Companhia Paranaense de Energia
), also known as COPEL, reported a 16.9% decline in its net
earnings in the first quarter of 2012. Net income in the quarter
settled at R$319.7 million (US$180.63 million) or R$1.17 per share
(US$0.66 per ADR).
Net operating revenues in the first quarter increased 10.9% year
over year to R$2,024.6 million (US$1,143.8 million) due to higher
Revenue improvement was witnessed in all the categories
mentioned below: about 6.5% for Electricity sales to final
customers; 16.5% for sales to distributors; 13.5% for use of main
transmission grid; 9.2% for telecommunications revenue; 22.6% for
distribution of piped gas and 43.3% for other operating revenues.
However, construction revenue dipped 12.7% year over year.
During the quarter, operating costs and expenses went up 15.1%
year over year to R$1,580.6 million (US$893.0 million), due
primarily to a rise in expenses in almost all the categories
including 10.8% in electricity purchased for resale, 11.8% in
expenses related to use of main transmission grid, 22.7% in
personnel and management, 26.6% in pension and healthcare, and
44.4% in natural gas and supplies for the gas business, among
However, higher costs in the above mentioned categories were
partially offset by a 26.8% decline in material and supplies costs;
23.6% drop in raw material and supplies for electricity generation;
and a 14.0% fall in construction costs.
EBITDA dipped slightly by 0.3% to R$585.4 million (US$330.7
million) with an EBITDA margin of 28.9% versus 32.2% in the
Exiting the first quarter 2012, COPEL's cash and cash
equivalents plummeted 21.7% sequentially to R$821.0 (US$451.1
million) while loans and financing increased 3% to R$2,118.8
million (US$1,164.2 million).
Net cash flow from operating activities in the first quarter
2012 was R$59.0 million (US$33.3 million), down 69.8% year over
year while capital spending was R$216.8 million (US$122.5 million),
up 75.3% year over year.
For the fiscal year 2012, COPEL plans to spend approximately
R$2,257.4 million, with roughly 47.4% on Generation and
Transmission, 48.9% on Distribution and 3.7% on
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 provincial
government of the State of Paraná controls about 58.6% of the
shares of COPEL. The company faces stiff competition from
Cia Energetica de Minas Gerais
We currently maintain a Neutral recommendation on the stock.
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