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____
Teleconference Portuguese Wednesday, May 4, 2005 10:00 a.m. (SP) 9:00 a.m. ( US ET) (55 11) 2101-1490 Code: CPFL *Webcast: http://ri.cpfl.com.br Teleconference English Wednesday, May 4, 2005 12:00 a.m. (SP), 11:00 p.m. ( US ET) (1-973) 935-2403 Code: CPFL or 6015299 *Webcast: http://ri.cpfl.com.br APIMEC Meeting SP May 17, 2005 Tuesday, 16:00 p.m. Hotel Renaissance Sala Amazônia Al. Jaú, 1620, São Paulo RSVP: (11) 3107-1571ou apimecsp@apimecsp.com.br ABAMEC Meeting RJ May 23, 2005 Monday, 17:00 p.m. JW Marriott Hotel Sala Wayana Av. Atlântica, 2600 Copacabana, Rio de Janeiro RSVP: (21) 2509-9596 ou secretaria@abamec.com |
1Q05 Results Bovespa: CPFE3 R$ 20.15
/ share CPFL ENERGIA REPORTS R$ 166 MILLION NET INCOME
São Paulo, May 3, 2005
CPFL Energia S.A. (Bovespa: CPFE3 e NYSE: CPL), announces today its
first quarter (1Q05) results. Financial and operating information herein
is presented on a consolidated basis and in accordance with Brazilian
Corporate Law. Comparisons refer to 1Q04, unless otherwise indicated. |
1Q05 HIGHLIGHTS | |
|
(1) EBITDA is
calculated from the sum of net income, taxes, financial results,
depreciation/amortization and private pension fund, in addition to adjustments
regarding the extraordinary item and non-recurring transactions.
(2) Estimates
considering full loan conversion and assumptions of the first installment.
(3) Considering
calendar adjustments and CPFL Brasils bilateral contracts.
BUSINESS OVERVIEW
|
CPFL Energia is a non-operating holding Company. Thus, CPFLs results rely directly on the results of its subsidiaries: CPFL Paulista (94.94%), CPFL Geração (97.01%) and CPFL Brasil (100%).
The following chart provides an overview of stakes held by CPFL Energia in its subsidiaries:
In 1Q05, CPFL Energia shares traded on BOVESPA (CPFE3) rose 0.7%, compared to a 1.6% rise of BOVESPA Index (IBOVESPA) and a 2.8% rise of Electricity Index (IEE). The ADRs (CPL) rose 2.7% in the same period, compared to a 2.8% fall in DJIA.
Source: Broadcast
Source: Economática
It is also important to highlight that CPFL Energias was included in Dow Jones Brazil Titan 20 ADR, a remarkable reference index for Brazilian stocks traded in the international market and the expectation to join IBX 100 Index in September, what will contribute to increase liquidity.
In June 2003, CPFL Energia got hold of a US$ 40 million funding from IFC - International Finance Corporation, with conversion to stock rights (full or not, according to IFCs option), through a Subscription Bond, given to IFC on the Investment Agreement.
In April 2005, IFC declared to CPFL the exercise of its right to convert a US$10 million installment. Conversion will be set at a price per share of R$ 17.57, equivalent to R$ 17.22 (IPO price in September, 29 2004) capitalized at the TJLP rate in excess of 6%. This conversion will result in a 0.32% stake in the Companys total capital held by IFC.
Moreover, IFC also informed the Company that it intends to exercise its remaining subscription rights in three additional installments over the next twelve months.
In case IFC decides to exercise its remaining subscription rights, free float may reach approximately 16.7% (1), totaling a 1.26% (1) stake in CPFL Energias capital held by IFC.
(1) Estimates considering full loan conversion and assumptions of the first installment
PERFORMANCE
|
Financial Information (R$ Thousand) |
Distribution
|
Generation
|
Comercialization
|
CPFL Energia (Consolidated)
|
||||||||
1Q05
|
1Q04
|
% Chg
|
1Q05
|
1Q04
|
% Chg
|
1Q05
|
1Q04
|
% Chg
|
1Q05
|
1Q04
|
% Chg
|
|
Gross Revenues | 2,321,582 | 2,082,464 | 11.5 | 296,292 | 189,026 | 56.7 | 100,917 | 86,692 | 16.4 | 2,500,466 | 2,189,280 | 14.2 |
Net Revenues | 1,635,492 | 1,448,289 | 12.9 | 256,265 | 177,085 | 44.7 | 91,284 | 81,181 | 12.4 | 1,764,716 | 1,529,564 | 15.4 |
EBIT | 287,561 | 115,285 | 149.4 | 57,259 | 45,697 | 25.3 | 74,051 | 66,465 | 11.4 | 417,383 | 222,804 | 87.3 |
Adjusted EBITDA | 376,313 | 304,249 | 23.7 | 52,279 | 45,757 | 14.3 | 81,462 | 74,085 | 10.0 | 506,694 | 419,818 | 20.7 |
Net Income (Loss) | 121,538 | (23,692) | (613.0) | 38,878 | 30,899 | 25.8 | 24,158 | 16,806 | 43.7 | 165,646 | (11,959) | (1,485.1) |
Total Assets | 8,772,763 | 8,779,095 | (0.1) | 216,385 | 177,990 | 21.6 | 2,586,256 | 2,492,906 | 3.7 | 12,878,569 | 12,618,121 | 2.1 |
Shareholders' Equity | 1,935,467 | 1,813,929 | 6.7 | 38,882 | 30,902 | 25.8 | 1,068,559 | 1,044,401 | 2.3 | 4,261,628 | 4,095,982 | 4.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(*)Considering 100% of Distribution and Generation Businesses |
MARKET |
Energy sold by CPFL Group through its distribution and commercialization activities to final costumers totaled 9,070 GWh, representing a 3.5% increase (excluding calendar adjustments). This growth reflects basically the increase in the residential, commercial and rural segments due to, mainly, increased income and higher temperatures for the period.
CPFL Brasil played a relevant role in energy sales growth of Group CPFL, mainly by servicing industrial clients which were captive customers from distributors and migrated to the free market.
