6-K 1 ebrmarketletter1q22_6k.htm 6-K

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, 2022

 

Commission File Number 1-34129

 


 

CENTRAIS ELÉTRICAS BRASILEIRAS S.A. - ELETROBRÁS

(Exact name of registrant as specified in its charter)




BRAZILIAN ELECTRIC POWER COMPANY

(Translation of Registrant's name into English)




Rua da Quitanda, 196 – 24th floor,
Centro, CEP 20091-005,
Rio de Janeiro, RJ, Brazil

(Address of principal executive office)



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____

 
 

 

 
 

 

 

 

 
 

 

 

MARKETLETTER 1Q22

INTRODUCTION

Rio de Janeiro, May 16, 2022

 

A Eletrobras (Centrais Elétricas Brasileiras S.A.)
[B3: ELET3 e ELET6 – NYSE: EBR e EBR-B – LATIBEX: XELTO e XELTB]

Eletrobras, the largest company in the electric energy sector in Latin America, operating in the generation, transmission and commercialization segment, direct controller of 5 operating subsidiaries and a holding company – Eletropar –, a research center – Cepel, 50% interest of the share capital of Itaipu Binacional and, with direct and indirect interest in 77 Special Purpose Entities, announces, on this date, its results for the period referring to the first quarter of 2022.

1st QUARTER OF 2022

Eletrobras presented, in the first quarter of 2022 (1Q22), a net income of R$ 2,716 million, 69% higher than net income of R$ 1,609 million obtained in the first quarter of 2021 (1Q21). The 1Q22 result was positively impacted by the company's financial performance, with emphasis on the positive effect of the exchange rate variation and the 12% increase in gross revenue. Another positive highlight in the quarter was the 3.4% reduction in PMSO costs. The negative highlight was the recording of BRL 1,226 million in Provisions for Doubtful Accounts, arising from the continued default of Amazonas Energia D, of which BRL 867 million refers to the purchase of electricity from independent power producers (PIE) located in Amazonas and R$ 359 million related to loan agreements owed by the aforementioned distributor.

Net Operating Revenue increased from R$ 8,208 million in 1Q21 to R$ 9,181 million in 1Q22, an increase of 12%, influenced by the better performance of bilateral contracts and the readjustment of transmission revenues. IFRS EBITDA, amounting to R$ 3,858 million in 1Q21, changed to a positive amount of R$ 3,752 million in 1Q22. Recurring Net Operating Revenue grew by 11%, from R$ 8,200 million in 1Q21 to R$ 9,121 million in 1Q22. Recurring EBITDA increased by 9.6%, from R$ 4,952 million in 1Q21 to R$ 5,428 million in 1Q22. The recurring growth in 2022 demonstrates the improvement in the Company's operating performance.

 

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

3 

MARKETLETTER 1Q22

 

 

OTHER 1Q22 HIGHLIGHTS

 

 

 

Table 01: MAIN INDICATORS

(R$ Million)

  1Q22 1Q21 %
Energy Sold - Generation GWh (1) 42.7 49.2 -13.1%
Gross Revenue 10,980 9,821 12%
Recurring Gross Revenue (2) 10,911 9,820 11%
Net operating revenue 9,181 8,208 12%
Recurring Net Operating Revenue (3) 9,121 8,200 11%
EBITDA 3,752 3,858 -3%
Recurring EBITDA (4) 5,428 4,952 10%
Ebitda Margin 41% 47% -6.1
Recurring Ebitda Margin 60% 60% -0.9
Gross debt without third party RGR 41,639 46,608 -11%
Recurring Net Debt 20,554 20,565 0%
Recurring Net Debt / Recurring LTM EBITDA 1,0 1,9 -94%
Net Profit 2,716 1,609 69%
Investments 523 519 1%
Employees 12,090 12,221 -1%

(1) Does not consider the energy allocated to quotas, from the plants renewed by Law 12,783 / 2013;

(2), (3) and (4) Detailed adjustments in the consolidated analysis presented below.

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

4 

MARKETLETTER 1Q22

 

 

 

1       ANALYSIS OF THE
CONSOLIDATED RESULT (R$ MILLION)

Tabela 02: CONSOLIDATED RESULTS
Financial Statements 1Q22 1Q21
Generation Revenue 6,542 5,846
Transmission Revenue 4,235 3,801
Others Revenue 202 173
Gross Revenue 10,980 9,821
Deductions from Revenue -1,798 -1,612
Net Operating Revenue 9,181 8,208
Energy resale, grid, fuel and construction -2,068 -1,641
Personnel, Material, Services and Others -1,965 -2,034
Depreciation and amortization -645 -458
Operating Provisions -2,070 -1,105
  2,434 2,970
Shareholding 552 430
  0 0
Others Revenues and Expenses 121 0
  3,107 3,400
Financial Result 478 -584
Income before tax 3,585 2,817
Income tax and social contribution -869 -1,207
NET INCOME FOR THE PERIOD 2,716 1,609

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

5 

MARKETLETTER 1Q22

 

 

 

Tabela 03: RECURRING CONSOLIDATED RESULT
Recurring Financial Statement * 1Q22 1Q21
Generation Revenue Recurring 6,474 5,837
Transmission Revenue Recurring 4,235 3,801
Others Revenue Recurring 202 181
Gross Revenue Recurring 10,911 9,820
Deductions from Revenue Recurrent -1,791 -1,619
Net Operating Revenue Recurring 9,121 8,200
Operational costs Recurring -2,064 -1,632
Personnel, Material, Services and Others Recurring -1,916 -1,933
Depreciation and amortization Recurring -645 -458
Operating Provisions Recurring -265 -114
  4,230 4,064
Shareholdings Recurring 552 430
  4,783 4,494
Financial Result Recurring 643 -540
Income before tax Recurring 5,426 3,954
Income tax and social contribution Recurring -843 -1,198
Net Income for the year Recurring 4,583 2,756

* Non-recurring adjustments mentioned in the Highlights.

