Results Conference Call
2009 Second Quarter
First Half of 2009 Scenario
0.9% growth in consumption (captive + free markets) Strong recovery in collection beginning in the 2Q09 Cash generation of R$ 387.4 million (before dividends)
OPERATIONAL PERFORMANCE
MACROECONOMIC IMPACTS
Slower economic growth Reduction in industrial activity: down 13.4% in the 1H09 Devaluation of the dollar: 16.5% in the first half
Tariff Review (November 2008) Reduction of regulatory EBITDA
REGULATORY IMPACTS
Secondary Offering
Increase of effective free float
OFFERING SIZE: R$ 707.3 million SALES PRICE: R$ 24.00 BEFORE OFFERING
Effective Free Float 7.7% EDFI 6.6% BNDESPAR 33.6%
BNDES: 16.079.135 EDF: 13.391.345 TOTAL: 29.470.480
AFTER OFFERING
Effective Free Float 23.5% RME 52.1%
RME 52.1%
BNDESPAR 24.4%
Average trading volume (2009): R$ 6.7 million (jan to 07/13/09)
Average trading volume: R$ 28.1 milion (07/16/09 to 08/11/09)
Energy Markey
Brazilian and regional consumption
TOTAL MARKET (Captive and Free Customers) BRAZIL1
-2.7%
SOUTHEAST1
-4.1%
LIGHT2
+0.9%
193,667 188,506
104,945
100,615
10,692
10,785
1H08
1 2
1H09
1H08
1H09
1H08
1H09
Source: EPE (Monthly Overview of the Electricity Market) Taking into account the power consumed by the free clients CSN, Valesul and CSA, the variation in consumption would be -3.7%. To preserve comparability with the market approved by Aneel in the tariff review process, the billed energy and demand of free customers Valesul, CSN and CSA were excluded, in view of these customers planned migration to the core network.
Captive Market
Second quarter and the first half performance
+2.9% +2.0%
4,529 4,619
9,351
9,621
+2.2% +1.7%
1,821
1,862
-0.1%
+3.1%
1,452
1,477 797 822
9,351
459
459
Residential
Industrial
Commercial
Others
Total
1H08
1H09
2Q08
2Q09
Captive
Free Market
Consumption and billed demand
ELECTRICITY CONSUMPTION (GWh) NETWORK USE FREE CLIENTS ELECTRICITY DEMAND (GW)1 NETWORK USE
+6.3% -13.1%
-3.1%
7,321
7,781
1,340
1,165
4,577
4,436
1H08
1H09
Free Clients 1H08
Concessionaires 1H09
Free market
1
The amount presented in GW is related to the annual sum of billed demand each month, considering peak and out-of-peak periods.
Note: To preserve comparability in the market approved by ANEEL in the tariff adjustment process, the billed energy and demand of the free customers Valesul, CSN and CSA were excluded in view of these customers planned migration to the core network.
Collection
COLLECTION RATE BY SEGMENT Second Quarter
111.7% 109.8%
COLLECTION RATE 12-month moving average
98.8% 96.6% 103.4% 100.7% 98.4% 102.1% 101.8% 100.7%
97.4%
Total
Retail 2Q08
Large Clients 2Q09
Public Power
June/08
March/09
June/09
Loss Prevention
EVOLUTION OF LOSSES (12 months)
20.56% 20.79% 21.23%
ENERGY INCORPORATION GWh 35.2
19.15% 15.95%
19.15%
14.7
139.5%
6,791
6,885
6,929
1H08 1H09
4,812 1,979 June/08
4,835 2,050 March/09
4,873 2,056 June/09
ENERGY RECOVERY GWh 75.7 50.0
51.4%
Technical losses GWh Non-technical losses GWh
% Losses / Grid Load % Regulatory Level
1H08
1H09
Loss Prevention
NEW TECHNOLOGIES CMS (centralized metering system) Pilots Results 1H09 X 1H08
Location den and Roncalli (SMC) So Joo de Meriti and Belford Roxo (%) 11.7 3.40 N. of Clientes 16,000 298,000 5.5 22.7 44.6 37.1
GRID SHIELDING (CONSTRUCTION KM/MONTH)
61.3
3.8
MARKET GROWTH RATE 11.7%
Jan Feb Mar Apr May Jun
3.4%
Areas SMC
SJM and B.Roxo
Net Revenue
NET REVENUE (Millions of R$) NET REVENUE BY SEGMENT (1H09)
Generation 5.3% Commercialization 1.3% Distribution 93.4%
2,613
2,711
1,298
-1.9%
1,273
+3.7%
2Q08
2Q09
1H08
1H09
NET REVENUE FROM DISTRIBUTION (1H09)
Industrial 8% Other (Captive) 12% Network Use (TUSD) 7%
Commercial 30%
Various 1%
Residential 42%
Operating Costs and Expenses
Manageable (distribution): 528.9 (22.8%) Non-manageable (distribution): 1,690.8 (73.0%)
MANAGEABLE DISTRIBUTION COSTS (Millions of R$)
1,561 1,143
-39.3%
994
948 575
-8.0%
529
Generation and Commercialization: 95.5 (4.1%)
2006
*Does not account for eliminations
2007
2008
UDM June/09
1H08
1H09
11
EBITDA
CONSOLIDATED EBITDA (Millions of R$)
-11.2%
642
-34.0%
570
EBITDA VARIATION (Millions of R$) DISTRIBUTION
Light Other Concessionaires*
334 221 -6.6%
-26.3%
2Q08 2Q09 1Q08 1Q09
