COPEL's net earnings in 2013 increased 51.6% year over year, while
earnings per American Depository Receipt (ADR) came in at $1.87.
Revenues were up 8.1%, partially offset by a 7.6% increase in
operating costs and expenses. Loans, financing and debentures were
up 32.1% sequentially. Rising expenses and loans together with
dependency on rainwater for electricity generation and political
interference can prove to be major impediments to growth. Also, the
non-renewal of lease agreement for the Arauc ria thermal power
plant will result in lower lease revenues in the quarters ahead.
Considering these headwinds, we maintain an Underperform
recommendation on the stock. However, over the long term, we
believe COPEL will reap benefits from industrial developments in
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 of
Paran 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 9 power generation companies. COPEL also
provides telecommunications, natural gas, engineering, water and
In Oct 2013, COPEL restructured its business and came up with
two new subsidiaries, in addition to the existing three Copel Gera
o e Transmiss o (GeT deals with the generation and transmission of
electricity), Copel Distribui o (DIS deals with the distribution of
electricity) and Copel Telecom (TEL deals with the
The two new subsidiaries are Copel Participa es and Copel Renov
veis]. The former will primarily focus on management of the
company's interests in special purpose entities (SPEs) in the
energy, gas, telecommunication, sanitation and service sectors
while the latter will centralize the company's investments in
renewable energy generation projects.
Companhia Paranaense De Energia (ELP): Read the
Full Research Report
COPEL-ADR PR B (ELP): Free Stock Analysis
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