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

6 

MARKETLETTER 1Q22

 

1.1 MAIN VARIATIONS OF FINANCIAL STATEMENTS

HIGHLIGHTS IN ANALYSIS OF VARIATION 1Q22 X 1Q21

OPERATING INCOME

Table 04: GENERATION REVENUE

Operating Revenue - Generation 1Q22 1Q21 %
Generation Revenue      
Energy supply to distribution companies 4,033 3,623 11%
Supply 937 719 30%
CCEE 483 465 4%
Operation and Maintenance Revenue 1,082 1,034 5%
Construction Revenue 3 9 -61%
Itaipu Transfer 4 -4 -211%
Generation Revenue 6,542 5,846 12%
Non-recurring events      
       
(-) Reversal of Penalties for Unavailability - CCEAR - CGT Eletrosul -65 0 -
(-) Construction Generation -3 -9 -61%
Recurring Generation Revenue 6,474 5,837 11%

 

Variation Analysis 1Q21X1Q22

ENERGY SUPPLY TO DISTRIBUTION COMPANIES

 

·At Eletronuclear (+R$312 million): (i) increase in Fixed Revenue from Angra 1 and 2 plants, according to ANEEL Homologatory Resolution No. 3002 of 12/14/2021, due to (a) coverage of costs related to nuclear fuel in November and December 2020, which were reduced from 2021 Fixed Revenue, impacting 1Q21 by - R$77 million, which did not occur in 1ITR22, and (b) the update of the nuclear power plant decommissioning plan, which demanded from Eletronuclear an increase in the contribution of resources to the fund for this purpose, impacting 1Q22 by + R$ 46.6 million.
·At CGT Eletrosul (+R$122 million): (i) R$99 million increase in ACR revenue, mainly due to the following factors: (a) 21 million increase, due to the 12% increase in average sales prices (R$238/MWh versus R$268/MWh) as a result of the adjustment by the IPCA; and (b) reduction in reimbursement for unavailability of UTE Candiota III, resulting in a R$ 8.5 million increase in revenue; (ii) an increase of R$ 64.8 million resulting from the recognition of a court decision favorable to CGT Eletrosul, referring to the retroactivity of the recognition of nullity of the clause - Penalties for unavailability - of CCEARs of the 1st New Energy Auction of 2005, signed by former CGTEE (today CGT Eletrosul) and 31 agents (electricity distributors), which will result in CCEE re-accounting; (iii) In the ACL, the R$22.5 million increase in revenue was mainly due to the positive variation in the average sales price of contracts signed in this environment (average price of R$201/MWh in 1Q21 and R$ 332 /MWh in 1Q22), offset by the reduction in the quantity sold in this environment (from 340 average MW in 1Q22 to 244 average MW in 1Q22).

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

7 

MARKETLETTER 1Q22

 
·At Eletronorte (+R$38 million): (i) R$97 million increase in revenue from the sale of PIEs in the capital of Amazonas due to the 15% increase in contractual prices linked to the IGPM (1Q21 R$889.88/MWh X 1Q22 R$ 1,024.24/MWh); (ii) increase of R$ 12 million in revenue from the sale of UHE Samuel due to the 5% increase in contractual prices (1Q21 R$ 219.67/MWh X 1Q22 R$ 231.55/MWh) and the 16% increase the amount of energy sold (1Q21 116 MWavg X 1Q22 134 MWavg); (iii) increase of R$ 7 million in UHE Balbina sales, as a result of the increase in contractual prices by 11% (1Q21 R$ 345.45/MWh X 1Q22 R$ 382.32/MWh); (iv) increase of R$ 6 million in sales at UTE Aparecida, as a result of the 124% increase in contractual prices (1Q21 R$ 333.92/MWh X 1Q22 R$ 746.44/MWh), despite the negative variation in volume -52% of energy (1Q21 117 MWavg X 1Q22 56 MWavg); gains partially offset by (v) a 17% reduction, R$ 85 million, in sales at UHE Tucuruí, due to a 34% reduction in energy sold (1Q21 1,597 MWavg X 1Q22 1,056 MWavg), even at prices 26% larger (1Q21 R$144.82/MWh X 1Q22 R$181.89/MWh).
·In Furnas (+R$21 million): (i) Higher dispatch from the Santa Cruz thermal plant in 2022, totaling R$16 million; (ii) Seasonal adjustment and price adjustment of ACR contracts of approximately 8% (R$174 million in 1Q21 and R$188 million in 1Q22); (iii) an increase of approximately R$6.5 million in Brasil Ventos Energia's revenue; partially offset by: (iv) Lower amount of energy traded on the ACL (2,320GWh in 1Q21 to 2,008 GWh in 1Q21, representing a decrease of R$16 million.

Partially offset by:

·Chesf (-R$79 million): (i) Reduction of 142 average MW sold in ACL due to the commercialization strategy adopted; (ii) reclassification of revenues from wind farms with reserve contracts, in the amount of R$ 12 million (under CCEE, while in 1Q21 they were in supply).

SUPPLY FOR END CONSUMERS

·At Eletronorte (+R$149 million): (i) increase in Albrás' revenue by R$137 million, due to the readjustment of the base price, the variations of the parameters defined in the contract for the calculation of the final sale price, such as price aluminum, US dollar and sector charges, with emphasis on (a) adjustment by the IGP-M of 32% of the base price, from R$134.77/MWh to R$177.92/MWh; (b) a 42% increase in average aluminum prices (US$ 2,040 in 1Q21 X US$ 2,972 in 1Q22); (c) a 4% drop in the average dollar conversion rates (1Q21 R$5.47/US$ X 1Q22 R$5.23/US$); (ii) increase of R$ 12 million due to the 32% readjustment of other sales contracts at UHE Tucuruí (1Q21 R$ 175.45/MWh X 1Q22 R$ 231.17/MWh).
·Chesf (+R$42 million): (i) increase, in the period, of around 38 average MW in consumption by industrial customers covered by Law 13,182/2015. Due to the problems faced by a consumer in the State of Alagoas that lasted from May/2019 until the first months of 2021, in that period last year there was a reduction of about 60 average MW in relation to the historical average.
·In Furnas (+R$26 million): (i) Adjustments in the unit prices of supply contracts, linked to UHE Itumbiara (Law 13,182), of approximately 9%, resulting in an increase of R$23 million in the period; (ii) Start of new supply contracts in 2022, representing an increase of R$3 million.

CCEE

·In Furnas (+R$91 million): (i) variation of the GSF in the period, which increased by approximately 6% (average of 89% in 2021 and 95% in 2022), despite the drop in the average PLD of R R$ 172.57 in 1Q21 to R$ 55.70 in 1Q22), and due to the lower energy sales in the period which, added to the off-order dispatch of UTE Santa Cruz, provided a greater amount of energy to be settled in comparison with the previous period and consequent higher result in the Short Therm market.

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

8 

MARKETLETTER 1Q22

 

·At Eletronorte (+R$50 million): (i) the 29% increase in the post-GSF seasonal physical guarantee (1Q21 2,806MWavg X 1Q22 3,613MWavg); (ii) the 21% drop in energy sold through bilateral contracts (1Q21 2,620 MWavg X 1Q22 2,061 MWavg).
·At CGT Eletrosul (+R$6 million): (i) increase in energy settled in 1Q22 compared to 1Q21, corresponding to an increase of R$10 million due to the seasonality adopted; offset by (ii) the 66% reduction in PLD (from R$ 173 / MWh in 1Q21 to R$ 58 / MWh in 1Q22), corresponding to a negative variation of R$ 4.3 million.

