6-K 1 elppr1q14_6k.htm 1Q14RESULTS elppr1q14_6k.htm - Generated by SEC Publisher for SEC Filing
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

 
FORM 6-K
 
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934
 
For the month of May, 2014
Commission File Number 1-14668
 

 
COMPANHIA PARANAENSE DE ENERGIA
(Exact name of registrant as specified in its charter)
 
Energy Company of Paraná
(Translation of Registrant's name into English)
 
Rua Coronel Dulcídio, 800
80420-170 Curitiba, Paraná
Federative Republic of Brazil
(5541) 3222-2027
(Address of principal executive offices)
 
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.  Form 20-F ___X___ Form 40-F _______

 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____

 

 

 

1Q14Results 

 

COPEL records net income of R$ 583 million in the first quarter

 

Curitiba, Brazil, May 14, 2014 – Companhia Paranaense de Energia - Copel (BM&FBovespa: CPLE3, CPLE5, CPLE6 / NYSE: ELP / LATIBEX: XCOP), a company that generates, transmits, distributes and sells power, announces its results for the 1st quarter of 2014. Copel’s consolidated balance sheet presents the figures of its wholly owned subsidiaries, controlled companies and investees. The consolidated financial statements were prepared in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), and with accounting practices adopted in Brazil.

 

Highlights

 

* Net income totaled R$ 583.1 million in 1Q14, 46.3% higher than in 1Q13;

* Net revenue increased 28.2%;

* EBITDA stood at R$ 858.6 million in 1Q14, 29.1% up on 1Q13;

* Electricity sales to final customers moved up by 6.6% in the period.

 

 

 

 

 

1Q14
(1)

1Q13
(2)

Var. %
(1/2)

Operating Revenues (R$ million)

3,051

2,380

28.2

Operating Income (R$ million)

816

592

37.8

Net Income (R$ million)

583

399

46.3

Earnings per share (R$)

2.13

1.46

46.3

EBITDA (R$ million)

859

665

29.1

Return on Shareholders' Equity (annualized)

19.3%

13.5%

42.5

Energy Supply (GWh)

7,231

6,785

6.6

Capex¹

456

360

26.6

EBITDA Margin

28.1%

27.9%

0.7

Operating Margin

26.7%

24.9%

7.5

Net Margin

19.1%

16.7%

14.1

Values subject to rounding adjustments.

¹ Includes contributions and advances for future investments and capital increases.

 

           

Average Rates (BRL / MWh)

Mar/14

Dec/13

Sep/13

Jun/13

Mar/13

Power Purchase Average Rate - Copel Distribuição

144.37  

132.65

132.57

129.59

121.99

Retail Average Rate - Copel Distribuição

226.12

225.33

227.53

206.15

205.68

Sales to Distributors Average Rate - Copel GeT

147.72  

125.18

123.81

119.40

117.39

 

 

 

 

 

 

Indicators

Mar/14

Dec/13

Sep/13

Jun/13

Mar/13

Equity

13,503

12,929

13,116

12,942

12,757

Net debt

2,817

2,280

1,370

1,066

1,409

Book Value per Share

49.34

47.24

47.93

47.29

46.62

Net debt/ Shareholders' Net Equity

33.6%

35.1%

26.8%

25.2%

25.6%

Current Liquidity

1.5

1.4

1.5

1.6

1.6

 

 


 

 

 

LIST  O CONTENT

 

 

