Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes _______ No ___X____.
Campinas, November 12, 2018 – CPFL Energia S.A. (B3: CPFE3 and NYSE: CPL), announces its 3Q18 results. The financial and operational information herein, unless otherwise indicated, is presented on a consolidated basis and is in accordance with the applicable legislation. Comparisons are relative to 3Q17, unless otherwise stated.
CPFL ENERGIA ANNOUNCES ITS 3Q18 RESULTS
Indicators (R$ Million) |
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
Sales within the Concession Area - GWh |
16,249 |
15,933 |
2.0% |
50,193 |
48,748 |
3.0% |
Captive Market |
10,808 |
10,770 |
0.3% |
34,082 |
33,894 |
0.6% |
Free Client |
5,441 |
5,162 |
5.4% |
16,111 |
14,854 |
8.5% |
Gross Operating Revenue |
12,174 |
11,073 |
9.9% |
32,313 |
28,960 |
11.6% |
Net Operating Revenue |
8,130 |
7,784 |
4.4% |
21,450 |
19,285 |
11.2% |
EBITDA(1) |
1,548 |
1,275 |
21.4% |
4,284 |
3,498 |
22.5% |
Net Income |
626 |
390 |
60.5% |
1,496 |
745 |
100.6% |
Investments(2) |
525 |
544 |
-3.6% |
1,373 |
1,923 |
-28.6% |
Notes:
(1) EBITDA is calculated from the sum of net income, taxes, financial result, depreciation/amortization, as CVM Instruction no. 527/12. See the calculation in item 4.6 of this report;
(2) Includes investments related to the transmission segment; according to the requirements of IFRIC 12, it was recorded as “Financial Asset of Concession” (in non-current assets). Does not include special obligations.
3Q18 HIGHLIGHTS
• Increase in sales within the concession area (+2.0%), highlighting the growths of the residential (+2.0%) and industrial (+2.4%) classes;
• Increases of 4.4% in Net Operating Revenue and of 21.4% in EBITDA;
• Net debt of R$ 15.5 billion and leverage of 2.92x Net Debt/EBITDA;
• Investments of R$ 525 million;
• Winning projects in the 28th LEN - A-6 Auction (Aug-18): Cherobim SHPP, with 28.0 MW of installed capacity, and Gameleira Wind Complex, with 69.3 MW of installed capacity.
Conference Call with Simultaneous Translation into English | Investor Relations |
(Bilingual Q&A) | Department |
· Tuesday, November 13, 2018 – 11:00 a.m. (Brasília), 08:00 a.m. (ET) | |
55-19-3756-8458 | |
( Portuguese: 55-11-3193-1001 or 55-11-2820-4001 (Brazil) | ri@cpfl.com.br |
( English: 1-800-492-3904 (USA) and 1-646-828-8246 (Other Countries) | www.cpfl.com.br/ir |
3Q18 Results | November 12, 2018 |
INDEX
1) MESSAGE FROM THE CEO | 4 |
2) ENERGY SALES | 5 |
2.1) Sales within the Distributors’ Concession Area | 5 |
2.1.1) Sales by Segment – Concession Area | 6 |
2.1.2) Sales to the Captive Market | 7 |
2.1.3) Free Clients | 7 |
2.2) Generation Installed Capacity | 7 |
3) INFORMATION ON INTEREST IN COMPANIES AND CRITERIA OF FINANCIAL STATEMENTS | |
CONSOLIDATION | 9 |
3.1) Consolidation of CPFL Renováveis Financial Statements | 11 |
3.2) Consolidation of RGE Sul Financial Statements | 11 |
3.3) Economic-Financial Performance Presentation | 11 |
3.4) Consolidation of Transmission Companies | 11 |
4) ECONOMIC-FINANCIAL PERFORMANCE | 12 |
4.1) Opening of economic-financial performance by business segment | 12 |
4.2) Sectoral Financial Assets and Liabilities | 13 |
4.3) Operating Revenue | 13 |
4.4) Cost of Electric Energy | 14 |
4.5) Operating Costs and Expenses | 16 |
4.6) EBITDA | 18 |
4.7) Financial Result | 19 |
4.8) Net Income | 21 |
5) INDEBTEDNESS | 22 |
5.1) Debt (IFRS) | 22 |
5.1.1) Debt Amortization Schedule in IFRS (Sep-18) | 23 |
5.2) Debt in Financial Covenants Criteria | 24 |
5.2.1) Indexation and Debt Cost in Financial Covenants Criteria | 24 |
5.2.2) Net Debt in Financial Covenants Criteria and Leverage | 25 |
6) INVESTMENTS | 25 |
6.1) Actual Investments | 25 |
6.2) Investments Forecasts | 26 |
7) STOCK MARKETS | 27 |
7.1) Stock Performance | 27 |
7.2) Daily Average Volume | 27 |
8) CORPORATE GOVERNANCE | 28 |
9) SHAREHOLDERS STRUCTURE | 29 |
10) PERFORMANCE OF THE BUSINESS SEGMENTS | 30 |
10.1) Distribution Segment | 30 |
10.1.1) Economic-Financial Performance | 30 |
10.1.1.1) Sectoral Financial Assets and Liabilities | 30 |
10.1.1.2) Operating Revenue | 31 |
10.1.1.3) Cost of Electric Energy | 33 |
10.1.1.4) Operating Costs and Expenses | 34 |
10.1.1.5) EBITDA | 36 |
10.1.1.6) Financial Result | 37 |
10.1.1.7) Net Income | 39 |
Page 2 de 67
3Q18 Results | November 12, 2018 |
10.1.2) Tariff Events | 39 |
10.1.3) Operating Performance of Distribution | 42 |
10.2) Commercialization and Services Segments | 43 |
10.2.1) Commercialization Segment | 43 |
10.2.2) Services Segment | 44 |
10.3) Conventional Generation Segment | 45 |
10.3.1) Economic-Financial Performance | 45 |
10.3.1.1) Operating Revenue | 45 |
10.3.1.2) Cost of Electric Power | 46 |
10.3.1.3) Operating Costs and Expenses | 46 |
10.3.1.4) Equity Income | 48 |
10.3.1.5) EBITDA | 49 |
10.3.1.6) Financial Result | 50 |
10.3.1.7) Net Income | 51 |
10.4) CPFL Renováveis | 51 |
10.4.1) Economic-Financial Performance | 51 |
10.4.1.1) Operating Revenue | 52 |
10.4.1.2) Cost of Electric Power | 53 |
10.4.1.3) Operating Costs and Expenses | 53 |
10.4.1.4) EBITDA | 54 |
10.4.1.5) Financial Result | 55 |
10.4.1.6) Net Income | 55 |
10.4.2) Status of Generation Projects – 100% Participation | 55 |
11) ATTACHMENTS | 57 |
11.1) Statement of Assets – CPFL Energia | 57 |
11.2) Statement of Liabilities – CPFL Energia | 58 |
11.3) Income Statement – CPFL Energia | 59 |
11.4) Cash Flow – CPFL Energia | 60 |
11.5) Income Statement – Conventional Generation Segment | 61 |
11.6) Income Statement – CPFL Renováveis | 62 |
11.7) Income Statement – Distribution Segment | 63 |
11.8) Economic-Financial Performance by Distributor | 64 |
11.9) Sales within the Concession Area by Distributor (In GWh) | 65 |
11.10) Sales to the Captive Market by Distributor (in GWh) | 66 |
11.11) Reconciliation of Net Debt/EBITDA Pro Forma ratio of CPFL Energia for purposes of financial | |
covenants calculation | 67 |
Page 3 de 67
3Q18 Results | November 12, 2018 |
1) MESSAGE FROM THE CEO
The CPFL Group continued to be very active in the third quarter of this year, promoting improvements in its operations and management, as well as following the unfolding of the political and economic scenarios of Brazil in its markets.
The results of CPFL Group in the third quarter of 2018 reflected the growth of energy sales in all consumption classes, our discipline in cost and expense management, as well as the drop in interest rates in the last twelve months in Brazil.
The distribution segment had an increase in energy sales (+2.0%). Residential, industrial and commercial classes registered market variations of 2.0%, 2.4% and 0.2%, respectively, reflecting the slow recovery of economy activity.
CPFL Group’s operating cash generation, measured by EBITDA, reached R$ 1,548 million in 3Q18 (+21.4%), reflecting the positive results of all business segments. We highlight the distribution segment, whose EBITDA reached R$ 718 million in 3Q18 (+47.1%), mainly reflecting the results coming from the conclusion of the tariff revision process (4th cycle) of CPFL Paulista, RGE Sul (both in April 2018) and RGE (in June 2018). In addition, the Company is promoting organizational reviews in order to simplify its processes and structure, aiming at greater efficiency and focus on business.
We continue working on value initiatives and in our investment plan in the third quarter, with financial discipline, efforts and commitment of our teams. We invested R$ 525 million in this period.
Among the value initiatives, it is worth mentioning the creation of CPFL Soluções, which brings together services and products previously offered under the brands CPFL Brasil, CPFL Serviços and CPFL Eficiência. In this way, we have an integrated platform for interaction with customers seeking solutions for energy trading, energy efficiency, distributed generation, energy infrastructure and consulting services.
We also had the participation of CPFL Renováveis in the A-6 Auction of August 2018. The Company won with the following projects: (i) Cherobim SHPP, with 28.0 MW of installed capacity, located in Paraná state, and (ii) Gameleira Wind Complex, with 69.3 MW of installed capacity, located in Rio Grande do Norte state.
Still in relation to CPFL Renováveis, we presented advances in relation to the Mandatory Tender Offer of the Company. On October 11, the CVM approved the application for registration of the Mandatory Tender Offer resulting from the indirect transfer of control. On October 22, the Company released a Material Fact informing the publication, on that date, of the Form of Notice of the Offer. The auction will take place on November 26.
CPFL Energia’s capital structure and consolidated leverage remained at adequate levels. The Company’s net debt reached 2.92 times EBITDA at the end of the quarter, under the criteria to measure our financial covenants, below the level verified during 2017 and in 1p8. It is worth mentioning that the reductions in interest rates have benefited the Company.
Finally, CPFL’s management remains optimistic about the advances of the Brazilian electricity sector and remains confident in its business platform, which is increasingly prepared and well positioned to face the challenges and opportunities in the country.
Andre Dorf
CEO of CPFL Energia
Page 4 de 67
3Q18 Results | November 12, 2018 |
2) ENERGY SALES
Sales within the Concession Area - GWh | ||||||
|
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
Captive Market |
10,808 |
10,770 |
0.3% |
34,082 |
33,894 |
0.6% |
Free Client |
5,441 |
5,162 |
5.4% |
16,111 |
14,854 |
8.5% |
Total |
16,249 |
15,933 |
2.0% |
50,193 |
48,748 |
3.0% |
In 3Q18, sales within the concession area, achieved by the distribution segment, totaled 16,249 GWh, an increase of 2.0%. Sales to the captive market totaled 10,808 GWh in 3Q18, an increase of 0.3%. The quantity of energy, in GWh, which corresponds to the consumption of free clients in the concession area of group’s distributors, billed through the Tariff for the Usage of the Distribution System (TUSD), reached 5,441 GWh in 3Q18, an increase of 5.4%.
In 9M18, sales within the concession area totaled 50,193 GWh, an increase of 3.0%. Sales to the captive market totaled 34,082 GWh in 9M18, an increase of 0.6%. The quantity of energy billed through TUSD reached 16,111 GWh in 9M18, an increase of 8.5%.
Sales within the Concession Area - GWh | ||||||||
|
3Q18 |
3Q17 |
Var. |
Part. |
9M18 |
9M17 |
Var. |
Part. |
Residential |
4,627 |
4,538 |
2.0% |
28.5% |
14,647 |
14,256 |
2.7% |
29.2% |
Industrial |
6,368 |
6,221 |
2.4% |
39.2% |
18,653 |
18,030 |
3.5% |
37.2% |
Commercial |
2,482 |
2,478 |
0.2% |
15.3% |
8,207 |
8,101 |
1.3% |
16.4% |
Others |
2,772 |
2,697 |
2.8% |
17.1% |
8,685 |
8,361 |
3.9% |
17.3% |
Total |
16,249 |
15,933 |
2.0% |
100.0% |
50,193 |
48,748 |
3.0% |
100% |
Note: The tables with sales within the concession area by distributor are attached to this report in item 11.9.
Noteworthy in 3Q18, in the concession area:
· Residential and commercial classes (28.5% and 15.3% of total sales, respectively): increases of 2.0% and 0.2%, respectively. Highlights for RGE (+6.3%) and RGE Sul (+4.0%) of the residential class where the effect of temperature contributed to the growth of consumption.
· Industrial class (39.2% of total sales): increase of 2.4%. Highlights for grown in CPFL Piratininga (+4.3%), RGE (+3.7%) and RGE Sul (+4.8%). Even with a low confidence index because of the political scenario, we had an increase in sales with highlights for the activities of chemicals, automotive vehicles, rubber and plastic and foods.
Noteworthy in 9M18, in the concession area:
· Residential and commercial classes (29.2% and 16.4% of total sales, respectively): increases 2.7% and 1.3%, respectively. Lower temperatures in the first quarter were offset by higher temperatures in the last six months, contributing to a year over year sales growth.
· Industrial class (37.2% of total sales): increase of 3.5%, reflecting the positive performance of the main industrial activities in the concession area of CPFL Energia (chemicals, automotive vehicles, rubber and plastic, foods and metallurgy).
Page 5 de 67
3Q18 Results | November 12, 2018 |
2.1.1) Sales by Segment – Concession Area
Note: in parentheses, the variation in percentage points from 3Q17/9M17 to 3Q18/9M18.
Page 6 de 67
3Q18 Results | November 12, 2018 |
2.1.2) Sales to the Captive Market
Sales to the Captive Market - GWh | ||||||
|
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
Residential |
4,627 |
4,538 |
2.0% |
14,647 |
14,256 |
2.7% |
Industrial |
1,557 |
1,631 |
-4.5% |
4,590 |
4,939 |
-7.1% |
Commercial |
1,931 |
1,988 |
-2.9% |
6,413 |
6,584 |
-2.6% |
Others |
2,693 |
2,613 |
3.1% |
8,432 |
8,116 |
3.9% |
Total |
10,808 |
10,770 |
0.3% |
34,082 |
33,894 |
0.6% |
Note: The tables with captive market sales by distributor are attached to this report in item 11.10.
Sales to the captive market totaled 10,808 GWh in 3Q18, an increase of 0.3% (38 GWh), mainly due to the performance of the residential class (+2.0%); the performance of industrial (-4.5%) and commercial (-2.9%) classes, reflects the migration of customers to the free market.
In 9M18, sales to the captive market totaled 34,082 GWh, an increase of 0.6% (188 GWh), mainly due to the performance of the residential class (+2.7%); the performance of industrial (-7.1%) and commercial (-2.6%) classes, also reflects the migration of customers to the free market.
Free Client - GWh | ||||||
|
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
Industrial |
4,811 |
4,590 |
4.8% |
14,063 |
13,091 |
7.4% |
Commercial |
551 |
489 |
12.7% |
1,794 |
1,517 |
18.3% |
Others |
79 |
84 |
-5.9% |
254 |
246 |
3.2% |
Total |
5,441 |
5,162 |
5.4% |
16,111 |
14,854 |
8.5% |
Free Client by Distributor - GWh | ||||||
|
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
CPFL Paulista |
2,493 |
2,421 |
3.0% |
7,434 |
6,950 |
7.0% |
CPFL Piratininga |
1,577 |
1,478 |
6.6% |
4,707 |
4,274 |
10.1% |
RGE |
624 |
596 |
4.7% |
1,804 |
1,725 |
4.6% |
RGE Sul |
593 |
534 |
11.0% |
1,715 |
1,538 |
11.5% |
CPFL Santa Cruz |
155 |
133 |
16.3% |
451 |
368 |
22.5% |
Total |
5,441 |
5,162 |
5.4% |
16,111 |
14,854 |
8.5% |
2.2) Generation Installed Capacity
In 3Q18, the generation installed capacity of CPFL Energia group, considering the proportional stake in each project, is of 3,283 MW.
Page 7 de 67
3Q18 Results | November 12, 2018 |
Page 8 de 67
3Q18 Results | November 12, 2018 |
3) INFORMATION ON INTEREST IN COMPANIES AND CRITERIA OF FINANCIAL STATEMENTS CONSOLIDATION
The interests directly or indirectly held by CPFL Energia in its subsidiaries and jointly-owned entities are described below. Except for: (i) the jointly-owned entities ENERCAN, BAESA, Foz do Chapecó and EPASA, that, as from January 1, 2013 are no longer proportionally consolidated in the Company’s financial statements, being their assets, liabilities and results accounted for using the equity method of accounting, and (ii) the investment in Investco S.A. recorded at cost by the subsidiary Paulista Lajeado, the other units are fully consolidated.
As of September 30, 2018 and 2017, the participation of non-controlling interests stated in the consolidated statements refers to the third-party interests in the subsidiaries CERAN, Paulista Lajeado and CPFL Renováveis.
Since November 1st, 2016 CPFL Energia is considering the full consolidation of RGE Sul.
Energy distribution |
Company Type |
Equity Interest |
Location (State) |
Number of municipalities |
Approximate number of consumers |
Concession term |
End of the concession |
Companhia Paulista de Força e Luz ("CPFL Paulista") |
Publicly-quoted corporation |
Direct |
Countryside of São Paulo |
234 |
4,468 |
30 years |
November 2027 |
Companhia Piratininga de Força e Luz ("CPFL Piratininga") |
Publicly-quoted corporation |
Direct |
Countryside and seaside of São Paulo |
27 |
1,746 |
30 years |
October 2028 |
Rio Grande Energia S.A. ("RGE") |
Publicly-quoted corporation |
Direct |
Countryside of Rio Grande do Sul |
255 |
1,505 |
30 years |
November 2027 |
RGE Sul Distribuidora de Energia S.A. ("RGE Sul") |
Publicly-quoted corporation |
Direct and Indirect |
Countryside of Rio Grande do Sul |
118 |
1,358 |
30 years |
November 2027 |
Companhia Jaguari de Energia ("CPFL Santa Cruz") (d) |
Private corporation |
Direct |
Countryside of São Paulo, Paraná and Minas Gerais |
45 |
454 |
30 years |
July 2045 |
Energy generation (conventional and renewable sources) |
Company Type |
Equity Interest |
Location (State) |
Number of plants / type of energy |
Installed capacity | |
Total |
CPFL participation | |||||
CPFL Geração de Energia S.A. ("CPFL Geração") |
Publicly-quoted corporation |
Direct |
São Paulo and Goiás |
3 Hydroelectric (a) |
1,295 |
678 |
CERAN - Companhia Energética Rio das Antas ("CERAN") |
Private corporation |
Indirect |
Rio Grande do Sul |
3 Hydroelectric |
360 |
234 |
Foz do Chapecó Energia S.A. ("Foz do Chapecó") |
Private corporation |
Indirect |
Santa Catarina and |
1 Hydroelectric |
855 |
436 |
Campos Novos Energia S.A. ("ENERCAN") |
Private corporation |
Indirect |
Santa Catarina |
1 Hydroelectric |
880 |
429 |
BAESA - Energética Barra Grande S.A. ("BAESA") |
Publicly-quoted corporation |
Indirect |
Santa Catarina and |
1 Hydroelectric |
690 |
173 |
Centrais Elétricas da Paraíba S.A. ("EPASA") |
Private corporation |
Indirect |
Paraíba |
2 Thermoelectric |
342 |
182 |
Paulista Lajeado Energia S.A. ("Paulista Lajeado") |
Private corporation |
Indirect |
Tocantins |
1 Hydroelectric |
903 |
63 |
CPFL Energias Renováveis S.A. ("CPFL Renováveis") |
Publicly-quoted corporation |
Indirect |
See chapter 10.4.2 |
See chapter 10.4.2 |
See chapter 10.4.2 |
See chapter 10.4.2 |
CPFL Centrais Geradoras Ltda. ("CPFL Centrais Geradoras") |
Limited company |
Direct |
São Paulo and Minas Gerais |
6 MHPPs |
4 |
4 |
Transmission |
Company Type |
Core activity |
Equity Interest | |||
CPFL Transmissão Piracicaba S.A. ("CPFL Piracicaba") |
Private corporation |
Electric energy transmission services |
Indirect | |||
CPFL Transmissão Morro Agudo S.A. ("CPFL Morro Agudo") |
Private corporation |
Electric energy transmission services |
Indirect | |||
CPFL Transmissão Maracanaú S.A. ("CPFL Maracanaú) |
Privately-held corporation |
Energy transmission services |
Indirect |
Notes:
(a) CPFL Geração holds 51.54% of the assured power and power of the Serra da Mesa HPP, whose concession belongs to Furnas. The Cariobinha HPP and the Carioba TPP projects are deactivated pending the position of the Ministry of Mines and Energy on the anticipated closure of its concession and are not included in the table.
(b) The joint venture Chapecoense fully consolidates the interim financial statements of its direct subsidiary, Foz de Chapecó;
(c) Paulista Lajeado has a 7% participation in the installed power of Investco S.A. (5.94% share of its capital);
(d) On December 31, 2017, was approved the merger of the subsidiaries Companhia Luz e Força Santa Cruz, Companhia Leste Paulista de Energia, Companhia Jaguari de Energia, Companhia Sul Paulista de Energia and Companhia Luz e Força de Mococa into Companhia Jaguari de Energia, whose fancy name became "CPFL Santa Cruz”.
Page 9 de 67
3Q18 Results | November 12, 2018 |
Energy commercialization |
Company Type |
Core activity |
Equity Interest |
CPFL Comercialização Brasil S.A. ("CPFL Brasil") |
Private corporation |
Energy commercialization |
Direct |
Clion Assessoria e Comercialização de Energia Elétrica Ltda. ("CPFL Meridional") |
Limited company |
Commercialization and provision of energy services |
Indirect |
CPFL Comercialização Cone Sul S.A. ("CPFL Cone Sul") |
Private corporation |
Energy commercialization |
Indirect |
CPFL Planalto Ltda. ("CPFL Planalto") |
Limited company |
Energy commercialization |
Direct |
CPFL Brasil Varejista S.A. ("CPFL Brasil Varejista") |
Private corporation |
Energy commercialization |
Indirect |
Services |
Company Type |
Core activity |
Equity Interest |
CPFL Serviços, Equipamentos, Industria e Comércio S.A. ("CPFL Serviços") |
Private corporation |
Manufacturing, commercialization, rental and maintenance of electro-mechanical equipment and service provision |
Direct |
NECT Serviços Administrativos Ltda. ("Nect") |
Limited company |
Provision of administrative services |
Direct |
CPFL Atende Centro de Contatos e Atendimento Ltda. ("CPFL Atende") |
Limited company |
Provision of telephone answering services |
Direct |
CPFL Total Serviços Administrativos Ltda. ("CPFL Total") |
Limited company |
Billing and collection services |
Direct |
CPFL Eficiência Energética S.A. ("CPFL Eficiência") |
Private corporation |
Management in Energy Efficiency |
Direct |
TI Nect Serviços de Informática Ltda. ("Authi") |
Limited company |
IT services |
Direct |
CPFL GD S.A. ("CPFL GD") |
Private corporation |
Electric energy generation services |
Indirect |
Others |
Company Type |
Core activity |
Equity Interest |
CPFL Jaguari de Geração de Energia Ltda. ("Jaguari Geração") |
Limited company |
Venture capital company |
Direct |
Chapecoense Geração S.A. ("Chapecoense") |
Private corporation |
Venture capital company |
Indirect |
Sul Geradora Participações S.A. ("Sul Geradora") |
Private corporation |
Venture capital company |
Indirect |
CPFL Telecom S.A. ("CPFL Telecom") |
Private corporation |
Telecommunication services |
Direct |
Page 10 de 67
3Q18 Results | November 12, 2018 |
3.1) Consolidation of CPFL Renováveis Financial Statements
On September 30, 2018, CPFL Energia indirectly held 51.6% of CPFL Renováveis, through its subsidiary CPFL Geração. CPFL Renováveis has been fully consolidated (100%, line by line), in CPFL Energia’s financial statements since August 1, 2011, and the interest held by the non-controlling shareholders has been mentioned bellow the net income line (in the Financial Statements), as “Non-Controlling Shareholders’ Interest”, and in the Shareholders Equity (in the Balance Sheet) in the line with the same name.