Partially offset by:

·In the holding company (-R$87 million): due to the reduction in the sale of electricity imported from Uruguay, due to the lower demand for energy volume by the ONS due to the improvement in the country's hydrological situation.
·At Chesf (-R$41 million): (i) variation in the average PLD from R$159.91/MWh to R$56.21/MWh); (ii) maintenance of the GSF injunction, equivalent to R$36 million, until May/2021, with no effect in 1Q22; (iii) reclassification of revenues from the plants of the Pindaí complex which, after the incorporation in March/2021, began to be recorded in the CCEE account, representing approximately R$ 12 million in 1Q22.

OPERATION AND MAINTENANCE REVENUE - PLANTS RENEWED BY LAW 12.783/2013

·At Chesf (+R$46 million): (i) annual adjustment of the RAG of around 6.5%, in accordance with Ratifying Resolution No. 2,902/2021 (2021-2022 cycle), and a 3.97% increase in CFURH in the accumulated in Mar/22 compared to the accumulated in Mar/21.

CONSTRUCTION REVENUE

·In Furnas (-R$6 million): (i) changes in investments made in the Furnas plants in the amount of -6.26 million and in Porto Colombia in the amount of -464 thousand.

TRANSFER ITAIPU

·In the Holding (+R$ 8 million): (i) Variation of the tariff on which the monetary restatement is applied, calculated based on the Commercial Price and Industrial goods American price indices, levied on the financial asset of Itaipu that offset the exchange variation incident on said asset, recognized by interministerial decree 04/2018 of the MME and Ministry of Finance, which determines Itaipu's revenue.
Table 05: TRANSMISSION REVENUE
Operating Transmission Revenue 1Q22 1Q21 %
Transmission Revenue 4,235 3,801 11%
O&M Revenue - Renewed Lines 1,215 1,038 17%
Operation and Maintenance revenue 302 304 -1%
Construction Revenue 147 120 23%
Contractual Revenue - Transmission 2,571 2,340 10%
Recurring Transmission Operating Revenue      
Non-recurring events      
Retroactive adjustment of the monthly tariff for energy transport from Itaipu Binacional      
Recurring Transmission Operating Revenue 4,235 3,801 11%

 

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

9 

MARKETLETTER 1Q22

 

 

ANALYSIS OF VARIATION 1Q21X1Q22

O&M REVENUE - RENEWED LINES LAW 12.783/13

·Chesf (+R$153 million): (i) publication of Aneel Homologatory Resolution 2,895/21, which includes, among other aspects, the readjustment of the 21/22 cycle, the recognition of RAP's of reinforcements without previously established revenue and improvements included by Aneel to the 2021/2022 cycle.

Partially compensated by:

·Eletronorte (-R$62 million): (i) Reduction of R$192.8 million in billed revenue. Mainly impacted by the Tariff Review process (2021/2022), Resolution 2,595/21, which took place in July/21, in which it defined the reprofiling of contract 058/2001 revenue, reducing the financial component. On the other hand, (ii) an increase in revenue of R$ 130 million due to the decrease in the amortization reduction portion. There was a reduction in the average monthly amortization from R$ 123 million monthly to R$ 80 million monthly due to the Tariff Review process of contract 058/2001.
·In Furnas (-R$28 million): (i) due to a decrease, in 2022, in the amount billed by facilities dedicated to Itaipu. This drop was due to the reduction in energy amounts from distributors, despite the tariff readjustment. Itaipu's revenue is the revenue from facilities dedicated to the transport of energy from Itaipu, whose payment is made by Shareholder Distributors. This revenue is defined as follows: amount of energy (defined in ANEEL's resolution) x Itaipu's TUST (defined in ANEEL's resolution), with the product being the revenue to be paid by each distributor.
·CGT Eletrosul (-R$7 million): (i) Increase in revenue of R$9.3 million referring to revenue from new authorized facilities; (ii) gradual reduction of the RAP during the 2018/2023 cycle, resulting from the result of the periodic tariff review of concession 057/2001, resulting in -R$ 11.3 million in the period; (iii) Advance apportionment of -R$ 4.1 million.

O&M REVENUE - EXPLORATION REGIME

·At Chesf (+R$ 3 million): (i) publication of REH Aneel 2,895/21, which includes, among other aspects, the readjustment of the 21/22 cycle (including the effects of the tariff review of concession contracts 006/2009, 007 /2005, 017/2009 and 018/2009), the recognition of RAP's of reinforcements without previously established revenue and improvements included by Aneel for the 2021/2022 cycle.

Partially compensated by:

·In subsidiary Eletronorte (+R$46 million): (i) increase of R$52.5 million in billed revenue, due to the cycle adjustment (8%), mainly in the Estação, Linha Verde and Porto Velho contracts. Contracts that underwent review had an average adjustment of 16% (however, they have lower absolute revenue). On the other hand, (ii) a reduction in revenue of R$ 6.2 million due to the increase in the reduction in amortization.
·At CGT Eletrosul (+R$30 million): (i) The variation is mainly due to: (i) acquisition of control of investee TSLE, contract 020/2012, R$19.0 million; acquisition of control of investee FOTE, contract 007/2014, R$ 2.7 million; (ii) readjustment of the RAP of concession 010/2005 due to the IGP-M of 37%, R$ 7.5 million.

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

10 

MARKETLETTER 1Q22

 

·In Furnas (+R$12 million): (i) Increase due to the change of tariff cycles, based on current regulations (REH No. 2,959/21. Highlight for the Ibiúna-Bateias contract, which varied 34%, representing + R$ 15. million in billed RAP.

 

CONSTRUCTION REVENUE – TRANSMISSION

·Chesf (+R$42 million): (i) increase in the volume of transmission projects being built by the company between the periods, mainly in contract 061/2001. These investments are linked to Aneel's authorizing resolutions and improvements to the existing system.
·CGT Eletrosul (+R$10 million): (i) Increase in the volume of transmission projects being built by the company between the periods, from R$22.2 million in 1Q21 to R$27.5 million in 1Q22. These investments are linked to Aneel's authorizing resolutions and improvements to the existing system; (ii) R$5.2 million in 1Q22 referring to SPE TSLE.

Partially offset by:

·Furnas (-R$15 million): (i) reduction in the volume of transmission projects being built by the company compared to the same period in 2021, mainly in contract 062/2001.