1. Main Events in the Period  3 
2. Financial Performance  6 
2.1 Operating Revenues  6 
2.2 Operating Costs and Expenses  7 
2.3 Equity in the Earnings of Subsidiaries  9 
2.4 EBITDA  9 
2.5 Financial Result  9 
2.6 Consolidated Net Income  10 
2.7 Consolidated Income Statement  11 
3. Consolidated Balance Sheet  12 
3.1 Assets  12 
3.2 Liabilities  15 
3.3 Debt and Shareholders Equity  16 
4. Performance by Subsidiary  18 
4.1 Copel Geração e Transmissão   18 
4.2 Copel Distribuição  19 
4.3 Copel Telecomunicações  20 
5. Investment Program  21 
6. Power Market and Tariffs  22 
6.1 Captive Market Copel Distribuição  22 
6.2 Grid Market (TUSD)  23 
6.3 Electricity Sales to Final Customers  23 
6.4 Total Electricity Sold  24 
6.5 Energy Flow  25 
6.6 Tariffs  27 
7. Capital Market  28 
7.1 Capital Stock  28 
7.2 Stock Performance  29 
7.3 Dividends and Interest on Own Capital  30 
8. Operating Performance  30 
8.1 Generation  30 
8.2 Transmission   34 
8.3 Distribution  36 
8.4 Telecommunications  37 
8.5 Equity Interests  38 
8.6 New Projects  40 
9. Other Information  43 
9.1 Human Resources  43 
9.2 Main Operational Indicators   44 
9.3 1Q14 Results Conference Call  45 

Exhibit I Consolidated Cash Flow Statement 

46 

Exhibit II Financial Statements Wholly Owned Subsidiaries

 47 

Exhibit III Financial Statements by Company 

50 
 
 

2


 

Earnings Release 1Q14

 

 

1. Main  Event i th Perio

 

 

Copel’s  net  incom totaled  R$  583.1  millio in 1Q14 46.3 u o the  R 398. millio recorded  in  1Q13 This resul was  chiefl du to  (a the  increase  in  revenue stemmin fro the  expansio o Copel  Dis’  captive market an the  sale o the  energy  produced  b th Araucári Thermal  Power  Plan in  the  spot  market an (b)  lower costs  relate t personnel  an charge fo th use  o th main  transmissio grid For  further  information please refer t ite 2

 

CV Effects 

 

If the  regulatory assets an liabilities wer recognized,  the  gross effect  o changes to the Accoun for Compensatio o Portio (CVA o COPE Distribuição’s  results  would  b positiv R$  265.3 millio in 1Q14 (versus  positiv R 96. millio in  1Q13),  as  shown  below

 

 

 

1Q14
(1)

1Q13
(2)

Var. %
(1/2)

CVA - Gross Efect (R$ million)

265.3  

96.2

175.7

Copel Distribuição

 

 

 

EBITDA (R$ million)

(20.7)

(101.4)

79.6

EBITDA Adjusted (R$ million)

244.6

(5.2)

-

Copel Consolidated

 

 

 

EBITDA (R$ million)

858.6

664.9

29.1

EBITDA Adjusted (R$ million)

1,123.8

761.1

47.7

 

 

Pleas refer  t Note  3 in  our Quarterl Informatio (ITRs)  for further  information

 

Dividend an Interest  o Own  Capita

 

The 5th   Annual  Shareholders’  Meetin (ASM held  o April  24 201 approved  the  distributio o R$  560.5 millio fo fiscal  year  201 –  equivalent  t a 50 payou –  R 325. millio o which  (R$  180.0  millio in  interest o own  capital  an R$  145.0  millio in  dividends)  wa declared  an paid  o December  16 2013, with R$ 235.5 millio in dividend remainin to  be  pai o Ma 28 2014

 

Araucári Thermal  Powe Plan

 

On January  31 2014 th lease  agreement  fo the  Araucária  Thermal  Power  Plant,  entered  int between UEG Araucária  (UEGA) an PETROBRAS  expired  an was  no renewed As  result,  sinc February 1, 2014, the plant’s operatio has  bee under  the  responsibilit o UEGA COPEL  subsidiary which retains 80 o its  capita (the remaining   20%   is   held   by   PETROBRAS).   The   Araucária   Thermal   Power   Plant   does   not   have   availability agreement and operates  under  the  merchan model,  in  which  revenu depend o the  plant’s  operation and energy when  produced is  sold  in  the  short-ter market.  In  1Q14 UEGA’s  consolidate ne revenu totaled  R$ 474.4 million R 466.0  millio o which  refers  to  electricit sales  to  distributor an R$  8. millio t thplant’s  lease  in  January.   In  the  sam period net  incom stoo at  R 133. millio an EBITD cam to  R$  166.6 million The  tabl belo show power allocatio in  1Q14

 

3


 