1Q05 Sales by Customer Breakdown Excluding calendar adjustments(*)
Sales GWh 1Q05 | |||||
Segments |
Paulista
|
Piratininga
|
RGE
|
Brasil
|
CPFL Energia
|
Residential | 1,324 | 595 | 244 | - | 2,163 |
Industrial | 1,690 | 894 | 442 | 1,336 | 4,362 |
Commercial | 838 | 356 | 142 | 5 | 1,341 |
Rural | 195 | 41 | 170 | - | 406 |
Others | 530 | 165 | 88 | 15 | 798 |
Total | 4,577 | 2,051 | 1,086 | 1,356 | 9,070 |
(*) Includes CPFL Brasils bilateral contracts |
Sales Comparison 1Q05 vs. 1Q04 - Excluding calendar adjustments (*)
CPFL Energia Consolidated | |||
Sales in GWh | |||
Segments |
1Q05
|
1Q04
|
% Change
|
Residential | 2,163 | 2,091 | 3.4 |
Industrial | 4,362 | 4,276 | 2.0 |
Commercial | 1,341 | 1,242 | 8.0 |
Rural | 406 | 381 | 6.6 |
Others | 798 | 775 | 3.0 |
Total | 9,070 | 8,765 | 3.5 |
(*) Includes CPFL Brasils bilateral contracts
|
1Q05 Sales Breakdown by Segment
Considering the same 2005 year calendar basis, which has fewer days when compared to 2004 (leap year), CPFL groups energy sales recorded a 4.3% increase, among which we highlight residential, commercial and rural segment increase of 5.1%, 8.7% and 8.9%, respectively.
Sales Comparison 1Q05 vs. 1Q04 Same 2005 Calendar Basis
CPFL Energia Consolidated | |||
Sales (in GWh) | |||
Segments | 1Q05 | 1Q04 | % Change |
Residential | 2,163 | 2,058 | 5.1 |
Industrial | 4,362 | 4,264 | 2.3 |
Commercial | 1,341 | 1,234 | 8.7 |
Rural | 406 | 373 | 8.9 |
Others | 798 | 772 | 8.4 |
Total | 9,070 | 8,700 | 4.3 |
(*) Includes CPFL Brasils bilateral contracts
|
Its important to point out that, in 1Q05, demand in CPFL group distributors concession area increased 7.3%, higher than the 7.1% raise in Brazil and the 6.1% increase in Southeast Region.
FINANCIAL PERFORMANCE |
Gross operating revenue reached R$ 2.5 billion in 1Q05, representing an increase of 14.2% .
The determining factors for revenue increase in 1Q05 were:
i. |
Increase of 3.5% in total sales volume, as mentioned before; |
ii. |
Tariff adjustments at CPFLs subsidiaries Paulista, RGE and Piratininga; |
iii. |
Revenue increased by 171% for the use of distribution system (TUSD), totaling R$ 95.3 million; and |
iv. |
Revenue increase of 26.8% derived from energy supply to other agents, by CPFL Geração and CPFL Brasil. |
Net Revenue in 1Q05 reached R$ 1.8 billion, representing a 15.4% growth in comparison to 1Q04.
Energy Costs
Cost of energy services in 1Q05 totaled R$ 919.6 million, a 9.9% increase, impacted basically by the higher charges from usage of energy network, adding up R$ 203.6 million, a 75.8% increase, mainly due to the increase in
tariffs resulted from the transferring of the generation and transmission costs and from the IGP-M variation. In the quarter, energy cost purchased for resale remained flat, totaling R$ 716 million.
Operating Costs/Expenses
Operating Costs / Expenses reached R$ 427.7 million in 1Q05, representing a 9.1% reduction in comparison to 1Q04.
Operating Expenses | |||
R$ thousand | 1Q05 | 1Q04 | % Change |
Payroll | 75,521 | 74,524 | 1.3 |
Material | 9,356 | 7,919 | 18.1 |
Third-Part Services | 54,245 | 48,727 | 11.3 |
Others | 52,639 | 49,766 | 5.8 |
Employee Pension Plans | 22,408 | 39,930 | -43.9 |
Depreciation and Amortization | 74,347 | 66,832 | 11.2 |
Amortization of Merged Goodwill | 2,037 | 91,211 | -97.8 |
CCC Subsidy | 76,663 | 58,570 | 30.9 |
CDE Subsidy | 60,518 | 32,881 | 84.1 |
Total | 427,734 | 470,360 | -9.1 |
Manageable Expenses Payroll, Material, Third-part services & other
Manageable Expenses totaled R$ 191.8 million in 1Q05, representing a 6.0% increase. This increase, lower than the inflation for the period, occurred basically due to cost control program and the established operating synergies between the groups companies.
Private Pension Fund
Expenses related to the Private Pension Fund were 43.9% lower in 1Q05, totaling R$ 22.4 million. This reduction reflects adjusts made from third-party actuarials calculations, considering assumptions such as mortality table and expected income from the funds investments.
Amortization of Incorporated Goodwill
Goodwill amortization was reduced by R$ 89.2 million in 1Q05, representing a 97.8% drop. This reduction occurred mainly due to a change in amortization curve of goodwill from RGE and CPFL Paulista (combined with a provision for goodwill amortization, in accordance to the resolution 319 from CVM).
Energy Development Account CDE and CCC
These expenses refer to contribution made by energy distribution companies to development projects and alternative energy sources incentive programs. CDE expenses totaled R$ 60.5 million, an 84.1% increase and CCC expenses totaled R$ 76.7 million, 30.9% higher than 1Q04. These increases were mainly a consequence of the deferred amortization in 2004 and the tariff adjustments of its subsidiaries.
Income from Electric Utility ServiceIn 1Q05, income from electric utility service achieved R$ 417.4 million, an 87.3% increase. This evolution is result of two factors:
i. Revenues increase:
Increase in total energy sold;
Tariff readjustments by distribution subsidiaries;
TUSD revenue increase; and
Energy supply revenue increase.
ii. Operating costs reduction:
Change in the amortization curve and constitution of goodwill provision in CPFL Paulista;
Change in the amortization curve of goodwill provision in RGE; and
Reduction in expenses related to Private Pension Fund.