CONTRACTUAL REVENUE – TRANSMISSION

·Chesf (+R$17 million): (i) increase in contractual assets related to contract 061/2001, due to the increase in the volume of transmission projects being built by the company between the periods.
·CGT Eletrosul (+R$46 million): (i) The variation is mainly due to: i) increase in contractual assets related to contract 057/2001, due to the increase in the volume of transmission projects being built by the company between the periods, R$ 8 million; (ii) acquisition of control of investee TSLE, concession agreement 020/2012 (TSLE), R$34 million; (iii) acquisition of control of investee FOTE, concession agreement 007/2014, R$8 million; and reduction of the IGPM in purchase with the same period in 2021 (6.18% Dec/20-Feb/21 and 4.59% Dec/21-Feb/22), with effects mainly on contract 010/2005; R$ - 4 million.
·At Furnas (+R$41 million): (i) increase in the balance of contractual assets related to contract 062/2001, as a result of the adjustment made in September 2021, as a result of re-estimates of progress in the execution of transmission projects in progress and of ANEEL authorizations for RAPs for completed transmission projects.
Table 06: OTHER OPERATING REVENUE
Operating Income 1Q22 1Q21 %  
Others Revenues 202 173 17%  
Non-recurring events        
Revenue reversal energy interconnection between Brazil and Uruguay 0 8 100%  
Other recurring income 202 181 11%

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

11 

MARKETLETTER 1Q22

 

OTHERS REVENUES

ANALYSIS OF VARIATION 1Q21X1Q22

·At Eletronorte (+R$21 million): (i) increase of (a) R$ 10.3 million in Proinfa; (b) R$ 5.3 million in CDE; (c) R$ 4.3 million in Operation and Maintenance services; (d) R$ 2.9 million in leases and rentals, partially offset by (ii) a R$4.4 million reduction in other revenues.

·        In the holding (+R$13 million): higher revenue from the provision of various services.

Partially offset by:

·CGT Eletrosul (-R$ 3 million): (i) in 1Q21 there was revenue from the sale of studies and projects in the transmission segment in the amount of R$ 3.1 million, which did not occur in 1Q22; reduction partially offset by (ii) the entry, in 1Q22, of new fiber optic sharing service contracts, in the amount of R$ 0.2 million.

OPERATIONAL EXPENSES

Table 07: OPERATIONAL COSTS AND EXPENSES
Operational costs 1Q22 1Q21 %
Energy purchased for resale -483 -499 -3%
Charges on use of the electricity grid -621 -456 36%
Fuel for production electric power -768 -537 43%
Construction -195 -149 31%
Personnel, Material, Services and Others -1,965 -2,034 -3%
Depreciation and amortization -645 -458 41%
Operating Provisions      
Total Operating Costs and Expenses -2,070 -1,105 87%
Non-recurring events -6,748 -5,238 29%
(-) Non-recurring PMSO events      
(-) Non-recurring provisions 49 101 -52%
(-) Generation Construction 1,805 991 82%
Total Recurring Operating Costs and Expenses -4,890 -4,137 18%

ANALYSIS OF VARIATION 1Q21X1Q22

ENERGY PURCHASED FOR RESALE

·In the holding company (-R$85 million): due to the reduction in energy imports from Uruguay, due to the lower demand for energy volume by the ONS due to the improvement in the country's hydrological situation.

Partially offset by:

·In Furnas (+R$59 million): (i) price readjustment of the current purchase agreements of approximately 22% in the period, representing an increase of approximately R$48 million; (ii) Purchases made in 1Q22 (taking advantage of market opportunities, including incentivized energy), without comparison in 2021, totaling an increase of R$ 36 million for the period; (iii) difference in purchases in the Short-Term Market, since, in the months of 1Q22, the results were positive, therefore, there was no purchase in the MCP, while in the 1Q21, although the results were positive in the MCP, in the first two months of 2021 Furnas presented a total negative result of R$ -17 million, as there were amounts withheld at the CCEE due to the judicialization of the sector and such results allowed the use of this credit at the time; (iv) remaining difference (-R$ 8 million) is due to Cofins/Pasep credits.

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

12 

MARKETLETTER 1Q22

 

·At Eletronorte (+R$14 million): (i) increase in the costs of purchase contracts for PIEs in Amazonas, R$56 million of which resulted from the contractual readjustment based on the IGP-M; (ii) start of the TEMPO power purchase agreement, totaling R$5 million; (iii) readjustment of the SINOP purchase agreement, generating an increase of R$ 117 thousand; (iv) at MCP, the difference was R$802 thousand; (iii) increase in taxes (PIS, COFINS and PASEP) and leasing recoverable by R$ 48 million.

FUEL FOR ELECTRICITY PRODUCTION

·In Furnas (+R$193 million): difference in the dispatch of the Santa Cruz plant, which in 1Q22 had a generation of 557,686 MWh and in the same period of 2021 a generation of 272,552 MWh, representing an increase of approximately 285,000 MWh.
·At Eletronorte (+R$42 million): (i) R$80.4 million increase in Ship or Pay and Take or Pay accessory expenses, as a result of the 15.25% reduction in natural gas consumption, thus reflecting in the increase, since the volume of natural gas that was no longer consumed and billed as a purchase of natural gas, started to be charged as an ancillary expense, due to the obligation of minimum consumption of contracted natural gas; (ii) a reduction of R$ 19.8 million in expenses with the purchase of natural gas, equivalent to 3.6%, despite the price of natural gas having suffered the average contractual readjustment of 11.09%, mainly due to the reduction in 46.63 % in the production of energy at UTE Mauá 3 caused by the plant to remain operating at the inflexibility of 50% due to the increase in the reservoirs of the UHEs of the Submarket of the North Region, causing the dispatches of the UHE to be prioritized compared to the plants thermal plants that have inflexibility in their contracts; (iii) reduction of R$ 19 million referring to the ICMS refund on the sales of energy produced by UTE Mauá 3, due to the consumption of natural gas. The reversal occurs because the sale is outside the state of AM and is exempt from ICMS;

Partially offset by:

·At CGTEletrosul (-R$9 million): (i) variation in fuel cost (a) consumption, in 1Q21, of 380 thousand tons of coal and, in 1Q22, 250 thousand tons, negative variation of 34%, mainly due to downtime for maintenance of the generator set that took place in January 2022, offset by (b) an increase in the price of mineral coal between the periods, which had an impact of 17%.

Charges on use of the electricity grid

·As a result of the increase in the tariff for the transmission and distribution system, the highlights being Eletronorte (+R$24 million) and Eletronuclear (+R$10 million).

CONSTRUCTION

·At Chesf (+R$ 87 million): (i) expenses incurred (appropriated and allocated) in transmission investment events in progress. In addition, the company obtained a negative construction margin (when compared to revenue from transmission construction), due to reestimations of the progress in the execution of transmission projects in progress (including due to delays in works) and the identification of investments made still without authorized RAPs, mainly related to contract 061/2001.

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

13 

MARKETLETTER 1Q22

 
·At CGT Eletrosul (+R$10 million): (i) Increase in the volume of transmission projects being built by the company between the periods, from R$22.2 million in 1Q21 to R$27.5 million in 1Q22. These investments are linked to Aneel's authorizing resolutions and improvements to the existing system. (ii) R$ 5.2 million in 1Q22 referring to SPE TSLE.