3.2) Consolidation of RGE Sul Financial Statements
On September 30, 2018, CPFL Energia held the following stake in the capital stock of RGE Sul: 76.3893%, directly, and 23.4561%, indirectly, through CPFL Brasil. RGE Sul has been fully consolidated (100%, line by line), in CPFL Energia’s financial statements since November 1Ht, 2016.
3.3) Economic-Financial Performance Presentation
In accordance with U.S. SEC (Securities and Exchange Commission) guidelines and pursuant to items 100(a) and (b) of Regulation G, with the disclosure of 4Q16/2016 results, in order to avoid the disclosure of non-GAAP measures, we no longer disclose the economic-financial performance considering the proportional consolidation of the generation projects and the adjustment of the numbers for non-recurring items, focusing the disclosure in the IFRS criterion. Only in chapter 5, of Indebtedness, we continue presenting the information in the financial covenants criterion, considering that the proper reconciliation with the numbers in the IFRS criterion are presented in item 12.11 of this report.
3.4) Consolidation of Transmission Companies
As of 4Q17, the subsidiaries CPFL Transmissão Piracicaba and CPFL Transmissão Morro Agudo are consolidated in the financial statements of the segment "Conventional Generation".
Page 11 de 67
3Q18 Results | November 12, 2018 |
4) ECONOMIC-FINANCIAL PERFORMANCE
Consolidated Income Statement - CPFL ENERGIA (R$ Million) | ||||||
|
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
Gross Operating Revenue |
12,174 |
11,073 |
9.9% |
32,313 |
28,960 |
11.6% |
Net Operating Revenue |
8,130 |
7,784 |
4.4% |
21,450 |
19,285 |
11.2% |
Cost of Electric Power |
(5,401) |
(5,246) |
3.0% |
(13,953) |
(12,205) |
14.3% |
Operating Costs & Expenses |
(1,656) |
(1,738) |
-4.7% |
(4,647) |
(4,978) |
-6.7% |
EBIT |
1,073 |
800 |
34.2% |
2,850 |
2,102 |
35.6% |
EBITDA1 |
1,548 |
1,275 |
21.4% |
4,284 |
3,498 |
22.5% |
Financial Income (Expense) |
(279) |
(343) |
-18.8% |
(832) |
(1,198) |
-30.5% |
Income Before Taxes |
881 |
546 |
61.2% |
2,259 |
1,157 |
95.2% |
Net Income |
626 |
390 |
60.5% |
1,496 |
745 |
100.6% |
Note: (1) EBITDA is calculated from the sum of net income, taxes, financial result and depreciation/amortization, according to CVM Instruction no. 527/12. See the calculation in item 4.6 of this report.
Income Statement by business segment - CPFL Energia (R$ million) | ||||||||||||||||
|
|
Distribution |
|
Conventional Generation |
|
Renewable Generation |
|
Commerciali-zation |
|
Services |
|
Others |
|
Eliminations |
|
Total |
3Q18 | ||||||||||||||||
Net operating revenue |
6,465 |
307 |
622 |
981 |
140 |
- |
(385) |
8,130 | ||||||||
Operating costs and expenses |
|
(5,747) |
|
(58) |
|
(195) |
|
(937) |
|
(109) |
|
(8) |
|
385 |
|
(6,670) |
Depreciation e amortization |
(183) |
(27) |
(156) |
(1) |
(6) |
(16) |
- |
(388) | ||||||||
Income from electric energy service |
|
535 |
|
222 |
|
271 |
|
43 |
|
26 |
|
(24) |
|
- |
|
1,073 |
Equity accounting |
- |
87 |
- |
- |
- |
- |
- |
87 | ||||||||
EBITDA |
|
718 |
|
336 |
|
427 |
|
43 |
|
32 |
|
(8) |
|
- |
|
1,548 |
Financial result |
(98) |
(62) |
(126) |
(1) |
0 |
8 |
- |
(279) | ||||||||
Income (loss) before taxes |
438 |
247 |
145 |
42 |
26 |
(16) |
- |
881 | ||||||||
Income tax and social contribution |
(161) |
(48) |
(24) |
(14) |
(6) |
(1) |
- |
(255) | ||||||||
Net income (loss) |
|
277 |
|
198 |
|
121 |
|
27 |
|
20 |
|
(17) |
|
- |
|
626 |
3Q17 | ||||||||||||||||
Net operating revenue |
6,131 |
306 |
585 |
986 |
128 |
0 |
(352) |
7,784 | ||||||||
Operating costs and expenses |
|
(5,643) |
|
(75) |
|
(177) |
|
(944) |
|
(107) |
|
(5) |
|
352 |
|
(6,600) |
Depreciation e amortization |
(175) |
(30) |
(158) |
(1) |
(5) |
(16) |
- |
(385) | ||||||||
Income from electric energy service |
|
314 |
|
201 |
|
250 |
|
41 |
|
15 |
|
(21) |
|
- |
|
800 |
Equity accounting |
- |
90 |
- |
- |
- |
- |
- |
90 | ||||||||
EBITDA |
|
488 |
|
321 |
|
408 |
|
42 |
|
21 |
|
(5) |
|
(0) |
|
1,275 |
Financial result |
(132) |
(62) |
(131) |
(4) |
0 |
(15) |
0 |
(343) | ||||||||
Income (loss) before taxes |
182 |
229 |
119 |
37 |
16 |
(36) |
- |
546 | ||||||||
Income tax and social contribution |
(77) |
(41) |
(24) |
(12) |
(3) |
1 |
- |
(156) | ||||||||
Net income (loss) |
|
104 |
|
187 |
|
95 |
|
26 |
|
13 |
|
(35) |
|
- |
|
390 |
Variation | ||||||||||||||||
Net operating revenue |
5.4% |
0.4% |
6.3% |
-0.5% |
10.1% |
-100.0% |
9.3% |
4.4% | ||||||||
Operating costs and expenses |
|
1.8% |
|
-22.7% |
|
10.0% |
|
-0.7% |
|
1.8% |
|
55.4% |
|
9.3% |
|
1.1% |
Depreciation e amortization |
4.6% |
-9.5% |
-1.4% |
-19.6% |
11.2% |
-2.2% |
- |
0.8% | ||||||||
Income from electric energy service |
|
70.7% |
|
10.6% |
|
8.5% |
|
3.2% |
|
67.1% |
|
12.1% |
|
- |
|
34.2% |
Equity accounting |
- |
-3.5% |
- |
- |
- |
- |
- |
-3.5% | ||||||||
EBITDA |
|
47.1% |
|
4.7% |
|
4.7% |
|
2.8% |
|
53.2% |
|
55.4% |
|
-100.0% |
|
21.4% |
Financial result |
-25.9% |
0.0% |
-3.5% |
-71.7% |
-89.4% |
- |
-100.0% |
-18.8% | ||||||||
Income (loss) before taxes |
140.7% |
7.9% |
21.7% |
11.4% |
63.2% |
-56.9% |
- |
61.2% | ||||||||
Income tax and social contribution |
107.8% |
17.4% |
-1.8% |
24.5% |
99.6% |
- |
- |
63.1% | ||||||||
Net income (loss) |
|
165.1% |
|
5.8% |
|
27.6% |
|
5.5% |
|
54.0% |
|
-52.0% |
|
- |
|
60.5% |
Note: an analysis of the economic-financial performance by business segment is presented in chapter 10.
Page 12 de 67
3Q18 Results | November 12, 2018 |
Income Statement by business segment - CPFL Energia (R$ million) | ||||||||||||||||
|
|
Distribution |
|
Conventional Generation |
|
Renewable Generation |
|
Commerciali-zation |
|
Services |
|
Others |
|
Eliminations |
|
Total |
9M18 | ||||||||||||||||
Net operating revenue |
17,307 |
859 |
1,420 |
2,534 |
380 |
- |
(1,050) |
21,450 | ||||||||
Operating costs and expenses |
|
(15,029) |
|
(141) |
|
(510) |
|
(2,452) |
|
(301) |
|
(26) |
|
1,050 |
|
(17,408) |
Depreciation e amortization |
(570) |
(88) |
(468) |
(2) |
(17) |
(47) |
- |
(1,192) | ||||||||
Income from electric energy service |
|
1,708 |
|
631 |
|
442 |
|
80 |
|
62 |
|
(73) |
|
- |
|
2,850 |
Equity accounting |
- |
241 |
- |
- |
- |
- |
- |
241 | ||||||||
EBITDA |
|
2,278 |
|
960 |
|
910 |
|
82 |
|
79 |
|
(26) |
|
- |
|
4,284 |
Financial result |
(249) |
(205) |
(375) |
(13) |
(1) |
10 |
- |
(832) | ||||||||
Income (loss) before taxes |
1,459 |
667 |
68 |
67 |
62 |
(63) |
- |
2,259 | ||||||||
Income tax and social contribution |
(537) |
(132) |
(56) |
(24) |
(15) |
1 |
- |
(764) | ||||||||
Net income (loss) |
|
921 |
|
535 |
|
12 |
|
43 |
|
46 |
|
(62) |
|
- |
|
1,496 |
9M17 | ||||||||||||||||
Net operating revenue |
15,327 |
895 |
1,368 |
2,370 |
346 |
1 |
(1,022) |
19,285 | ||||||||
Operating costs and expenses |
|
(13,760) |
|
(224) |
|
(501) |
|
(2,252) |
|
(285) |
|
(40) |
|
1,022 |
|
(16,041) |
Depreciation e amortization |
(524) |
(90) |
(462) |
(2) |
(14) |
(49) |
- |
(1,142) | ||||||||
Income from electric energy service |
|
1,042 |
|
581 |
|
406 |
|
115 |
|
46 |
|
(88) |
|
- |
|
2,102 |
Equity accounting |
- |
253 |
- |
- |
- |
- |
- |
253 | ||||||||
EBITDA |
|
1,566 |
|
924 |
|
867 |
|
117 |
|
61 |
|
(39) |
|
(0) |
|
3,498 |
Financial result |
(479) |
(265) |
(387) |
(25) |
2 |
(44) |
0 |
(1,198) | ||||||||
Income (loss) before taxes |
563 |
568 |
18 |
90 |
49 |
(132) |
- |
1,157 | ||||||||
Income tax and social contribution |
(235) |
(100) |
(50) |
(29) |
(11) |
14 |
- |
(412) | ||||||||
Net income (loss) |
|
328 |
|
469 |
|
(32) |
|
61 |
|
38 |
|
(118) |
|
- |
|
745 |
Variation | ||||||||||||||||
Net operating revenue |
12.9% |
-4.0% |
3.8% |
6.9% |
9.7% |
-100.0% |
2.7% |
11.2% | ||||||||
Operating costs and expenses |
|
9.2% |
|
-37.2% |
|
1.8% |
|
8.8% |
|
5.4% |
|
-35.1% |
|
2.7% |
|
8.5% |
Depreciation e amortization |
8.8% |
-3.1% |
1.4% |
-25.5% |
16.9% |
-4.3% |
- |
4.3% | ||||||||
Income from electric energy service |
|
63.8% |
|
8.7% |
|
9.1% |
|
-30.3% |
|
34.4% |
|
-16.9% |
|
- |
|
35.6% |
Equity accounting |
- |
-4.6% |
- |
- |
- |
- |
- |
-4.6% | ||||||||
EBITDA |
|
45.4% |
|
3.9% |
|
5.0% |
|
-30.2% |
|
30.3% |
|
-33.0% |
|
-100.0% |
|
22.5% |
Financial result |
-48.0% |
-22.7% |
-3.2% |
-46.4% |
- |
- |
-100.0% |
-30.5% | ||||||||
Income (loss) before taxes |
158.9% |
17.4% |
266.8% |
-25.8% |
26.8% |
-52.5% |
- |
95.2% | ||||||||
Income tax and social contribution |
128.3% |
32.0% |
11.3% |
-18.4% |
42.6% |
-93.8% |
- |
85.5% | ||||||||
Net income (loss) |
|
180.9% |
|
14.2% |
|
- |
|
-29.4% |
|
22.3% |
|
-47.7% |
|
- |
|
100.6% |
Note: an analysis of the economic-financial performance by business segment is presented in chapter 10.
In 3Q18, it was accounted the total sectoral financial assets in the amount of R$ 1,089 million, compared to the total sectoral financial assets in the amount of R$ 1,245 million in 3Q17, a reduction of 12.6% (R$ 156 million). In 9M18, it was accounted the total sectoral financial assets in the amount of R$ 1,943 million, compared to the total sectoral financial assets in the amount of R$ 1,049 million in 9M17, an increase of 85.2% (R$ 893 million).
On September 30, 2018, the balance of these sectoral financial assets and liabilities was positive in R$ 2,207 million, compared to a positive balance of R$ 1,094 million on June 30, 2018 and a negative balance of R$ 107 million on September 30, 2017.
As established by the applicable regulation, any sectoral financial assets or liabilities shall be included in the tariffs of the distributors in their respective annual tariff events.
In 3Q18, gross operating revenue reached R$ 12,174 million, representing an increase of 9.9% (R$ 1,101 million). Deductions from the gross operating revenue was of R$ 4,044 million in 3Q18, representing an increase of 22.9% (R$ 755 million). Net operating revenue reached R$ 8,130 million in 3Q18, registering an increase of 4.4% (R$ 346 million).
The main factors that affected the net operating revenue were:
· Increase of revenues in the Distribution segment, in the amount of R$ 334 million (for more details, see item 10.1.1.2);
Page 13 de 67
3Q18 Results | November 12, 2018 |
· Increase of revenues in the Renewable Generation segment, in the amount of R$ 37 million;
· Increase of revenues in the Services segment, in the amount of R$ 13 million;
· Increase of revenues in the Conventional Generation segment, in the amount of R$ 1 million;
Partially offset by:
· Reduction of R$ 33 million, due to eliminations;
· Reduction of revenues in the Commercialization segment, in the amount of R$ 5 million.
In 9M18, gross operating revenue reached R$ 32,313 million, representing an increase of 11.6% (R$ 3,353 million). Deductions from the gross operating revenue was of R$ 10,862 million in 9M18, representing an increase of 12.3% (R$ 1,188 million). Net operating revenue reached R$ 21,450 million in 9M18, registering an increase of 11.2% (R$ 2,165 million).
The main factors that affected the net operating revenue were:
· Increase of revenues in the Distribution segment, in the amount of R$ 1,980 million (for more details, see item 10.1.1.2);
· Increase of revenues in the Commercialization segment, in the amount of R$ 164 million;
· Increase of revenues in the Renewable Generation segment, in the amount of R$ 52 million;
· Increase of revenues in the Services segment, in the amount of R$ 34 million;
Partially offset by:
· Reduction of revenues in the Conventional Generation segment, in the amount of R$ 36 million;
· Reduction of R$ 28 million, due to eliminations;
· Reduction of revenues in Others, in the amount of R$ 1 million.
Cost of Electric Energy (R$ Million) | ||||||
|
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
Cost of Electric Power Purchased for Resale |
||||||
Energy from Itaipu Binacional |
751 |
596 |
25.9% |
2,025 |
1,764 |
14.8% |
Energy Purchased in the Spot Market/PROINFA |
82 |
74 |
11.5% |
250 |
216 |
15.5% |
Energy Purchased through Auction in the Regulated Environment and Bilateral Contracts |
4,660 |
4,582 |
1.7% |
11,077 |
10,466 |
5.8% |
PIS and COFINS Tax Credit |
(490) |
(478) |
2.4% |
(1,186) |
(1,134) |
4.5% |
Total |
5,003 |
4,773 |
4.8% |
12,167 |
11,312 |
7.6% |
|
|
|
|
|||
Charges for the Use of the Transmission and Distribution System |
|
|
|
|
||
Basic Network Charges |
487 |
492 |
-0.9% |
1,630 |
988 |
65.0% |
Itaipu Transmission Charges |
71 |
66 |
6.6% |
198 |
97 |
104.8% |
Connection Charges |
46 |
31 |
48.1% |
116 |
91 |
28.1% |
Charges for the Use of the Distribution System |
13 |
8 |
76.0% |
35 |
30 |
17.1% |
System Service Usage Charges - ESS |
(178) |
(76) |
135.6% |
(138) |
(224) |
-38.2% |
Reserve Energy Charges - EER |
(0) |
(0) |
276.2% |
135 |
(0) |
- |
PIS and COFINS Tax Credit |
(40) |
(47) |
-16.2% |
(189) |
(87) |
116.7% |
Total |
399 |
473 |
-15.8% |
1,786 |
894 |
99.9% |
|
|
|
|
|||
Cost of Electric Energy |
5,401 |
5,246 |
3.0% |
13,953 |
12,205 |
14.3% |
In 3Q18, the cost of electric energy, comprising the purchase of electricity for resale and charges for the use of the distribution and transmission system, amounted to R$ 5,401 million, registering an increase of 3.0% (R$ 155 million).
Page 14 de 67
3Q18 Results | November 12, 2018 |
The factors that explain these variations follow below:
· The cost of electric power purchased for resale reached R$ 5,003 million in 3Q18, an increase of 4.8% (R$ 230 million), due to the following factors:
(i) Increase of 25.9% (R$ 155 million) in the cost of energy from Itaipu, due to the increase of 33.4% in the average purchase price (R$ 267.46/MWh in 3Q18 vs. R$ 200.52/MWh in 3Q17), partially offset by the reduction of 5.6% (166 GWh) in the volume of purchased energy;
(ii) Increase of 1.7% (R$ 78 million) in the cost of energy purchased through auction in the regulated environment and bilateral contracts, due to the increase of 11.4% in the average purchase price (R$ 311.58/MWh in 3Q18 vs. R$ 279.58/MWh in 3Q17), partially offset by the reduction of 8.7% (1,431 GWh) in the volume of purchased energy;
(iii) Increase of 11.5% (R$ 8 million) in the amount of energy purchased in the spot market/PROINFA cost;
Partially offset by:
(iv) Increase of 2.4% (R$ 11 million) in PIS and COFINS tax credits (cost reducer), generated from the energy purchase.
· Charges for the use of the transmission and distribution system reached R$ 399 million in 3Q18, a reduction of 15.8% (R$ 75 million), due to the following factors:
(i) Increase of 135.6% (R$ 103 million) in the System Service Usage Charges – ESS (cost reducer), from a revenue of R$ 76 million in 3Q17 to a revenue of R$ 178 million in 3Q18;
(ii) Reduction of 0.9% (R$ 5 million) in the basic network charges;
Partially offset by:
(iii) Increase of 48.1% (R$ 15 million) in charges for connection;
(iv) Reduction of 16.2% (R$ 8 million) in PIS and COFINS tax credits (cost reducer), generated from the charges;
(v) Increase of 76.0% (R$ 6 million) in charges for usage of the distribution system;
(vi) Increase of 6.6% (R$ 4 million) in Itaipu transmission charges.
In 9M18, the cost of electric energy, comprising the purchase of electricity for resale and charges for the use of the distribution and transmission system, amounted to R$ 13,953 million, registering an increase of 14.3% (R$ 1,748 million).
The factors that explain these variations follow below:
· The cost of electric power purchased for resale reached R$ 12,167 million in 9M18, an increase of 7.6% (R$ 855 million), due to the following factors:
(i) Increase of 5.8% (R$ 612 million) in the cost of energy purchased through auction in the regulated environment and bilateral contracts, due to the increase of 13.8% in the average purchase price (R$ 243.23/MWh in 9M18 vs. R$ 213.74/MWh in 9M17), partially offset by the reduction of 7.0% (3,423 GWh) in the volume of purchased energy;
(ii) Increase of 14.8% (R$ 261 million) in the cost of energy from Itaipu, due to the increase of 21.7% in the average purchase price (R$ 243.71/MWh in 9M18 vs. R$ 200.32/MWh in 9M17), partially offset by the reduction of 5.6% (496 GWh) in the
Page 15 de 67
3Q18 Results | November 12, 2018 |
volume of purchased energy;
(iii) Increase of 15.5% (R$ 34 million) in the amount of energy purchased in the spot market/PROINFA cost;
Partially offset by:
(iv) Increase of 4.5% (R$ 52 million) in PIS and COFINS tax credits (cost reducer), generated from the energy purchase.
· Charges for the use of the transmission and distribution system reached R$ 1,786 million in 9M18, an increase of 99.9% (R$ 893 million), due to the following factors:
(i) Increase of 65.0% (R$ 642 million) in the basic network charges;
(ii) Expense of R$ 135 million in 9M18, related to Reserve Energy Charges – EER;
(iii) Increase of 104.8% (R$ 102 million) in Itaipu transmission charges;
(iv) Reduction of 38.2% (R$ 86 million) in the System Service Usage Charges – ESS (cost reducer), from a revenue of R$ 224 million in 3Q17 to a revenue of R$ 138 million in 3Q18;
(v) Increase of 28.1% (R$ 25 million) in charges for connection;
(vi) Increase of 17.1% (R$ 5 million) in charges for usage of the distribution system;
Partially offset by:
(vii) Increase of 116.7% (R$ 102 million) in PIS and COFINS tax credits (cost reducer), generated from the charges.
Operating costs and expenses reached R$ 1,656 million in 3Q18, compared to R$ 1,738 million in 3Q17, a reduction of 4.7% (R$ 82 million). In 9M18, operating costs and expenses reached R$ 4,647 million, compared to R$ 4,978 million in 9M17, a reduction of 6.7% (R$ 331 million).
