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COPEL Posts Weak 2012 Results - Analyst Blog

By: Zacks.com
Posted: 3/28/2013 9:28:00 AM
Referenced Stocks: BIP;ELP;OTTR;PIKE

Companhia Paranaense de Energia ( ELP ), also known as COPEL, reported its financial results for 2012 on Mar 25, 2013. The company's net income in the year fell 38.3% year over year to R$726.5 million (US$352.7 million). Copel's earnings per share came in at R$2.65 (or equivalent to US$1.29 per ADR) as compared with R$4.30 per share in 2011.

Revenue

Net operating revenues in 2012 increased 9.7% year over year to R$8,532.2 million (US$4,141.8 million).

Revenue improvement was witnessed across all of business categories of COPEL: Electricity sales to final customers grew about 12.6%; sales to distributors surged 12.8%; use of main transmission grid climbed 2.5%; telecommunications revenue increased 7.2%; distribution of piped gas spiked 18.6%; construction revenue rose by 6.3% and other operating revenues shot up 93.3%.

Expenses/Income

During 2012, operating costs and expenses went up 16.5% year over year and came at R$7,542.7 million (US$3,661.5 million). The increase was driven by higher expenses in the following categories: 30.4% rise in electricity purchased for resale, 22.1% in expenses related to use of main transmission grid, 26.9% in personnel and management expenses, 21.2% in pension and health plans, 32.5% in natural gas and supplies for the gas business and 1.96% in material and supplies for the gas operations, among others.            

Higher costs in the above-mentioned categories were partially offset by an 18.4% decline in material costs, 24.5% fall in provisions and reversals and a 17.9% decline in other operating costs and expenses.

EBITDA plummeted 18.9% to R$1,551.1 million (US$753.0 million) with an EBITDA margin of 18.2% versus 24.6% in the year-ago quarter.

Balance Sheet

COPEL's cash and cash equivalents in the fourth quarter of 2012 increased drastically by 97.9% over the sequential quarter and settled at R$1,483.1 million (US$760.6 million) at the end of the quarter. Loans and financing, on the other hand, increased 49.8% sequentially to R$2,987.5 million (US$1,532.1 million).

Cash Flow

COPEL generated cash flow of $1,395.2 million (US$677.3 million) from operating activities in 2012, up 21.5% year over year. Capital spending on purchase of property, plant and equipment was R$875.6 million (US$425.0 million), reflecting an increase of 6.5% year over year.

For the year 2013, COPEL plans to spend approximately R$1,981.4 million, with roughly 46.7% on Generation and Transmission, 49.9% on Distribution and 3.4% 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 ParanĂ¡. The provincial government of the State of ParanĂ¡ controls about 58.6% of the shares of COPEL. The stock currently bears a Zacks Rank #3 (Hold).

Other stocks to watch out for in the industry are Brookfield Infrastructure Partners L.P. ( BIP ), Pike Electric Corporation ( PIKE ) and Otter Tail Corporation ( OTTR ), each holding a Zacks Rank #1 (Strong Buy).



BROOKFIELD INFR (BIP): Free Stock Analysis Report

COPEL-ADR PR B (ELP): Free Stock Analysis Report

OTTER TAIL CORP (OTTR): Free Stock Analysis Report

PIKE ELECTRIC (PIKE): Free Stock Analysis Report

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