Partially offset by:

·In Furnas (-R$20 million): (i) changes in investments in generation and transmission contracts in the period. Construction expenses in Generation in 1Q21 totaled R$ -8.79 million and in 1Q22 the amount was R$ -3.42 million. As for the transmission, the amount referring to contract 062/01 in 2021 was R$ -30.13 million and in 2022 it was R$ -14.86 million. In the other contracts, the values for 2021 and 2022 totaled -524 thousand and -717 thousand, respectively.

 

Table 08: PERSONNEL, MATERIAL, SERVICES AND OTHER
Personnel, Material, Services and Others 1Q22 1Q21 %
Personnel -1,183 -1,247 -5%
Material -56 -60 -6%
Services -423 -379 12%
Others -302 -349 -13%
PMSO total -1,965 -2,034 -3,4%
Non-Recurring Items      
Incentive Plans (PAE, PDC) -2 -2 87%
Eletronorte Dismissal 0 64 0%
Indemnity Allowance Health Plan 15 0 0%
Reversal contributions to foundations - CVM 600 adjustment -7 -8 94%
CGT Eletrosul Retroactive Tx of ADM ELOSAUDE 0 2 0%
Furnas labor claims 17 0 0%
Generator set rental (emergency assistance to Amapá) 0 28 0%
Recovery of expenses (Commissions Debentures transferred to Liabilities) 0 -8 0%
AmazGT gain from alienation 0 -3 0%
Legal costs (except labor) 20 0 0%
Asset Write-off (Energisa Acre) 6 0 0%
PMSO Recorrente -1,916 -1,933 -1%
         

 

Análise da variação 1Q21X1Q22

personnel

·readjustment of 6.76% referring to the Collective Bargaining Agreement ACT 2021-2022, applied from November 2021 (date of the agreement), but retroactive to May 2021 (base date of the ACT), with repercussions on wages, benefits , 13th salary, among others.
·Payment of a non-recurring indemnity allowance of approximately R$ 15 million related to the change in the conditions of the health plan and an increase in the co-participation of employees of the companies, with the exception of Chesf (paid in April) and Eletronuclear (change not yet effected). These expenses represented R$10.2 million at Eletronorte, R$ 2.2 million at Holding, R$ 4.1 million at CGT and a reversal in Furnas of R$1.7 million, as Furnas had already posted this expense in December of 2021 in the amount of BRL 15.7 million.

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

14 

MARKETLETTER 1Q22

 

compensated by:

·reduction of expenses between 1Q22 and 1Q21 as a result of the change in the conditions of the Health plan mentioned above, with an increase in the co-payment of monthly fees by employees and adjustments resulting from this process, reducing the expenses of the Eletrobras companies;
·At Eletronorte (-R$69 million): (i) Reduction of R$87.6 million in expenses with: (a) FGTS, of R$52.5 million and Prior Notice, of R$13.7 million, both due to the dismissals that took place in 2021; (c) reduction of vacations, of R$ 10.5 million, due to the fact that, in 2021, it was higher due to dismissals (R$ 64 million in 1Q21 and R$ 270 thousand in 1Q22), in addition to the impact arising from of the normalization of vacation pay, which had been reduced in 2020 due to initiatives arising from the pandemic.
·Furnas (-R$57 million): (i) reversal of part of the unpaid PLR/2020 provisioned balance (R$56.9 million); (ii) decrease of R$ 1.9 million in Labor Claims, partially offset by (iii) increase in the Additional items for length of service (R$ 4.1 million) influenced by the last salary adjustment (ACT21 - IPCA 6.7%), and Dangerous work (R$ 3.8 million) due to the return to face-to-face activities; and (iv) Reduction of R$ -7.9 million in the item Consumption of activities, causing an increase in Personnel, since less expenses were directed to investment.

Partially offset by:

·Chesf (+R$35 million): (i) increase in the cost of interest due to the actuarial liability of the CD and BD benefit plans +R$36.8 million, partially offset by (ii) the reduction in expenses with medical/hospital expenses (co-payment) -R$ 1.4 million (iii) reduction in expenses with food/education/transport assistance - R$ 1.2 million; (iv) greater allocation of expenses in investment activity -R$ 15.7 million in the period.
·At CGT Eletrosul (+R$8 million): (i) reduction in the allocation of personnel in investment in 1Q22 by R$ 4.4 million compared to 1Q21, which increases personnel expenses (ii) increase in the INSS ceiling by 10.1%, as of Jan/22, whose impact was R$1.7 million in 1Q22; (iii) an increase of R$ 1.8 million in hazardous work, overtime and on-call, due to scheduled maintenance carried out in 1Q22, mainly related to the scheduled stoppage of the Candiota III plant.

 

Material

·At CGT Eletrosul (-R$11 million): (i) reduction in consumption of inputs by UTE Candiota III given the annual scheduled stoppage that took place from 01/04/22 to 02/16/22, especially at Virgin Cal, which had a 54% reduction in consumption in tons or R$9.1 million, partially offset by (ii) a 22% increase in consumption of other materials, especially parts and equipment used in the maintenance of the same plant; (iii) Reconciliation between PIS/Cofins credit accounts in 1Q21, which reduced the recorded amount of the credit, in 1Q21, by R$0.1 million, against R$4.7 million in 1Q22.

 

 

 

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

15 

MARKETLETTER 1Q22

 

Partially offset by:

·At Eletronuclear (+R$7 million): (i) the usual consumption of materials outside the shutdown period may vary according to the type of material consumed in the maintenance of the plants, without relevant facts.

ServiCES

·At CGT Eletrosul (+R$26 million): (i) Operational maintenance services were R$29.0 million higher in 1Q22 when compared to 1Q21, especially due to the annual maintenance of UTE Candiota III, carried out in 1Q22, which represents about 85% of this increase. The remainder is related to maintenance at HPP São Domingos, Aerogenerators and Substation Equipment. This increase was offset by: (ii) a R$3.2 million reduction in legal consulting services.
·In Furnas (+R$19 million): (i) R$19.14 million increase in Medical, Hospital and Dental Care, due to the damming of expenses related to the use of the health plan due to the pandemic, where the elective surgeries were not being authorized and use of the plan dropped during the critical period of the pandemic, nor were occupational exams being performed.
·At Chesf (+R$7 million): (i) increase in maintenance services for operating assets [+R$2.2 million]; (ii) increase in cleaning and maintenance services for properties and facilities [+R$ 3.9 million]; (iii) increase in cargo transportation [+R$ 1.6 million]; (iv) increase in surveillance services [+R$1.9 million]; on the other hand, we had: (v) reduction in expenses with hired labor [-R$ 2.3 million] due to the improvement in processes.

