Companhia Paranaense De Energia · BMFBOVESPA:CPLE3
Companhia Paranaense De Energia — Energy Co of Parana — Q1 2019 Earnings Presentation
79 slides from Companhia Paranaense De Energia's earnings presentation, May 17, 2019
Slide 1: 1Q19 Results
1Q19 Results Copel records EBITDA of R$1.1 billion in the first quarter
Slide 2: 1Q19 Results
1Q19 Results Conference Call 05.15.2019 —9:30 a.m (Brazilian time) Telephone (+1844) 204-8942 Code: COPEL EBITDA increased 39.3% in 1Q19 Operating cash generation of R$1.4 billion Net Income of R$506.0 million Growth of 5.1% in Copel Distribuicdo's grid market in 1Q19 Reduction of 27.1% in personnel
Slide 3: 1Q19 key financial indicators
1019 4QI8 IQA‘ o 3) a (yay "Net Operating Revenues (RS million) 38960) 36711) 33487 163 Operating Costs and Expenses (RS million) 30430) 31201, 2,786.6 92 ‘Operating Income (R$ milion) M12) aa) 5372 435 Net Income (R$ million) 5060 3008 355.9 22 Earnings per share (RST! 182 136 127 29 EBITDA (RS mil
Slide 4: CPLE3 | R$32.10
CPLE3 | R$32.10 CPLE6 | R$36.40 ELP | US$ 9.28 XCOP | € 8.95 Market value | R$9.3 bi * Quotes 03.29.2019
Slide 5: Reduction of personnel costs
Reduction of personnel costs Personnel costs, excluding social security and care plans, totaled R$284.6 million in 1Q19, 27.1% lower than the R$390.3 million registered in 1Q18, mainly due to the provision of R$91.2 million for indemnification related to the Incentivized Dismissal Program (PDI) in 1
Slide 6: Election of the members of the Company's Statutory Audit Committee
Election of the members of the Company's Statutory Audit Committee At the 184th Extraordinary Meeting of the Board of Directors, held on May 3, 2019, the following Statutory Audit Committee (CAE) was elected for the period from April 2019 to April 2021:
Slide 7: Election of the members of the Company's Supervisory Board
Election of the members of the Company’s Supervisory Board At the 64th Annual Shareholders' Meeting, held on April 29, 2019, the following Supervisory Board (Conselho Fiscal) was elected for the period from April 2019 to April 2021:
Slide 8: Debenture and promissory note issuances
Issuance of R $ 210 million in debentures – SPE Mata de Santa Genebra On April 22, 2019, Mata de Santa Genebra Transmissão S.A. issued Simple Debentures, pursuant to article 2º of Law 12,431, dated June 24, 2011 ("Infrastructure Debentures"), not convertible into shares, in the total amount of R$ 21
Slide 9: 2.2 Operating Costs and Expenses
2.2 Operating Costs and Expenses In 1Q19, operating costs and expenses increased by 9.2% compared to 1Q18, totaling R$3,043.0 million, mainly due to the 18.4% of cost increase in "electricity purchased for resale", notably due to the higher amount of energy from Copel Distribuição's CCEAR agreements
Slide 10: Reduction in PMSO costs
This increase in energy purchase costs was partially offset by the 11.6% reduction in PMSO costs, mainly due to the lower personnel costs, of R$105.7 million, resulting from R$91.2 million in provisions for indemnification related to the Voluntary Dismissal Program (PDI) in 1Q18 and the reduction of
Slide 11: Personnel and management costs table
ssmlllon pease 1019 08 108 Var.% tH 2 @ ay Personnel and management 234,585 31534 380310 (274) Private pension and healthcare plans 59.508 63.98 64003 co) Material 17,660 21396 sgont ay ‘Third-party services 133,198 350517 133208 45 (Other costs and expenses operating 10797 posi 38.828 247 TOTAL 13,
Slide 12: Provisions and reversals reduction
(iii) 11.6% reduction in the “provisions and reversals” line, mainly due to a 44.9% reduction in labor lawsuits (R$43.7 million in 1Q19 vs. R$79.3 million in 1Q18), which was partially offset by the 11.2% increase in “expected credit losses” (R$29.8 million vs. R$26.8 million in 1Q18) and by R$5.4 m
Slide 13: 2.3 Equity in the Earnings of Subsidiaries
2.3 Equity in the Earnings of Subsidiaries Equity in the earnings of investees reflects gains and losses from investments in Copel’s investees and jointly-controlled company, are presented in the table below.