The factors that explain these variations follow below:
PMSO
Reported PMSO (R$ million) | ||||||||
|
3Q18 |
3Q17 |
Variation |
9M18 |
9M17 |
Variação | ||
|
R$ MM |
% |
R$ MM |
% | ||||
Reported PMSO |
|
|
|
|
|
|
|
|
Personnel |
(344) |
(329) |
(15) |
4.5% |
(1,034) |
(998) |
(36) |
3.6% |
Material |
(62) |
(69) |
7 |
-10.6% |
(188) |
(182) |
(6) |
3.3% |
Outsourced Services |
(162) |
(174) |
12 |
-6.9% |
(499) |
(548) |
50 |
-9.1% |
Other Operating Costs/Expenses |
(215) |
(154) |
(61) |
39.6% |
(463) |
(543) |
79 |
-14.6% |
Allowance for doubtful accounts |
(45) |
(33) |
(13) |
38.6% |
(114) |
(119) |
5 |
-4.3% |
Legal, judicial and indemnities expenses |
(69) |
(8) |
(60) |
723.4% |
(113) |
(122) |
9 |
-7.7% |
Others |
(100) |
(113) |
12 |
-10.9% |
(237) |
(302) |
65 |
-21.5% |
Total Reported PMSO |
(783) |
(726) |
(57) |
7.8% |
(2,184) |
(2,271) |
87 |
-3.8% |
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3Q18 Results | November 12, 2018 |
The PMSO item reached R$ 783 million in 3Q18, compared to R$ 726 million in 3Q17, an increase of 7.8% (R$ 57 million), due to the following factors:
(i) Personnel - increase of 4.5% (R$ 15 million), mainly due to:
ü Collective bargaining agreement – wages and benefits (R$ 8 million);
ü Other effects (R$ 7 million);
(ii) Material - increase of 10.6% (R$ 7 million), mainly due to:
ü Increase in the replacement of material to the maintenance of lines and grid (R$ 10 million);
Partially offset by:
ü Other effects (R$ 3 million);
(iii) Out-sourced services - reduction of 6.9% (R$ 12 million), mainly due to:
ü Reduction with the primarization of miscellaneous services (R$ 10 million);
ü Other effects (R$ 2 million);
(iv) Other operational costs/expenses - increase of 39.6% (R$ 61 million), mainly due to:
ü Increase of 723.4% in legal and judicial expenses (R$ 60 million);
ü Increase of 38.6% in allowance for doubtful account (R$ 13 million);
ü Compensation for non-compliance with technical indicators (R$ 7 million), which from January 2018 onwards was classified under Other Revenues;
Partially offset by:
ü Reduction of 30.0% of loss on disposal, retirement and other noncurrent assets (R$ 15 million);
ü Other effects (R$ 4 million).
In 9M18, the PMSO item reached R$ 2,184 million, compared to R$ 2,271 million in 9M17, a reduction of 3.8% (R$ 87 million), due to the following factors:
(i) Personnel - increase of 3.6% (R$ 36 million), mainly due to the collective bargaining agreement – wages and benefits;
(ii) Material - increase of 3.3% (R$ 6 million), mainly due to the increase in the replacement of material to the maintenance of lines and grid:
(iii) Out-sourced services - reduction of 9.1% (R$ 50 million), mainly due to the reductions PIS and COFINS tax credits, with the primarization of miscellaneous services, in the equipment maintenance and in audit and consulting;
(iv) Other operational costs/expenses - reduction of 14.6% (R$ 79 million), mainly due to:
ü Compensation for non-compliance with technical indicators (R$ 34 million), which from January 2018 onwards was classified under Other Revenues;
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3Q18 Results | November 12, 2018 |
ü Reduction of 12.0% of loss on disposal, retirement and other noncurrent assets (R$ 12 million);
ü Reduction of 7.7% in legal and judicial expenses (R$ 9 million);
ü Reduction of 4.3% in allowance for doubtful account (R$ 5 million);
ü Other effects (R$ 19 million).
Other operating costs and expenses
Other operating costs and expenses reached R$ 873 million in 3Q18, compared to R$ 1,012 million in 3Q17, registering a reduction of 13.7% (R$ 139 million), due to the following factors:
· Reduction of 22.7% (R$ 136 million) in Costs of Building the Infrastructure item;
· Reduction of 21.1% (R$ 6 million) in Private Pension Fund item, due to the registration of the impacts of the 2018 actuarial report;
Partially offset by:
· Increase of 1.0% (R$ 3 million) in Depreciation and Amortization item.
In 9M18, other operating costs and expenses reached R$ 2,462 million, compared to R$ 2,707 million in 9M17, registering a reduction of 9.0% (R$ 244 million), due to the following factors:
· Reduction of 18.6% (R$ 276 million) in Costs of Building the Infrastructure item;
· Reduction of 21.1% (R$ 18 million) in Private Pension Fund item, due to the registration of the impacts of the 2018 actuarial report;
· Reduction of 0.7% (R$ 1 million) in Amortization of Intangible of Concession Asset item;
Partially offset by:
· Increase of 5.5% (R$ 51 million) in Depreciation and Amortization item.
In 3Q18, EBITDA reached R$ 1,548 million, compared to R$ 1,275 million in 3Q17, registering an increase of 21.4% (R$ 273 million). In 9M18, EBITDA reached R$ 4,284 million, compared to R$ 3,498 million in 9M17, registering an increase of 22.5% (R$ 786 million).
EBITDA is calculated according to CVM Instruction no. 527/12 and showed in the table below:
EBITDA and Net Income conciliation (R$ million) | ||||||
|
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
Net Income |
626 |
390 |
60.5% |
1,496 |
745 |
100.6% |
Depreciation and Amortization |
388 |
385 |
1,192 |
1,143 |
||
Financial Result |
279 |
343 |
832 |
1,198 |
||
Income Tax / Social Contribution |
255 |
156 |
764 |
412 |
||
EBITDA |
1,548 |
1,275 |
21.4% |
4,284 |
3,498 |
22.5% |
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3Q18 Results | November 12, 2018 |
4.7) Financial Result
Financial Result (R$ Million) | ||||||
|
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
Revenues |
||||||
Income from Financial Investments |
55 |
94 |
-41.8% |
176 |
384 |
-54.2% |
Additions and Late Payment Fines |
70 |
61 |
15.3% |
203 |
204 |
-0.3% |
Fiscal Credits Update |
8 |
10 |
-21.0% |
13 |
15 |
-15.3% |
Judicial Deposits Update |
10 |
14 |
-25.8% |
28 |
40 |
-29.6% |
Monetary and Foreign Exchange Updates |
22 |
21 |
3.9% |
51 |
50 |
1.3% |
Discount on Purchase of ICMS Credit |
6 |
4 |
60.6% |
25 |
9 |
165.2% |
Sectoral Financial Assets Update |
23 |
(1) |
- |
45 |
- |
- |
PIS and COFINS - over Other Financial Revenues |
(12) |
(10) |
16.2% |
(35) |
(37) |
-7.2% |
PIS and COFINS over Interest on Own Capital |
- |
(2) |
-100.0% |
0 |
(2) |
- |
Others |
31 |
15 |
104.5% |
74 |
46 |
59.8% |
Total |
213 |
206 |
3.4% |
579 |
709 |
-18.3% |
|
|
|
|
|||
Expenses |
|
|
|
|
||
Debt Charges |
(321) |
(393) |
-18.4% |
(1,003) |
(1,321) |
-24.1% |
Monetary and Foreign Exchange Updates |
(136) |
(98) |
38.6% |
(299) |
(436) |
-31.5% |
(-) Capitalized Interest |
7 |
8 |
-7.2% |
20 |
42 |
-52.0% |
Sectoral Financial Liabilities Update |
3 |
(30) |
- |
- |
(81) |
-100.0% |
Use of Public Asset |
(5) |
(1) |
404.0% |
(14) |
(5) |
193.8% |
Others |
(39) |
(34) |
15.1% |
(116) |
(106) |
9.5% |
Total |
(492) |
(549) |
-10.5% |
(1,411) |
(1,907) |
-26.0% |
|
|
|
|
|||
Financial Result |
(279) |
(343) |
-18.8% |
(832) |
(1,198) |
-30.5% |
In 3Q18, net financial expense was of R$ 279 million, a reduction of 18.8% (R$ 64 million) compared to the net financial expense of R$ 343 million reported in 3Q17.
The items explaining these variations in Financial Result are as follows:
· Financial Revenues: increase of 3.4% (R$ 7 million), from R$ 206 million in 3Q17 to R$ 213 million in 3Q18, mainly due to the following factors:
(i) Variation of R$ 24 million in sectoral financial assets update, from an expense of R$ 1 million in 3Q17 to a revenue of R$ 23 million in 3Q18;
(ii) Increase of 104,5% (R$ 16 million) in other financial revenues;
(iii) Increase of 15.3% (R$ 9 million) in additions and late payment fines;
(iv) Increase of 60.6% (R$ 2 million) in discount on the acquisition of ICMS credit;
(v) Reduction of R$ 2 million in PIS and COFINS over Interest on Own Capital (revenue reducer);
(vi) Increase of 3.9% (R$ 1 million) in the monetary and foreign exchange updates, due to: (a) the increase of R$ 16 million in revenues from fines, interest and monetary adjustment relating to installment payments made by consumers; partially offset by the reductions (b) of R$ 12 million in other monetary and foreign exchange updates; and (c) of R$ 3 million in gains with the zero-cost collar derivative1;
1 In 2015, subsidiary CPFL Geração contracted US$ denominated put and call options, involving the same financial institution as counterpart, and which on a combined basis are characterized as an operation usually known as zero-cost collar. The contracting of this operation does not involve any kind of speculation, inasmuch as it is aimed at minimizing any negative impacts on future revenues of the joint venture ENERCAN, which has electric energy sale agreements with annual restatement of part of the tariff based on the variation in the US$. In addition, according to Management’s view, the scenario was favorable for contracting this type of financial instrument, considering the high volatility implicit in dollar options and the fact that there was no initial cost for same.
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3Q18 Results | November 12, 2018 |
Partially offset by:
(vii) Reduction of 41.8% (R$ 39 million) in the income from financial investments, due to the reductions in the CDI interbank rate and in the average balance of investments;
(viii) Reduction of 25.8% (R$ 4 million) in judicial deposits update;
(ix) Reduction of 21.0% (R$ 2 million) in fiscal credits update;
(x) Increase of 16.2% (R$ 2 million) in PIS and COFINS over Other Financial Revenue (revenue reducer).
· Financial Expenses: reduction of 10.5% (R$ 57 million), from R$ 549 million in 3Q17 to R$ 492 million in 3Q18, mainly due to the following factors:
(i) Reduction of 18.4% (R$ 72 million) of debt charges in local currency, due to the reduction in the CDI interbank rate;
(ii) Variation of R$ 33 million in sectoral financial liabilities update, from an expense of R$ 30 million in 3Q17 to a revenue of R$ 3 million in 3Q18;
Partially offset by:
(iii) Increase of 38.6% (R$ 38 million) in the monetary and foreign exchange updates, due to: (a) the mark-to-market negative effect for financial operations under Law 4,131 – non-cash effect (R$ 35 million); and (b) the effect of Itaipu’s exchange variation (R$ 14 million); partially offset by (c) the reduction of debt charges in foreign currency, with swap to CDI interbank rate (R$ 11 million);
(iv) Increase of 15.1% (R$ 5 million) in other financial expenses;
(v) Increase of 404.4% (R$ 4 million) in the financial expenses with the Use of Public Asset (UBP);
(vi) Reduction of 7.2% (R$ 1 million) in capitalized interest (expense reducer).
In 9M18, net financial expense was of R$ 832 million, a reduction of 30.5% (R$ 366 million) compared to the net financial expense of R$ 1,198 million reported in 9M17.
The items explaining these variations in Financial Result are as follows:
· Financial Revenues: reduction of 18.3% (R$ 130 million), from R$ 709 million in 9M17 to R$ 579 million in 9M18, mainly due to the following factors:
(i) Reduction of 54.2% (R$ 208 million) in the income from financial investments, due to the reductions in the CDI interbank rate and in the average balance of investments;
(ii) Reduction of 29.6% (R$ 12 million) in judicial deposits update;
(iii) Reduction of 15.3% (R$ 2 million) in fiscal credits update;
(iv) Reduction of 0.3% (R$ 1 million) in additions and late payment fines;
Partially offset by:
(v) Variation of R$ 45 million in sectoral financial assets update;
(vi) Increase of 59.8% (R$ 28 million) in other financial revenues;
(vii) Increase of 165.2% (R$ 15 million) in discount on the acquisition of ICMS credit;
(viii) Reduction of 7.2% (R$ 3 million) in PIS and COFINS over Other Financial Revenue (revenue reducer);
(ix) Reduction of R$ 2 million in PIS and COFINS over Interest on Own Capital (revenue
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3Q18 Results | November 12, 2018 |
reducer);
(x) Increase of 1.3% (R$ 1 million) in the monetary and foreign exchange updates, due to the increases: (a) of R$ 26 million in revenues from fines, interest and monetary adjustment relating to installment payments made by consumers; and (b) of R$ 1 million in the update of the balance of tariff subsidies, as determined by ANEEL; partially offset by the reductions (c) of R$ 18 million in the gains with the zero-cost collar derivative; and (d) of R$ 9 million in other monetary and foreign exchange updates.
· Financial Expenses: reduction of 26.0% (R$ 496 million), from R$ 1,907 million in 9M17 to R$ 1,411 million in 9M18, mainly due to the following factors:
(i) Reduction of 24.1% (R$ 319 million) of debt charges in local currency, due to the reduction in the CDI interbank rate;
(ii) Reduction of 31.5% (R$ 137 million) in the monetary and foreign exchange updates, due to: (a) the reduction of debt charges in foreign currency, with swap to CDI interbank rate (R$ 146 million); partially offset by (b) the effect of Itaipu’s exchange variation (R$ 7 million); and (c) the mark-to-market negative effect for financial operations under Law 4,131 – non-cash effect (R$ 2 million);
(iii) Variation of R$ 81 million in sectoral financial liabilities update;
Partially offset by:
(iv) Reduction of 52.0% (R$ 22 million) in capitalized interest (expense reducer);
(v) Increase of 9.5% (R$ 10 million) in other financial expenses;
(vi) Increase of 193.8% (R$ 9 million) in the financial expenses with the Use of Public Asset (UBP).
Net income was of R$ 626 million in 3Q18, registering an increase of 60.5% (R$ 236 million) if compared to the net income of R$ 390 million observed in 3Q17. In 9M18, net income was of R$ 1,496 million, registering an increase of 100.6% (R$ 750 million) if compared to the net income of R$ 745 million observed in 9M17.
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3Q18 Results | November 12, 2018 |
5) INDEBTEDNESS
Page 22 de 67
3Q18 Results | November 12, 2018 |
Net Debt in IFRS
IFRS | R$ Million |
3Q18 |
3Q17 |
Var. % |
Financial Debt (including hedge) |
(20,650) |
(19,291) |
7.0% |
(+) Available Funds |
3,579 |
3,832 |
-6.6% |
(=) Net Debt |
(17,071) |
(15,459) |
10.4% |
CPFL Energia has a large market access to liquidity sources through diversified funding alternatives, either through local market financing lines such as debenture issues, BNDES and other development banks, or through financing lines in the foreign market. This access to credit for the CPFL group is currently strengthened by the support of its shareholding structure, as State Grid gives greater robustness to CPFL group in financial market.
The cash position at the end of 3Q18 had a coverage ratio of 0.94x the amortizations of the next 12 months, enough to honor all amortization commitments until the beginning of 2019. The average amortization term, calculated from this schedule, is of 3.16 years.
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3Q18 Results | November 12, 2018 |
Gross Debt Cost1 in IFRS criteria
Note: (1) as of 2Q17, CPFL Energia started to calculate its debt average cost considering the end of the period, to better reflect the variations on interest rates.
Indexation1 After Hedge2 in Financial Covenants Criteria – 3Q17 vs. 3Q18
3Q17
3Q18
1) Considering proportional consolidation of CPFL Renováveis, CERAN, ENERCAN, Foz do Chapecó and EPASA;
2) For debt linked to foreign currency (29.3% of total), swap operations are contracted, aiming the protection of the foreign exchange and the rate linked to the contract.
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3Q18 Results | November 12, 2018 |
In 3Q18 Proforma Net Debt totaled R$ 15,503 million, an increase of 12.9% compared to net debt position at the end of 3Q17, in the amount of R$ 13,731 million.
Covenant Criteria (*) - R$ Million |
3Q18 |
3Q17 |
Var. |
Financial Debt (including hedge)1 |
(18,589) |
(17,138) |
8.5% |
(+) Available Funds |
3,086 |
3,407 |
-9.4% |
(=) Net Debt |
(15,503) |
(13,731) |
12.9% |
EBITDA Proforma2 |
5,306 |
4,235 |
25.3% |
Net Debt / EBITDA |
2.92 |
3.24 |
-9.89% |
1) Considering proportional consolidation of CPFL Renováveis, CERAN, ENERCAN, Foz do Chapecó and EPASA;
2) Proforma EBITDA in the financial covenants criteria: adjusted according to equivalent participation of CPFL Energia in each of its subsidiaries, with the inclusion of regulatory assets and liabilities and the historical EBITDA of newly acquired projects.
In line with the criteria for calculation of financial covenants of loan agreements with financial institutions, net debt is adjusted according to the equivalent stake of CPFL Energia in each of its subsidiaries. Also, include in the calculation of Proforma EBITDA the effects of historic EBITDA of newly acquired projects. Considering that the Proforma Net Debt totaled R$ 15,503 million and Proforma EBITDA in the last 12 months reached R$ 5,306 million, the ratio Proforma Net Debt / EBITDA at the end of 3Q18 reached 2.92x.
Investments (R$ Million) | ||||||
Segment |
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
Distribution |
440 |
477 |
-7.7% |
1,152 |
1,264 |
-8.8% |
Generation - Conventional |
2 |
1 |
49.6% |
6 |
3 |
81.0% |
Generation - Renewable |
70 |
45 |
56.3% |
174 |
566 |
-69.2% |
Commercialization |
1 |
1 |
34.9% |
2 |
2 |
1.7% |
Services and Others1 |
10 |
15 |
-36.0% |
35 |
42 |
-14.8% |
Subtotal |
522 |
538 |
-3.0% |
1,370 |
1,877 |
-27.0% |
Transmission |
3 |
6 |
-57.7% |
3 |
46 |
-93.6% |
Total |
525 |
544 |
-3.6% |
1,373 |
1,923 |
-28.6% |
Note:
1) Others – basically refer to assets and transactions that are not related to the listed segments.
In 3Q18, investments were R$ 525 million, a reduction of 3.6% compared to 3Q17. In 9M18, the investments were R$ 1,373 million, a reduction of 28.6%. Investments related to the transmission segment, according to IFRIC 12, are recorded as “Financial Assets of Concession” (non-current assets).
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3Q18 Results | November 12, 2018 |
We highlight investments made by CPFL Energia in each segment:
(i) Distribution:
a. Expansion and strengthening of the electric system;
b. Electricity system maintenance and improvements;
c. Operational infrastructure;
d. Upgrade of management and operational support systems;
e. Customer help services;
f. Research and development programs;
(ii) Generation:
a. Boa Vista II SHPP.
On November 9, 2017, CPFL Energia’s Board of Directors approved Board of Executive Officers’ proposal for 2018 Annual Budget and 2019/2022 Multiannual Plan for the Company, which was previously discussed by the Budget and Corporate Finance Commission.
Notes:
1) Constant currency;
2) Disregard investments in Special Obligations on Distribution segment (among other items financed by consumers);
3) Conventional + Renewable.
Page 26 de 67
3Q18 Results | November 12, 2018 |
7) STOCK MARKETS
CPFL Energia is listed on both the B3 (Novo Mercado) and the New York Stock Exchange (NYSE) (ADR Level III), segments with the highest levels of corporate governance.
B3 |
NYSE | ||||||
Date |
CPFE3 (R$) |
IEE |
IBOV |
Date |
CPL (US$) |
DJBr20 |
Dow Jones |
06/30/2018 |
R$ 23.87 |
39,351 |
79,342 |
06/30/2018 |
$ 11.82 |
19,406 |
26,458 |
03/31/2018 |
R$ 21.67 |
38,562 |
72,763 |
03/31/2018 |
$ 11.08 |
18,614 |
24,271 |
06/30/2017 |
R$ 27.22 |
41,306 |
74,294 |
06/30/2017 |
$ 17.16 |
23,149 |
22,405 |
QoQ |
10.2% |
2.0% |
9.0% |
QoQ |
6.7% |
4.3% |
9.0% |
YoY |
-12.3% |
-4.7% |
6.8% |
YoY |
-31.1% |
-16.2% |
18.1% |
On September 30, 2018, CPFL Energia’s shares closed at R$ 23.87 per share on the B3 and US$ 11.82 per ADR on the NYSE, an appreciation in the quarter of 10.2% and 6.7%, respectively. Considering the variation in the last 12 months, the shares and ADRs presented a depreciation of 12.3% on the B3 and of 31.1% on the NYSE, respectively.
The daily trading volume in 3Q18 averaged R$ 9.9 million, of which R$ 9.0 million on the B3 and R$ 0.9 million on the NYSE, representing a reduction of 72.7% in relation to 3Q17. The number of trades on the B3 decreased by 41.7%.
Page 27 de 67
3Q18 Results | November 12, 2018 |
8) CORPORATE GOVERNANCE
The corporate governance model adopted by CPFL Energia and its subsidiaries is based on the principles of transparency, equity, accountability and corporate responsibility.
In 2018, CPFL marked 14 years since being listed on the B3 and the New York Stock Exchange (“NYSE”). With more than 100 years of history in Brazil, the Company’s shares are listed on the Novo Mercado Special Listing Segment of the B3 with Level III ADRs, a special segment for companies that comply with corporate governance best practices. All CPFL shares are common shares, entitling all shareholders the right to vote with 100% Tag Along rights guaranteed in case of sale of shareholding control.
CPFL’s Management is composed of the Board of Directors (“Board”), its decision-making authority, and the Board of Executive Officers, its executive body. The Board is responsible for defining the strategic business direction of the holding company and subsidiaries, and is composed of 7 members (of which 2 independent members), with terms of one year, eligible for reelection.
The Bylaws of the Board establishes the procedures for evaluating the directors, under the leadership of the Chairman, their main duties and rights.
The Board set up three advisory committees (Management Processes, Risks and Sustainability, People Management and Related Parties), which support the Board in its decisions and monitor relevant and strategic themes, such as people and risk management, sustainability, the surveillance of internal audits and analysis of transactions with Parties Related to controlling shareholders and handling of incidents recorded through complaint hotlines and ethical conduct channels.
The Board of Executive Officers is made up of 1 Chief Executive Officer, 1 Deputy Chief of Executive Officer and 7 Vice Presidents, with terms of two years, eligible for reelection, responsible for executing the strategy of CPFL Energia and its subsidiaries as defined by the Board of Directors in line with corporate governance guidelines. To ensure alignment of governance practices, Executive Officers sit on the Boards of Directors of companies that make up the CPFL group and nominate their respective executive officers.
