Companhia Paranaense de Energia
, also known as COPEL
, reported financial results for the third quarter 2013 on Nov 8,
2013. The company's net income in the quarter decreased 14.5%
year over year to R$273.0 million (US$119.7 million).
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Copel's earnings per share came in at R$1.00 or 44 cents per ADR.
The results mark a decline of 25.4% over 59 cents per ADR
reported in the year-ago quarter. However, the result was 3 cents
above the Zacks Consensus Estimate of 41 cents.
In the third quarter 2013, Copel reported a 10.5% year over year
increase in net operating revenues that came in at R$2,254.6
million (US$988.9 million).
Revenue improvement was witnessed in almost all the business
categories of COPEL: Electricity sales to final customers grew
45.4% and to distributors grew 7.1%.; construction revenue rose
by 99.4%; telecommunications revenues grew 16.5%; distribution of
piped gas spiked 19.5%, while revenues from other sources
An exception to these was a 33.0% fall in revenues generated from
use of the main distribution and transmission grid.
Copel reported a year-over-year increase of 15.7% in operating
costs and expenses that totaled R$1,964.6 million (R$861.7
million) in the third quarter 2013. The increase was due
primarily to higher expenses in the following categories: 13.9%
rise in pension and healthcare plans, 27.2% in electricity
purchased for resale, 23.6% in natural gas and supplies for the
gas business and 106.2% in construction costs.
Higher costs in the above-mentioned categories were partially
offset by 47.0% decline in costs related to use of main
distribution and transmission grid, 17.8% in personnel and
management, 14.4% in materials and supplies, 25.7% in materials
and supplies for power electricity and 27.7% in provisions and
EBITDA decreased 6.1% to R$463.3 million (US$203.2 million) with
an EBITDA margin of 20.5% versus 24.2% in the year-ago quarter.
Copel's cash and cash equivalents fell 2.5% sequentially and came
in at R$1,531.8 million (US$686.9 million) exiting the third
quarter 2013. Loans, financing and debentures also went down
sequentially to the extent of 2.4% and came in at R$2,662.5
million (US$1,193.9 million).
Copel in the quarter generated roughly R$275.5 million (US$120.8
million) cash flow from operating activities, down 49.4% year
over year. Capital spending on the purchase of property, plant
and equipment was R$127.0 million (US$55.7 million), reflecting a
42.4% decline from the year-ago quarter.
For the year 2013, Copel plans to spend approximately R$1,922.8
million, with roughly 45.1% on Generation and Transmission, 51.3%
on Distribution and 3.6% on Telecommunications.
Companhia Paranaense de Energia is a fully integrated electric
utility of Brazil engaged in the generation, transmission, and
distribution of electricity to the State of Paraná. The stock
currently has a Zacks Rank #4 (Sell).
However, stocks to watch out for in the industry are
NRG Yield, Inc.
Tractebel Energia S.A.
), both with a Zacks Rank #1 (Strong Buy) and
Alliant Energy Corporation
) with a Zacks Rank #2 (Buy).