Partially offset by:

·At Eletronorte (-R$11 million): (i) reduction of R$25.4 million in expenses with: (a) PASEP/CONFINS credits (reducing accounts), of R$19 million, since in 2021 there were reversal, no counterpart in 2022; (b) medical, hospital and dental care, of R$4.5 million, as the amounts are being recorded in the Personnel group; (c) maintenance of right-of-way and access roads, in the amount of R$1.9 million. On the other hand, there was: (ii) an increase of R$14.1 million in: (a) maintenance of operating assets, of R$6.1 million; (b) maintenance of office equipment, of R$4.3 million; (c) driver service, of R$3.7 million, due to the gradual resumption of contracts due to the return of on-site activities.

OTHERS

·In the Holding (-R$38 million): (i) lower tax expense, as IR was paid in 1Q21 resulting from the 2015 IR sentence of R$42 million, which did not occur in 1Q22; (ii) an increase of R$ 11 million related to the contribution to Cepel.
·At Eletronorte (-R$46 million): (i) reduction of (a) Rent of Generator Sets: R$ 29 million (Emergency assistance to the state of Amapá); and (b) Write-off of assets: R$ 28.3 million (Energisa Acre), both occurred in 2021 with no counterpart in 2022, partially offset by (ii) an increase of R$ 11 million in: (a) Recovery of expenses ( reducing account): R$ 3.7 million; (b) Procedural/administrative fine of R$3.3 million referring to an administrative proceeding with the CCEE; (c) Rental of real estate for commercial purposes, in the amount of R$2.4 million; and (d) Insurance - facilities, equipment and inventories: R$1.7 million.
·At Chesf (+R$7 million): (i) reduction in expenses with indemnities, losses and damages by (-R$39.5 million); partially offset by (ii) increase in taxes (mainly IPTU) (+R$ 6.4 million); (v) increase in outpatient and occupational health expenses (+R$ 4.1 million); (vi) recording of write-offs for conversion to payments in guarantees (+R$9.2 million), with no counterpart in 2021.

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

16 

MARKETLETTER 1Q22

 

Partially offset by:

·In Furnas (+R$22 million): (i) impact in 1Q22 in the Indemnity, losses and damages item in the amount of R$19.6 million due to the lawsuit filed by CAEFE, referring to the collection of administrative expenses related to an agreement signed between the parties, including attorneys' fees and interest/currency adjustment; (ii) increase in the item Taxes and Fees - IPTU in the amount of R$ 1.42 million; partially offset by (iv) reduction in amounts paid as "Contribution to CEPEL" in 1Q22, compared to 1Q21 (approximately R$ 2 million); (ii) Donation to schools and road maintenance, with a reduction of R$ 1.4 million.
·At CGT Eletrosul (+R$13 million): (i) recovery of expenses in 1Q22 were R$ 4.6 million lower than in 1Q21, especially due to the recovery of R$ 8.1 million referring to debenture commissions to be amortized that occurred in 1Q21; (ii) In 1Q22, there were expenses of R$ 5.4 million, referring to the emergency that occurred in the assets of the SPE TSLE and which did not occur in 1Q21; (iii) indemnity for damages and legal costs were R$0.9 million higher in 1Q22 (iv) Insurance expenses were R$1.6 million higher in 1Q22 when compared to 1Q21.

DEPRECIATION AND AMORTIZATION

Table 09: Depreciation and amortization
Depreciation and amortization 1Q22 1Q21 %
Depreciation and amortization -645 -458 40.8%
       
Non-Recurring Events      
       
Recurring Depreciation and Amortization -645 -458 40.8%

OPERATING PROVISIONS

Table 10: Operating Provisions

Operating Provisions 1Q22 1Q21 %
Operating Provisions/Reversals -2,070 -1,105 87%
       
Non-recurring provisions/reversals      
Provision for Disputes -372 -497 -25%
Compulsory Loan -300 -435 -31%
Allowance for PCLD Prospective credit loss estimate (CPC 48) -1,057 0 -
Provision for actuarial liabilities -27 -14 97%
Provision for investment losses -16 -15 6%
RAP adjustment portion (g) 0 0 -
Long-term asset impairment 0 0 -
Provision/(Reversal) for Implementation of Shares - Compulsory Loan -11 7 -265%
Provision for judicial deposits 0 0 -
Provision for the reduction of Fuel inventories 0 0 -
ANEEL Provision - CCC 0 -31 -100%
Provision for unsecured liabilities -23 0 -
Candiota III Plant - Inflexibility 0 0 -
Candiota III Plant - Coal 0 -6 -100%
Non-recurring provisions/reversals -1,805 -991 82%
       
Recurring Provisions/Reversals      
Warranties 3 18 -83%
PCLD (excluding PCLD Prospective Estimate of Prospective Credit Loss (CPC 48)) -191 -99 92%
GAG improvement -75 -51 47%
Others -2 19 -111%
Recurring provisions/reversals -265 -114 133%

The positive values in the table above mean reversal of provision.

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

17 

MARKETLETTER 1Q22

 

VARIATION ANALYSIS 1Q21X1Q22

The variation is mainly explained by:

·Provision for Litigation of R$607 million in 1Q22: (a) In the Holding, provision for litigation of R$286 million, highlighting the R$300 million provision for compulsory loan lawsuits; and (b) in Furnas, R$176 million, with emphasis on Environmental Contingency, with the change in the risk classification to "probable" of a lawsuit, in the amount of R$64 million, referring to the Municipality of Capitólio, Regulatory Contingency, related to ANEEL's tax assessment notice (R$ +27 million); and Civil Contingency, in the process of Acciona Concessões Rodovia do Aço S.A., for indemnity for material damages (R$ +22.9 million);
·Provision for Allowance for Consumers and Resellers, in the amount of R$896 million, with emphasis on the increase in the provision of R$867 million at Eletronorte, referring to the delinquency of Amazonas Energia with electric energy debts from independent energy producers (PIE). The total amount receivable from the customer Amazonas Energia until 03/31/2022 with Eletronorte is R$ 2.6 billion, of which R$ 547 million is overdue and unpaid debt. Of the total accounts receivable, the amount of R$1.9 billion is provisioned on 03/31/2022.
·Provision for Allowance for Financing and Loans, in the amount of R$351 million, with emphasis on the provision of R$359 million, referring to the delinquency of Amazonas Energia with financial debts, of which R$169 million of Overdue Debts and R$190 million of Estimate (Prospective CPC 48). The total amount provisioned until 03/31/2022 of Amazonas Energia's financial debt with the holding company is R$ 1.6 billion, with the total balance of the financial debt until 3/31/22 of R$ 4.6 billion.
·Gag Melhoria: highlight for Chesf of R$51 million, referring to investments in renovated plants and Furnas, with R$24 million.