Consolidated EBITDA was R$ 506.7 million in 1Q05, 20.7% higher when compared to R$ 419.8 million reported in 1Q04. EBITDA is calculated from the sum of net income, taxes, financial results, depreciation/amortization and private pension fund, in addition to adjustments regarding the extraordinary item and non-recurring transactions.
R$ million | 1Q 05 | 1Q04 | |
Net Income |
165,646
|
(11,959) |
|
+ | Income tax and Social Contribution |
114,900
|
39,115
|
+ | Depreciation and Amortization |
76,384
|
158,043
|
+ | Private Pension Fund Costs |
22,213
|
39,253
|
+ | Financial Results |
119,391
|
187,234
|
+ | Extraordinary Item |
8,160
|
8,132
|
+ | Adjusts - non current transactions |
-
|
-
|
= | EBITDA |
506,694
|
419,818
|
In 1Q05, financial expenses totaled R$ 246.8 million, a 14.1% drop, mainly as a result of the decrease in its debt balance and the change in the Companys debt profile.
Net financial expenses were R$ 119.4 million in the quarter, representing a 36.2% drop. This reduction is result of lower financial expenses and of the 27.2% increase in financial revenues from market securities and due to the raise in cash balance as a result of funding provided from the IPO.
Net IncomeIn 1Q05, net income reached R$ 165.6 million, compared to the R$ 12 million loss in 1Q04. This growth is basically due to the increase in operating profit, combined to reduction in financial results.
INDEBTEDNESS |
Actions commenced in 2004 regarding its debt management, remain improving indebtedness profile. Financial debt drop 12.8% in 1Q05 when compared to 1Q04, totalizing R$ 5.1 billion.
Debt (R$ billion)
In December 2004, BNDES approved CPFL Paulista and CPFL Piratiningas compliance in the FINEM Electric System Expansion and Modernization Program, granting R$ 241 million and R$ 89 million credits, respectively,
both TJLP indexed and 6-year maturity. In March, the first disbursement of resources was liberated amounting to R$ 33.7 million. In this month, CPFL Paulista achieved the last settlement to Distributors Capitalization (Funding) Program; and the
company is in the final round of negotiations with BNDES.
Loans and Financing (R$ thousands)
Consolidated | ||||
|
||||
1T05 | ||||
|
||||
Principal
|
||||
|
||||
Charges
|
Short-term
|
Long-term
|
Total
|
|
|
|
|
|
|
NATIONAL CURRENCY | ||||
BNDES - reempowerment (PCH's) |
78 | 3,683 | 14,825 | 18,586 |
BNDES - Investment |
1,341 | 43,152 | 775,939 | 820,432 |
BNDES - Regulatory Asset |
6,507 | 233,352 | 491,077 | 730,936 |
BNDES - CVA and Resolution 116 |
1,921 | 168,105 | 46,130 | 216,156 |
FIDC |
24,643 | 65,230 | 59,397 | 149,270 |
BRPE |
- |
19,867 |
10,910 | 30,777 |
Furnas Centrais Elétricas S,A, |
- |
- |
85,532 | 85,532 |
Financial Institutions |
3,522 | 46,278 | 157,523 | 207,323 |
Others |
501 | 20,045 | 23,851 | 44,397 |
|
|
|
|
|
Subtotal |
38,513 | 599,712 | 1,665,184 | 2,303,409 |
|
|
|
|
|
FOREIGN CURRENCY |
||||
IFC - CPFL Energia |
1,755 | 21,330 | 85,318 | 108,403 |
Floating Rate Notes - CPFL Paulista |
6,836 | 195,166 | 191,966 | 393,968 |
Trade Finance - Sul Geradora |
637 | 101,926 |
- |
102,563 |
Financial Institutions |
2,633 | 16,223 | 113,915 | 132,771 |
|
|
|
|
|
Subtotal |
11,861 | 334,645 | 391,199 | 737,705 |
|
|
|
||
DEBÊNTURES |
||||
CPFL Paulista |
128,823 | 150,710 | 1,139,663 | 1,419,196 |
SEMESA |
18,623 | 107,725 | 469,205 | 595,553 |
BAESA |
- |
- |
50,324 | 50,324 |
|
|
|
|
|
Subtotal |
147,446 | 258,435 | 1,659,192 | 2,065,073 |
|
|
|
|
|
Total |
197,820 | 1,192,792 | 3,715,575 | 5,106,187 |
|
|
|
|
Efforts towards debt profile improvement can be seen on the debt index composition, where exposure to CDI dropped from 44% to 30% giving in to IGP-M and TJLP indexed debt. Furthermore there was a reduction from 17.2% to 15.6%
in the nominal debt cost in 1Q05, and the average term increased from 5.2 to 6 years in the same period.
Debt Profile by Index Type
Adjusted net debt in 1Q05 was R$ 3.7 billion. Adjusted net debt is calculated from the total debt (financial debt + employee pension fund), excluding regulatory assets and cash and cash equivalents.
R$ 000 | 1Q05 | 1Q04 | |
Total Debt (1) | (6,082,072) | (6,708,853) | |
+ Regulatory Assets & Liabilities (note 3) | 1,450,994 | 1,639,659 | |
+ Cash & Equivalents | 967,898 | 345,452 | |
= Adjusted Net Debt | (3,663,180) | (4,723,742) | |
(1) Includes Financial debt+ Private Pension debt (Fundação CESP) |
CAPEX |
In 1Q05, CPFL Group invested R$ 147 million to maintain and expand its business, of which R$ 37 million were for maintenance and R$ 110 million for expansion
The main CPFL Energias investments in the last three years have been focused on:
Maintenance CAPEX | Expansion CAPEX |
(R$ million) | (R$ million) |
BUSINESS OUTLOOK |
In 1Q05, gross revenue from the energy sales and/or from the distribution business totaled R$ 2.3 billion, corresponding to an 11.5% increase mainly due to the combined effect from the growth in residential, commercial and rural segments, to tax readjustments in the subsidiaries and to TUSD revenue.
