 03 28 Aucti
Slide 30: Sales to Final Customers Average Tariff Copel Distribuição
Sales to Final Customers Average Tariff Copel Distribuição
Slide 31: Shareholding structure
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Slide 32: Share performance on B3
From January to June 2018, 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 June 2018, the market value of
Slide 33: 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:
Slide 34: Dividends and interest on own capital payments
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Slide 35: Copel GeT plants and concession extension
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 process relat
Slide 36: Wind farms under quota system
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Slide 37: 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 38: São Miguel do Gostoso I Wind Complex
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 received th
Slide 39: Colíder Hydroelectric Power Plant
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, from January 17, 2011, the signing date of MME - Colíder HPP Concession Agreement no. 001/11. The project is part o
Slide 40: Cutia wind farm under construction
The largest Copel wind farm called Cutia is under construction, and is divided into two large complexes:
Slide 41: Assets under Construction
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 1,074 km of transmission lines and 4 substations and will generate APR of R$234.9 million of which refers to Cope
Slide 42: 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
Slide 43: Operating Data
Operating Data In the distribution business, Copel serves more than 4.6 million energy customers in 1,113 locations, belonging to 394 municipalities in State of Paraná and one in the State of Santa Catarina. Copel Distribuição operates and maintains the installations in the 13.8 kV, 34.5 kV, 69 kV a
Slide 44: Compact-Design Distribution Lines
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 of power s
Slide 45: 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
Slide 46: Map of the State of Paraná
Slide 47: 8.6 New Projects
<0 <0} 8.6 New Projects Project Portfolio Copel holds interests in different power generation projects. When these projects go into commercial operation, they will add 327.2 MW of installed capacity to the Company's portfolio.
Slide 48: Estimated installed capacity of new projects
Estimated installed Capacity Estimated Assured Power COPEL Stake Prost aw (average MW) oo oP 280 52.0 Bela Vita 290 166 360 Dols Sats 300 155 300 ‘Salto Alems 200 198 190 WP 378.0 205.0 ‘Sto Jeronimo 3310 wea 412 “Sato Grande 470 269 358 wer rrr 736 “Complex Alto Oriente 483 247 1000 Complex Jandala
Slide 49: Gas Exploration and Production
Gas Exploration and Production (Paraná Gás Exploração e Produção S.A) 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 opera
Slide 50: Customers and employees
At the end of June, Copel Distribuição had 4,600,505 customers, representing a consumer-to-employee ratio of 818. Compagas, Elejor and UEG Araucária, companies in which Copel holds a majority interest, had 160, 07 and 17 employees, respectively.
Slide 51: Generation, transmission and distribution data
Generation Copel Get Imoperation Hydroeletic* (Quota System ‘Thermal Wind power Under construction Hydroeletic ‘Wind Farms Inoperation Under construction Partnership Inoperation Hydroeletic ‘Thermal Wind farms opel Telecom ‘optical cables backbone network (km) ‘optical cables access network (km) Ces
Slide 52: Consolidated Cash Flow
‘Consolidated Cash Flow aHI8 17 Cash flows from operating activities "Netincome forthe period xr] 568,251 [Adjustments to reconcile ntincome withthe cath provided by operating activities 63.405) 1,248,407 Depreciation and Amortization 367,168 367,198 ‘Unrealized monetary and exchange variations, net
Slide 53: Income statement by company
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Slide 54: Income statement by company
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Slide 55: Income statement
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Slide 63: 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 August 17, 2018 COMPANHIA PARANAENSE DE ENERGIA – COPEL By: / S / Jo