CPFL Energia S.A. (CPL)

CPL 
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CPFL Energia S.A. (CPL)

Q3 2012 Earnings Call

November 06, 2012 8:00 am ET

Executives

Wilson Pinto Ferreira - Former Chief Business Development Officer, Vice President of Strategy & Regulation, Vice-President of Distribution Generation & Energy Management and Member of Executive Board

Analysts

Alexandre Kogake - Citigroup Inc, Research Division

Márcio Prado - Santander, Equity Research

Presentation

Operator

Good morning, and thank you for waiting. Welcome to CPFL's Energy Third Quarter of 2012 Earnings Conference Call. Today with us, we have Mr. Wilson Ferreira jr., CEO of CPFL Energia and other officers of the company. This call is being broadcasted simultaneously on the Internet at the Investor Relations website of CPFL Energia, www.cpfl.com.br/ir, where you can also find the presentation for download. [Operator Instructions]

I would like to mention that this call is being recorded. Before proceeding, we would like to mention that forward-looking statements are being made, are made under the Safe Harbor of the Securities Litigation Reform Act of 1996. Forward-looking statements are based on the beliefs and assumptions of CPFL Energia's management and on information currently available to the company.

Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur. Investors should understand that general economic conditions, industry conditions and other operating factors may also affect the future results of CPFL Energia and may lead to results that differ materially from those expressed in such forward-looking statements.

Now I would like to turn the conference over to Mr. Wilson Ferreira, jr. Mr. Ferreira, you may proceed.

Wilson Pinto Ferreira

Thank you very much. Good morning, everyone. I would like to thank you for your presence and for your presence, so investors and analysts during our Third Quarter of 2012 Earnings Conference Call.

And I would like to start with Page #3, where we have the highlights for the third quarter of 2012. Starting with the growth in our sales in the concession area, a 1% growth. In this quarter, we have 2 days left in our revenue timeline. Normalizing this, we will be talking later about that, and this would mean almost 3% growth if we adjust this. And also the commercial startup of the Santa Clara wind farms, which occurred in July. And I would like to mention that due to negotiations with the agency in spite of the fact that the farms are not connected to the network, to the grid, because of delays in the ECG, we are already receiving the resources and billing for the wind farms in Rio Grande do Norte. I would like to highlight the acquisition of the Ester power plant, and we have already published a material information. And in September28, we paid out the dividend of BRL 640 million on September 28. And the normal course of our activities from the investment viewpoint, BRL 660 million in Q3, very much aligned with our estimate, our annual estimate. And I would like to highlight the conclusion of the first area of review of Piratininga, distribution company of the group, with results that are very close to the ones that we had already informed. The markets and that corresponded to an economic repositioning of 7.7% post tariff review, and the annual tariff review applied on October 28. And I would like to talk about the maintenance of the credit score of AA+ by Standard & Poor's for CPFL Energia and for the subsidiaries of the group at a national scale. And maybe due to this moment of the market, a very important moment of a daily -- average daily trading volume in our stock, both in the Brazilian market and by means of our common stock and also ADRs in the U.S. market, we reached an average daily trading volume of BRL 50.4 million and many other recognitions for the company, for the group in this last quarter, and I would like to highlight the Você S.A. survey about the best companies to work for. For more than a 10 years, we've been participating in this important survey carried out by this magazine. And 2 awards, 2 new awards, the first ones that we get, the first one, the EPOCA Climate Change Award of 2012, and especially the EPOCA Business 360 degrees and of company ranked first in this sector in the third in the general ranking in the first survey, involving not only economic results, but also corporate governance and the treatment that the company gives to sustainability and human resources and strategy. So this award, this is very much encompassing from the viewpoint of the valuation. It is more encompassing than the others. So we were very happy to get this recognition for the first time for CPFL in this list. And finally, the Carbon Disclosure Project reports that highlighted the company due to its performance and the disclosure about our CO2 emissions.

Very well, on Page #4, we have the energy sales in the third quarter on the left, we see sales of our accounting release and we see a BRL 2.7 million drop in the captive market and 11.1% increase in what would be the free market in the concession area, giving a total of 1%, highlighting a very important move here in Q3, the migration of free consumers. But also the fact that we are comparing these quarters to the number of days build, which is lower in Q3 2012. On the right we see the volume already normalized in order to allow us to compare the segments. And this is important and based on that, we have a 2.8% growth in the captive market, 3.2%, and the free market, 1.8% growth.

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