Gross Revenue (R$ million)
Increase in revenue would be higher, if captive customers migration to the free market were lower. This migration impacted to the loss of 18.8% and 5.9% in industrial and total sales volumes, respectively. In the comparison excluding this effect, CPFL would have a sales increase of 8.4% in industrial segment, totalizing a 6.3% growth in the distributors.
Sales Comparison 1Q05 vs. 1Q04
Excluding Calendar Adjustments
Distribution Segment | 1Q05 | 1Q04 | % Change |
Sales (in GWh) | |||
Residential | 2,163 | 2,091 | 3.4 |
Industrial | 3,026 | 3,726 | (18.8) |
Commercial | 1,336 | 1,237 | 8.0 |
Rural | 406 | 381 | 6.6 |
Others | 783 | 761 | 2.9 |
Total | 7,714 | 8,196 | (5.9) |
Considering calendar adjustments, distribution energy sales would reduce 5.0% compared to 1Q04.
Sales Comparison 1Q05 vs. 1Q04
Same Calendar Basis
Sales (in GWh) | 1Q05 | 1Q04 | % Change |
Residential | 2,163 | 2,058 | 5.1 |
Industrial | 3,026 | 3,702 | (18.3) |
Commercial | 1,336 | 1,228 | 8.8 |
Rural | 406 | 373 | 8.9 |
Others | 783 | 758 | 3.3 |
Total | 7,714 | 8,119 | (5.0) |
Its important to point out the reduction on sales in consequence of captive customers migration to free market has an offset impact in distributors results due to counterpart effect in growth of TUSD revenues. These revenues achieved R$ 95.3 million in 1Q05 from R$ 35.2 million in 1Q04, corresponding to a 170.9% increase.
EBITDA |
EBITDA of distribution business was R$ 376.3 million in 1Q05, 23.7% above the R$ 304.2 million reported in 1Q04. This growth was basically from the increase in revenues from the supplied electricity and from TUSD revenues.
Net Income |
Consolidated net income from the distributors reached R$ 121.5 million in 1Q05, representing a 613% growth from a R$ 23.7 million loss in 1Q04. This increment was mainly as consequence of the 34.8% reduction in net financial expenses resulted from the new indebtedness profile - and from the goodwill amortization criterion change which reduced 97.8% in this account.
Economic and Financial Indexes R$ million |
Paulista*
|
Piratininga*
|
RGE*
|
||||||
1Q05
|
1Q04
|
% Change
|
1Q05
|
1Q04
|
% Change
|
1Q05
|
1Q04
|
% Change
|
|
Gross Revenue | 1,331.2 | 1,163.5 | 14.4 | 659.8 | 629.1 | 4.9 | 493.0 | 432.2 | 14.1 |
EBITDA | 277.9 | 193.7 | 43.5 | 113.8 | 91.2 | 24.9 | 68.7 | 42.0 | 63.5 |
Net Income | 121.5 | -23.7 | 613.0 | 53.0 | 35.3 | 50.2 | 18.4 | -11.9 | 254.1 |
(*) Considering 100% of the Distribution Companies |
In April 2005, ANEEL (Brazilian Electricity Energy Agency) approved the tariff adjustment for CPFL Paulista establishing a 20.29% increase in supply tariffs. The main alteration from 2005s final version from the temporarily adjustment settled in 2004 was the reduction in Gross Revenue Basis, partially offset by the increase in Reintegration Quota and in the limit of operating costs and provisions for doubtful accounts.
Additionally, CPFL is requiring revision about depreciation rate (from 4.64% to 4.85%) and energy loss rates considered by ANEEL. Financial statements already reflect this revision, once, due to the nature and transparency through which the information to be used by ANEEL when revising this rate may be proved, controlling Companys management expects to be successful in these discussions.
Main impacts of this revision were: |
Gross revenue: R$ 26.5 million drop (R$ 48.9 million loss from the changes in final version + R$ 22.4 million gained in depreciation rate inquiry);
EBITDA: R$ 24 million reduction; and
Net Income: R$ 15.8 million decrease.
Distributors current position of tariff conditions:
Base Value | ||||
R$ million | Status | IRT1 | Tax Revision | |
17.74% | 20.29% | |||
Paulista | 2,217 | Definitive | Applied | |
April'05 | ref. April'03 | |||
|
|
|
|
|
14.00%1 | 10.51% | |||
Piratininga | 930 | Provisory | Applied | |
Oct'04 | ref. Oct'03 | |||
|
|
|
|
|
21.93% | 27.96% | |||
RGE | 833 | Definitive | Applied | |
April'05 | ref April'03 | |||
¹ Full Readjustments |
Commercialization Segment - CPFL Brasil
Gross Revenue |
In 1Q05, CPFL Brasil gross revenue increased 56.7%, totaling R$ 296.3 million. This growth basically reflects the capture of new costumers in the free market, also the supply increase to groups companies and short-term market sales. Its important to point out the 84.5% growth in high-added value services through our distributors.
Gross Revenue (R$ million)
Sales to final custumers totaled 1,356 GWh, representing a 133.4% increase. Industrial segment achieved a 137.7% increase, as a result of capturing costumers from free market, through former CPFL group customers retention and out-of-concession area customers acquisition.
Sales Comparison 1Q05 vs 1Q04 CPFL Brasil(*)
Sales (in GWh) | |||
Segments | 1T05 | 1T04 | Var.% |
Residential | - | - | - |
Industrial | 1,336 | 562 | 137.7 |
Commercial | 5 | 5 | 5.8 |
Rural | - | - | - |
Others | 15 | 14 | 4.8 |
Total | 1,356 | 581 | 133.4 |
(*) Includes bilateral contracts |
EBITDA
CPFL Brasil EBITDA achieved R$ 57.3 million in 1Q05, 25.2% higher than the R$ 45.8 million reported in 1Q04, mainly as a consequence of the increase in energy sales.
Net Income
In 1Q04, CPFL Brasil net income totaled R$ 38.9 million, increasing 25.8%, when compared to the R$ 30.9 million realized 1Q04.