Earnings Release 1Q14

 

  

GWh

TPP Araucária - UEGA

Feb-Mar/14

Own Generation

646

Total Available Power

646

CCEE (MCP)

630

Losses and differences

15

 

Compensatio o Electricit Costs  (Transfe o CDE  Fund an AC Account) 

 

The Brazilian  governmen issued  decre 8203/2014 amendin Decre 7945/201 an permitting  th transfer  of CD (Cont d Desenvolviment Energético funds to cover  costs  arisin fro the  involuntary  exposur of distributors in Januar 2014

In April  2014 the  Brazilian government  issued  Decre 8221/201 creatin the  Regulated  Marke Accoun (ACR account)  t cover  th distributors'  expense arisin from (a)  involuntary  exposure  to  the  spo market an (b) the dispatch  o thermal  power  plants  linke t the CCEAR (regulated  spot market agreements  unde the availability  model betwee February  an December  2014

The Compan closed  Marc 201 with  compensatio o electricit costs  estimated  at  R$  831.8 million however R$ 883.8  million was transferred  relate t the  first  quarter  o 2014 o whic (a)  R$  114. millio refers  to January,  (b)  R$ 447.3 millio to  February,  an (c R 321. millio t March.  The  R$ 52.0 millio difference between  the  amoun estimated  b the  Compan an the  amoun transferre will  b adjuste in  the  next quarter.  The  amounts  transferred  (CD fund and the AC account)  wer recognized  as  compensatio of electricity  costs  an charge for the use  of the main  transmissio grid a detaile in  Notes  31. and 31.2  of our Quarterly  Information

Energ Purchase  –  1th  Existin Energ Auctio (Auctio A”) 

 

In the  1th  Existin Energ Auction held  o April  30 2014 Copel  Dis  contracted throug CCEAR  agreements,  a total 388. average-MW at the averag price o R$ 268.33/MWh.  The  supply agreements will begin  in  May 2014 an expire  in  December  201 an will  b restated  b the  IPCA  consumer  pric index As  result,  Copel  Dis  is mitigatin its involuntary  exposur to  th spot  market

 

Transmissio Auctio 001/201

 

On May  9 2014 Copel  GeT  (49%) in  partnershi with  Elecnor (51%), wo th righ to  build  an operat 32 km o double  circui transmissio lines  (50 kV)  between  the  states  o Minas  Gerais  an Sã Paulo The  project  will absorb  Investments o R$ 624.0 millio an generate Annual  Permitted  Revenu (APR) o R$  76.9 million The term  fo th start-u o the  lines  is  4 months a of th agreement executio date. 

Copel  GeT  (100%)  als won  lo M comprisin 12 k o transmissio lines  (50 kV)  t b built  betwee the states of Paraná an Sã Paulo With  APR of R$ 15.0  millio an investment estimated  at R$ 135. million the projec is scheduled t begi operation 3 months  as  of th agreement executio date. 

In the  sam auction Copel  GeT  (100%)  also  acquired the righ to  build  an operate  5 k o transmissio lines (23 kV)  an on substatio in  Paraná.  With  investments  o R$  49. million the  projec will  hav APR  o R$ 5.8 millions  an start-u is  scheduled  fo 3 months  as  of the agreemen executio date For  further  details,  please refer t pag 36

 

 

4


 

Earnings Release 1Q14

 

Equity  Interest  –  SANEPA

 

COPE no hold direct  interest  o thirty-six  million three  hundred  an forty-three  thousand tw hundred an sixty-seven  (36,343,267 preferred  shares  (PN of    Companhia d Saneament d Paraná  SANEPAR, equivalent  t 14.86 o it P shares  an 7.63 of the total  capital.  Considerin the  interest  held  through Dominó  Holdings,  COPEL’s  interest  in  SANEPAR  will  remain  at  13.58%.  For  furthe details,  please  refer  to  pag39.

 

Smart  Gri Projec

 

In May  2014 Copel  began  the  most  advanced  smart grid  pilo projec in  Brazil,  th Paraná  Smart  Grid  project, which comprises  a series  o technological  innovation that  will  reduc th number  an duration of outages, combinin smar grids,  electricit mobility shared telemeterin an distribute generation The  complete automatio o th grid which  eliminates  the  nee for human  interference  t isolate  stretche withou power,  is on of th project' most  ambitiou goals. 

