COPEL's third-quarter results fared no better than the previous
quarter. Net income declined 14.5% year over year with earnings
coming in at $0.18 per ADS. Revenues grew 45.8%, supported by an
increase in electricity sales to final customers and distributors,
among others. However, top-line growth was more than offset by a
51.7% increase in operating costs and expenses. Also, huge debt
levels pose a threat to COPEL's growth. Moreover, being a
state-owned company, governmental interference causes delay in the
execution of its regular operations. All these factors compelled us
to maintain an Underperform recommendation on the stock. However,
the company's long-term prospects seem bright, backed by its
initiatives to improve power generation capacity and reward
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 in
the state of Paran . The provincial government of the state
controls about 58.6% of the shares of COPEL. The company directly
serves approximately 4.3 million customers in 395 municipalities
and 1,113 localities.
COPEL has roughly 5,454 megawatt (MW) of generating capacity,
99% of which is hydroelectric. The company owns 20 power plants,
including 18 hydroelectric, 1 thermal and 1 wind plant. Moreover,
it has interests in as many as ten power generation companies.
COPEL also provides telecommunications, natural gas, engineering,
water and sanitation services.
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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