Generation Segment CPFL GeraçãoInitially impact from beginning of Monte Claro hydroelectric power plant, adding a R$ 9 million in 1Q05, CPFL Geração gross revenue reached R$ 100.9 million, corresponding to a 16% growth. Readjusted tariffs in SEMESA and CPFL Centrais Elétricas supply contracts have also contributed for the improvement in revenue.
Gross Revenue (R$ million)
In 1Q05, CPFL Geração EBITDA totaled R$ 81.5 million, representing a 10% increase when compared to the R$ 74.1 million from 1Q04, mainly as result of the revenue increase from energy sales and the 29.5% reduction in cost of electricity energy purchased for resale.
Net income in the generation segment totaled R$ 24.2 million, a 43.7% increase, due to the 11.2% drop in net financial expenses.
Material Events Related to Projects
In 1Q05, there were material events related to the generation projects, in which it is important to point out:
Pre-Environmental License Issuing in March 2005 for re-empowerment PCH
Gavião Peixoto; and
Conclusion of deforesting activities in the area of Barra Grande hydroelectric power plants future reservoir, which enables IBAMA to issue the Operating License for this power plant.
BUSINESS PERSPECTIVES |
CPFL seeks to add value through the right positioning in different segments of the electricity industry
CPFL is involved in four generation projects, composed by 6 hydroelectric power plants. The first one, Monte Claro Power Plant, part of the Ceran Complex, was concluded in December 2004. At the conclusion of these projects, part of the business strategy of the group, CPFL shall increase installed power capacity from 897 MW to 1990 MW up to 2008. In this period, CPFL Energia will be responsible for 35% of all added energy in the electric sector.
Moreover, CPFL may seek investment opportunities in new PCHs Small Hydroelectric Plants, in the purchase of existing assets and greenfields generation investments.
CPFLs market has shown outstanding growth and registered in 1Q05 a larger growth rate than the rates of Southeast Region and Brazil, reaching a higher level than the pre-rationing period (2000). CPFL Brasil had an important role in this market growth, keeping the free customers within CPFL Group.
Consumption Evolution
Brazil vs. SE vs. CPFL
IR Team: | ||
José Antonio de Almeida Filippo - DRI | ||
Vitor Fagá de Almeida Gerente de RI | E-mail: | Phone: (+55 19) 3756-6083 |
Adriana M. Sarinho Ribeiro | ri@cpfl.com.br | Fax: (+55 19) 3756-6089 |
Alessandra M. Mazia Munhoz | ||
Felipe Viana de Paula | ||
Sílvia Emanoele P. de Paula | ||
Vitor Fagali de Souza | ||
ri.cpfl.com.br |
CPFL Energia is one of the largest private companies in the distribution, generation and commercialization of electric energy in Brazil. CPFL is the only private company in the Brazilian electric energy sector that
adopted the best corporate governance practices Bovespa - Novo Mercado and also has a level-3 ADR program in NYSE - New York Stock Exchange. Our strategy is focused on the improvement of the efficiency of our operations, on the conclusion of current
generation project and pursuing new projects, on the strengthening our commercialization business, developing new value-added products and services, and on strategically positioning the company to benefit from the sector consolidation, taking
advantage of our experience in integrating and restructuring other operations. |
CPFL Energia S.A. | ||||
(Convenience Translation into English from the Original Previously Issued in Portuguese) | ||||
Balance Sheets as of March 31, 2005 and December 31, 2004 | ||||
(In thousands of Brazilian Reais) | ||||
|
||||
Company
|
Consolidated
|
|||
|
|
|||
ASSETS |
03/31/2005
|
12/31/2004
|
03/31/2005
|
12/31/2004
|
|
|
|
|
|
CURRENT ASSETS | ||||
Cash and cash equivalents | 330,964 | 186,385 | 967,898 | 817,724 |
Consumers, concessionaires and permittees | - | - | 1,613,304 | 1,572,487 |
Dividends and interest on equity | 243,424 | 387,387 | - | - |
Other receivables | 115 | 115 | 69,845 | 68,944 |
Securities | - | - | - | - |
Recoverable taxes | 44,473 | 48,838 | 188,953 | 174,663 |
Allowance for doubtful accounts | - | - | (47,550) | (50,420) |
Inventories | - | - | 8,043 | 7,575 |
Deferred tariff costs | - | - | 521,490 | 463,928 |
Prepaid Expenses | - | - | 9,754 | 9,425 |
Other | - | - | 135,303 | 158,339 |
|
|
|
|
|
618,976 | 622,725 | 3,467,040 | 3,222,665 | |
NONCURRENT ASSETS | ||||
Consumers, concessionaires and permittees | - | - | 579,957 | 582,290 |
Related parties | - | - | - | - |
Other receivables | - | - | 112,153 | 125,259 |
Escrow deposits | - | - | 165,043 | 145,396 |
Securities | - | - | 850 | 850 |
Recoverable taxes | - | - | 45,993 | 33,551 |
