COPEL has solid long-term growth prospects, especially in the light
of an anticipated rise of 5.9% in the annual electricity demand in
Brazil. Also, with revival in the economic health of the country,
huge investments are being made for infrastructural developments
that, in turn, will boost electricity demand. To benefit from
growing electricity needs, COPEL has planned investments worth
roughly R$2.6 billion for 2014, in order to improve its electricity
generation capacity. In this regard, the recent agreement for a 49%
stake acquisition in Voltalia's wind farm complex is worth
mentioning. Considering all these factors as well as the company's
stellar performance in first-quarter 2014, with net earnings and
revenues increasing by 46% and 28% respectively, we upgrade our
recommendation from Neutral to Outperform on COPEL.
Companhia Paranaense de Energia (ELP), also known as COPEL, is a
fully integrated electric utility in Brazil. The company is engaged
in the generation, transmission and distribution of electricity to
the state of Paran . The provincial government of the state
controls about 58.6% of the shares of COPEL. The company directly
serves approximately 4.2 million customers in 395 municipalities
and 1,113 localities.
COPEL has roughly 5,640 megawatt (MW) of generating capacity,
99% of which is hydroelectric. The company owns 21 power plants,
including 19 hydroelectric, 1 thermal and 1 wind plant. It has
interests in as many as nine power generation companies. COPEL also
provides telecommunications, natural gas, engineering, water and
COPEL operates primarily through its five subsidiaries,
including Copel Gera o e Transmiss o (GeT deals with generation and
transmission of electricity), Copel Distribui o (DIS deals with
distribution of electricity), Copel Telecom (TEL deals with the
telecommunication business), Copel Participa es (manages the
company's interests in special purpose entities in the energy, gas,
telecommunication, sanitation and service sectors) and Copel Renov
veis (deals with the company's investments in renewable energy
Companhia Paranaense De Energia (ELP): Read the
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