 

Abrade Surve Awar

 

Companies  an other  majo energ customer elected  Copel  as  the  best  distributo in  Brazil.  This  award  was based  o the Majo Customer  Satisfactio Survey  carried  b Abradee, the energ distributors  association, between  January  an February  2014 The  surve covered mainly medium an high-voltag commercial and industrial  customer of eleven  energ distributors  nationwide an revealed  tha 87.6% o majo customers  in Paraná ar satisfied  o very  satisfied  with  the quality  of th services  provided by Copel. 

 

Best  Servic

 

Anee electe Copel  as  th energ distributo that  best  deals  with  customer  complaints  in  Brazil.  The  survey showed  that  99.9 o the  complaints  t the  Compan in  201 were  resolved  in  the  first  o secon instance, throug its  customer  service  cente o ombudsman The  resul was  obtained  based  o an  index  o th number of legitimate  complaints  for each  10,00 consumer  units  –  the legitimate  complain density  index

 

5


 

Earnings Release 1Q14

 
 

 

2. Financial  Performance 

 

 

2. Operatin Revenues 

In  1Q14,   operating   revenues   reached   R$   3,051.1 million 28.2 u o the  R$  2,380.4  millio in  1Q13, led by:

(i)  the   19.6%   increase   in  revenue   from   electricity sales t final  customers, which reflect only  actual sales revenues,  excludin the  distributio grid tariff (TUSD) chiefly  du to  (a the  9.55 Copel  Dis’  tariff increase  as  o Jun 24 2013 an (b)  the  6.6 upturn in sales  volum in the period

(ii) the  52.9 increase  in electricity  sales  t distributors,   mainly  stemmin fro higher  revenu fro energy sales in the spo marke (CCEE),  du to  the Araucarária Thermal Power  Plant’s  sales in the short-ter marke (as of Februar 2014 an higher  prices  (PLD in  th period

(iii the  8.8%  upturn  in  use  o the  main  distribuitio an transmission  grid”  ite (TUS an TUST  revenue),  duto the 8.3%  expansio of Copel  Dis’ grid  market

 

(iv the  60.0%  increase  in constructio revenues as  resul o the  booking o investments  in construction services  an improvements  t electricit distributio an transmissio infrastructure

(v th 20.0 upturn  in  telecommunication revenue following  the  expansio o the  area  o operation and the provisio o services  t new  customers,  especiall in  the  individual  segment.  In  1Q14 the  customer  base increase b 156.9%,  fro 3,99 in March 201 t 10,26 in  March  2014; 

(vi)  the  2.1 increas in  “piped  gas  distribution”  (supplied  b Compagas),  chiefly  du to  marke growth  in  thperiod It is worth  notin that  revenu fro Compagas  grew  substantially a result o gas supply t the Araucária  Thermal  Power  Plant;  however,  thi effec is  eliminated  in the consolidated resul as  i refers  to a compan belongin t th sam group and 

(vii)  the  32.9 reductio i other  operatin revenues mainly  du t lowe revenu fro the  leas o the Araucária  Thermal  Powe Plant,  as  resul o the  en o the  lease  agreement  with  PETROBRAS  o January  312014

 

6


 

Earnings Release 1Q14

 

R$ '000

Income Statement

1Q14

1Q13

Var.%

(1)

(2)

(1/2)

Electricity sales to final customers

922,710

771,195

19.6

Electricity sales to distributors

1,107,926

724,767

52.9

Use of the main distribution and transmission grid

557,924

513,000

8.8

Construction revenue

289,848

181,191

60.0

Revenues from telecommunications

39,252

32,702

20.0

Distribution of piped gas

80,861

79,221

2.1

Other operating revenues

52,551

78,334

(32.9)

Operating revenue

3,051,072

2,380,410

28.2

 

 

 

 

