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    EGIE3   BREGIEACNOR9

ENGIE BRASIL ENERGIA S.A.

(EGIE3)
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Engie Brasil Energia S A : reports adjusted net income of R$ 710 million in the 3rd quarter, growth of 17.2%

11/08/2022 | 06:01pm EST

ENGIE Brasil Energia (EGIE3) reported net adjusted income of R$ 710 million in the 3rd quarter of 2022, 17.2% up on the same period for 2021. Performance was a positive one given organic growth plus the addition of installed capacity at the Campo Largo II Wind Complex and the Paracatu and Floresta photovoltaic complexes, representing an increase in energy volume available for sale. Adjusted net income was also driven by the higher average price for energy and the impact of inflationary deceleration on loans, financing, debentures, and concessions payable.

Net operational revenue in the quarter was R$ 2.7 billion, 18.9% down on a year-on-year basis, a reflection of lower revenue from transmission line construction due to the advanced stage of implementation, albeit this attenuated by a combination of improving volumes and average prices of energy sales agreements. Adjusted Ebitda posted a reduction of 15.7%, to reach R$ 1.4 billion in the period and the consequence of the effects already mentioned, in addition to the booking in 3Q21 of an additional amount complementary to the value relative to the renegotiation of hydrological risk (R$ 372 million). Excluding this effect, EBITDA would have increased by 8%. Adjusted Ebitda Margin rose 2.0 pp, reaching 52.1%.

The Company reported net debt in 3Q22 of R$ 15.0 billion, an 8.3% decrease in relation to 2Q22, in the light of the reclassification of the assets and liabilities of Pampa Sul as Asset Held for Sale. The cash position was approximately R$ 3.8 billion and the net debt/Ebitda ratio, 2.0x, maintaining the Company in a comfortable situation in line with the financial discipline necessary for the envisaged growth.

"We have taken a historic step in the direction of achieving our commitment to decarbonization, with the signature of the agreement for the sale of the Pampa Sul Thermoelectric Power Plant - the last remaining coal-fired plant in our portfolio. In this way we move forward in the pursuit of our strategy of becoming a solely renewable energy generator and consolidating our position as the largest clean energy company in the Brazilian electricity sector", points out Eduardo Sattamini, Chief Executive and Investor Relations Officer at ENGIE Brasil Energia.

Credit of Complementary Interim Dividends

ENGIE Brasil Energia's Board of Directors, at a meeting on November 8, 2022, approved the credit of complementary interim dividends - based on the financial statements raised on June 30, 2022 - in the amount of R$ 472.8 million (R$ 0.5794807287 per share), representing a payout of 45% of distributable net income for the first half of 2022, to reach a 100% payout in the period.

The Company's shares will be traded ex-dividends from November 22, 2022. This remuneration will be paid on a date to be decided in due course by the Executive Board with an announcement to be made through a Notice to Shareholders.

Growth in renewables and transmission

In September, the Company announced the signature of an agreement with Vestas for the supply of up to 188 V150 wind turbines, each with a rated capacity of 4.5 MW, to the Serra do Assuruá Wind Complex, the total installed capacity of which will be 846 MW. The signature of the supply contract is one of the critical stages prior to work starting on the implementation of the project, representing an investment of approximately R$ 6 billion and creating approximately three thousand direct and indirect jobs in the region.

"The growth of the Company in renewable sources is moving forward stronger and faster. The combination of Serra do Assuruá and the Santo Agostinho Wind Complex with an additional 434 MW and already under construction in the state of Rio Grande do Norte, will represent a further 1.3 GW of renewable energy in our generator park, replacing with wind power the loss of 1.2 GW in installed capacity over the past 12 months - due to our exit from coal-fired assets in Brazil", explains Sattamini. "The decarbonization strategy of our generation activities began in 2016, and since then, over R$ 20 billion has been invested in ramping up installed capacity in renewable sources and in expanding transmission infrastructure", he added.