SHAREHOLDINGS

Table 12: Shareholdings

 

   
Shareholdings 1Q22 1Q21 %
Shareholdings 552 430 28%
Non-recurring adjustments      
       
       
Recurring shareholdings 552 430 28%

 

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

18 

MARKETLETTER 1Q22

 

 

 

VARIATION ANALYSIS 1Q21X1Q22

 

SHAREHOLDINGS

·The main highlights were: (i) Madeira Energia S.A.: negative variation of R$220 million in 1Q21 against a reduction to zero considering that the negative effects due to the arbitration were already addressed by Eletrobras in 4Q21; Partially offset by: (ii) worsening results in affiliates, highlighting: (a) CEEE (-R$28 million), with a record of R$39 million at CEEE-GT in 1Q21 against a record of R$11 million at CEEE-G in 1Q22; and (b) Cemar (-R$22 million). (iii) in SPE Norte Energia (-R$19 million), mainly as a result of the impact of the increase in interest rates.

FINANCIAL RESULT

Table 12: financial income and expenses

Financial Result 1Q22 1Q21 %
Financial income      
Interest income, commissions and fees 199 139 44%
Revenue from financial investments 342 91 276%
Moratorium addition on electricity 113 128 -12%
Net currency updates -223 326 -168%
Net exchange rate variations 1,130 -601 -288%
Net derivative gains and losses -79 285 -128%
Financial Expenses      
Debt Charges -821 -493 67%
Lease Charges -141 -114 23%
Charges on shareholder resources -2 -143 -98%
Other net financial income and expenses -39 -201 -80%
Financial Result 478 -584 -182%
Non-recurring adjustments      
(-) Company Revenue distributors -163 -81 101%
(-) Regularization of tax credits/Fine and Infraction Notices 0 63 -100%
(-) Monetary update. company compulsory 362 56 543%
Financial expense related to the write-off of the customer to adjust the customer's balance related to the renegotiation of the CEA. -34 0 -
Financial Charges 0 6 -100%
Recurring Financial Result 643 -540 -219%

FINANCIAL RESULT:

VARIATION ANALYSIS 1Q21X1Q22

 

In 1Q22, the financial result showed a positive variation, with a negative result of R$ 584 million in 1Q21 and a positive result of R$ 429 million in 1Q22. The main variations were:

·The net exchange variation, which went from a negative net variation of R$601 million in 1Q21 to a positive net exchange variation of R$1,130 million in 1Q22, mainly due to the variation in the debt balance in dollars and the variation in the dollar in the respective periods . In 1Q21, there was a devaluation of the real against the dollar when compared to the immediately previous quarter (4Q20), from R$5.20 to R$5.70 and, against the Euro, from R$6.38 to R$ 6.69, while in 1Q22 the opposite occurred, where the appreciation of the real was observed, with the quotation against the dollar, changing from R$ 5.58 to R$ 4.74 and against the Euro of R$ 6.32 to BRL 5.26.

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

19 

MARKETLETTER 1Q22

 

·Income from financial investments, which increased from R$91 million in 1Q21 to R$342 million in 1Q22, due to the increase in the average volume of the cash balance in the period, together with a higher profitability of the portfolio's investments, mainly as a result of the increase in of interest rates.

Partially offset by:

·Net monetary restatements, which went from a positive net variation of R$326 million in 1Q21 to a negative net variation of R$228 million in 1Q22. In the Holding, the result of net monetary restatements was impacted by the increase in passive monetary restatements related to the compulsory loan, which went from R$56 million in 1Q21 to R$362 million in 1Q22, mainly due to the Selic variation and the increase in the stock of accrued provision, mainly due to the change in the parameters of the provisioning criteria as of 3Q21. At Chesf, with the recognition of losses from customers Ligas do Brasil, Rio Doce Manganês, Energisa Sergipe and Equatorial Alagoas in 2021, the company stopped recording the active update of the balance of overdue invoices, which totaled R$19.7 million in transactions in 1Q21 . There was also the record of lower updating of judicial deposits (-R$ 18.0 million) between the base dates.
·At Eletronorte: (i) net gain of R$ 285 million, in 1Q21, against a net expense of R$ 79 million in 1Q22, representing a reduction of R$ 364 million, with derivatives, due to the variation of the LME - London Metal Exchange in the period. The contract with Albras provides for an energy sale price plus the payment of a premium, which varies according to the aluminum price on the LME, quoted in US dollars. In 2022, the LME reached the maximum price stipulated in the contract and, due to the negative variation of the dollar, losses with derivatives were recorded.

INCOME TAX

Income tax and social contribution 1Q22 1Q21 %
    Current income tax and social contribution -789 -972 -19%
    Deferred income tax and social contribution -80 -235 -66%
 Total income tax and social contribution -869 -1,207 -28%
Non-Recurring Events      
(-) Non-recurring Eletrosul adjustment 26 9 189%
Recurring income tax and social contribution -843 -1,198 -30%

 

 

 

 

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

20 

MARKETLETTER 1Q22

 

1.2 EBITDA Consolidated

Table 13: EBITDA Detail

EBITDA 2022 2021 %
Result of the Exercise 2,716 1,609 69%
+ Provision for Income Tax and Social Contribution 869 1,207 -28%
+ Financial Result -478 584 -182%
+ Amortization and Depreciation 645 458 41%
 = EBITDA 3,752 3,858 -3%
ADJUSTMENTS NON-RECURRING EVENTS      
Other Income and Expenses -121 0 -
Reversal of Revenue energy interconnection between Brazil and Uruguay 0 8 -100%
Reversão de Penalidades por indisponibildiade - CCEAR - CGT Eletrosul -65 0 -
Variation corresponding to the increase in Eletrosul's retroactive Supply revenue 8 0 -
Inflexibility Reimbursement 2020 Candiota III (revenue deductions) 0 -7 100%
Incentive Plans (PAE, PDC) -2 -2 -13%
Eletronorte resignation 0 64 -100%
Indemnity Allowance Health Plan 15 0 -
Foundations contributions reversal - CVM 600 adjustment -7 -8 -6%
CGT Eletrosul Retroativo Tx by ADM ELOSAUDE 0 2 -100%
Furnas labor claims 17 0 -
Generator set rental (emergency assistance to Amapá) 0 28 -100%
Recovery of expenses (Commissions Debentures transferred to Liabilities) 0 -8 -100%
Amazonas GT gain from alienation 0 -3 -100%
Indemnities, losses and damages: CAEFE (2022) Furnas 20 0 -
Legal costs (except labor) 6 0 -
Asset Write-off (Energisa Acre) 0 29 -100%
Provision for Disputes 372 497 -25%
Compulsory Loan 300 435 -31%
Allowance for Credit Loss Estimate (CPC 48) 1,057 0 -
Provision for actuarial liabilities 27 14 97%
Provision for investment losses 16 15 6%
Provision/(Reversal) for Implementation of Shares - Compulsory Loan 11 -7 -265%
Provision for unsecured liabilities 23 0 -
ANEEL Provision - CCC 0 31 -100%
Candiota III Plant - Coal 0 6 -100%
 = EBITDA RECURRING 5,428 4,952 9.6%