Slide 14: Equity in earnings table
abs 1019 418 i018 Var. % @ 2 @) a) Joint Ventures 9,810 4728 39,542 (75.2) Dominé Holdings = = S S Voltalia Sdo Miguel do Gostoso | Participacées S.A. (3,530) (963) (3594) (1) Parand Gas Exploraco e Producdo S.A. : - ) - Costa Oeste Transmissora de Energia S.A.” - - 3,035 - Marumbi Transmissora de E
Slide 15: 2.5 Financial Result
2.5 Financial Result In 1Q19, the financial result was a negative by R$98.2 million, against a negative amount of R$69.7 million in 1Q18. Financial income totaled R$206.6 million, up by 0.6% against R$205.4 million in 1Q18, mainly due to the higher monetary variation on the CRC reflected by higher i
Slide 16: 2.6 Consolidated Net Income
2.6 Consolidated Net Income In 1Q19, Copel had a net income of R$506.0 million, 42.2% higher than the net income of R$355.9 million recorded in the same period of 2018.
Slide 17: Income statement
$'000 qai9 aai8 rae Var.% Income Strement «) @) @) (1/3) (OPERATING REVENUES 3996006. «367418 «3.348.681 163 Electricity sales to final customers yeas 147.4731 38858 a7 Electricity sales to dstibutors 60,158 727,210 617,568 63 Use ofthe main distribution and transmission grid 1,048,227 967,253 768,4
Slide 18: Balance sheet - assets
aaa Wario becis Warde Var% Var « 2) @ (a) (3) ‘CURRENT 6,800,453 6,677,846 6,008,435 18 12 Cash and cash equivalents 2,053,970, 1,988,409 1,697,463 54 210 Bonds and securities ‘92,909 aaa 41,361 (248) ; Collaterals and escrow accounts 61.368 203 39,839 E 540 Customers 2,905,916 2,988,001, 2,519,265
Slide 19: Loans, financing and debentures maturities
Loans, financing and debentures maturities are presented below:
Slide 20: Debt of joint ventures
RS'000 see rucarcu niaigee Mari9 Decl8 Marl8 Var.% — Var.% eu) (2) 3) (a2) (a3) Calua Transmissora de Energia S.A, 35,843 35843 34,206 - aa Integracdo Maranhense Transmissora de Energia S.A. 58,797 58,797 55,840 - 53 Matrinché Transmissora de Energia (TP NORTE) S.A. 381,776 381,776 369,574 Z 33 Guar
Slide 21: Net Debt by Subsidiary
Net Debt by Subsidiary The following table shows the gross debt and net debt of the subsidiaries:
Slide 22: Lawsuits classified as possible losses
The lawsuits classified as possible losses (those that are not provisioned in the balance sheet), as estimated by the Company and its controlled companies at the end of March 2019, totaled R$3,075.9 million, amount 1.6% higher than registered in December 2018 (R$3,052.7 million), distributed in laws
Slide 23: Balance sheet - liabilities
vomits Deca Marie vars vars c) @ c) ary ay ‘CURRENT 6,886,528 660518] 5,911,286 29 165 Payroll, social charges and accruals 288,907 284,179 387,998 a7 055) Suppliers 1529,904 4419243, 1,389,288 78 wa Income tax and social contribution payable 94219 397,949 334005, (524) (297) Other taxes due 387,980
Slide 24: Manageable costs reduction
Manageable costs, excluding estimated losses, provisions and reversals, and water use fees, reduced by 19,2% and basically reflect the 29.7% reduction in “personnel and management” expenses, described above.
Slide 25: Copel GeT net income and EBITDA
In the first quarter of 2019, Copel GeT reported a net income of R$292.1 million, 32.1% higher than the R$221.1 million reported in 1Q18. Except for the extraordinary effects listed below, the Copel Get’s EBITDA grew of 15.4% in 1Q19.
Slide 26: 4.2 Copel Distribuição
4.2 Copel Distribuição Copel Distribuição reported an EBITDA of R$329.8 million in 1Q19, up by 151.1% over the R$131.3 million reported in 1Q18. This result is particularly due to, (i) the 16.42% increase in TUSD, on June 24, 2018, which together with the 5.1% growth in the grid market, contributed
Slide 27: Personnel costs excluding PDI
Excluding the effects from provisions for indemnification related to the PDI, the personnel costs in 1Q19 were 3.1% lower than the same period of the previous year.