Deferred tax credits | - | - | 1,033,691 | 1,055,675 |
Advance for future capital increase | - | - | - | - |
Deferred tariff costs | - | - | 524,537 | 580,232 |
Prepaid Expenses | - | - | 62,666 | 49,186 |
Other | - | - | 124,923 | 97,700 |
|
|
|
|
|
- | - | 2,649,813 | 2,670,139 | |
PERMANENT ASSETS | ||||
Investiments | 3,918,898 | 3,754,635 | 2,804,359 | 2,841,132 |
Property, plant and equipment | - | - | 4,518,980 | 4,414,917 |
Special liabilities | - | - | (603,638) | (588,053) |
Deferred charges | 96 | - | 42,015 | 57,321 |
|
|
|
|
|
3,918,994 | 3,754,635 | 6,761,716 | 6,725,317 | |
|
|
|
|
|
TOTAL ASSETS | 4,537,970 | 4,377,360 | 12,878,569 | 12,618,121 |
|
CPFL Energia S.A. | ||||
(Convenience
Translation into English from the Original Previously Issued in Portuguese)
|
||||
Balance Sheets as of March 31, 2005 and December 31, 2004 | ||||
(In thousands of Brazilian Reais) | ||||
|
||||
Company | Consolidated | |||
|
|
|||
LIABILITIES AND SHAREHOLDERS´ EQUITY | 03/31/2005 | 12/31/2004 | 03/31/2005 | 12/31/2004 |
|
|
|
|
|
CURRENT LIABILITIES | ||||
Suppliers | 3,886 | 6,831 | 636,222 | 663,857 |
Payroll | - | 3,392 | 3,792 | |
Debt Charges | 1,755 | 3,556 | 50,374 | 39,748 |
Debenture charges | - | - | 147,446 | 98,490 |
Loans and financing | 21,330 | 10,618 | 934,357 | 864,573 |
Debentures | - | - | 258,435 | 257,502 |
Private pension plans | - | - | 108,555 | 100,530 |
Regulatory charges | - | - | 66,430 | 61,504 |
Taxes and payroll charges | 628 | 4,489 | 398,414 | 409,474 |
Employee profit sharing | 13 | - | 15,331 | 5,284 |
Dividends and interest on capital | 140,147 | 140,147 | 155,840 | 158,644 |
Related parties | 58 | 58 | - | - |
Accrued liabilities | 8 | 7 | 24,548 | 25,935 |
Deferred tariff costs | - | - | 164,135 | 148,536 |
Derivative contracts | 5,581 | 2,934 | 47,375 | 43,056 |
Other | 2 | 2 | 197,925 | 116,318 |
|
|
|
|
|
173,408 | 168,642 | 3,208,779 | 2,997,243 | |
LONG-TERM LIABILITIES | ||||
Suppliers | - | - | 240,377 | 229,874 |
Loans and financing | 85,318 | 95,558 | 2,056,383 | 2,144,341 |
Debentures | - | - | 1,659,192 | 1,640,705 |
Private pension plans | - | - | 787,378 | 798,903 |
Taxes and payroll charges | - | - | 80,759 | 86,503 |
Reserve for contingencies | - | - | 323,107 | 304,036 |
Deferred tariff costs | - | - | 20,560 | 47,209 |
Derivative contracts | 17,616 | 17,178 | 32,577 | 44,696 |
Other | - | - | 62,565 | 91,611 |
|
|
|
|
|
102,934 | 112,736 | 5,262,898 | 5,387,878 | |
MINORITY INTEREST | - | - | 145,264 | 137,018 |
SHAREHOLDERS´ EQUITY | ||||
Capital | 4,082,036 | 4,082,036 | 4,082,036 | 4,082,036 |
Capital reserves | 13,946 | 13,946 | 13,946 | 13,946 |
Profit retention | 165,646 | - | 165,646 | - |
|
|
|
|
|
4,261,628 | 4,095,982 | 4,261,628 | 4,095,982 | |
|
|
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS´ EQUITY | 4,537,970 | 4,377,360 | 12,878,569 | 12,618,121 |
|
CPFL Energia S.A. | ||||
(Convenience Translation into English from the Original Previously Issued in Portuguese) | ||||
Statement of Operations for the Quarters Ended March 31, 2005 and 2004 | ||||
(In thousands of Brazilian Reais) | ||||
|
||||
Company
|
Consolidated
|
|||
|
|
|||
2005
|
2004
|
2005
|
2004
|
|
|
|
|
||
From January | From January | From January | From January | |
to March | to March | to March | to March | |
|
|
|
||
OPERATING REVENUES | ||||
Energy sales to final consumers | - | - | 2,270,094 | 2,046,889 |
Energy sales to distributors | - | - | 104,374 | 82,300 |
Other | - | - | 125,998 | 60,091 |
|
|
|
||
- | - | 2,500,466 | 2,189,280 | |
DEDUCTIONS FROM OPERATING REVENUES | ||||
ICMS (State VAT) | - | - | (433,110) | (369,724) |
PIS (tax on revenue) | - | - | (39,486) | (63,759) |
COFINS (tax on revenue) | - | - | (181,269) | (115,709) |
ISS (service tax) | - | - | (161) | (87) |
Global Reversion Quota | - | - | (10,787) | (12,007) |
Emergencial charges (ECE/EAEE) | - | - | (70,937) | (98,430) |
|
|
|
||
- | - | (735,750) | (659,716) | |
|
|
|
||
NET OPERATING REVENUES | - | - | 1,764,716 | 1,529,564 |
ELECTRIC UTILITY SERVICE COSTS | ||||
Electricity Costs | ||||
Electricity purchased for resale | - | - | (716,025) | (720,574) |
Electricity network usage charges | - | - | (203,574) | (115,826) |
|
|
|
||
- | - | (919,599) | (836,400) | |
Operating Costs | ||||
Personnel | - | - | (48,095) | (48,511) |
Private pension plans | - | - | (22,213) | (39,253) |
Materials | - | - | (7,570) | (6,184) |
Outside services | - | - | (20,815) | (17,472) |
Depreciation and amortization | - | - | (66,400) | (61,010) |
Fuel usage quota (CCC) | - | - | (76,663) | (58,569) |
Energy development account (CDE) | - | - | (60,518) | (32,882) |
Other | - | - | (1,845) | (1,525) |
|
|
|
||
- | - | (304,119) | (265,406) | |