In addition to the Gralha Azul Transmission System in the state of Paraná, already in operation, and the Novo Estado Project, under construction in the states of Pará and Tocantins, work has already begun on the implementation of the Gavião Real Transmissora de Energia transmission project, the new denomination for Bloc 7, for which a successful bid was made at Aneel's transmission auction in June. The concession agreement was signed in October and provides for the installation of one kilometer of transmission line in the state of Pará together with a substation complementary to the Novo Estado Project. The deadline set for transmission line operations to begin is March 30, 2026, but ENGIE envisages anticipating this timeframe by at least 24 months. The Company is also forecasting Capex of approximately R$ 77 million - 30% less than Aneel's estimate of R$ 110 million.

Energy Production

Electricity output from the plants operated by ENGIE Brasil Energia was 13,799 GWh (6,250 average MW) in the quarter, 28% higher than production reported for the same period in 2021, excluding generation from the Jorge Lacerda Thermoelectric Complex in this period in the light of the latter's disposal at the end of 2021.

Of the total generated, the hydropower plants accounted for 11,382 GWh (5,155 average MW), the complementary power sources, for 2,110 GWh (956 average MW) and Pampa Sul TPP for 307 MWh (139 average MW). These results represent, respectively increases of 32.6%, 9.4% and 15.9% in generation from hydropower, complementary and thermoelectric plants when compared with 3Q21.

The improvement in hydropower generation was largely due to heavy rainfall in southern Brazil. The hike in output from complementary sources reflects the commercial operations of the Paracatu and Floresta photovoltaic plants, acquired in March, and generating 116 GWh in the 3rd quarter. Output from the Campo Largo II Wind Complex, and now fully operational, and higher generation from the Lages Cogeneration Plant also contributed to the overall result.

Energy sales

The average energy selling price, net of revenue charges and trading operations, reached R$ 224.80/MWh, 8% greater than the 3rd quarter 2021. The result is mainly a result of monetary restatement of existing contracts and the acquisition of the Paracatu and Floresta photovoltaic complexes, the latter enjoying selling prices higher than the average for the Company's portfolio. These factors were partially attenuated by the reduction in prices of transactions on the short-term market executed by and large with trading companies.

The quantity of energy sold in agreements, net of trading operations rose from 8,642 GWh (3,914 average MW) in 3rd quarter 2021 to 9,445 GWh (4,278 average MW) in the same period in 2022, a growth of 9;3% or 803 GWh (364 average MW).

About ENGIE

Our group is a global reference in low-carbon energy and services. Together with our 101,500 employees, our customers, partners and stakeholders, we are committed to accelerate the transition towards a carbon-neutral world, through reduced energy consumption and more environmentally-friendly solutions. Inspired by our purpose ("raison d'être"), we reconcile economic performance with a positive impact on people and the planet, building on our key businesses (gas, renewable energy, services) to offer competitive solutions to our customers.

In Brazil, ENGIE, leader in renewable power generation in the country, operates in generation, commercialization and transmission of electric power, gas transport and energy solutions. With 3,500 employees, ENGIE has an installed capacity of approximately 10 GW, of which 100%* is from renewable sources.

*Considering the selling of the Thermal Power Plant Pampa Sul, signed on September 15, which closing is subject to fulfillment of certain conditions precedent in the agreement.

Disclaimer

ENGIE Brasil Energia SA published this content on 08 November 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 November 2022 23:00:04 UTC.


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Sales 2022 11 663 M 2 276 M 2 276 M
Net income 2022 2 547 M 497 M 497 M
Net Debt 2022 16 418 M 3 203 M 3 203 M
P/E ratio 2022 11,9x
Yield 2022 7,66%
Capitalization 30 956 M 6 040 M 6 040 M
EV / Sales 2022 4,06x
EV / Sales 2023 4,24x
Nbr of Employees 1 216
Free-Float 31,3%
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Number of Analysts 13
Last Close Price 37,94 BRL
Average target price 45,57 BRL
Spread / Average Target 20,1%
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Managers and Directors
Eduardo Antonio Gori Sattamini CEO & Investor Relations Officer
Marcelo Cardoso Malta Chief Financial Officer
MaurÝcio Stolle Bńhr Chairman
JosÚ Luiz Jansson Laydner Chief Operation Officer
Dirk Achiel Marc Beeuwsaert Independent Director