Slide 28: Copel Distribuição net income
Net income in 1Q19 was R$175.1 million, more than four times higher than the R$41.8 million reported in the same period of 2018.
Slide 29: 4.3 Copel Telecomunicações
4.3 Copel Telecomunicações Copel Telecom reported an EBITDA of R$35.9 million in 1Q19, up by 34.4% against the R$26.7 million reported in 1Q18, mainly due to the expansion in customer base and lower personnel and administrative expenses, partially offset by the deactivation of equipment infrastructu
Slide 30: Personnel and management expenses
Personal and management expenses totaled R$16.6 million in 1Q19, 43.0% lower than in 1Q18, basically reflecting the reduction of 177 employees resulting from internal restructurings involving the transfer of 137 employees to other subsidiaries, and the Voluntary Dismissal Program (PDI) concluded in
Slide 31: Copel Telecom adjusted EBITDA
As there was no extraordinary effects in 1Q19, of R$35.9 million was 1.7% lower than the adjusted EBITDA of R$36.5 million reported in 1Q18.
Slide 32: 4.4 Accounting Information
4.4 Accounting Information Accounting information concerning Copel’s interests in other companies in 1Q19 is shown in the following table:
Slide 33: 5. Investment Program
5. Investment Program The following chart shows the investment program carried in 1Q19 and schedule 2019, which was reviewed by the Board of Directors, with the last change in the 184th Ordinary Meeting of the Board of Directors.
Slide 34: Investment program by subsidiary
R$ million Subsidiary / SPC Carried Scheduled* 1Q19 2019 Copel Geragao e Transmissao 74.9 794.8 HPP Colider 268 593 HPP Baixo Iguacu? 5.6 18.1 TL Curitiba Leste-Blumenau 37.2 196.1 Substation Bateias o1 113 Mata da Santa Genebra Transmissao* = 55.4 SHP Bela Vista - 113.6 SPC Uirapuru - 133.0 Others
Slide 35: 6.2 Grid Market (TUSD)
For more details visit the Notice to the Market - IR 12/19 ( link ). 6.2 Grid Market (TUSD) Copel Distribuição’s grid market, comprising the captive market, concessionaires and licensees in the state of Paraná, and all free consumers in the Company’s concession area, increased by 5.1% in terms of en
Slide 36: Captive and free market consumption growth
The result is mainly due to (i) 4.7% increase in captive market consumption, especially influenced by the residential class, and (ii) 5.8% increase in free market consumption in 1Q19, resulting from the improved industrial production in the state of Paraná - growth by 9.8% and 10.8% in January and F
Slide 37: 6.4 Total Energy Sold
6.4 Total Energy Sold 1 Total energy sold by Copel in all markets, comprising sales by Copel Distribuição, Copel Geração e Transmissão, Wind Farm Complexes, and Copel Comercialização totaled 12,260 GWh in the first quarter of 2019, an increase of 15.3%. The following table illustrates the total ener
Slide 38: Customers, agreements and energy sold
Number of Customers / Agreements Energy Sold (GWh) Mar-19 Mar-18 Var. % 1019 1018 Var. % Copel DIS. Captive Market 4,855,362 4,579,660 17 5,246 5,009 a7 Concessionaries and Licensees 3 3 E 64 ot (29.4) CCEE (MCP) : : : 381 104 265.1 Total Copel DIS 4,655,365 4,579,663, 17 5,691 5,204 24 Copel GeT CC
Slide 39: Energy Flow - Copel Dis
Energy Flow - Copel Dis 1019 1018 Var. % ftaipu 1,375 1413 (35) CCEAR - Copel Geraco ¢ Transmiss30 31 23 55 CCEAR - Other 3,068 2,674 84 CCE (MCP) . 16 (84.2) Angra 243 249 (13) coGF 1,590 1,674 (10.3) Proinfa ua 114 (42) Elejor S.A 293 293 - ‘Available Power 6712 6456 3) Captive market 5,245 5,009
Slide 40: Energy Flow - Copel GeT
Energy Flow - Copel GeT 1019 1018 Var. % (Own Generation (net of losses) 4,592 5,631 (a5) Dona Francisca 35 35 : Copel Comercializac3o ° ° z Other ° z MRE Receipt 20 : Total Available Power 4,647 5,666 (28.0) Bilateral Agreements 765 1,263 (39.4) Bilateral Agreements - Copel Comercializaco 1114 623
Slide 41: Energy Flow – Copel Comercialização
Energy Flow – Copel Comercialização
Slide 42: Consolidated Energy Flow (Jan to Mar 19)
Consolidated Energy Flow (Jan to Mar 19)
Slide 43: Tariffs: Sales to Distributors Average Tariff
6.6 Tariffs Sales to Distributors Average Tariff (CCEARs) – Copel Geração e Transmissão
Slide 44: Power Purchase Average Tariff – Copel Distribuição
Power Purchase Average Tariff – Copel Distribuição
Slide 45: Sales to Final Customers Average Tariff
Sales to Final Customers Average Tariff Copel Distribuição
Slide 46: Average tariff by customer class
RS / awh Maris Dec-is Maris Var.% Var.%6 Tone i) 2 8) 2) a) Industrial 598.38 574.63 449.14 ad 332 Residential 505.00 505.05 440.49 (0.0) 146 Commercial 487.45 482.35 411.08 14a 186 Rural 341.76 335.1 292.35 17 163 Other 350.30 352.97 303.12 (08) 156 Retall distribution average rate 471.68 4715 398.