CPFL has a permanent Fiscal Council, made up of 3 members, that also exercises the duties of the Audit Committee, in line with Sarbanes-Oxley law (SOX) rulings applicable to foreign companies listed on U.S. stock exchanges.
The guidelines and documents on corporate governance are available at the Investor Relations website http://www.cpfl.com.br/ir.
Page 28 de 67
3Q18 Results | November 12, 2018 |
9) SHAREHOLDERS STRUCTURE
CPFL Energia is a holding company that owns stake in other companies. State Grid Corporation of China (SGCC) controls CPFL Energia through its subsidiaries State Grid International Development Co., Ltd, State Grid International Development Limited (SGID), International Grid Holdings Limited, State Grid Brazil Power Participações S.A. (SGBP) and ESC Energia S.A.:
Reference date: 09/30/2018
Notes:
(1) 51.54% stake of the availability of power and energy of Serra da Mesa HPP, regarding the Power Purchase Agreement between CPFL Geração and Furnas;
(2) RGE Sul is held by CPFL Energia (76.3893%) and CPFL Brasil (23.4561%).
Page 29 de 67
3Q18 Results | November 12, 2018 |
10) PERFORMANCE OF THE BUSINESS SEGMENTS
Consolidated Income Statement - Distribution (R$ Million) | ||||||
|
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
Gross Operating Revenue |
10,317 |
9,247 |
11.6% |
27,698 |
24,571 |
12.7% |
Net Operating Revenue |
6,465 |
6,131 |
5.4% |
17,307 |
15,327 |
12.9% |
Cost of Electric Power |
(4,594) |
(4,419) |
4.0% |
(11,918) |
(10,380) |
14.8% |
Operating Costs & Expenses |
(1,336) |
(1,399) |
-4.5% |
(3,681) |
(3,905) |
-5.7% |
EBIT |
535 |
314 |
70.7% |
1,708 |
1,042 |
63.8% |
EBITDA(1) |
718 |
488 |
47.1% |
2,278 |
1,566 |
45.4% |
Financial Income (Expense) |
(98) |
(132) |
-25.9% |
(249) |
(479) |
-48.0% |
Income Before Taxes |
438 |
182 |
140.7% |
1,459 |
563 |
158.9% |
Net Income |
277 |
104 |
165.1% |
921 |
328 |
180.9% |
Note:
(1) EBITDA (IFRS) is calculated from the sum of net income, taxes, financial result and depreciation/amortization, as CVM Instruction no. 527/12.
In 3Q18, total sectoral financial assets accounted for R$ 1,089 million, a reduction of 12.6% (R$ 156 million) if compared to 3Q17, when sectoral financial assets amounted to R$ 1,245 million. In 9M18, total sectoral financial assets accounted for R$ 1,943 million, an increase of 85.2% (R$ 893 million) if compared to 9M17, when sectoral financial assets amounted to R$ 1,049 million.
On September 30, 2018, the balance of sectoral financial assets and liabilities was positive in R$ 2,207 million, compared to a positive balance of R$ 1,094 million on June 30, 2018 and a negative balance of R$ 107 million on September 30, 2017.
As established by the applicable regulation, any sectoral financial assets or liabilities shall be included in the tariffs of the distributors in their respective annual tariff events.
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3Q18 Results | November 12, 2018 |
10.1.1.2) Operating Revenue
Operating Revenue (R$ Million) | ||||||
|
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
Gross Operating Revenue |
||||||
Revenue with Energy Sales (Captive + TUSD) |
7,790 |
6,195 |
25.7% |
21,958 |
19,153 |
14.6% |
Short-term Electric Energy |
393 |
780 |
-49.6% |
768 |
1,529 |
-49.8% |
Revenue from Building the Infrastructure of the Concession |
462 |
597 |
-22.6% |
1,202 |
1,434 |
-16.2% |
Sectoral Financial Assets and Liabilities |
1,089 |
1,245 |
-12.6% |
1,943 |
1,049 |
85.2% |
CDE Resources - Low-income and Other Tariff Subsidies |
407 |
334 |
21.9% |
1,162 |
1,072 |
8.4% |
Adjustments to the Concession's Financial Asset |
99 |
10 |
852.9% |
302 |
92 |
229.8% |
Other Revenues and Income |
78 |
86 |
-9.0% |
363 |
242 |
49.9% |
Total |
10,317 |
9,247 |
11.6% |
27,698 |
24,571 |
12.7% |
|
|
|
|
|||
Deductions from the Gross Operating Revenue |
|
|
|
|
||
ICMS Tax |
(1,565) |
(1,247) |
25.6% |
(4,443) |
(3,957) |
12.3% |
PIS and COFINS Taxes |
(902) |
(779) |
15.7% |
(2,436) |
(2,123) |
14.8% |
CDE Sector Charge |
(1,010) |
(785) |
28.7% |
(2,829) |
(2,399) |
17.9% |
R&D and Energy Efficiency Program |
(59) |
(55) |
7.1% |
(158) |
(138) |
14.7% |
PROINFA |
(38) |
(41) |
-7.1% |
(112) |
(128) |
-12.7% |
Tariff Flags and Others |
(271) |
(203) |
33.8% |
(395) |
(484) |
-18.4% |
Others |
(6) |
(5) |
19.5% |
(18) |
(16) |
12.0% |
Total |
(3,852) |
(3,115) |
23.7% |
(10,391) |
(9,245) |
12.4% |
|
|
|
|
|||
Net Operating Revenue |
6,465 |
6,131 |
5.4% |
17,307 |
15,327 |
12.9% |
In 3Q18, gross operating revenue amounted to R$ 10,317 million, an increase of 11.6% (R$ 1,071 million), due to the following factors:
· Increase of 25.7% (R$ 1,595 million) in the revenue with energy sales (captive + free clients), due to: (i) the positive average tariff adjustment in the distribution companies for the period between 3Q17 and 3Q18 (highlight for the average increases of 17.28% in CPFL Piratininga, in October 2017, of 16.90% in CPFL Paulista and 22.47% in RGE Sul, in April 2018, and of 20.58% in RGE, in June 2018); and (ii) the increase of 2.0% in the sales volume within the concession area;
· Increase of 852.9% (R$ 89 million) in the adjustments to the Concession´s Financial Asset;
· Increase of 21.9% (R$ 73 million) in tariff subsidies (CDE resources);
Partially offset by:
· Reduction of 49.6% (R$ 387 million) in Short-term Electric Energy;
· Reduction of 12.6% (R$ 156 million) in the Sectoral Financial Assets/Liabilities;
· Reduction of 22.6% (R$ 135 million) in revenue from building the infrastructure of the concession
· Reduction of 9.0% (R$ 8 million) in Other Revenues and Income.
Deductions from the gross operating revenue were R$ 3,852 million in 3Q18, representing an increase of 23.7% (R$ 737 million), due to the following factors:
· Increase of 25.6% (R$ 319 million) in ICMS tax;
· Increase of 28.7% (R$ 225 million) in the CDE sector charge;
· Increase of 15.7% (R$ 123 million) in PIS and COFINS taxes;
· Increase of 33.8% (R$ 69 million) in tariff flags approved by the CCEE;
· Increase of 7.1% (R$ 4 million) in the R&D and Energy Efficiency Program;
· Increase of 19.5% (R$ 1 million) in other deductions from the gross operating revenue;
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3Q18 Results | November 12, 2018 |
Partially offset by the following factor:
· Reduction of 7.1% (R$ 3 million) in the PROINFA.
Net operating revenue reached R$ 6,465 million in 3Q18, representing an increase of 5.4% (R$ 334 million).
In 9M18, gross operating revenue amounted to R$ 27,698 million, an increase of 12.7% (R$ 3,126 million), due to the following factors:
· Increase of 14.6% (R$ 2,805 million) in the revenue with energy sales (captive + free clients), due to: (i) the positive average tariff adjustment in the distribution companies for the period between 9M17 and 9M18; and (ii) the increase of 3.0% in the sales volume within the concession area;
· Increase of 85.2% (R$ 893 million) in the Sectoral Financial Assets/Liabilities;
· Increase of 229.8% (R$ 211 million) in the adjustments to the Concession´s Financial Asset;
· Increase of 49.9% (R$ 121 million) in Other Revenues and Income;
· Increase of 8.4% (R$ 90 million) in tariff subsidies (CDE resources);
Partially offset by:
· Reduction of 49.8% (R$ 761 million) in Short-term Electric Energy;
· Reduction of 16.2% (R$ 232 million) in revenue from building the infrastructure of the concession.
Deductions from the gross operating revenue were R$ 10,391 million in 9M18, representing an increase of 12.4% (R$ 1,146 million), due to the following factors:
· Increase of 12.3% (R$ 486 million) in ICMS tax;
· Increase of 17.9% (R$ 430 million) in the CDE sector charge;
· Increase of 14.8% (R$ 313 million) in PIS and COFINS taxes;
· Increase of 14.7% (R$ 20 million) in the R&D and Energy Efficiency Program;
· Increase of 12.0% (R$ 2 million) in other deductions from the gross operating revenue;
Partially offset by the following factors:
· Reduction of 18.4% (R$ 89 million) in tariff flags approved by the CCEE;
· Reduction of 12.7% (R$ 16 million) in the PROINFA.
Net operating revenue reached R$ 17,307 million in 9M18, representing an increase of 12.9% (R$ 1,980 million).
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3Q18 Results | November 12, 2018 |
10.1.1.3) Cost of Electric Energy
Cost of Electric Energy (R$ Million) | ||||||
|
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
Cost of Electric Power Purchased for Resale |
||||||
Energy from Itaipu Binacional |
751 |
596 |
25.9% |
2,025 |
1,764 |
14.8% |
Energy Purchased in the Spot Market/PROINFA |
94 |
89 |
5.6% |
1,761 |
243 |
625.2% |
Energy Purchased through Auction in the Regulated Environment and Bilateral Contracts |
3,789 |
3,690 |
2.7% |
7,407 |
8,532 |
-13.2% |
PIS and COFINS Tax Credit |
(414) |
(403) |
2.6% |
(997) |
(972) |
2.6% |
Total |
4,219 |
3,971 |
6.2% |
10,196 |
9,567 |
6.6% |
|
|
|
|
|||
Charges for the Use of the Transmission and Distribution System |
|
|
|
|
||
Basic Network Charges |
468 |
472 |
-1.0% |
1,573 |
928 |
69.5% |
Itaipu Transmission Charges |
71 |
66 |
6.6% |
198 |
97 |
104.8% |
Connection Charges |
44 |
23 |
94.8% |
110 |
77 |
43.0% |
Charges for the Use of the Distribution System |
9 |
3 |
152.4% |
21 |
16 |
32.2% |
System Service Usage Charges - ESS |
(178) |
(76) |
135.3% |
(138) |
(224) |
-38.3% |
Reserve Energy Charges - EER |
- |
- |
- |
135 |
- |
- |
PIS and COFINS Tax Credit |
(38) |
(42) |
-7.8% |
(177) |
(81) |
118.9% |
Total |
375 |
448 |
-16.2% |
1,722 |
812 |
112.0% |
|
|
|
|
|||
Cost of Electric Energy |
4,594 |
4,419 |
4.0% |
11,918 |
10,380 |
14.8% |
In 3Q18, the cost of electric energy, comprising the purchase of electricity for resale and charges for the use of the distribution and transmission system, amounted to R$ 4,594 million, representing an increase of 4.0% (R$ 175 million):
· The cost of electric power purchased for resale was R$ 4,219 million in 3Q18, representing an increase of 6.2% (R$ 248 million), due to the following factors:
(i) Increase of 25.9% (R$ 155 million) in the cost of energy from Itaipu, due to the increase of 33.4% in the average purchase price (from R$ 200.52/MWh in 3Q17 to R$ 267.46/MWh in 3Q18), partially offset by the reduction of 5.6% (166 GWh) in the volume of purchased energy;
(ii) Increase of 2.7% (R$ 99 million) in the cost of energy purchased in the regulated environment and bilateral contracts, due to the increase of 12.6% in the average purchase price (from R$ 338.91/MWh in 3Q17 to R$ 381.74/MWh in 3Q18), partially offset by the reduction of 8.8% (964 GWh) in the volume of purchased energy.
(iii) Increase of 5.6% (R$ 5 million) in the cost of energy purchased in the short term and Proinfa;
Partially offset by:
(iv) Increase of 2.6% (R$ 11 million) in PIS and Cofins tax credit (cost reducer), generated from the energy purchase.
· Charges for the use of the transmission and distribution system reached R$ 375 million in 3Q18, representing a reduction of 16.2% (R$ 73 million), due to the following factors:
(i) Increase of 135.3% (R$ 102 million) in the System Service Usage Charges – ESS (cost reducer), from a revenue of R$ 76 million in 3Q17 to a revenue of R$ 178 million in 3Q18;
(ii) Reduction of 1.0% (R$ 5 million) in charges for basic network;
Partially offset by:
(iii) Increase of 94.8% (R$ 22 million) in connection charges;
(iv) Increase of 152.4% (R$ 5 million) in the usage of the distribution system charges;
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3Q18 Results | November 12, 2018 |
(v) Increase of 6.6% (R$ 4 million) in the Itaipu transmission charges;
(vi) Reduction of 7.8% (R$ 3 million) in PIS and Cofins tax credit (cost reducer), generated from the charges.
In 9M18, the cost of electric energy, comprising the purchase of electricity for resale and charges for the use of the distribution and transmission system, amounted to R$ 11,918 million, representing an increase of 14.8% (R$ 1,538 million):
· The cost of electric power purchased for resale was R$ 10,196 million in 9M18, representing an increase of 6.6% (R$ 629 million), due to the following factors:
(i) Increase of 625.2% (R$ 1,518 million) in the cost of energy purchased in the short term and Proinfa;
(ii) Increase of 14.8% (R$ 261 million) in the cost of energy from Itaipu, due to the increase of 21.7% in the average purchase price (from R$ 200.32/MWh in 9M17 to R$ 243.71/MWh in 9M18), partially offset by the reduction of 5.6% (496 GWh) in the volume of purchased energy;
Partially offset by:
(iii) Reduction of 13.2% (R$ 1,125 million) in the cost of energy purchased in the regulated environment and bilateral contracts, due to the reduction of 18.9% (6,479 GWh) in the volume of purchased energy, partially offset by the increase of 7.1% in the average purchase price (from R$ 249.52/MWh in 9M17 to R$ 267.27/MWh in 9M18);
(iv) Increase of 2.6% (R$ 26 million) in PIS and Cofins tax credit (cost reducer), generated from the energy purchase.
· Charges for the use of the transmission and distribution system reached R$ 1,722 million in 9M18, representing an increase of 112.0% (R$ 910 million), due to the following factors:
(i) Increase of 69.5% (R$ 645 million) in charges for basic network;
(ii) Expense of R$ 135 million in 9M18, related to the Energy Reserve Charges – EER;
(iii) Increase of 104.8% (R$ 102 million) in the Itaipu transmission charges;
(iv) Reduction of 38.3% (R$ 86 million) in the System Service Usage Charges – ESS (cost reducer), from a revenue of R$ 224 million in 9M17 to a revenue of R$ 138 million in 9M18;
(v) Increase of 43.0% (R$ 33 million) in connection charges;
(vi) Increase of 32.2% (R$ 5 million) in the usage of the distribution system charges;
Partially offset by:
(vii) Increase of 118.9% (R$ 96 million) in PIS and Cofins tax credit (cost reducer), generated from the charges.
Operating costs and expenses reached R$ 1,336 million in 3Q18, compared to R$ 1,399 million in 3Q17, a reduction of 4.5% (R$ 63 million). In 9M18, operating costs and expenses reached R$ 3,681 million, compared to R$ 3,905 million in 9M17, a reduction of 5.7% (R$ 223 million).
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3Q18 Results | November 12, 2018 |
The factors that explain these variations follow below:
PMSO
Reported PMSO (R$ million) | ||||||||
|
3Q18 |
3Q17 |
Variation |
9M18 |
9M17 |
Variação | ||
|
R$ MM |
% |
R$ MM |
% | ||||
Reported PMSO |
|
|
|
|
|
|
|
|
Personnel |
(226) |
(215) |
(10) |
4.7% |
(680) |
(669) |
(11) |
1.7% |
Material |
(42) |
(43) |
1 |
-2.0% |
(124) |
(124) |
(0) |
0.2% |
Outsourced Services |
(211) |
(212) |
1 |
-0.5% |
(627) |
(618) |
(9) |
1.4% |
Other Operating Costs/Expenses |
(191) |
(129) |
(62) |
47.7% |
(411) |
(452) |
40 |
-9.0% |
Allowance for doubtful accounts |
(48) |
(33) |
(14) |
43.4% |
(116) |
(119) |
4 |
-3.0% |
Legal, judicial and indemnities expenses |
(66) |
(19) |
(46) |
238.4% |
(106) |
(120) |
14 |
-11.7% |
Others |
(77) |
(76) |
(1) |
1.1% |
(189) |
(212) |
23 |
-10.8% |
Total Reported PMSO |
(669) |
(600) |
(70) |
11.7% |
(1,843) |
(1,863) |
20 |
-1.1% |
In 3Q18, PMSO reached R$ 669 million, an increase of 11.7% (R$ 70 million), compared to R$ 600 million in 3Q17.
Personnel – increase of 4.7% (R$ 10 million), mainly due to the collective bargaining agreement – wages and benefits (R$ 8 million);
Material – reduction of 2.0% (R$ 1 million);
Third party services – reduction of 0.5% (R$ 1 million), mainly due to the reductions in the following items: other outsourced services (R$ 11 million), maintenance in machinery and equipment (R$ 4 million) and maintenance of the electric system – lines and network (R$ 3 million); partially offset by the increases in outsourced services (R$ 5 million), maintenance services in lines, network and substations (R$ 5 million), meter reading and use (R$ 3 million), audit and consulting (R$ 2 million) and hardware/software maintenance (R$ 2 million);
Other operating costs/expenses – increase of 47.7% (R$ 62 million), due to the increases in the following items: (a) legal and judicial expenses (R$ 46 million), (b) allowance for doubtful accounts (R$ 14 million), and (c) compensation for non-compliance with technical indicators (R$ 7 million), which as from January 2018 was classified under Other Revenues; partially offset by the reduction in other costs/expenses (R$ 5 million).
In 9M18, PMSO reached R$ 1,843 million, a reduction of 1.1% (R$ 20 million), compared to R$ 1,863 million in 9M17.
Personnel – increase of 1.7% (R$ 11 million), mainly due to the collective bargaining agreement – wages and benefits;
Material – increase of 0.2% (R$ 0.3 million);
Third party services – increase of 1.4% (R$ 9 million), mainly due to the increases in the following items: maintenance services in lines, network and substations (R$ 13 million), outsourced
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3Q18 Results | November 12, 2018 |
services (R$ 9 million), meter reading and use (R$ 7 million), tree pruning (R$ 7 million), audit and consulting (R$ 4 million), hardware/software maintenance (R$ 2 million) and maintenance and conservation of buildings (R$ 2 million); partially offset by the reductions in other outsourced services (R$ 24 million), maintenance in machinery and equipment (R$ 9 million) and re notification, cut and reconnection (R$ 4 million);
Other operating costs/expenses – reduction of 9.0% (R$ 40 million), due to the reductions in the following items: (a) compensation for non-compliance with technical indicators (R$ 34 million), which as from January 2018 was classified under Other Revenues, (b) legal and judicial expenses (R$ 14 million), and (c) allowance for doubtful accounts (R$ 4 million); partially offset by the increase in other costs/expenses (R$ 12 million).
Other operating costs and expenses
In 3Q18, other operating costs and expenses reached R$ 666 million, compared to R$ 799 million in 3Q17, registering a reduction of 16.6% (R$ 133 million), with the variations below:
(i) Reduction of 22.6% (R$ 135 million) in cost of building the concession´s infrastructure. This item, which reached R$ 462 million in 3Q18, does not affect results, since it has its counterpart in “operating revenue”;
(ii) Reduction of 21.0% (R$ 6 million) in Private Pension Fund item, due to the registration of the impacts of the 2018 actuarial report;
Partially offset by:
(iii) Increase of 4.9% (R$ 8 million) in Depreciation and Amortization item.
In 9M18, other operating costs and expenses reached R$ 1,839 million, compared to R$ 2,042 million in 9M17, registering a reduction of 10.0% (R$ 203 million), with the variations below:
(iv) Reduction of 16.2% (R$ 232 million) in cost of building the concession´s infrastructure. This item, which reached R$ 1,202 million in 9M18, does not affect results, since it has its counterpart in “operating revenue”;
(v) Reduction of 21.0% (R$ 18 million) in Private Pension Fund item, due to the registration of the impacts of the 2018 actuarial report;
(vi) Reduction of 5.2% (R$ 2 million) in Amortization of Intangible of Concession Asset item;
Partially offset by:
(vii) Increase of 10.1% (R$ 48 million) in Depreciation and Amortization item.
EBITDA totaled R$ 718 million in 3Q18, compared to R$ 488 million in 3Q17, an increase of 47.1% (R$ 230 million). In 9M18, EBITDA totaled R$ 2,278 million, compared to R$ 1,566 million in 9M17, an increase of 45.4% (R$ 711 million).