* Average variation in EBITDA during the first quarter subsequent to the tariff adjustment compared to the same period in the previous year. Concessionaires analyzed: Cemig, Eletropaulo, Escelsa, Bandeirante, Paulista, Piratininga and RGE
EBITDA BY ACTIVITY* 1H09
Distribution 83.3% Generation 15.6%
Commercialization 1.1%
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Net Income
492.1
285.4 118.4 95.9 289.7
+6.2%
44.9
251.6
267.2
1H08 NI Pro forma
Net effect PIS/COFINS
Net effect offshore exchange variation
1H08 NI w/o nonrecurring effects
1H09 NI w/o nonrecurring effects
Tax credits
Offshore exchange variation
1H09 NI
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Capital Expenditures
CAPITAL EXPENDITURES (Millions of R$) 237.3 203.9
1H08
1H09
R$ MM Loss Prevention Development of Distribution Network Quality Improvements (optimization of structure and preventative maintenance) Generation Maintenance New Generation Projects
1H08 81.7 81.3 35.5 3.2 3.4
1H09 62.3 64.7 26.0 9.1 2.7
Diference (19.4) (16.6) (9.5) 5.9 (0.7)
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Paracambi SHPP
PROJECT DATA Installed capacity: 25 MW Assured Energy:20.4 MW average High generating capacity (average between 55% and 60%)
PROJECT EVOLUTION August/2009: Approval to hire EPC consortium Winning consortia: Orteng e Equipamentos e Sistemas Ltda and Construtora Quebec Ltda. Total project cost: R$195 million Construction start date: September/2009 Commercial inauguration: August/2011
Cash Position and Dividends
8.3% 8.2% 7.9%
4.1% 695 518 490 203
1.8% 866 351 408 200 590 570 92
Dec/06
Nov/07
Dec/07
Mar/08
Sep/08
Nov/08
Dec/08
Apr/09
Jun/08
Jul/09
Nov/09
Cash Position
Dividends
Dividend Yield
351
16
6th Debenture Issue
12.85% 13.97% 12.17% 10.42% 10.36%
9.42% 7.39% 7.62% 5.36% 2006 2007 2008 June/09 5.31% June/09 pro forma
Real Cost
Nominal Cost
CHARACTERISTICS: Funds Raised: R$300 million Issue Date: 06/01/2009 Maturity: 2-year bullet Interest Payments: Biannual Return: 115% of CDI rate
RATINGS: MoodysAmricaLatina: Aa2.br
Standard&Poors: brA+
Forward-Looking Statement
This presentation may include declarations that represent forward-looking statements according to Brazilian regulations and international securities. These declarations are based on certain assumptions and analyses made by the Company in accordance with its experience, the economic environment, market conditions and future events expected, many of which are out of the Companys control. Important factors that can lead to significant differences between the real results and the future declarations of expectations on events or business-oriented results include the Companys strategy, the Brazilian and international economic conditions, technology, financial strategy, developments of the public service industry, hydrological conditions, conditions of the financial market, uncertainty regarding the results of its future operations, plain, goals, expectations and intentions, among others. Because of these factors, the Companys actual results may significantly differ from those indicated or implicit in the declarations of expectations on events or future results. The information and opinions herein do not have to be understood as recommendation to potential investors, and no investment decision must be based on the veracity, the updated or completeness of this information or opinions. None of the Companys assessors or parts related to them or its representatives will have any responsibility for any losses that can elapse from the use or the contents of this presentation. This material includes declarations on future events submitted to risks and uncertainties, which are based on current expectations and projections on future events and trends that can affect the Companys businesses. These declarations include projections of economic growth and demand and supply of energy, in addition to information on competitive position, regulatory environment, potential growth opportunities and other subjects. Various factors can adversely affect the estimates and assumptions on which these declarations are based on.
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