Slide 47: Shareholders
‘Shareholders ‘common * % Preferred"® TOTAL % ‘State of Parand 35029, 586 2 = 2 -| 85029 | 32.0 BNDESPAR 38299 26.8 = ~ 2782 23 65581240 Bletrobras 1531 aa = = Z - 4531 0.6 Free Floating 19836 137 ” 23.4 100965 737120878 44.2 23 19aze aa 7m 234 62280 537 2385 32.3 NYSE 408 03 - Z 31g81 Pye 32209) 18
Slide 48: Shareholder breakdown charts
Preferred Common 0.2% a 526% y, 21.2% 137% a sate of Parand ° State of sm BNDESPAR ‘= BNDESPAR, Free Floating Betrabras other 1.196 = FreeRoating 78.6% Other 264% A. Total 0.2% 310% 44.2% ws State of Parand = BNDESPAR » Eletrebras 1 Free Floating a _ da
Slide 49: Share trading and performance
From January to March 2019, 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 68.92% of the Company’s capital. At the end of March 2019, the market value
Slide 50: 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 51: 8. Operating Performance: Power Generation
8. Operating Performance 8.1 Power Generation Assets in Operation Copel Geração e Transmissão
Slide 52: TPP Figueira and quota system plants
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 53: Cutia wind farms and generation interests
Copel's largest wind farm, known as Cutia Empreendimentos Eólicos, started operations in 2018. Currently 95% of the 149 wind turbines are in operation. The complex is formed of 13 projects and is divided into two large complexes with a total installed capacity estimated at 312.9 MW: Complexo Cutia i
Slide 54: 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 55: Generation under construction
Under Construction Copel Geração e Transmissão Copel GeT is completing the construction of the last generating unit (of a total of three units) of the Colíder Hydroelectric Power Plant, as detailed in the sequence. In addition of Colíder HPP, in August 2018 Copel conquered the right to build Bela Vi
Slide 56: 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 will be m
Slide 57: 8.2 Transmission Assets in Operation
8.2 Transmission Assets in Operation The chart below shows the transmission concession agreements and the design of the substations park and the transmission lines in operation:
Slide 58: SPC Uirapuru Transmissora de Energia
SPC Uirapuru Transmissora de Energia S.A. In March 2019, Copel GeT signed an Agreement to Purchase and Sale Shares - CCVA with Centrais Elétricas Brasileiras SA - Eletrobrás and the Eletrosul Foundation for Social Security and Assistance - ELOS to transfer 100% of the shares of Uirapuru Transmissora
Slide 59: SPC Mata de Santa Genebra
SPC Mata de Santa Genebra On February 25, 2019, all the stages planned for the test run period of the Santa Bárbara d’Oeste substation, belonging to the SPC Mata de Santa Genebra, allowing the operation of this substation under the Commercial Operation regime. The SPC Mata de Santa Genebra is still
Slide 60: Distribution 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 61: Compact-Design Distribution Lines
Compact-Design Distribution Lines
Slide 62: 8.4 Telecommunications
8.4 Telecommunications Copel Telecomunicações has an optical backbone/backhaul, 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'
Slide 63: Map of Paraná fiber optic network
Slide 64: 8.6 New Projects Project Portfolio
8.6 New Projects Project Portfolio
Slide 65: Feasibility studies: Chopim and Piquiri rivers, wind
<0} Copel, in partnership with others companies is also developing studies in the lower reaches of the Chopim river that will lead to the feasibility of another hydroelectric projects. As for wind power generation, there are studies for the feasibility of new wind farms in the State of Rio Grande do
Slide 66: Gas Exploration and Production (Paraná Gás)
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 67: Public Civil Action and ANP discharge request
Due to the ruling rendered regarding the Public Civil Action referred to above (in the lower court), issued on June 7, 2017, stating the nullity of the bidding procedure and the respective agreements signed for the areas of the Rio Paraná Basin, and the lack of compliance prospects of the object of
Slide 68: Customers and employees
At the end of March 2019, Copel Distribuição had 4,655,362 customers, representing a consumer-to-employee ratio of 874. Compagas, Elejor and UEG Araucária, companies in which Copel holds a majority interest, had 159, 07 and 17 employees, respectively.