Page 36 de 67
3Q18 Results | November 12, 2018 |
Conciliation of Net Income and EBITDA (R$ million) | ||||||
|
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
Net income |
277 |
104 |
165.1% |
921 |
328 |
180.9% |
Depreciation and Amortization |
183 |
175 |
|
570 |
524 |
|
Financial Results |
98 |
132 |
|
249 |
479 |
|
Income Tax /Social Contribution |
161 |
77 |
|
537 |
235 |
|
EBITDA |
718 |
488 |
47.1% |
2,278 |
1,566 |
45.4% |
Financial Result (R$ Million) | ||||||
|
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
Revenues |
||||||
Income from Financial Investments |
21 |
41 |
-49.7% |
59 |
189 |
-68.9% |
Additions and Late Payment Fines |
69 |
60 |
15.5% |
200 |
201 |
-0.1% |
Fiscal Credits Update |
4 |
5 |
-21.3% |
7 |
7 |
6.0% |
Judicial Deposits Update |
10 |
14 |
-25.9% |
27 |
39 |
-31.8% |
Monetary and Foreign Exchange Updates |
21 |
8 |
146.6% |
50 |
26 |
88.7% |
Discount on Purchase of ICMS Credit |
6 |
4 |
60.6% |
25 |
9 |
165.2% |
Sectoral Financial Assets Update |
23 |
(1) |
- |
45 |
- |
- |
PIS and COFINS - over Other Financial Revenues |
(9) |
(7) |
20.6% |
(27) |
(28) |
-2.9% |
Others |
11 |
9 |
20.5% |
29 |
29 |
-0.5% |
Total |
155 |
132 |
17.4% |
414 |
472 |
-12.4% |
|
|
|
|
|||
Expenses |
|
|
|
|
||
Debt Charges |
(141) |
(144) |
-2.5% |
(433) |
(492) |
-12.0% |
Monetary and Foreign Exchange Updates |
(102) |
(73) |
39.2% |
(183) |
(322) |
-43.1% |
(-) Capitalized Interest |
4 |
5 |
-17.0% |
12 |
14 |
-15.6% |
Sectoral Financial Liabilities Update |
3 |
(30) |
- |
- |
(81) |
-100.0% |
Others |
(17) |
(21) |
-20.6% |
(58) |
(71) |
-17.6% |
Total |
(253) |
(264) |
-4.2% |
(663) |
(951) |
-30.4% |
|
|
|
|
|||
Financial Result |
(98) |
(132) |
-25.9% |
(249) |
(479) |
-48.0% |
In 3Q18, the net financial result recorded a net financial expense of R$ 98 million, a reduction of 25.9% (R$ 34 million). The items explaining these changes are as follows:
· Financial Revenue: increase of 17.4% (R$ 23 million), from R$ 132 million in 3Q17 to R$ 155 million in 3Q18, mainly due to the following factors:
(i) Variation of R$ 24 million in sectoral financial assets update, from an expense of R$ 1 million in 3Q17 to a revenue of R$ 23 million in 3Q18;
(ii) Increase of 146.6% (R$ 12 million) in adjustments for inflation and exchange rate changes, due to the increase (a) of R$ 16 million in revenues from fines, interest and monetary adjustment relating to installment payments made by consumers; partially offset by (b) the reduction of R$ 4 million in other adjustments for inflation and exchange rate changes;
(iii) Increase of 15.5% (R$ 9 million) in late payment interest and fines;
(iv) Increase of 60.6% (R$ 2 million) in the discount on purchase of ICMS credit;
(v) Increase of 20.5% (R$ 2 million) in other financial revenues;
Partially offset by:
(vi) Reduction of 49.7% (R$ 20 million) in the income from financial investments, due to
Page 37 de 67
3Q18 Results | November 12, 2018 |
the lower average balance of investments and the fall of CDI interbank rate;
(vii) Reduction of 25.9% (R$ 3 million) in adjustments for inflation of escrow deposits;
(viii) Increase of 20.6% (R$ 2 million) in PIS and Cofins on financial revenues (revenue reducer);
(ix) Reduction of 21.3% (R$ 1 million) in fiscal credits update.
· Financial Expense: reduction of 4.2% (R$ 11 million), from R$ 264 million in 3Q17 to R$ 253 million in 3Q18, mainly due to the following factors:
(i) Variation R$ 33 million in the sectoral financial liabilities update, from a revenue of R$ 30 million in 3Q17 to an expense of R$ 3 million in 3Q18;
(ii) Reduction of 2.5% (R$ 4 million) in interest on debt in local currency;
(iii) Reduction of 20.6% (R$ 4 million) in other financial expenses;
Partially offset by:
(iv) Increase of 39.2% (R$ 29 million) in adjustments for inflation and exchange rate changes, due to: (a) the mark-to-market negative effect for financial operations under Law 4,131 – non-cash effect (R$ 22 million); and (b) the effect of Itaipu’s exchange variation (R$ 14 million); partially offset by (c) the reduction of debt charges in foreign currency, with swap to CDI interbank rate (R$ 7 million);
(v) Reduction of 17.0% (R$ 1 million) in capitalized interest (expense reducer).
In 9M18, the net financial result recorded a net financial expense of R$ 249 million, a reduction of 48.0% (R$ 230 million). The items explaining these changes are as follows:
· Financial Revenue: reduction of 12.4% (R$ 59 million), from R$ 472 million in 9M17 to R$ 414 million in 9M18, mainly due to the following factors:
(i) Reduction of 68.9% (R$ 130 million) in the income from financial investments, due to the lower average balance of investments and the fall of CDI interbank rate;
(ii) Reduction of 31.8% (R$ 12 million) in adjustments for inflation of escrow deposits;
Partially offset by:
(iii) Increase of R$ 45 million in sectoral financial assets update;
(iv) Increase of 88.7% (R$ 23 million) in adjustments for inflation and exchange rate changes, due to the increases: (a) of R$ 26 million in revenues from fines, interest and monetary adjustment relating to installment payments made by consumers; and (b) of R$ 1 million in the adjustment of the balance of tariff subsidies, as determined by Aneel; partially offset by (c) the reduction of R$ 4 million in other adjustments for inflation and exchange rate changes;
(v) Increase of 165.2% (R$ 15 million) in the discount on purchase of ICMS credit;
(vi) Reduction of 2.9% (R$ 1 million) in PIS and Cofins on financial revenues (revenue reducer).
· Financial Expense: reduction of 30.4% (R$ 289 million), from R$ 951 million in 9M17 to R$ 663 million in 9M18, mainly due to the following factors:
(i) Reduction of 43.1% (R$ 139 million) in adjustments for inflation and exchange rate changes, due to: (a) the reduction of debt charges in foreign currency, with swap to CDI interbank rate (R$ 107 million); and (b) the mark-to-market positive effect for financial
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3Q18 Results | November 12, 2018 |
operations under Law 4,131 – non-cash effect (R$ 39 million); partially offset by (c) the effect of exchange variation in Itaipu invoices (R$ 7 million);
(ii) Reduction of R$ 81 million in the sectoral financial liabilities update;
(iii) Reduction of 12.0% (R$ 59 million) in interest on debt in local currency;
(iv) Reduction of 17.6% (R$ 12 million) in other financial expenses;
Partially offset by:
(v) Reduction of 15.6% (R$ 2 million) in capitalized interest (expense reducer).
Net Income totaled R$ 277 million in 3Q18, compared to R$ 104 million in 3Q17, an increase of 165.1% (R$ 172 million). In 9M18, Net Income totaled R$ 921 million, compared to R$ 328 million in 9M17, an increase of 180.9% (R$ 593 million).
Reference dates
Tariff Process Dates | |
Distributor |
Date |
CPFL Santa Cruz |
March 22nd* |
CPFL Paulista |
April 8th |
RGE Sul |
April 19th |
RGE |
June 19th |
CPFL Piratininga |
October 23rd |
Tariff Revision | |||
Distributor |
Periodicity |
Next Revision |
Cycle |
CPFL Piratininga |
Every 4 years |
October 2019 |
5th PTRC |
CPFL Santa Cruz |
Every 5 years |
March 2021* |
5th PTRC |
CPFL Paulista |
Every 5 years |
April 2023 |
5th PTRC |
RGE Sul |
Every 5 years |
April 2023 |
5th PTRC |
RGE |
Every 5 years |
June 2023 |
5th PTRC |
Page 39 de 67
3Q18 Results | November 12, 2018 |
Annual tariff adjustments occurred in March 2018¹
|
CPFL Santa Cruz |
CPFL Leste Paulista |
CPFL Jaguari |
CPFL Sul Paulista |
CPFL Mococa |
Ratifying Resolution |
2,376 |
2,376 |
2,376 |
2,376 |
2,376 |
Adjustment |
5.71% |
5.71% |
5.71% |
5.71% |
5.71% |
Parcel A |
5.92% |
5.92% |
5.92% |
5.92% |
5.92% |
Parcel B |
-1.51% |
-1.51% |
-1.51% |
-1.51% |
-1.51% |
Financial Components |
1.30% |
1.30% |
1.30% |
1.30% |
1.30% |
Effect on consumer billings |
5.32% |
7.03% |
21.15% |
7.50% |
3.40% |
Date of entry into force |
3/22/2018 |
3/22/2018 |
3/22/2018 |
3/22/2018 |
3/22/2018 |
¹Considering the merger of the concessions in 12/31/2017, the same percentage of adjustment was considered for all the concessions, but the effect on consumer billings is different for each one of the concessions. |
Annual tariff adjustments occurred in October 2018
|
CPFL Piratininga |
Ratifying Resolution |
2,472 |
Adjustment |
20.01% |
Parcel A |
7.07% |
Parcel B |
1.76% |
Financial Components |
11.18% |
Effect on consumer billings |
19.25% |
Date of entry into force |
10/23/2018 |
Page 40 de 67
3Q18 Results | November 12, 2018 |
Periodic tariff reviews occurred in 2018
|
CPFL Paulista |
RGE Sul |
RGE |
Ratifying Resolution |
2,381 |
2,385 |
2,401 |
Adjustment |
12.68% |
18.44% |
21.27% |
Parcel A |
5.53% |
6.79% |
6.11% |
Parcel B |
3.14% |
4.77% |
9.45% |
Financial Components |
4.01% |
6.88% |
5.71% |
Effect on consumer billings |
16.90% |
22.47% |
20.58% |
Date of entry into force |
04/08/2018 |
04/19/2018 |
06/19/2018 |
4th Periodic Tariff Review Cycle |
CPFL Paulista |
RGE Sul |
RGE |
Date |
Apr-18 |
Apr-18 |
Jun-18 |
Gross Regulatory Asset Base (A) |
9,457 |
3,605 |
4,374 |
Depreciation Rate (B) |
3.72% |
3.87% |
3.74% |
Depreciation Quota (C = A x B) |
352 |
140 |
164 |
Net Regulatory Asset Base (D) |
5,193 |
2,389 |
3,032 |
Pre-tax WACC (E) |
12.26% |
12.26% |
12.26% |
Cost of Capital (F = D x E) |
637 |
290 |
372 |
Special Obligations (G) |
45 |
5 |
8 |
Regulatory EBITDA (H = C + F + G) |
1,033 |
435 |
543 |
OPEX = CAOM + CAIMI (I) |
1,245 |
438 |
523 |
Parcel B (J = H + I) |
2,278 |
872 |
1,066 |
Productivity Index Parcel B ( K ) |
0.96% |
0.98% |
1.07% |
Quality Incentive Mechanism ( L) |
-0.17% |
-0.71% |
0.05% |
Parcel B with adjusts (M = J * (K - L) |
2,260 |
870 |
1,054 |
Other Revenues (N) |
88 |
19 |
28 |
Adjusted Parcel B (O = M - N) |
2,172 |
851 |
1,026 |
Parcel A (P) |
7,785 |
2,653 |
2,816 |
Required Revenue (Q = O + P) |
9,957 |
3,504 |
3,842 |
On April 3, 2018, ANEEL approved the result of the fourth Periodic Tariff Review of distributor CPFL Paulista. The average effect to be perceived by the consumers is 16.90% and details can be found in the table above.
RGE Sul
On April 17, 2018, ANEEL approved the result of the fourth Periodic Tariff Review of distributor RGE Sul. The average effect to be perceived by the consumers was 22.47% and details can be found in the table above.
Page 41 de 67
3Q18 Results | November 12, 2018 |
RGE
On June 19, 2018, ANEEL approved the result of the fourth Periodic Tariff Review of distributor RGE Sul. The average effect to be perceived by the consumers was 20.58% and details can be found in the table above.
Below we are presenting the results achieved by the distribution companies with regard to the main indicators that measure the quality and reliability of their supply of electric energy. The SAIDI (System Average Interruption Duration Index) measures the average duration, in hours, of interruption per consumer per year. The SAIFI (System Average Interruption Frequency Index) measures the average number of interruptions per consumer per year.
SAIDI and SAIFI Indicators | ||||||||||||||||
Distributor |
SAIDI (hours) |
SAIFI (interruptions) | ||||||||||||||
2014 |
2015 |
2016 |
2017 |
1Q18 |
2Q18 |
3Q18 |
ANEEL1 |
2014 |
2015 |
2016 |
2017 |
1Q18 |
2Q18 |
3Q18 |
ANEEL1 | |
CPFL Paulista |
6.92 |
7.76 |
7.62 |
7.14 |
6.90 |
6.50 |
6.25 |
7.38 |
4.87 |
4.89 |
5.00 |
4.94 |
4.76 |
4.46 |
4.13 |
6.33 |
CPFL Piratininga |
6.98 |
7.24 |
8.44² |
6.97 |
6.37 |
5.93 |
6.01 |
6.74 |
4.19 |
4.31 |
3.97² |
4.45 |
4.13 |
3.61 |
3.71 |
5.82 |
RGE |
18.77 |
15.98 |
14.44 |
14.16 |
13.74 |
13.46 |
13.15 |
11.48 |
9.14 |
8.33 |
7.56 |
7.74 |
7.09 |
6.71 |
6.28 |
8.50 |
RGE Sul |
17.75 |
19.11 |
19.45 |
15.58 |
15.30 |
15.54 |
15.98 |
10.79 |
8.87 |
8.42 |
9.41 |
7.62 |
7.05 |
6.51 |
6.34 |
8.30 |
CPFL Santa Cruz - Grouping |
|
|
|
6.13 |
5.80 |
5.61 |
5.61 |
8.75 |
|
|
|
5.04 |
5.26 |
4.98 |
4.89 |
7.88 |
1) 2018 Regulatory Agency (ANEEL);
2) In the previous disclosures, we reported a SAIDI of 6.97 and a SAIFI of 3.80 for CPFL Piratininga in 2016. This number excluded the effect of a CTEEP transmission failure during a storm. However, a decision by ANEEL determined that this effect was included in the SAIDI and SAIFI statistics, so that we corrected the values, as shown in the table.
RGE and RGE Sul have plans to improve SAIDI technical indicators. Among the actions, are part of the plan for 2018, Rural, Troncal and Urban pruning, treatment of major primary, secondary and damage recidivism, programming of services for testing and maintenance in substations and transmission lines, carry out termovision and ultrasound inspections in distribution networks, substations and transmission lines. In addition, part of the maintenance plan, improvements and extensions of the existing structure, with the forecast of exchanges of posts, capacity adjustment, modernization of substations, and installation of remote control and control equipment. This plan is part of a continuous improvement that is already under development. In addition to the significant investments being made, the significant reduction of these investments has already been observed.
The SAIFI indicator was kept below regulatory limits in all companies, reflecting the effectiveness of the maintenance performed and the constant investments in improvements and modernization carried out by CPFL.
Page 42 de 67
3Q18 Results | November 12, 2018 |
Losses
Find below the performance of CPFL distribution companies throughout the last quarters:
12M Accumulated Losses1 |
Total Losses | |||||
3Q17 |
4Q17 |
1Q18 |
2Q18 |
3Q18 |
ANEEL2 | |
CPFL Energia |
9.26% |
9.12% |
8.83% |
9.03% |
8.87% |
8.24% |
CPFL Paulista |
8.93% |
9.07% |
8.93% |
9.10% |
8.87% |
8.30% |
CPFL Piratininga |
7.73% |
7.67% |
7.72% |
7.87% |
7.79% |
6.95% |
RGE |
9.41% |
9.27% |
8.79% |
9.09% |
9.06% |
9.28% |
RGE Sul |
10.61% |
10.68% |
10.25% |
10.56% |
10.59% |
8.90% |
Nova CPFL Santa Cruz |
8.78% |
8.59% |
8.65% |
8.84% |
8.09% |
7.59% |
Notes:
1) The figures above were adequate to a better comparison with the regulatory losses trajectory defined by the Regulatory Agency (ANEEL). In CPFL Piratininga, RGE and RGE Sul, high-voltage customers were disregarded;
2) Regulatory targets for losses are defined in the periodic tariff revision (RTP) process. CPFL Paulista, RGE and RGE Sul are on the 3rd PTRC and other distributors are in 4th PTRC.
The consolidated losses index of CPFL Energia was of 8.87% in 3Q18, compared to 9.03% in 2Q18, a reduction of 0.16 p.p. Compared to 3Q17 (9.26%), there was a reduction of 0.39 pp.
Consolidated Income Statement - Commercialization (R$ Million) | ||||||
|
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
Net Operating Revenue |
981 |
986 |
-0.5% |
2,534 |
2,370 |
6.9% |
EBITDA(1) |
43 |
42 |
2.8% |
82 |
117 |
-30.2% |
Net Loss |
27 |
26 |
5.5% |
43 |
61 |
-29.4% |
Note:
(1) EBITDA is calculated from the sum of net income, taxes, financial result and depreciation/amortization.
Operating Revenue
In 3Q18, net operating revenue reached R$ 981 million, representing a reduction of 0.5% (R$ 5 million).
In 9M18, net operating revenue reached R$ 2,534 million, representing an increase of 6.9% (R$ 164 million).
EBITDA
In 3Q18, EBITDA totaled R$ 43 million, compared to R$ 42 million in 3Q17, an increase of 2.8% (R$ 1 million).
In 9M18, EBITDA totaled R$ 82 million, compared to R$ 117 million in 9M17, a reduction of 30.2% (R$ 35 million).
Page 43 de 67
3Q18 Results | November 12, 2018 |
Net Income
In 3Q18, net income was R$ 27 million, compared to net income of R$ 26 million in 3Q17, an increase of 5.5% (R$ 1 million).
In 9M18, net income was R$ 43 million, compared to net income of R$ 61 million in 9M17, a reduction of 29.4% (R$ 18 million).
Consolidated Income Statement - Services (R$ Million) | ||||||
|
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
Net Operating Revenue |
140 |
128 |
10.1% |
380 |
346 |
9.7% |
EBITDA(1) |
32 |
21 |
53.2% |
79 |
61 |
30.3% |
Net Income |
20 |
13 |
54.5% |
46 |
38 |
22.3% |
Note:
(1) EBITDA is calculated from the sum of net income, taxes, financial result and depreciation/amortization.
Operating Revenue
In 3Q18, net operating revenue reached R$ 140 million, representing an increase of 10.1% (R$ 13 million).
In 9M18, net operating revenue reached R$ 380 million, representing an increase of 9.7% (R$ 34 million).
EBITDA
In 3Q18, EBITDA totaled R$ 32 million, compared to R$ 21 million in 3Q17, an increase of 53.2% (R$ 11 million).
In 9M18, EBITDA totaled R$ 79 million, compared to R$ 61 million in 9M17, an increase of 30.3% (R$ 18 million).
Net Income
In 3Q18, net income was R$ 20 million, compared to R$ 13 million in 3Q17, an increase of 54.5% (R$ 7 million).
In 9M18, net income was R$ 46 million, compared to R$ 38 million in 9M17, an increase of 22.3% (R$ 8 million).
Page 44 de 67
3Q18 Results | November 12, 2018 |
10.3) Conventional Generation Segment
10.3.1) Economic-Financial Performance
Consolidated Income Statement - Conventional Generation (R$ million) | ||||||
|
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
Gross Operating Revenue |
355 |
336 |
5.8% |
960 |
979 |
-1.9% |
Net Operating Revenue |
307 |
306 |
0.4% |
859 |
895 |
-4.0% |
Cost of Electric Power |
(32) |
(49) |
-33.8% |
(68) |
(99) |
-31.5% |
Operating Costs & Expenses |
(53) |
(57) |
-6.2% |
(161) |
(216) |
-25.5% |
EBIT |
222 |
201 |
10.6% |
631 |
581 |
8.7% |
EBITDA |
336 |
321 |
4.7% |
960 |
924 |
3.9% |
Financial Income (Expense) |
(62) |
(62) |
0.0% |
(205) |
(265) |
-22.7% |
Income Before Taxes |
247 |
229 |
7.9% |
667 |
568 |
17.4% |
Net Income |
198 |
187 |
5.8% |
535 |
469 |
14.2% |
Nota:
(1) EBITDA is calculated from the sum of net income, taxes, financial result and depreciation/amortization.
In the analysis presented in this report we consider the migration of the transmission companies CPFL Piracicaba and CPFL Morro Agudo from “Others” to “Conventional Generation” segment.
In 3Q18, Gross Operating Revenue reached R$ 355 million, an increase of 5.8% (R$ 20 million) in relation to 3Q17. Net Operating Revenue was of R$ 307 million, registering an increase of 0.4% (R$ 1 million).
The main factors that affected the net operating revenue are:
Partially offset by:
In 9M18, Gross Operating Revenue reached R$ 960 million, a reduction of 1.9% (R$ 19 million) in relation to 9M17. Net Operating Revenue was of R$ 859 million, registering a reduction of 4.0% (R$ 36 million). The main factor contributing to the reduction in net operating revenue was the effect of the consolidation of the transmission companies, with the reduction of R$ 45 million in the Revenue from Construction of Concession Infrastructure. This effect was partially offset by the increase in the revenue (R$ 28 million) from the plants of Rio das Antas Complex (CERAN).
Page 45 de 67
3Q18 Results | November 12, 2018 |
10.3.1.2) Cost of Electric Power
In the analysis presented in this report we consider the migration of the transmission companies CPFL Piracicaba and CPFL Morro Agudo from “Others” to “Conventional Generation” segment.
In 3Q18, the cost of electric power reached R$ 32 million, a reduction of 33.8% (R$ 16 million), when compared to 3Q17, mainly due to the following factors:
In 9M18, the cost of electric power reached R$ 68 million, a reduction of 31.5% (R$ 31 million), when compared to 9M17, due mainly to the following factors:
· Reduction of 40.0% (R$ 31 million) in the cost with Electric Energy Purchased for Resale, mainly due to the following factors:
(i) In CPFL Geração, reduction in the cost with the purchase of energy (R$ 40 million), mainly due to the reduction in the average purchase price of the energy from BAESA, combined with the gain with reimbursement of the GSF agreement;
(ii) Reduction of R$ 2 million in the cost with energy from CPFL Centrais Geradoras;
Partially offset by:
(iii) Increase of R$ 10 million in the cost with energy from Paulista Lajeado.
· Increase of 2.1% (R$ 0.4 million) in the cost with Charges for the Use of the Transmission and Distribution System.
In the analysis presented in this report we consider the migration of the transmission companies CPFL Piracicaba and CPFL Morro Agudo from “Others” to “Conventional Generation” segment.
Operating costs and expenses reached R$ 53 million in 3Q18, compared to R$ 57 million in 3Q17, a reduction of 6.2% (R$ 4 million). In 9M18, operating costs and expenses reached R$ 161 million, compared to R$ 216 million in 9M17, a reduction of 25.5% (R$ 55 million).
Page 46 de 67
3Q18 Results | November 12, 2018 |
The factors that explain these variations follow:
PMSO
PMSO (R$ million) | ||||||
|
3Q18 |
3Q17 |
Variation |
9M18 |
9M17 |
Variation |
|
% |
% | ||||
PMSO |
|
|
|
|
|
|
Personnel |
9 |
9 |
-1.9% |
26 |
29 |
-9.4% |
Material |
1 |
2 |
-65.7% |
2 |
4 |
-42.2% |
Outsourced Services |
4 |
5 |
-20.6% |
14 |
19 |
-26.7% |
Other Operating Costs/Expenses |
12 |
8 |
37.3% |
28 |
27 |
4.7% |
GSF Risk Premium |
2 |
2 |
0.0% |
4 |
4 |
- |
Others |
10 |
7 |
47.5% |
25 |
23 |
5.4% |
Total PMSO |
25 |
24 |
1.6% |
71 |
79 |
-10.3% |
PMSO item reached R$ 25 million in 3Q18, compared to R$ 24 million in 3Q17, registering an increase of 1.6% (R$ 0.4 million), due to the following factors:
(i) Reduction of 1.9% (R$ 0.2 million) in expenses with Personnel;
(ii) Reduction of 65.7% (R$ 2 million) in expenses with Material;
(iii) Reduction of 20.6% (R$ 1 million) in expenses with Outsourced Services;
Partially offset by:
(iv) Increase of 37.3% (R$ 3 million) in Other Operating Costs/Expenses.