2. Operatin Cost and Expense

In 1Q14 operating  costs  an expenses  reached R$ 2,401.8  million 27.6 u o the  R$  1,882.0 millio recorded  in  1Q13 The  most  important variations were

(i) the  16.7 increas in electricity  purchased for resale, chiefl du t higher costs with energ acquisitio (a)  in CCEAR auctions,  arising fro ne agreements,  the  higher  dispatch  othermal    power    plants    and    the    monetarrestatement  o agreement based  o perio inflation an (b)  fro Itaipu following  the  appreciatio o the dollar.   The  Compan recorded  CCEE  costs  o R$  995.8  millio in  1Q14 which  were  partially  offse b CD fundan th ACR account

 

 

 

R$'000

Electricity Purchased for Resale

1Q14

1Q13

Var. %

(1)

(2)

(1/2)

Itaipu

182,265

131,734

38.4

CCEAR (Auction)

620,303

532,505

16.5

Bilateral

60,162

57,058

5.4

CCEE

995,843

249,418

299.3

(-) Transfer CDE - CCEE

(831,771)

(93,605)

788.60

Proinfa

46,000

41,673

10.4

(-) Pis / Pasep and Cofins

(90,492)

(77,081)

17.4

TOTAL

982,310

841,702

16.7

 

 

7


 

Earnings Release 1Q14

(ii) the  14.1 reductio in  charges  fo th use  o th main  distributio an transmissio grid du t the declin in  Syste Servic Charges  –  ESS following  the  lowe dispatch  o thermal powe plants  outsid the  merit order  in  the period; 

 

 

 

R$ '000

Charges of the main distribution and transmission grid

1Q14
(1)

1Q13
(2)

Var. %
(1/2)

System Service Charges - ESS

20,135

174,248

(88.4)

(-) Transfer CDE - ESS

-

(118,958)

-

System usage charges – distribution

65,137

54,960

18.5

System usage charges – basic network and connection

44,111  

41,810

5.5

Itaipu transportation charges

14,920

12,402

20.3

Charge reserve energy - EER

-

3,159

-

(-) PIS / Pasep and Cofins taxes on charges for use of power grid

(13,726) 

(15,544)

(11.7)

TOTAL

130,577

152,077

(14.1)

 

 

(iii the  9.4 declin in  personnel  an management”  t R 218.8  million, as a resul o the  14.3 decrease  in expenses  with  compensation   and   related   charges,  chiefly   due   to   the   8.7%  reduction   in   the   number   of employees,  thanks  to  the voluntar redundancy  program partiall offset  b th increased  provisio fo profit sharing, du to  th higher  result in th period

(iv the  17.3 upturn  in privat pension and healthcare  plans, which  reflects th accrual of amounts  related to the private  pensio an healthcare  plans,  calculated  i accordanc with  CVM  Resolutio 695/2012 chiefly  due to the actuarial revision; 

(v the  materials  an supplies  fo powe electricity”  lin includes  costs  with  the  acquisitio o coal  fo thFigueira  Thermal  Power  Plan an natural  gas  for the Araucária  Thermal  Power  Plant an consider  the eliminatio between companies o th sam grou (Araucaria TP buys gas fro Compagas);

(vi)  th 405.1 upturn  in  “natural  gas  an supplies  fo the  gas  business",  as  resul o th purchase  o natural gas  b Compagas  t supply especially, th Araucária  Thermal Power  Plant, which has  been operate b UEGA,  a COPE subsidiary, since February  1 2014

(vii)  "third-party  services”  remained  fla over  the  sam perio last  year,  du to  the  declin in  costs with maintenance,  meterin an bill  delivery partially  offset  b the  inflatio adjustmen in other  service in the period; 

(viii)  provision an reversals  “  totaled  R$  61.0  millio in  the  period chiefly  du to  lowe provision fo (a) civil an administrativ claim an (b)  employee  benefit  claims,  partiall offset  b lower  equity  an expropriation provisions; 

(ix) the  53.1 increase  in  constructio costs as  resul o investments  in  power  distributio an transmissioin th period and 

(x) the  15,0 upturn  in  other  costs  an expenses chiefly  du t increased  costs  with  financial  compensatiofor th u