Slide 69: Generation, transmission and distribution data
Generation Copel GeT Im operation Hyarocletric* Quota System Thermal Wind power Under construction Hyaroeletric Wind Farms Im operation Under construction Partnership Im operation Hyaroeletric Thermal Wind farms Copel Telecom. Optical cables backbone/backhaul (km) Cities served in Parana State Admin
Slide 70: Exhibit II – Income Statement – Copel Geração e Transmissão
Exhibit II – Financial Statements – Wholly Owned Subsidiaries Income Statement – Copel Geração e Transmissão
Slide 71: Income Statement – Copel Distribuição
Income Statement – Copel Distribuição
Slide 72: Income Statement – Copel Telecomunicações
Income Statement – Copel Telecomunicações
Slide 73: Copel Telecom income statement table
R$ ‘000 aciae und Frere) a8 Frere} Var fe) 2 (3) (3) NET OPERATING REVENUES 115,352 105,948 104,510 10.4 Revenuesfrom telecommunications 113,757 104, 286 94,675 202 Other operating revenues 1,596 1,662 9835, (338) ‘OPERATING COSTS AND EXPENSES (201,550) (129,345) (69,413) 13.6 Personnel and manageme
Slide 74: Balance sheet by subsidiary - assets
este Marts Gemcios pusrbuso Telecom Conpagas aor UEGAruchia Comeriaeedo WindFarms ™MAOUNSP petting enninations Comat ‘eument easom7 | eoosaas| unas] nase] s7700| as ETc cad aa7s7|korsasa|(uaeo0] 6am Cash and cash equator ‘smoo7)7s0763| ——609|—skass| ass) a om Ed moss | 2.208 3a | 2058970 Bonds ad se
Slide 75: Balance sheet by subsidiary - assets continued
set D038 cwto® ouundelo Team compnens —cr Scomercunso Wintamn SMO tng canton cmc cmon tana] ssnsis| sexo mers] soso sma] isior”| sam | mois] samam| (omen| cova sh ards equnelens ose) cea|—ssam| onss5|eess|ausis| 12358 _aosae sen | sso = pos fonds and eater = 3 p =) aa : =f mse =p amsse olaeas ad exc
Slide 76: Balance sheet by subsidiary - liabilities
ens Sones eaaments pa) cnc) ee) Cee ee mnie, SO cys) med cong Tua] aaa | arm] ae | aa || means] area] aa ec a a ani amie | ke) oe [ae 3 = sa me Fat rene oR sae) : : : | aa 3 tea) : sales insm| tama | —aso|——mm| a0 | san | teen 3 suo) sao the Todd oon eo : 7a| aa | a : a8 a» : sae certo sues | gas |
Slide 77: Balance sheet by subsidiary - liabilities continued
tis Davis ame, ico Tom Cannes nbr—«UEG Amin Comma Windfarm OUST ty em come amar aoa | saeaa7|——saae7| mae | namo] ass] aa] aa] saat] sana] ano] cman coal ger sna yam | eae? tae a ae| te ais ra on iT saat conpsie snd puRSLSORIODE va) awe z i a| ae in 5| oma] : supoies ios) enn) an) waa) ——aam| anata
Slide 78: Income Statement by subsidiary
Income Statement 1038 = DisibueSo Telecom Campagas “jor, «UG Arata ComerdalingSo, WindFarms Pc and Hang EN Conuoidatecd TNETORERATING INCOME Toros] asa] —assqao] sas] amen] Pao 3 ams] man] mas =] essa] Sco0e eeity sales to final store 116.056 =| beso : : 666 - : (00m) 4631035 eceity sles toasters sm
Slide 79: Signature and forward-looking statements
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 May 15, 2019 COMPANHIA PARANAENSE DE ENERGIA – COPEL By: / S / Daniel Pimentel Slaviero Daniel Pime