In 9M18, PMSO item reached R$ 71 million, compared to R$ 79 million in 9M17, registering a reduction of 10.3% (R$ 8 million), due to the following factors:
(i) Reduction of 9.4% (R$ 3 million) in expenses with Personnel;
(ii) Reduction of 42.2% (R$ 2 million) in expenses with Material;
(iii) Reduction of 26.7% (R$ 5 million) in Outsourced Services;
Partially offset by:
(iv) Increase of 4.7% (R$ 1 million) in expenses with Other Operating Costs/Expenses.
Other operating costs and expenses
Other operating costs and expenses reached R$ 29 million in 3Q18, compared to R$ 33 million in 3Q17, registering a reduction of 12.0% (R$ 4 million), explained by the variations below:
(i) Reduction of 10.4% (R$ 3 million) in Depreciation and Amortization item.
(ii) Reduction of 47.4% (R$ 1 million) in Costs from Construction of Concession Infrastructure (CPFL Piracicaba and CPFL Morro Agudo);
(iii) Reduction of 24.9% (R$ 0.1 million) in Private Pension Fund.
Page 47 de 67
3Q18 Results | November 12, 2018 |
In 9M18, other operating costs and expenses reached R$ 90 million, compared to R$ 137 million in 9M17, registering a reduction of 34.3% (R$ 47 million), explained by the variations below:
(i) Reduction of 97.2% (R$ 44 million) in Costs from Construction of Concession Infrastructure (CPFL Piracicaba and CPFL Morro Agudo);
(ii) Reduction of 3.4% (R$ 3 million) in Depreciation and Amortization;
(iii) Reduction of 24.9% (R$ 0.4 million) in Private Pension Fund.
Equity Income (R$ Million) | ||||||||
|
3Q18 |
3Q17 |
Var. R$ |
Var. % |
9M18 |
9M17 |
Var. R$ |
Var. % |
Projects |
||||||||
Barra Grande HPP |
(7) |
9 |
(15) |
- |
(4) |
12 |
(16) |
- |
Campos Novos HPP |
22 |
26 |
(4) |
-15.2% |
71 |
89 |
(18) |
-20.5% |
Foz do Chapecó HPP |
36 |
34 |
1 |
3.7% |
95 |
94 |
1 |
1.0% |
Epasa TPP |
36 |
21 |
15 |
70.5% |
79 |
58 |
22 |
37.4% |
Total |
87 |
90 |
(3) |
-3.5% |
241 |
253 |
(12) |
-4.6% |
In 3Q18, Equity Income result reached R$ 87 million, compared to R$ 90 million in 3Q17, a reduction of 3.5% (R$ 3 million).
In 9M18, Equity Income result reached R$ 241 million, compared to R$ 253 million in 9M17, a reduction of 4.6% (R$ 12 million).
Equity Income (R$ Million) | ||||||||
EPASA |
3Q18 |
3Q17 |
Var. R$ |
Var. % |
9M18 |
9M17 |
Var. R$ |
Var. % |
Net Revenue |
181 |
130 |
51 |
38.9% |
327 |
283 |
44 |
15.6% |
Operating Costs / Expenses |
(134) |
(97) |
(37) |
38.4% |
(217) |
(191) |
(26) |
13.5% |
Deprec. / Amortization |
(5) |
(4) |
(0) |
8.3% |
(14) |
(13) |
(1) |
7.8% |
Net Financial Result |
(2) |
(2) |
0 |
-10.3% |
(5) |
(5) |
0 |
-1.4% |
Income Tax |
(8) |
(5) |
(3) |
50.7% |
(7) |
(6) |
(1) |
22.9% |
Net Income |
36 |
21 |
15 |
70.5% |
79 |
58 |
22 |
37.4% |
Equity Income (R$ Million) | ||||||||
FOZ DO CHAPECO |
3Q18 |
3Q17 |
Var. R$ |
Var. % |
9M18 |
9M17 |
Var. R$ |
Var. % |
Net Revenue |
116 |
106 |
10 |
9.1% |
330 |
313 |
17 |
5.4% |
Operating Costs / Expenses |
(23) |
(20) |
(3) |
14.1% |
(72) |
(62) |
(10) |
16.3% |
Deprec. / Amortization |
(16) |
(16) |
0 |
-2.4% |
(47) |
(49) |
1 |
-2.2% |
Net Financial Result |
(24) |
(12) |
(12) |
98.0% |
(68) |
(34) |
(35) |
103.1% |
Income Tax |
(16) |
(18) |
2 |
-9.5% |
(28) |
(33) |
5 |
-13.9% |
Net Income |
36 |
34 |
1 |
3.7% |
95 |
94 |
1 |
1.0% |
Page 48 de 67
3Q18 Results | November 12, 2018 |
Equity Income (R$ Million) | ||||||||
BAESA |
3Q18 |
3Q17 |
Var. R$ |
Var. % |
9M18 |
9M17 |
Var. R$ |
Var. % |
Net Revenue |
26 |
31 |
(5) |
-17.3% |
56 |
61 |
(5) |
-7.4% |
Operating Costs / Expenses |
(26) |
(14) |
(12) |
81.2% |
(41) |
(29) |
(12) |
42.3% |
Deprec. / Amortization |
(3) |
(3) |
0 |
-0.1% |
(9) |
(10) |
0 |
0.0% |
Net Financial Result |
(3) |
(0) |
(3) |
803.2% |
(9) |
(2) |
(7) |
403.8% |
Income Tax |
1 |
(5) |
6 |
- |
4 |
(3) |
7 |
- |
Net Income |
(7) |
9 |
(15) |
- |
(4) |
12 |
(16) |
- |
|
|
|
|
|
||||
Equity Income (R$ Million) | ||||||||
ENERCAN |
3Q18 |
3Q17 |
Var. R$ |
Var. % |
9M18 |
9M17 |
Var. R$ |
Var. % |
Net Revenue |
76 |
71 |
6 |
8.3% |
210 |
212 |
(1) |
-0.7% |
Operating Costs / Expenses |
(31) |
(27) |
(5) |
16.9% |
(69) |
(65) |
(4) |
5.7% |
Deprec. / Amortization |
(6) |
(6) |
0 |
-5.9% |
(18) |
(19) |
1 |
-4.9% |
Net Financial Result |
(5) |
3 |
(8) |
- |
(16) |
8 |
(23) |
- |
Income Tax |
(11) |
(14) |
2 |
-18.0% |
(19) |
(25) |
7 |
-25.8% |
Net Income |
22 |
26 |
(4) |
-15.2% |
71 |
89 |
(18) |
-20.5% |
In 3Q18, EBITDA was of R$ 336 million, compared to R$ 321 million in 3Q17, an increase of 4.7% (R$ 15 million).
In 9M18, EBITDA was of R$ 960 million, compared to R$ 924 million in 9M17, an increase of 3.9% (R$ 36 million).
Conciliation of Net Income and EBITDA (R$ million) | ||||||
|
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
Net Income |
198 |
187 |
5.8% |
535 |
469 |
14.2% |
Depreciation and Amortization |
27 |
30 |
|
88 |
91 |
|
Financial Result |
62 |
62 |
|
205 |
265 |
|
Income Tax /Social Contribution |
48 |
41 |
|
132 |
100 |
|
EBITDA |
336 |
321 |
4.7% |
960 |
924 |
3.9% |
Page 49 de 67
3Q18 Results | November 12, 2018 |
10.3.1.6) Financial Result
Financial Result (IFRS - R$ Million) | ||||||
|
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
Revenues |
||||||
Income from Financial Investments |
5 |
12 |
-56.6% |
34 |
68 |
-49.8% |
Adjustment for inflation and exchange rate changes |
1 |
12 |
-92.8% |
1 |
23 |
-95.8% |
Interest on loan agreements |
7 |
- |
100.0% |
11 |
- |
0.0% |
PIS and COFINS on other finance income |
(1) |
(1) |
40.0% |
(3) |
(3) |
-18.5% |
Others |
5 |
3 |
44.3% |
9 |
3 |
184.6% |
Total |
18 |
27 |
-32.8% |
55 |
92 |
-40.4% |
|
|
|
|
|||
Expenses |
|
|
|
|
||
Interest on debts |
(59) |
(76) |
-22.4% |
(190) |
(289) |
-34.1% |
Adjustment for inflation and exchange rate changes |
(14) |
(11) |
27.7% |
(52) |
(60) |
-13.8% |
Use of Public Asset |
(5) |
(1) |
404.5% |
(14) |
(5) |
193.8% |
Others |
(2) |
(1) |
89.0% |
(4) |
(4) |
6.6% |
Total |
(80) |
(89) |
-10.0% |
(260) |
(357) |
-27.3% |
|
|
|
|
|||
Financial Result |
(62) |
(62) |
0.0% |
(205) |
(265) |
-22.7% |
In 3Q18, the financial result was a net expense of R$ 62 million, with no change compared to the net financial expense of R$ 62 million registered in 3Q17.
· Financial Revenues moved from R$ 27 million in 3Q17 to R$ 18 million in 3Q18, a reduction of 32.8% (R$ 9 million), due to:
ü Reduction of R$ 11 million (92.8%) in monetary and foreign exchange updates, mainly due to the effect of the zero-cost collar derivative2 (R$ 12 million);
ü Reduction of 56.6% (R$ 7 million) related to income from financial investments;
Partially offset by:
ü Revenue of R$ 7 million in 3Q18, related to interest on loan agreements;
· Financial Expenses moved from R$ 89 million in 3Q17 to R$ 80 million in 3Q18, a reduction of 10.0% (R$ 9 million), due to:
ü Reduction of 22.4% (R$ 17 million) in debt charges, mainly due to the reduction in the CDI interbank rate;
Partially offset by:
ü Increase of 404,5% (R$ 4 million) in the financial expenses with the Use of Public Asset (UBP);
ü Increase of 27.7% (R$ 3 million) in monetary and foreign exchange updates;
ü Increase of 89.0% (R$ 1 million) in other financial expenses.
2 In 2015, subsidiary CPFL Geração contracted US$ denominated put and call options, involving the same financial institution as counterpart, and which on a combined basis are characterized as an operation usually known as zero-cost collar. The contracting of this operation does not involve any kind of speculation, inasmuch as it is aimed at minimizing any negative impacts on future revenues of the joint venture ENERCAN, which has electric energy sale agreements with annual restatement of part of the tariff based on the variation in the US$. In addition, according to Management’s view, the scenario was favorable for contracting this type of financial instrument, considering the high volatility implicit in dollar options and the fact that there was no initial cost for same.
Page 50 de 67
3Q18 Results | November 12, 2018 |
In 9M18, the financial result was a net expense of R$ 205 million, representing a reduction of 22.7% (R$ 60 million), compared to net financial expenses of R$ 265 million registered in 9M17.
· Financial Revenues moved from R$ 92 million in 9M17 to R$ 55 million in 9M18, a reduction of 40.4% (R$ 37 million), due to:
ü Reduction of 49.8% (R$ 34 million) in income from financial investments;
ü Reduction of 95,8% (R$ 22 million) in monetary and foreign exchange updates, mainly due to the effect of the zero-cost collar derivative;
Partially offset by:
ü Revenue of R$ 11 million in 9M18 related to Interest on loan agreements;
ü Increase of 184.6% (R$ 6 million) in other financial income;
ü Reduction of 18.5% (R$ 1 million) in PIS and COFINS over other financial revenue (revenue reducer);
· Financial Expenses moved from R$ 357 million in 9M17 to R$ 260 million in 9M18, a reduction of 27.3% (R$ 97 million), due to:
ü Reduction of 34.1% (R$ 98 million) in debt charges, mainly due to the reduction in the CDI interbank rate;
ü Reduction of 13.8% (R$ 8 million) in monetary and foreign exchange updates;
Partially offset by:
ü Increase of 193.8% (R$ 9 million) in the financial expenses with the Use of Public Asset (UBP).
In 3Q18, net income was of R$ 198 million, compared to a net income of R$ 187 million in 3Q17, an increase of 5.8% (R$ 11 million).
In 9M18, net income was of R$ 535 million, compared to a net income of R$ 469 million in 9M17, an increase of 14.2% (R$ 67 million).
Income Statement - CPFL Renováveis ( R$ Million) | ||||||
|
3Q18 |
3Q17 |
Var. % |
9M18 |
9M17 |
Var. % |
Gross Operating Revenue |
656 |
616 |
6.6% |
1,499 |
1,442 |
4.0% |
Net Operating Revenue |
622 |
585 |
6.3% |
1,420 |
1,368 |
3.8% |
Cost of Electric Power |
(109) |
(83) |
31.3% |
(262) |
(224) |
16.9% |
Operating Costs & Expenses |
(241) |
(252) |
-4.2% |
(716) |
(738) |
-3.0% |
EBIT |
271 |
250 |
8.5% |
442 |
406 |
9.1% |
EBITDA (1) |
427 |
408 |
4.7% |
910 |
867 |
5.0% |
Financial Income (Expense) |
(126) |
(131) |
-3.5% |
(375) |
(387) |
-3.2% |
Income Before Taxes |
145 |
119 |
21.7% |
68 |
18 |
266.8% |
Net Income |
121 |
95 |
27.6% |
12 |
(32) |
-137.9% |
Note:
(1) EBITDA is calculated from the sum of net income, taxes, financial result and depreciation/amortization.
Page 51 de 67
3Q18 Results | November 12, 2018 |
10.4.1.1) Operating Revenue
In 3Q18, Gross Operating Revenue reached R$ 656 million, representing an increase of 6.6% (R$ 40 million). Net Operating Revenue reached R$ 622 million, representing an increase of 6.3% (R$ 37 million). These variations are mainly explained by the following factors:
Wind Source:
· Increase in revenue from wind farms mainly due to (i) the higher generation of wind farms of Proinfa, which has higher value agreements (R$ 25 million); (ii) the positive effect of R$ 4 million in the new energy auction through the Surplus and Deficit Compensation Mechanism (MCSD) due to the higher volume not contracted (131.0 average-MW in 3Q18 versus 91.2 average-MW in 3Q17).
SHPPs Source and Holding Company:
· Reduction of R$ 2 million in revenue from SHPPs and the Holding Company, mainly due to the different seasonalization strategy of physical guarantee. Moreover, a higher revenue from the Holding Company occurred in 3Q17, basically due to the settlement of energy purchase to rebuild guarantee, which was not repeated in 3Q18.
Biomass Source:
· Increase of R$ 12 million in revenue from biomass due to the settlement of energy purchase to rebuild guarantee, with a matching cost of purchase of energy, and also some plants exceeded generation established in the contract and the surplus energy was settled at the spot price.
In 9M18, Gross Operating Revenue reached R$ 1,499 million, representing an increase of 4.0% (R$ 57 million). Net Operating Revenue was of R$ 1,420 million, representing an increase of 3.8% (R$ 52 million). These variations are mainly explained by the following factors:
Wind Source:
· Increase of R$ 63 million in revenue from wind farms mainly due to: (i) the positive effect of R$ 49 million of the new energy auction through Surplus and Deficit Offset Mechanism (MCSD), since the contract price in the free market was higher than the contract price in the regulated market for the eight wind farms that participated in the auction; (ii) the commercial startup of the Pedra Cheirosa wind complex in June 2017 (R$ 29 million); and (iii) inflation adjustment in sales agreement. These effects were partially offset by lower generation, mainly in the first half of 2018.
SHPPs Source and Holding Company:
· Reduction of R$ 23 million in revenue from SHPPs and the Holding Company, mainly due to the different seasonalization strategy of physical guarantee of the SHPPs between the periods. This effect was partially offset by the positive settlements in the CCEE (secondary) in the amount of R$ 10 million and the readjustment of energy sales agreements from SHPPs.
Page 52 de 67
3Q18 Results | November 12, 2018 |
Biomass Source:
· Increase of R$ 13 million in revenue from biomass, basically due to the settlement of energy purchase to rebuild guarantee, with a matching cost of purchase of energy, the positive settlement at the spot price at CCEE due to higher generation at some plants and price adjustments in energy sales agreements.
In 3Q18, cost of Electric Power totaled R$ 109 million, representing an increase of 31.3% (R$ 26 million), as a result of an increase of R$ 26 million in energy purchase cost, basically due to (i) the higher GSF impact, which was R$ 52 million in 3Q18 compared to R$ 39 million in 3Q17, (ii) the purchases to meet the short‐term market needs and hedge, partially offset by four‐year revisions of energy sale agreements of wind complexes in 3Q17 (R$ 5 million).
In 9M18, cost of Electric Power totaled R$ 262 million, representing an increase of 16.9% (R$ 38 million), as a result of an increase of R$ 48 million in energy purchase cost, mainly due to the items mentioned in the quarter, partially offset by the reduction of R$ 10 million in charges for the use of the system, mainly due to the positive effect of retroactive recovery of PIS and Cofins credits in 2Q18, partially offset by the adjustments in connection charges and the distribution and transmission system use and connection tariffs.
Operating Costs and Expenses reached R$ 241 million in 3Q18, compared to R$ 252 million in 3Q17, representing a reduction of 4.2% (R$ 10 million). In 9M18, Operating Costs and Expenses reached R$ 716 million, compared to R$ 738 million in 9M17, a reduction of 3.0% (R$ 22 million).
The factors that explain these variations follow:
PMSO
PMSO (R$ million) | ||||||||
|
3Q18 |
3Q17 |
Variation |
9M18 |
9M17 |
Variation | ||
|
R$ MM |
% |
R$ MM |
% | ||||
Reported PMSO |
|
|
|
|
|
|
|
|
Personnel |
(25) |
(26) |
1 |
-4.8% |
(76) |
(72) |
(4) |
5.7% |
Material |
(4) |
(9) |
5 |
-58.6% |
(21) |
(17) |
(4) |
23.5% |
Outsourced Services |
(44) |
(39) |
(5) |
14.1% |
(121) |
(126) |
5 |
-4.2% |
Other Operating Costs/Expenses |
(13) |
(20) |
7 |
-35.5% |
(31) |
(62) |
31 |
-50.5% |
GSF Risk Premium |
(1) |
(1) |
1 |
-50.0% |
(1) |
(2) |
1 |
-50.0% |
Others |
(12) |
(19) |
6 |
-34.6% |
(29) |
(60) |
30 |
-50.5% |
Total PMSO |
(86) |
(94) |
8 |
-8.9% |
(248) |
(277) |
29 |
-10.3% |
The PMSO item reached R$ 86 million in 3Q18, compared to R$ 94 million in 3Q17, a reduction of 8.9% (R$ 8 million), due to: (a) the write-off of receivables in 3Q17 due to the voluntary bankruptcy petition filed by the supplier (Suzlon) in the amount of R$ 6 million, which was not repeated in 3Q18, and (b) the lower costs with maintenance work resulting from insourcing of O&M services at the farms in Ceará; partially offset by the purchase of bagasse and wood chips for biomass generation.
Page 53 de 67
3Q18 Results | November 12, 2018 |
In 9M18, the PMSO item totaled R$ 248 million, compared to R$ 277 million in 9M17, a reduction of 10.3% (R$ 29 million), due to (in addition to the effects mentioned in the quarter): (a) the retroactive recovery of PIS and Cofins credits; (b) the write‐off of the intangible assets at SHPP projects due to the uncertainty surrounding their implementation, amounting to R$ 16 million in 2Q17; (c) the reversal of provision for impairment, amounting to R$ 6 million in 1Q18; and (d) the increase in personnel expenses mainly due to the trade union agreement.
Other operating costs and expenses
Other operating costs and expenses, represented by Depreciation and Amortization accounts, reached R$ 156 million in 3Q18, compared to R$ 158 million in 3Q17, registering a reduction of 1.4% (R$ 2 million). In 9M18, other operating costs and expenses totaled R$ 468 million, compared to R$ 462 million in 9M17, registering an increase of 1.4% (R$ 6 million). These variations are explained by the adequacy of the terms of depreciation of some assets of the Pedra Cheirosa wind complex.
In 3Q18, EBITDA was of R$ 427 million, compared to R$ 408 million in 3Q17, an increase of 4.7% (R$ 19 million). This result is mainly due to: (i) the higher net revenue from wind farms and biomass plants; (ii) the reduction in operating expenses due to the write-off of receivables in 3Q17, due to the voluntary bankruptcy petition filed by the supplier (Suzlon) in the amount of R$ 6 million, which was not repeated in 3Q18. These items were partially offset by higher costs with energy purchases.
In 9M18, EBITDA was of R$ 910 million, compared to R$ 867 million in 9M17, an increase of 5.0% (R$ 43 million). This result is chiefly due to: (i) the increase in net revenue, mainly driven by MCSD and the operational startup of the Pedra Cheirosa wind complex; (ii) the retroactive recovery of PIS and Cofins credits from industry and MSO (Material, Services and Others) charges in 2Q18; and (iii) the write‐offs of intangible assets of SHPP projects and receivables in 9M17. These items were partially offset by higher costs with the purchase of energy.
Conciliation of Net Income and EBITDA (R$ million) | ||||||
|
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
Net income |
121 |
95 |
27.6% |
12 |
(32) |
- |
Amortization |
156 |
158 |
|
468 |
462 |
|
Financial Results |
126 |
131 |
|
375 |
387 |
|
Income Tax /Social Contribution |
24 |
24 |
|
56 |
50 |
|
EBITDA |
427 |
408 |
4.7% |
910 |
867 |
5.0% |
Page 54 de 67
3Q18 Results | November 12, 2018 |
10.4.1.5) Financial Result
Financial Result (Adjusted - R$ Million) | ||||||
|
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
Revenues |
||||||
Income from Financial Investments |
24 |
33 |
-26.0% |
71 |
100 |
-28.8% |
Late payment interest and fines |
0 |
0 |
-69.6% |
0 |
1 |
-93.8% |
Judicial Deposits Update |
0 |
0 |
-19.1% |
1 |
0 |
150.7% |
Monetary and Foreign Exchange Updates |
0 |
0 |
-66.2% |
0 |
0 |
-43.8% |
PIS and COFINS - over Other Financial Revenues |
(1) |
(1) |
-28.6% |
(3) |
(4) |
-32.0% |
Others |
11 |
3 |
227.7% |
25 |
10 |
160.8% |
Total |
35 |
35 |
-1.8% |
95 |
107 |
-11.5% |
|
|
|
|
|||
Expenses |
|
|
|
|
||
Debt Charges |
(106) |
(139) |
-23.6% |
(343) |
(432) |
-20.8% |
Monetary and Foreign Exchange Updates |
(19) |
(17) |
16.4% |
(49) |
(53) |
-6.5% |
(-) Capitalized Interest |
3 |
3 |
12.7% |
8 |
28 |
-70.9% |
Others |
(39) |
(13) |
188.6% |
(85) |
(37) |
133.3% |
Total |
(161) |
(166) |
-3.2% |
(469) |
(494) |
-5.0% |
- |
- |
|
|
|||
Financial Result |
(126) |
(131) |
-3.5% |
(375) |
(387) |
-3.2% |
Net financial result registered a net financial expense of R$ 126 million in 3Q18, a reduction of 3.5% (R$ 5 million). In 9M18, net financial result registered a net financial expense of R$ 375 million, a reduction of 3.2% (R$ 12 million).