Outside Services Costs | - | - | (1,062) | (1,240) |
GROSS PROFIT | - | - | 539,936 | 426,518 |
OPERATING EXPENSES | ||||
Selling | - | - | (43,838) | (39,809) |
General and Administrative | (1,487) | (4,643) | (67,525) | (67,301) |
Other | - | - | (9,153) | (5,393) |
Amortization of goodwill from merger | - | - | (2,037) | (91,211) |
|
|
|
||
(1,487) | (4,643) | (122,553) | (203,714) | |
|
|
|
||
INCOME (LOSS) FROM ELECTRIC UTILITY SERVICE | (1,487) | (4,643) | 417,383 | 222,804 |
EQUITY IN SUBSIDIARIES | 177,700 | 24,477 | - | - |
FINANCIAL INCOME | ||||
Financial income | 10,276 | 11,297 | 127,447 | 100,195 |
Financial expenses | (20,420) | (43,090) | (246,838) | (287,429) |
|
|
|
||
Goodwill amortization of investment
|
(13,437) | (18) | (28,362) | (41,019) |
Other financial expenses
|
(6,983) | (43,072) | (218,476) | (246,410) |
|
|
|
||
(10,144) | (31,793) | (119,391) | (187,234) | |
|
|
|
||
INCOME FROM OPERATIONS | 166,069 | (11,959) | 297,992 | 35,570 |
NONOPERATING INCOME | ||||
Nonoperating income | - | - | 377 | 2,116 |
Nonoperating expense | - | - | (1,416) | (1,948) |
|
|
|
||
- | - | (1,039) | 168 | |
|
|
|
||
INCOME BEFORE TAXES ON INCOME AND EXTRAORDINARY ITEM | 166,069 | (11,959) | 296,953 | 35,738 |
Social Contribution Tax | (113) | - | (25,661) | (13,620) |
Deferred Social Contribution Tax | - | - | (4,858) | 4,696 |
Income Tax | (310) | - | (69,448) | (39,203) |
Deferred Income Tax | - | - | (14,933) | 9,012 |
|
|
|
||
(423) | - | |||
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM AND MINORITY INTEREST | ||||
165,646 | (11,959) | 182,053 | (3,377) | |
Extraordinary Item, Net of Tax Effects | - | - | (8,160) | (8,132) |
|
|
|
||
INCOME (LOSS) BEFORE MINORITY INTEREST | 165,646 | (11,959) | 173,893 | (11,509) |
Minority Interest | - | - | (8,247) | (450) |
|
|
|
||
NET INCOME (LOSS) FOR THE PERIOD | 165,646 | (11,959) | 165,646 | (11,959) |
Companhia Paulista de Força e Luz | ||||
(Convenience Translation into English from the Original Previously Issued in Portuguese) | ||||
Statement of Operations for the Quarters Ended March 31, 2005 and 2004 | ||||
(In thousands of Brazilian Reais) | ||||
|
||||
Company | Consolidated | |||
|
|
|||
2005 | 2004 | 2005 | 2004 | |
|
|
|
|
|
From | From | From | From | |
January to | January to | January to | January to | |
March | March | March | March | |
|
|
|
|
|
OPERATING REVENUES | ||||
Electricity sales to final consumer | 1,276,485 | 1,135,744 | 2,192,626 | 2,015,010 |
Electricity sales to distributors | 468 | 2,282 | 5,874 | 8,587 |
Other | 54,238 | 25,440 | 123,082 | 58,867 |
|
|
|
|
|
1,331,191 | 1,163,466 | 2,321,582 | 2,082,464 | |
|
|
|
|
|
DEDUCTIONS FROM OPERATING REVENUES | ||||
ICMS (State VAT) | (240,378) | (204,322) | (420,522) | (364,864) |
PIS (Tax on revenue) | (18,135) | (44,311) | (32,981) | (59,437) |
COFINS (Tax on revenue) | (83,589) | (44,815) | (151,299) | (99,974) |
ISS (Service tax) | (42) | (35) | (83) | (52) |
Global reversion quota | (5,759) | (6,547) | (10,268) | (11,418) |
Emergencial charges - ECE/EAEE | (42,010) | (57,040) | (70,937) | (98,430) |
|
|
|
|
|
(389,913) | (357,070) | (686,090) | (634,175) | |
|
|
|
|
|
NET OPERATING REVENUES | 941,278 | 806,396 | 1,635,492 | 1,448,289 |
|
|
|
|
|
ELECTRIC UTILITY SERVICE COSTS | ||||
Electricity Costs | ||||
Electricity purchased for resale | (438,877) | (419,293) | (740,259) | (768,293) |
Electricity network usage charges | (116,193) | (58,569) | (202,750) | (115,309) |
|
|
|
|
|
(555,070) | (477,862) | (943,009) | (883,602) | |
|
|
|
|
|
Operating Costs | ||||
Personnel | (31,572) | (31,140) | (46,589) | (47,526) |
Private pension plans | (16,602) | (31,418) | (22,115) | (39,253) |
Materials | (4,270) | (3,315) | (7,212) | (5,801) |
Outside services | (9,620) | (7,420) | (17,390) | (14,825) |
Depreciation and amortization | (35,490) | (32,171) | (59,152) | (53,937) |
Fuel usage quota (CCC) | (33,262) | (31,379) | (76,663) | (58,512) |
Energy development account (CDE) | (32,851) | (19,275) | (60,518) | (32,882) |
Other | (392) | (415) | (1,633) | (1,357) |
|
|
|
|
|
(164,059) | (156,533) | (291,272) | (254,093) | |
|
|
|
|
|
Outside Services Costs | (453) | (957) | (1,062) | (1,240) |
|
|
|
|
|
GROSS PROFIT | 221,696 | 171,044 | 400,149 | 309,354 |
|
|
|
|
|
OPERATING EXPENSES | ||||
Selling | (23,967) | (22,421) | (40,514) | (38,337) |
General and Administrative | (33,295) | (32,613) | (61,272) | (59,465) |
Other | (4,929) | (3,420) | (8,765) | (5,056) |
Amortization of goodwill from merger | - | (72,427) | (2,037) | (91,211) |
|
|
|
|
|
(62,191) | (130,881) | (112,588) | (194,069) | |
|
|
|
|
|
INCOME (LOSS) FROM ELECTRIC UTILITY SERVICE | 159,505 | 40,163 | 287,561 | 115,285 |