Financial revenues totaled R$ 35 million in 3Q18, a reduction of 1.8% (R$ 1 million). In 9M18, financial revenues totaled R$ 95 million, a reduction of 11.5% (R$ 12 million). These variations are mainly explained by the lower average CDI interbank rate in the periods (6.39% in 3Q18 vs. 9.17% in 3Q17 and 6.50% in 9M18 vs. 10.91% in 9M17), partially offset by the revenue with the update of financial settlement in the CCEE.
Financial expenses totaled R$ 161 million in 3Q18, a reduction of 3.2% (R$ 5 million). In 9M18, financial expenses totaled R$ 469 million, a reduction of 5.0% (R$ 25 million). These variations are mainly explained by the fall in the average CDI interbank rate and the TJLP rate, partially offset by the increase in expenses of projects related to long-term funding and update on the GSF provision.
In 3Q18, the net income was of R$ 121 million, compared to the net income of R$ 95 million in 3Q17, an increase of 27.6% (R$ 26 million). In 9M18, the net income was of R$ 12 million, compared to the net loss of R$ 32 million in 9M17. This result is mainly due to better EBITDA and financial result.
On the date of this report, the portfolio of projects of CPFL Renováveis (100% participation) totaled 2,103 MW of operating installed capacity and 127 MW of capacity under construction. The operational power plants comprises 39 Small Hydroelectric Power Plants – SHPPs (423 MW), 45 wind farms (1,309 MW), 8 biomass thermoelectric power plants (370 MW) and 1 solar power plant (1 MW). Still under construction there are 2 SHPP (58 MW) and 4 wind farms (69 MW).
Additionally, CPFL Renováveis owns wind, solar and SHPP projects under development totaling 2,418 MW.
Page 55 de 67
3Q18 Results | November 12, 2018 |
The table below illustrates the overall portfolio of assets (100% participation) in operation, construction and development, and its installed capacity on this date.
CPFL Renováveis - Portfolio (100% participation) | |||||
In MW |
SHPP |
Biomass |
Wind |
Solar |
Total |
Operating |
423 |
370 |
1,309 |
1 |
2,103 |
Under construction |
58 |
- |
69 |
- |
127 |
Under development |
167 |
- |
1,911 |
340 |
2,418 |
Total |
648 |
370 |
3,289 |
341 |
4,648 |
Boa Vista II SHPP
The Boa Vista II SHPP, project located in the State of Minas Gerais, is scheduled to start operating in 1Q20. The installed capacity is of 29.9 MW and the physical guarantee is of 15.2 average-MW. Energy was sold through a long-term contract in the 2015 A-5 new energy auction (price: R$ 240.47/MWh – September 2018).
Lucia Cherobim SHPP
The PCH Lucia Cherobim, project located in the State of Paraná, is scheduled to start operating in 2024. The installed capacity is of 28.0 MW and the physical guarantee is of 16.5 average-MW. Energy was sold through a long-term contract in the 2018 A-6 new energy auction (price: R$ 189.95/MWh – September 2018).
Wind Farms of the Gameleira Complex
The wind farms of the Gameleira Complex (Costa das Dunas, Figueira Branca, Farol de Touros e Gameleira), located in the State of Rio Grande do Norte, is scheduled to start operating in 2024. The installed capacity is of 69.3 MW. Part of the energy (12.0 average-MW) was sold through a long-term contract it the 2018 A-6 new energy auction (price: R$ 89.89/MWh – September 2018).
Page 56 de 67
3Q18 Results | November 12, 2018 |
Consolidated | |||
ASSETS |
09/30/2018 |
12/31/2017 |
09/30/2017 |
CURRENT |
|||
Cash and Cash Equivalents |
3,578,838 |
3,249,642 |
3,832,155 |
Consumers, Concessionaries and Licensees |
5,186,078 |
4,301,283 |
4,644,672 |
Dividend and Interest on Equity |
100,157 |
56,145 |
106,237 |
Recoverable Taxes |
480,447 |
395,045 |
372,859 |
Derivatives |
446,815 |
444,029 |
389,732 |
Sectoral Financial Assets |
1,515,712 |
210,834 |
5,449 |
Concession Financial Assets |
23,056 |
23,736 |
11,437 |
Other Credits |
860,614 |
900,498 |
935,255 |
TOTAL CURRENT |
12,191,717 |
9,581,212 |
10,297,796 |
NON-CURRENT |
|||
Consumers, Concessionaries and Licensees |
227,387 |
236,539 |
242,650 |
Affiliates, Subsidiaries and Parent Company |
- |
8,612 |
9,157 |
Judicial Deposits |
863,438 |
839,990 |
837,526 |
Recoverable Taxes |
240,430 |
233,444 |
232,379 |
Sectoral Financial Assets |
764,847 |
355,003 |
348,157 |
Derivatives |
484,402 |
203,901 |
261,942 |
Deferred Taxes |
767,696 |
943,199 |
979,110 |
Concession Financial Assets |
7,339,936 |
6,545,668 |
6,287,650 |
Investments at Cost |
116,654 |
116,654 |
116,654 |
Other Credits |
709,754 |
840,192 |
809,785 |
Investments |
959,216 |
1,001,550 |
1,042,445 |
Property, Plant and Equipment |
9,536,347 |
9,787,125 |
9,841,148 |
Intangible |
10,509,451 |
10,589,824 |
10,487,077 |
TOTAL NON-CURRENT |
32,519,557 |
31,701,701 |
31,495,681 |
TOTAL ASSETS |
44,711,274 |
41,282,912 |
41,793,477 |
Page 57 de 67
3Q18 Results | November 12, 2018 |
|
Consolidated | ||
LIABILITIES AND SHAREHOLDERS' EQUITY |
09/30/2018 |
12/31/2017 |
09/30/2017 |
CURRENT |
|||
Suppliers |
3,841,430 |
3,296,870 |
4,148,059 |
Loans and Financing |
2,751,778 |
3,589,607 |
3,767,294 |
Debentures |
1,646,527 |
1,703,073 |
1,610,575 |
Employee Pension Plans |
76,619 |
60,801 |
80,091 |
Regulatory Charges |
514,915 |
581,600 |
452,279 |
Taxes, Fees and Contributions |
829,795 |
710,303 |
698,712 |
Dividend and Interest on Equity |
38,440 |
297,744 |
5,418 |
Accrued Liabilities |
167,982 |
116,080 |
171,492 |
Derivatives |
32,648 |
10,230 |
4,464 |
Sectoral Financial Liabilities |
- |
40,111 |
384,115 |
Public Utilities |
11,431 |
10,965 |
11,936 |
Other Accounts Payable |
1,135,614 |
961,306 |
973,025 |
TOTAL CURRENT |
11,047,179 |
11,378,688 |
12,307,461 |
NON-CURRENT |
|||
Suppliers |
139,096 |
128,438 |
126,394 |
Loans and Financing |
8,556,530 |
7,402,450 |
8,006,258 |
Debentures |
8,586,345 |
7,473,454 |
6,436,820 |
Employee Pension Plans |
862,772 |
880,360 |
1,014,736 |
Taxes, Fees and Contributions |
12,268 |
18,839 |
21,107 |
Deferred Taxes |
1,288,800 |
1,249,591 |
1,267,570 |
Reserve for Tax, Civil and Labor Risks |
997,547 |
961,134 |
948,448 |
Derivatives |
7,350 |
84,576 |
117,130 |
Sectoral Financial Liabilities |
73,434 |
8,385 |
76,902 |
Public Utilities |
88,771 |
83,766 |
82,153 |
Other Accounts Payable |
465,124 |
426,889 |
293,538 |
TOTAL NON-CURRENT |
21,078,038 |
18,717,881 |
18,391,056 |
SHAREHOLDERS' EQUITY |
|||
Capital |
5,741,284 |
5,741,284 |
5,741,284 |
Capital Reserve |
468,018 |
468,014 |
468,014 |
Legal Reserve |
798,090 |
798,090 |
739,102 |
Statutory Reserve - Concession Financial Assets |
- |
826,600 |
760,976 |
Statutory Reserve - Strengthening of Working Capital |
1,292,046 |
1,292,046 |
545,505 |
Other Comprehensive Income |
(143,010) |
(164,506) |
(253,927) |
Retained Earnings |
2,216,629 |
- |
684,579 |
10,373,057 |
8,961,528 |
8,685,534 | |
Non-Controlling Shareholders' Interest |
2,213,000 |
2,224,816 |
2,409,425 |
TOTAL SHAREHOLDERS' EQUITY |
12,586,057 |
11,186,344 |
11,094,960 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
44,711,274 |
41,282,912 |
41,793,477 |
Page 58 de 67
3Q18 Results | November 12, 2018 |
11.3) Income Statement – CPFL Energia
Consolidated | ||||||||
|
|
3Q18 |
3Q17 |
Variation |
|
9M18 |
9M17 |
Variation |
OPERATING REVENUES |
|
|||||||
Electricity Sales to Final Customers |
|
7,471,689 |
6,110,261 |
22.3% |
21,128,905 |
18,807,612 |
12.3% | |
Electricity Sales to Distributors |
|
1,827,963 |
2,117,043 |
-13.7% |
4,143,917 |
4,521,967 |
-8.4% | |
Revenue from building the infrastructure |
|
462,838 |
602,337 |
-23.2% |
1,203,453 |
1,480,699 |
-18.7% | |
Update of concession's financial asset |
|
99,089 |
10,399 |
852.9% |
302,498 |
91,713 |
229.8% | |
Sectorial financial assets and liabilities |
|
1,088,508 |
1,244,970 |
-12.6% |
1,942,754 |
1,049,284 |
85.2% | |
Other Operating Revenues |
|
1,224,217 |
988,179 |
23.9% |
3,591,190 |
3,008,810 |
19.4% | |
|
12,174,303 |
11,073,189 |
9.9% |
|
32,312,716 |
28,960,086 |
11.6% | |
|
||||||||
DEDUCTIONS FROM OPERATING REVENUES |
|
(4,044,018) |
(3,289,243) |
22.9% |
(10,862,411) |
(9,674,812) |
12.3% | |
NET OPERATING REVENUES |
|
8,130,285 |
7,783,946 |
4.4% |
|
21,450,306 |
19,285,274 |
11.2% |
|
||||||||
COST OF ELECTRIC ENERGY SERVICES |
|
|
||||||
Electricity Purchased for Resale |
|
(5,002,833) |
(4,772,758) |
4.8% |
(12,166,742) |
(11,311,684) |
7.6% | |
Electricity Network Usage Charges |
|
(398,629) |
(473,326) |
-15.8% |
(1,786,478) |
(893,571) |
99.9% | |
|
(5,401,462) |
(5,246,084) |
3.0% |
|
(13,953,219) |
(12,205,255) |
14.3% | |
OPERATING COSTS AND EXPENSES |
|
|||||||
Personnel |
|
(344,089) |
(329,180) |
4.5% |
(1,034,222) |
(998,342) |
3.6% | |
Material |
|
(62,056) |
(69,451) |
-10.6% |
(188,036) |
(182,008) |
3.3% | |
Outsourced Services |
|
(161,910) |
(173,821) |
-6.9% |
(498,564) |
(548,210) |
-9.1% | |
Other Operating Costs/Expenses |
|
(214,744) |
(153,834) |
39.6% |
(463,284) |
(542,572) |
-14.6% | |
Allowance for Doubtful Accounts |
|
(45,495) |
(32,818) |
38.6% |
(113,737) |
(118,885) |
-4.3% | |
Legal and judicial expenses |
|
(68,852) |
(8,362) |
723.4% |
(112,603) |
(121,985) |
-7.7% | |
Others |
|
(100,397) |
(112,655) |
-10.9% |
(236,944) |
(301,702) |
-21.5% | |
Cost of building the infrastructure |
|
(462,799) |
(598,698) |
-22.7% |
(1,203,405) |
(1,478,990) |
-18.6% | |
Employee Pension Plans |
|
(22,477) |
(28,483) |
-21.1% |
(67,432) |
(85,426) |
-21.1% | |
Depreciation and Amortization |
|
(316,362) |
(313,328) |
1.0% |
(977,531) |
(926,776) |
5.5% | |
Amortization of Concession's Intangible |
|
(71,327) |
(71,293) |
0.0% |
(214,122) |
(215,526) |
-0.7% | |
|
(1,655,765) |
(1,738,088) |
-4.7% |
|
(4,646,595) |
(4,977,850) |
-6.7% | |
|
||||||||
EBITDA1 |
|
1,547,772 |
1,274,571 |
21.4% |
|
4,283,561 |
3,497,613 |
22.5% |
|
||||||||
INCOME FROM ELECTRIC ENERGY SERVICE |
|
1,073,058 |
799,774 |
34.2% |
|
2,850,491 |
2,102,168 |
35.6% |
|
||||||||
FINANCIAL REVENUES (EXPENSES) |
|
|||||||
Financial Revenues |
|
212,587 |
205,553 |
3.4% |
578,817 |
708,896 |
-18.3% | |
Financial Expenses |
|
(491,560) |
(548,953) |
-10.5% |
(1,410,983) |
(1,906,602) |
-26.0% | |
|
(278,973) |
(343,400) |
-18.8% |
|
(832,166) |
(1,197,706) |
-30.5% | |
|
||||||||
EQUITY ACCOUNTING |
|
|||||||
Equity Accounting |
|
87,025 |
90,176 |
-3.5% |
241,416 |
253,143 |
-4.6% | |
Assets Surplus Value Amortization |
|
(145) |
(145) |
0.0% |
(435) |
(435) |
0.0% | |
|
86,880 |
90,031 |
-3.5% |
|
240,982 |
252,709 |
-4.6% | |
|
||||||||
INCOME BEFORE TAXES ON INCOME |
|
880,966 |
546,404 |
61.2% |
|
2,259,307 |
1,157,171 |
95.2% |
|
||||||||
Social Contribution |
|
(70,757) |
(44,521) |
58.9% |
(207,469) |
(113,385) |
83.0% | |
Income Tax |
(183,986) |
(111,686) |
64.7% |
(556,033) |
(298,296) |
86.4% | ||
|
||||||||
NET INCOME |
|
626,223 |
390,198 |
60.5% |
|
1,495,804 |
745,490 |
100.6% |
Controlling Shareholders' Interest |
|
553,728 |
331,813 |
66.9% |
|
1,453,225 |
721,173 |
101.5% |
Non-Controlling Shareholders' Interest |
|
72,495 |
58,385 |
24.2% |
|
42,579 |
24,318 |
75.1% |
Note:
(1) EBITDA is calculated from the sum of net income, taxes, financial result and depreciation/amortization, according to CVM Instruction no. 527/12.
Page 59 de 67
3Q18 Results | November 12, 2018 |
11.4) Cash Flow – CPFL Energia
Consolidated | ||||
3Q18 |
Last 12M | |||
Beginning Balance |
2,490,235 |
3,832,155 | ||
Net Income Before Taxes |
880,966 |
2,948,806 | ||
Depreciation and Amortization |
387,688 |
1,578,403 | ||
Interest on Debts and Monetary and Foreign Exchange Restatements |
315,304 |
1,185,013 | ||
Consumers, Concessionaries and Licensees |
(693,093) |
(749,713) | ||
Sectoral Financial Assets |
(1,170,377) |
(1,821,625) | ||
Accounts Receivable - Resources Provided by the CDE/CCEE |
2,651 |
37,691 | ||
Suppliers |
615,238 |
(298,973) | ||
Sectoral Financial Liabilities |
61,306 |
(470,655) | ||
Accounts Payable - CDE |
26,824 |
48,236 | ||
Interest on Debts and Debentures Paid |
(383,832) |
(1,550,022) | ||
Income Tax and Social Contribution Paid |
(136,151) |
(473,753) | ||
Others |
682,580 |
459,529 | ||
(291,862) |
(2,055,869) | |||
Total Operating Activities |
589,104 |
892,937 | ||
Investment Activities |
||||
Acquisition of Property, Plant and Equipment, and Intangibles |
(522,186) |
(2,063,406) | ||
Others |
176,488 |
111,795 | ||
Total Investment Activities |
(345,698) |
(1,951,611) | ||
Financing Activities |
||||
Loans and Debentures |
1,895,860 |
10,134,925 | ||
Principal Amortization of Loans and Debentures, Net of Derivatives |
(1,047,613) |
(8,806,223) | ||
Dividend and Interest on Equity Paid |
(3,065) |
(400,563) | ||
Others |
15 |
(122,781) | ||
Total Financing Activities |
845,197 |
805,358 | ||
Cash Flow Generation |
1,088,603 |
(253,316) | ||
Ending Balance - 09/30/2018 |
|
3,578,838 |
|
3,578,838 |
Page 60 de 67
3Q18 Results | November 12, 2018 |
11.5) Income Statement – Conventional Generation Segment
Conventional Generation | ||||||
|
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
OPERATING REVENUE |
|
|
|
| ||
Eletricity Sales to Distributors |
322,851 |
295,019 |
9.4% |
898,295 |
870,522 |
3.2% |
Revenue from construction of concession infrastructure |
1,061 |
5,582 |
-81.0% |
1,317 |
46,756 |
-97.2% |
Other Operating Revenues |
31,414 |
35,153 |
-10.6% |
60,786 |
61,963 |
-1.9% |
|
355,327 |
335,754 |
5.8% |
960,398 |
979,240 |
-1.9% |
|
|
|
|
|
|
|
DEDUCTIONS FROM OPERATING REVENUE |
(47,885) |
(29,570) |
61.9% |
(100,987) |
(83,945) |
20.3% |
NET OPERATING REVENUE |
307,442 |
306,184 |
0.4% |
859,410 |
895,295 |
-4.0% |
|
|
|
|
|
|
|
COST OF ELETRIC ENERGY SERVICES |
|
|
|
|
|
|
Eletricity Purchased for Resale |
(25,582) |
(41,873) |
-38.9% |
(47,286) |
(78,761) |
-40.0% |
Eletricity Network Usage Charges |
(6,609) |
(6,748) |
-2.1% |
(20,338) |
(19,912) |
2.1% |
|
(32,191) |
(48,620) |
-33.8% |
(67,625) |
(98,673) |
-31.5% |
OPERATING COSTS AND EXPENSES |
|
|
|
|
|
|
Personnel |
(8,523) |
(8,686) |
-1.9% |
(25,899) |
(28,578) |
-9.4% |
Material |
(839) |
(2,446) |
-65.7% |
(2,133) |
(3,690) |
-42.2% |
Outsourced Services |
(3,728) |
(4,693) |
-20.6% |
(14,209) |
(19,387) |
-26.7% |
Other Operating Costs/Expenses |
(11,520) |
(8,391) |
37.3% |
(28,378) |
(27,102) |
4.7% |
Costs of infrastructure construction |
(1,023) |
(1,943) |
-47.4% |
(1,269) |
(45,047) |
-97.2% |
Employee Pension Plans |
(388) |
(517) |
-24.9% |
(1,165) |
(1,550) |
-24.9% |
Depreciation and Amortization |
(24,857) |
(27,739) |
-10.4% |
(80,143) |
(82,952) |
-3.4% |
Amortization of Concession's Intangible |
(2,492) |
(2,491) |
0.0% |
(7,475) |
(7,475) |
0.0% |
|
(53,369) |
(56,905) |
-6.2% |
(160,671) |
(215,781) |
-25.5% |
|
|
|
|
|
|
|
EBITDA |
336,256 |
321,064 |
4.7% |
960,149 |
924,412 |
3.9% |
|
|
|
|
|
|
|
EBIT |
221,883 |
200,659 |
10.6% |
631,115 |
580,841 |
8.7% |
|
|
|
|
|
|
|
FINANCIAL INCOME (EXPENSE) |
|
|
|
|
|
|
Financial Income |
18,290 |
27,222 |
-32.8% |
54,899 |
92,188 |
-40.4% |
Financial Expenses |
(80,386) |
(89,318) |
-10.0% |
(259,824) |
(357,266) |
-27.3% |
Interest on Equity |
- |
- |
- |
- |
- |
- |
|
(62,096) |
(62,097) |
0.0% |
(204,925) |
(265,078) |
-22.7% |
|
|
|
|
|
|
|
EQUITY ACCOUNTING |
|
|
|
|
|
|
Equity Accounting |
87,025 |
90,176 |
-3.5% |
241,416 |
253,143 |
-4.6% |
Assets Surplus Value Amortization |
(145) |
(145) |
0.0% |
(435) |
(435) |
0.0% |
|
86,880 |
90,031 |
-3.5% |
240,982 |
252,709 |
-4.6% |
|
|
|
|
|
|
|
INCOME BEFORE TAXES ON INCOME |
246,667 |
228,593 |
7.9% |
667,171 |
568,472 |
17.4% |
|
|
|
|
|
|
|
Social Contribution |
(13,000) |
(11,055) |
17.6% |
(35,170) |
(26,807) |
31.2% |
Income Tax |
(35,323) |
(30,110) |
17.3% |
(96,607) |
(73,041) |
32.3% |
|
||||||
NET INCOME (LOSS) |
198,344 |
187,428 |
5.8% |
535,395 |
468,624 |
14.2% |
(1) EBITDA (IFRS) is calculated from the sum of net income, taxes, financial result and depreciation/amortization, as CVM Instruction no. 527/12.
Page 61 de 67
3Q18 Results | November 12, 2018 |
11.6) Income Statement – CPFL Renováveis
Consolidated (100% Participation) | ||||||||
|
3Q18 |
3Q17 |
Var. |
Var. % |
9M18 |
9M17 |
Var. |
Var. % |
OPERATING REVENUES |
|
| ||||||
Eletricity Sales to Final Consumers |
4,935 |
5,534 |
(599) |
-10.8% |
16,242 |
35,358 |
(19,116) |
-54.1% |
Eletricity Sales to Distributors |
648,431 |
609,481 |
38,950 |
6.4% |
1,478,311 |
1,402,117 |
76,194 |
5.4% |
Other Operating Revenues |
3,020 |
956 |
2,064 |
216.0% |
4,791 |
4,392 |
399 |
9.1% |
|
656,386 |
615,970 |
40,415 |
6.6% |
1,499,344 |
1,441,867 |
57,478 |
4.0% |
|
|
| ||||||
DEDUCTIONS FROM OPERATING REVENUES |
(34,735) |
(31,057) |
(3,677) |
11.8% |
(79,109) |
(73,948) |
(5,162) |
7.0% |
NET OPERATING REVENUES |
621,651 |
584,913 |
36,738 |
6.3% |
1,420,235 |
1,367,919 |
52,316 |
3.8% |
|
|
| ||||||
COST OF ELETRIC ENERGY SERVICES |
|
| ||||||
Eletricity Purchased for Resale |
(84,948) |
(58,788) |
(26,160) |
44.5% |
(197,336) |
(149,568) |
(47,768) |
31.9% |
Eletricity Network Usage Charges |
(24,290) |
(24,389) |
99 |
-0.4% |
(64,346) |
(74,229) |
9,883 |
-13.3% |
|
(109,238) |
(83,177) |
(26,061) |
31.3% |
(261,682) |
(223,797) |
(37,885) |
16.9% |
OPERATING COSTS AND EXPENSES |
|
| ||||||
Personnel |
(24,690) |
(25,925) |
1,234 |
-4.8% |
(75,928) |
(71,863) |
(4,065) |
5.7% |
Material |
(3,852) |
(9,314) |
5,462 |
-58.6% |
(20,636) |
(16,715) |
(3,921) |
23.5% |
Outsourced Services |
(44,232) |
(38,779) |
(5,453) |
14.1% |
(120,995) |
(126,358) |
5,363 |
-4.2% |
Other Operating Costs/Expenses |
(12,846) |
(19,927) |
7,081 |
-35.5% |
(30,657) |
(61,926) |
31,269 |
-50.5% |
Depreciation and Amortization |
(116,673) |
(118,780) |
2,107 |
-1.8% |
(350,656) |
(345,223) |
(5,433) |
1.6% |
Amortization of Concession's Intangible |
(39,024) |
(39,057) |
32 |
-0.1% |
(117,214) |
(116,307) |
(908) |
0.8% |
|
(241,317) |
(251,781) |
10,463 |
-4.2% |
(716,086) |
(738,399) |
22,313 |
-3.0% |
|
|
|
|
|
|
|
|
|
EBITDA (1) |
426,793 |
407,791 |
19,001 |
4.7% |
910,337 |
867,259 |
43,077 |
5.0% |
|
|
| ||||||
EBIT |
271,095 |
249,955 |
21,140 |
8.5% |
442,466 |
405,729 |
36,737 |
9.1% |
|
|
| ||||||
FINANCIAL INCOME (EXPENSE) |
|
| ||||||
Financial Income |
34,598 |
35,217 |
(619) |
-1.8% |
94,610 |
106,957 |
(12,347) |
-11.5% |
Financial Expenses |
(161,064) |
(166,313) |
5,249 |
-3.2% |
(469,410) |
(494,239) |
24,829 |
-5.0% |
|
(126,466) |
(131,096) |
4,630 |
-3.5% |
(374,799) |
(387,282) |
12,483 |
-3.2% |
|
|
| ||||||
INCOME BEFORE TAXES ON INCOME |
144,629 |
118,859 |
25,770 |
21.7% |
67,667 |
18,448 |
49,219 |
266.8% |
|
|
| ||||||
Social Contribution |
(9,167) |
(9,240) |
74 |
-0.8% |
(20,047) |
(18,390) |
(1,657) |
9.0% |
Income Tax |
(14,416) |
(14,771) |
355 |
-2.4% |
(35,635) |
(31,654) |
(3,980) |
12.6% |
|
|
|
|
|
|
|
|
|
NET INCOME |
121,047 |
94,848 |
26,198 |
27.6% |
11,985 |
(31,597) |
43,582 |
-137.9% |
Note:
(1) EBITDA (IFRS) is calculated from the sum of net income, taxes, financial result and depreciation/amortization, as CVM Instruction no. 527/12.
Page 62 de 67
3Q18 Results | November 12, 2018 |
Consolidated | ||||||||
|
|
3Q18 |
3Q17 |
Variation |
|
9M18 |
9M17 |
Variation |
OPERATING REVENUE |
|
|||||||
Electricity Sales to Final Customers |
6,989,874 |
5,607,720 |
24.6% |
|
19,701,037 |
17,374,687 |
13.4% | |
Electricity Sales to Distributors |
513,749 |
856,716 |
-40.0% |
|
1,088,572 |
1,743,980 |
-37.6% | |
Revenue from building the infrastructure |
461,777 |
596,755 |
-22.6% |
|
1,202,136 |
1,433,943 |
-16.2% | |
Adjustments to the concession´s financial asset |
99,089 |
10,399 |
852.9% |
|
302,498 |
91,713 |
229.8% | |
Sectoral financial assets and liabilities |
1,088,508 |
1,244,970 |
-12.6% |
|
1,942,754 |
1,049,284 |
85.2% | |
Other Operating Revenues |
1,164,232 |
930,021 |
25.2% |
|
3,460,778 |
2,877,800 |
20.3% | |
|
10,317,227 |
9,246,580 |
11.6% |
|
27,697,776 |
24,571,407 |
12.7% | |
|
|
|
|
|
|
|||
DEDUCTIONS FROM OPERATING REVENUE |
(3,852,262) |
(3,115,274) |
23.7% |
|
(10,390,872) |
(9,244,529) |
12.4% | |
NET OPERATING REVENUE |
6,464,965 |
6,131,306 |
5.4% |
|
17,306,904 |
15,326,878 |
12.9% | |
|
|
|||||||
COST OF ELECTRIC ENERGY SERVICES |
|
|||||||
Electricity Purchased for Resale |
(4,218,803) |
(3,971,264) |
6.2% |
|
(10,195,773) |
(9,567,184) |
6.6% | |
Electricity Network Usage Charges |
(374,849) |
(447,555) |
-16.2% |
|
(1,722,134) |
(812,477) |
112.0% | |
|
(4,593,652) |
(4,418,818) |
4.0% |
|
(11,917,907) |
(10,379,661) |
14.8% | |
OPERATING COSTS AND EXPENSES |
|
|
||||||
Personnel |
|
(225,503) |
(215,343) |
4.7% |
|
(680,260) |
(668,968) |
1.7% |
Material |
|
(42,464) |
(43,344) |
-2.0% |
|
(124,238) |
(123,980) |
0.2% |
Outsourced Services |
|
(210,581) |
(211,655) |
-0.5% |
|
(626,909) |
(618,187) |
1.4% |
Other Operating Costs/Expenses |
|
(190,890) |
(129,200) |
47.7% |
|
(411,285) |
(451,778) |
-9.0% |
Allowance for Doubtful Accounts |
|
(47,746) |
(33,301) |
43.4% |
|
(115,790) |
(119,392) |
-3.0% |
Legal and Judicial Expenses |
|
(65,903) |
(19,478) |
238.4% |
|
(106,326) |
(120,396) |
-11.7% |
Others |
|
(77,241) |
(76,421) |
1.1% |
|
(189,169) |
(211,990) |
-10.8% |
Cost of building the infrastructure |
|
(461,777) |
(596,755) |
-22.6% |
|
(1,202,136) |
(1,433,943) |
-16.2% |
Employee Pension Plans |
|
(22,089) |
(27,966) |
-21.0% |
|
(66,267) |
(83,876) |
-21.0% |
Depreciation and Amortization |
|
(168,495) |
(160,555) |
4.9% |
|
(527,963) |
(479,513) |
10.1% |
Amortization of Concession's Intangible |
|
(14,133) |
(14,067) |
0.5% |
|
(42,399) |
(44,710) |
-5.2% |
|
(1,335,931) |
(1,398,885) |
-4.5% |
|
(3,681,457) |
(3,904,955) |
-5.7% | |
|
|
|||||||
EBITDA (IFRS)(1) |
|
718,009 |
488,224 |
47.1% |
|
2,277,902 |
1,566,486 |
45.4% |
|
|
|||||||
EBIT |
|
535,382 |
313,602 |
70.7% |
|
1,707,540 |
1,042,263 |
63.8% |
|
|
|||||||
FINANCIAL INCOME (EXPENSE) |
|
|
||||||
Financial Income |
|
154,871 |
131,887 |
17.4% |
|
413,535 |
472,317 |
-12.4% |
Financial Expenses |
|
(252,585) |
(263,689) |
-4.2% |
|
(662,568) |
(951,288) |
-30.4% |
Interest on Equity |
|
|
||||||
|
(97,714) |
(131,803) |
-25.9% |
|
(249,033) |
(478,971) |
-48.0% | |
|
|
|||||||
INCOME BEFORE TAXES ON INCOME |
|
437,668 |
181,799 |
140.7% |
|
1,458,507 |
563,292 |
158.9% |
|
|
|||||||
Social Contribution |
|
(43,109) |
(20,910) |
106.2% |
|
(143,348) |
(62,718) |
128.6% |
Income Tax |
|
(117,665) |
(56,455) |
108.4% |
|
(394,034) |
(172,622) |
128.3% |
|
|
|||||||
Net Income (IFRS) |
|
276,894 |
104,434 |
165.1% |
|
921,126 |
327,952 |
180.9% |
Note:
(1) EBITDA (IFRS) is calculated from the sum of net income, taxes, financial result and depreciation/amortization, as CVM Instruction no. 527/12.
Page 63 de 67
3Q18 Results | November 12, 2018 |
11.8) Economic-Financial Performance by Distributor
(R$ thousands)
Summary of Income Statement by Distribution Company (R$ Thousands) | ||||||
CPFL PAULISTA | ||||||
|
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
Gross Operating Revenue |
4,574,682 |
4,136,870 |
10.6% |
12,051,451 |
10,766,617 |
11.9% |
Net Operating Revenue |
2,914,610 |
2,772,410 |
5.1% |
7,612,682 |
6,745,874 |
12.8% |
Cost of Electric Power |
(2,114,248) |
(2,034,871) |
3.9% |
(5,344,757) |
(4,702,400) |
13.7% |
Operating Costs & Expenses |
(551,549) |
(619,707) |
-11.0% |
(1,506,793) |
(1,652,704) |
-8.8% |
EBIT |
248,814 |
117,832 |
111.2% |
761,133 |
390,769 |
94.8% |
EBITDA(1) |
310,594 |
178,287 |
74.2% |
957,090 |
564,955 |
69.4% |
Financial Income (Expense) |
(29,004) |
(45,808) |
-36.7% |
(63,925) |
(184,717) |
-65.4% |
Income Before Taxes |
219,809 |
72,025 |
205.2% |
697,208 |
206,052 |
238.4% |
Net Income |
140,604 |
42,664 |
229.6% |
443,747 |
118,256 |
275.2% |
CPFL PIRATININGA | ||||||
|
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
Gross Operating Revenue |
1,791,030 |
1,756,570 |
2.0% |
4,930,446 |
4,637,887 |
6.3% |
Net Operating Revenue |
1,108,488 |
1,162,416 |
-4.6% |
3,009,169 |
2,899,796 |
3.8% |
Cost of Electric Power |
(831,646) |
(894,263) |
-7.0% |
(2,175,406) |
(2,086,446) |
4.3% |
Operating Costs & Expenses |
(216,334) |
(202,389) |
6.9% |
(582,273) |
(581,694) |
0.1% |
EBIT |
60,509 |
65,764 |
-8.0% |
251,490 |
231,655 |
8.6% |
EBITDA(1) |
85,270 |
89,825 |
-5.1% |
326,071 |
303,678 |
7.4% |
Financial Income (Expense) |
(15,571) |
(24,247) |
-35.8% |
(40,079) |
(89,976) |
-55.5% |
Income Before Taxes |
44,938 |
41,518 |
8.2% |
211,412 |
141,680 |
49.2% |
Net Income |
27,816 |
26,053 |
6.8% |
132,104 |
87,908 |
50.3% |
RGE | ||||||
|
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
Gross Operating Revenue |
1,837,061 |
1,487,270 |
23.5% |
4,884,522 |
4,005,395 |
21.9% |
Net Operating Revenue |
1,141,975 |
953,510 |
19.8% |
3,096,534 |
2,475,450 |
25.1% |
Cost of Electric Power |
(751,161) |
(621,658) |
20.8% |
(2,029,196) |
(1,522,039) |
33.3% |
Operating Costs & Expenses |
(244,747) |
(267,597) |
-8.5% |
(700,820) |
(717,678) |
-2.3% |
EBIT |
146,067 |
64,256 |
127.3% |
366,518 |
235,733 |
55.5% |
EBITDA(1) |
187,176 |
103,947 |
80.1% |
491,270 |
355,166 |
38.3% |
Financial Income (Expense) |
(15,811) |
(23,116) |
-31.6% |
(45,197) |
(90,717) |
-50.2% |
Income Before Taxes |
130,256 |
41,140 |
216.6% |
321,320 |
145,016 |
121.6% |
Net Income |
84,629 |
26,149 |
223.6% |
207,565 |
91,850 |
126.0% |
RGE SUL | ||||||
|
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
Gross Operating Revenue |
1,639,524 |
1,436,902 |
14.1% |
4,549,321 |
4,013,628 |
13.3% |
Net Operating Revenue |
988,894 |
949,539 |
4.1% |
2,743,475 |
2,453,939 |
11.8% |
Cost of Electric Power |
(695,608) |
(685,929) |
1.4% |
(1,844,550) |
(1,638,238) |
12.6% |
Operating Costs & Expenses |
(248,950) |
(226,334) |
10.0% |
(671,786) |
(725,349) |
-7.4% |
EBIT |
44,336 |
37,276 |
18.9% |
227,138 |
90,352 |
151.4% |
EBITDA(1) |
87,777 |
72,354 |
21.3% |
368,524 |
215,771 |
70.8% |
Financial Income (Expense) |
(30,887) |
(37,114) |
-16.8% |
(87,278) |
(93,522) |
-6.7% |
Income Before Taxes |
13,448 |
162 |
8186.4% |
139,859 |
(3,170) |
- |
Net Income |
4,038 |
(12,025) |
- |
80,053 |
(20,871) |
- |
CPFL SANTA CRUZ | ||||||
|
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
Gross Operating Revenue |
474,930 |
428,967 |
10.7% |
1,282,036 |
1,147,880 |
11.7% |
Net Operating Revenue |
310,997 |
293,431 |
6.0% |
845,044 |
751,821 |
12.4% |
Cost of Electric Power |
(200,989) |
(182,098) |
10.4% |
(523,998) |
(430,537) |
21.7% |
Operating Costs & Expenses |
(74,351) |
(82,859) |
-10.3% |
(219,784) |
(227,530) |
-3.4% |
EBIT |
35,656 |
28,474 |
25.2% |
101,261 |
93,754 |
8.0% |
EBITDA(1) |
47,193 |
43,811 |
7.7% |
134,946 |
126,915 |
6.3% |
Financial Income (Expense) |
(6,440) |
(1,519) |
323.8% |
(12,554) |
(20,040) |
-37.4% |
Income Before Taxes |
29,217 |
26,955 |
8.4% |
88,707 |
73,714 |
20.3% |
Net Income |
19,807 |
21,594 |
-8.3% |
57,657 |
50,809 |
13.5% |
Note:
(1) EBITDA (IFRS) is calculated from the sum of net income, taxes, financial result and depreciation/amortization.
Page 64 de 67
3Q18 Results | November 12, 2018 |
11.9) Sales within the Concession Area by Distributor (In GWh)
CPFL Paulista | ||||||
|
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
Residential |
2,180 |
2,158 |
1.0% |
6,968 |
6,762 |
3.0% |
Industrial |
2,776 |
2,784 |
-0.3% |
8,190 |
8,021 |
2.1% |
Commercial |
1,257 |
1,239 |
1.5% |
4,123 |
4,056 |
1.7% |
Others |
1,182 |
1,128 |
4.8% |
3,349 |
3,211 |
4.3% |
Total |
7,394 |
7,308 |
1.2% |
22,630 |
22,050 |
2.6% |
CPFL Piratininga | ||||||
|
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
Residential |
915 |
915 |
-0.1% |
2,932 |
2,903 |
1.0% |
Industrial |
1,663 |
1,595 |
4.3% |
4,926 |
4,654 |
5.8% |
Commercial |
559 |
556 |
0.5% |
1,836 |
1,801 |
2.0% |
Others |
307 |
284 |
7.9% |
902 |
852 |
5.8% |
Total |
3,444 |
3,351 |
2.8% |
10,596 |
10,210 |
3.8% |
RGE | ||||||
|
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
Residential |
697 |
656 |
6.3% |
2,078 |
1,981 |
4.9% |
Industrial |
911 |
879 |
3.7% |
2,608 |
2,540 |
2.7% |
Commercial |
309 |
318 |
-2.9% |
1,009 |
1,028 |
-1.9% |
Others |
684 |
688 |
-0.5% |
2,200 |
2,162 |
1.7% |
Total |
2,601 |
2,540 |
2.4% |
7,894 |
7,711 |
2.4% |
RGE Sul | ||||||
|
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
Residential |
642 |
617 |
4.0% |
2,075 |
2,029 |
2.3% |
Industrial |
768 |
734 |
4.6% |
2,194 |
2,121 |
3.4% |
Commercial |
278 |
284 |
-2.2% |
979 |
959 |
2.1% |
Others |
415 |
410 |
1.2% |
1,694 |
1,619 |
4.6% |
Total |
2,102 |
2,045 |
2.8% |
6,942 |
6,727 |
3.2% |
CPFL Santa Cruz | ||||||
|
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
Residential |
193 |
192 |
0.7% |
595 |
582 |
2.3% |
Industrial |
251 |
229 |
9.4% |
735 |
694 |
6.0% |
Commercial |
80 |
80 |
-0.5% |
260 |
258 |
0.8% |
Others |
184 |
187 |
-1.4% |
540 |
517 |
4.6% |
Total |
708 |
688 |
2.9% |
2,131 |
2,050 |
3.9% |
Page 65 de 67
3Q18 Results | November 12, 2018 |
11.10) Sales to the Captive Market by Distributor (in GWh)
CPFL Paulista | ||||||
|
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
Residential |
2,180 |
2,158 |
1.0% |
6,968 |
6,762 |
3.0% |
Industrial |
626 |
678 |
-7.7% |
1,886 |
2,061 |
-8.5% |
Commercial |
941 |
963 |
-2.2% |
3,096 |
3,183 |
-2.7% |
Others |
1,154 |
1,089 |
5.9% |
3,247 |
3,094 |
4.9% |
Total |
4,901 |
4,888 |
0.3% |
15,196 |
15,100 |
0.6% |
CPFL Piratininga | ||||||
|
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
Residential |
915 |
915 |
-0.1% |
2,932 |
2,903 |
1.0% |
Industrial |
291 |
305 |
-4.6% |
861 |
935 |
-7.9% |
Commercial |
397 |
406 |
-2.2% |
1,321 |
1,356 |
-2.6% |
Others |
263 |
245 |
7.4% |
775 |
742 |
4.5% |
Total |
1,867 |
1,872 |
-0.3% |
5,889 |
5,936 |
-0.8% |
RGE | ||||||
|
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
Residential |
697 |
656 |
6.3% |
2,078 |
1,981 |
4.9% |
Industrial |
319 |
312 |
2.0% |
908 |
909 |
-0.1% |
Commercial |
283 |
293 |
-3.4% |
923 |
947 |
-2.6% |
Others |
678 |
683 |
-0.7% |
2,181 |
2,149 |
1.5% |
Total |
1,977 |
1,944 |
1.7% |
6,090 |
5,987 |
1.7% |
RGE Sul | ||||||
|
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
Residential |
642 |
617 |
4.0% |
2,075 |
2,029 |
2.3% |
Industrial |
220 |
235 |
-6.3% |
634 |
697 |
-9.0% |
Commercial |
234 |
250 |
-6.4% |
829 |
849 |
-2.4% |
Others |
413 |
408 |
1.1% |
1,688 |
1,614 |
4.6% |
Total |
1,509 |
1,510 |
-0.1% |
5,227 |
5,190 |
0.7% |
CPFL Santa Cruz | ||||||
|
3Q18 |
3Q17 |
Var. |
9M18 |
9M17 |
Var. |
Residential |
193 |
192 |
0.7% |
595 |
582 |
2.3% |
Industrial |
101 |
100 |
0.6% |
300 |
336 |
-10.7% |
Commercial |
75 |
76 |
-1.4% |
244 |
248 |
-1.4% |
Others |
184 |
187 |
-1.4% |
540 |
517 |
4.6% |
Total |
554 |
555 |
-0.3% |
1,680 |
1,682 |
-0.1% |
Page 66 de 67
3Q18 Results | November 12, 2018 |
11.11) Reconciliation of Net Debt/EBITDA Pro Forma ratio of CPFL Energia for purposes of financial covenants calculation
(R$ million)
Net debt - Generation projects | ||||||||||
Sep/18 |
Majority-controlled subsidiaries (fully consolidated) |
Investees accounted for under the equity method |
Total | |||||||
CERAN |
CPFL Renováveis |
Paulista Lajeado |
Subtotal |
ENERCAN |
BAESA |
Chapecoense |
EPASA |
Subtotal | ||
Borrowings and Debentures |
538 |
5,880 |
- |
6,418 |
512 |
- |
1,215 |
195 |
1,922 |
8,340 |
(-) Cash and Cash Equivalents |
(112) |
(1,044) |
(8) |
(1,163) |
(11) |
(56) |
(62) |
(7) |
(136) |
(1,299) |
Net Debt |
427 |
4,836 |
(8) |
5,255 |
501 |
(56) |
1,153 |
188 |
1,786 |
7,041 |
CPFL Stake (%) |
65.00% |
51.60% |
59.93% |
- |
48.72% |
25.01% |
51.00% |
53.34% |
- |
- |
Net Debt in Generation Projects |
278 |
2,495 |
(5) |
2,768 |
244 |
(14) |
588 |
100 |
918 |
3,687 |
Reconciliation | |
CPFL Energia | |
Gross Debt |
20,650 |
(-) Cash and Cash Equivalents |
(3,579) |
Net Debt (IFRS) |
17,071 |
(-) Fully Consolidated Projects |
(5,255) |
(+) Proportional Consolidation |
3,687 |
Net Debt (Pro Forma) |
15,503 |
EBITDA Pro Forma Reconciliation (3Q18 - LTM) | ||||
EBITDA - Generation Projects |
||||
3Q18 - LTM |
Majority-controlled subsidiaries (fully consolidated) | |||
CERAN |
CPFL Renováveis |
Paulista Lajeado | ||
Net operating revenue |
330 |
2,011 |
51 | |
Operating cost and expense |
(103) |
(747) |
(19) | |
EBITDA |
227 |
1,265 |
32 | |
CPFL stake (%) |
65.00% |
51.60% |
59.93% | |
Proportional EBITDA |
148 |
653 |
19 |
Reconciliation |
||
CPFL Energia - 3Q18 LTM | ||
Net income |
1,993 | |
Amortization |
1,578 | |
Financial Results |
1,122 | |
Income Tax /Social Contribution |
955 | |
EBITDA |
5,649 | |
(-) Equity income |
(301) | |
(-) EBITDA - Fully consolidated projects |
(1,524) | |
(+) Proportional EBITDA |
1,481 | |
EBITDA Pro Forma |
5,306 | |
Net Debt / EBITDA Pro Forma |
2.92x |
Note: in accordance with financial covenants calculation in cases of assets acquired by the Company.
Page 67 de 67
CPFL ENERGIA S.A. | ||
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By: |
/S/ GUSTAVO ESTRELLA
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Name: Title: |
Gustavo Estrella Chief Financial Officer and Head of Investor Relations |
This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates of future economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.