|
|
|
|
|
EQUITY IN SUBSIDIARIES | 62,072 | 13,448 | - | - |
|
|
|
|
|
FINANCIAL INCOME | ||||
Financial income | 82,785 | 67,438 | 113,270 | 89,734 |
Financial expenses | (142,687) | (154,580) | (191,046) | (208,995) |
|
|
|
|
|
(59,902) | (87,142) | (77,776) | (119,261) | |
|
|
|
|
|
INCOME FROM OPERATIONS | 161,675 | (33,531) | 209,785 | (3,976) |
|
|
|
|
|
NONOPERATING INCOME | ||||
Nonoperating income | - | 1,697 | 377 | 1,996 |
Nonoperating expense | (280) | (598) | (1,416) | (2,298) |
|
|
|
|
|
(280) | 1,099 | (1,039) | (302) | |
|
|
|
|
|
INCOME BEFORE TAXES ON INCOME AND EXTRAORDINARY ITEM | 161,395 | (32,432) | 208,746 | (4,278) |
Social Contribution Tax | (5,102) | (319) | (15,817) | (5,324) |
Deferred Social Contribution Tax | (4,644) | 4,179 | (4,858) | 3,319 |
Income Tax | (14,743) | (2,298) | (42,149) | (16,273) |
Deferred Income Tax | (12,699) | 9,847 | (14,933) | 7,856 |
Extraordinary Item, Net of Tax Effects | (2,669) | (2,669) | (8,078) | (8,078) |
INCOME BEFORE MINORITY INTEREST | 121,538 | (23,692) | 122,911 | (22,778) |
Minority interest participation | - | - | (1,373) | (914) |
|
|
|
|
|
NET INCOME (LOSS) | 121,538 | (23,692) | 121,538 | (23,692) |
CPFL Geração de Energia S.A. | ||||
(Convenience Translation into English from the Original Previously Issued in Portuguese) | ||||
Statement of Operations for the Quarters Ended March 31, 2005 and 2004 | ||||
(In thousands of Brazilian Reais) | ||||
|
||||
Company | Consolidated | |||
|
|
|||
2005 | 2004 | 2005 | 2004 | |
|
|
|
|
|
From | From | From | From | |
January to | January to | January to | January to | |
March | March | March | March | |
|
|
|
|
|
OPERATING REVENUES | ||||
Energy sales to final consumers / distributors | - | - | 100,013 | 86,773 |
Other | 904 | 189 | 904 | 189 |
|
|
|
|
|
904 | 189 | 100,917 | 86,962 | |
DEDUCTIONS FROM OPERATING REVENUES | ||||
ICMS (State VAT) | - | - | - | - |
PIS (tax on revenue) | (15) | (71) | (1,617) | (1,176) |
COFINS (tax on revenue) | (69) | (224) | (7,452) | (4,010) |
ISS (service tax) | (45) | (6) | (45) | (6) |
Global Reversion Quota | - | - | (519) | (589) |
Tariff Charges - Resolution # 71/2002 | - | - | - | - |
|
|
|
|
|
(129) | (301) | (9,633) | (5,781) | |
|
|
|
|
|
NET OPERATING REVENUES | 775 | (112) | 91,284 | 81,181 |
|
|
|
|
|
ELECTRIC UTILITY SERVICE COSTS | ||||
Electricity Costs | ||||
Electricity purchased for resale | - | (328) | (1,230) | (1,744) |
Electricity network usage charges | - | - | (416) | (68) |
|
|
|
|
|
- | (328) | (1,646) | (1,812) | |
Operating Costs | ||||
Personnel | - | - | (1,506) | (932) |
Private pension plans | - | - | (98) | (52) |
Materials | - | - | (93) | (219) |
Outside services | - | - | (1,271) | (927) |
Depreciation and amortization | - | - | (7,248) | (7,073) |
Other | - | - | (212) | (168) |
|
|
|
|
|
- | - | (10,428) | (9,371) | |
GROSS PROFIT | 775 | (440) | 79,210 | 69,998 |
|
|
|
|
|
OPERATING EXPENSES | ||||
Selling | - | - | (5) | (2) |
General and Administrative | (2,260) | (2,529) | (4,766) | (3,193) |
Other | - | - | (388) | (338) |
|
|
|
|
|
(2,260) | (2,529) | (5,159) | (3,533) | |
|
|
|
|
|
INCOME (LOSS) FROM ELECTRIC UTILITY SERVICE | (1,485) | (2,969) | 74,051 | 66,465 |
|
|
|
|
|
FINANCIAL INCOME | ||||
Financial income | 802 | 1,243 | 2,171 | 3,065 |
Financial expenses | (7,289) | (13,961) | (35,303) | (40,362) |
Interest on capital | - | - | - | - |
|
|
|
|
|
(6,487) | (12,718) | (33,132) | (37,297) | |
EQUITY IN SUBSIDIARIES | 32,212 | 29,572 | - | - |
|
|
|
|
|
Semesa S.A. | 24,533 | 20,334 | - | - |
CPFL Centrais Elétricas S.A. | 5,701 | 9,238 | - | - |
Barra Grande Energia S/A | 1,978 | - | - | - |
|
|
|
|
|
INCOME FROM OPERATIONS | 24,240 | 13,885 | 40,919 | 29,168 |
|
|
|
|
|
NONOPERATING INCOME | - | 470 | - | 470 |
|
|
|
|
|
Nonoperating income | - | 120 | - | 120 |
Nonoperating expense | - | 350 | - | 350 |
INCOME BEFORE TAXES ON INCOME | 24,240 | 14,355 | 40,919 | 29,638 |
|
|
|
|
|
Social contribution tax | - | 1,370 | (4,425) | (2,706) |
Income tax | - | 1,135 | (12,254) | (10,072) |
INCOME BEFORE EXTRAORDINARY ITEM | 24,240 | 16,860 | 24,240 | 16,860 |
|
|
|
|
|
Extraordinary item, net of tax effects | (82) | (54) | (82) | (54) |
INCOME BEFORE MINORITY INTEREST | 24,158 | 16,806 | 24,158 | 16,806 |
|
|
|
|
|
INCOME BEFORE REVERSAL OF INTEREST ON CAPITAL | 24,158 | 16,806 | 24,158 | 16,806 |
|
|
|
|
|
Reversal of interest on capital | - | - | - | - |
|
|
|
|
|
NET INCOME | 24,158 | 16,806 | 24,158 | 16,806 |
|
FORWARD-LOOKING STATEMENT DISCLAIMER |
CPFL ENERGIA S.A.
| ||
|
By: /S/
JOSÉ ANTONIO DE ALMEIDA FILIPPO
| |
Name: José Antonio de Almeida Filippo
Title: 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.