Note: As of 2019, the Company started to consider, in its recurring EBITDA, the RBSE revenue from the extended concessions in light of Law 12,783/2013, in order to maintain a protocol similar to the debenture covenants issued in 2019. In addition, considering the privatization of the distributors concluded in April 2019, and these operations are no longer part of its core business, the company treated as non-recurring the material effects of financial income, expenses, PL reversals and allowance for loan losses. (CPC 48) of loans contracted with them before or as a result of the privatization process, although revenues and eventual provisions arising from contracted loans may continue to affect the company's accounting results until their complete depletion. However, they were treated as recurring allowances for outstanding outstanding debt of distributors, as well as debts related to energy supply, with the exception, therefore, of provisions for prospective allowances (CPC 48) for energy supply.

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

21 

MARKETLETTER 1Q22

 

 

Recurring Cash Generation with Adjustment of the Transmission Regulatory RAP

  1Q22 1Q21
1. EBITDA Recurrent 5,428 4,952
     
2. (-) Total Corporate Revenue from Transmission 4,235 3,801
O&M Revenue 1,215 1,038
Construction Revenue 302 304
Finance - Return on Investment - RBSE 147 120
Contractual Revenue Transmission 2,571 2,340
     
     
3. (+) Total Payment of Allowed Annual Revenue 3,708 2,895
Revenue of RAP and indemnities 2,494 1,857
O & M Revenue 1,215 1,038
     
4 = 1 - 2 + 3 : Approximate Cash Generation 4,901 4,046

 

 

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

22 

MARKETLETTER 1Q22

 

1.3       Consolidated Results by Continued Operations segment:

Table 14: FINANCIAL STATEMENT BY SEGMENT – R$ THOUSAND   
2022

Finacial Statement

by Segment

Administration Generation Transmission Eliminations Total
Net Operating Revenue             43,612        5,441,185      3,824,629      (128,108)        9,181,318
Operating Costs           (31,824)      (3,104,043)        (684,043)        125,033       (3,694,877)
Operating Expenses      (2,683,891)         (200,179)        (171,868)           3,075       (3,052,863)
Operating Income Before Financial Result      (2,672,103)        2,136,963      2,968,718                   -        2,433,578
Financial Result                   478,188
Result of Equity Interests                   552,441
Other income and expenses                   121,033
Income tax and social contribution                 (868,866)
Net income                2,716,374

 

2021

Finacia Statement

by Segment

Administration Generation Transmission Eliminations Total
Net Operating Revenue 66,753 4,921,246 3,465,642 (245,215) 8,208,426
Operating Costs (119,357) (2,486,582) (574,619) 241,951 (2,938,607)
Operating Expenses (1,960,292) (179,085) (163,505) 3,264 (2,299,618)
Operating Income Before Financial Result (2,012,896) 2,255,579 2,727,518   2,970,201
Financial Result         (583,771)
Result of Equity Interests         430,075
Income tax and social contribution         (1,207,366)
Net income (loss) for the period         1,609,139

 

 

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

23 

MARKETLETTER 1Q22

 

 

 

1.3.1. INDEBTEDNESS AND RECEIVABLES

Table 15: GROSS DEBT AND NET DEBT
  03/31/2021
Gross Debt - R$ million 41,639
(-) (Cash and cash equivalents + marketable securities) 15,454
(-) Financing Receivable 5,195
(-) Net balance of Itaipu Financial Assets1 435
Net debt 20,554

1Explanatory Note 18b to the Financial Statements.

 

Total Consolidated Gross Debt without RGR with Debentures – R$ billion

 

Gross Parent Debt without RGR – R$ billion
  2022 2023 2024 2025 2026 2027 After 2027 Total (R$ million)
Amortization with RGR and Debentures 7.0 4.8 6.6 4.3 4.2 1.7 13.0 41.6

 


Table 17: Foreign Exchange Exposure
       
Asset US$ million %
Itaipu Loans Receivables 99,081 52%
Itaipu Financial Asset 91,816 48%
TOTAL 190,897 100%

 

Passivo* US$ thousand %
Bônus 2025 - Eletrobras 499,179 34%
Bônus 2030 - Eletrobras 741,305 51%
Others 224,698 15%
TOTAL 1,465,182 100%

 

  2022 2023 2024 2025 2026 2027 After 2027 TOTAL
Asset (US$ million) 145.76 43.64 1.49 0.00 0.00 0.00 0.00 190.90
Liabilities (US$ million) 33.56 46.07 19.51 518.69 19.51 19.51 808.32 1,465.18
Foreign Exchange Exposure 112.20 -2.43 -18.02 -518.69 -19.51 -19.51 -808.32 -1,274.28

Due to the atypical scenario and potentially unpredictable characteristics, it is not possible to accurately predict the scenarios that could materialize in the coming months in the company's operations.

* In the balance of Bonuses 2030 and 2025, there is an accounting effect on the deferral of expenses with repurchase of the 2021 bonus due to the operation carried out in February. 

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

24 

MARKETLETTER 1Q22

 

Ratings

Table 18: Ratings
Agency National Classification / Perspective Last Report
Moody’s Escala Global “Ba2”: / Estable 04/26/2022
Moody’s SACP “Ba2”: / Estable 04/26/2022
Fitch - Issuer Default Ratings (Foreign Currency) “BB-”: / Negativa 06/02/2021
Fitch - Issuer Default Ratings (Local Currency) “BB-”: / Negativa 06/02/2021
S&P LT Local Currency – Local Currency brAAA/ Estable 04/13/2022
S&P Issuer Credit Rating – Foreign Currency BB-/ Estable l 04/13/2022

*CreditWatch

 

FINANCING AND LOANS GRANTED (RECEIVABLES)

 

Total Consolidated Loans and Financing Receivables – R$ billion

 

Does not include: receivable from Itaipu's financial assets of R$435 million and allowance for loan losses of R$1,501 million and current charges.

Company and Financing receivable Parent company - R$ billion  
Receivables Projection 2022 2023 2024 2025 2026 2027 after 2027 TOTAL
Parent Company 1.5 1.4 1.1 0.4 0.4 0.3 2.2 7.3

Does not include charges and PCLD.

In the process of privatization of distributors, CCC credits were assigned, which depended on Aneel's analysis and inspection. These credits are activated in the Company's Financial Statements, as of 12/31/2021, in two accounts, namely Right of Reimbursement and Financing receivable, according to Explanatory Notes 13 and 9 of 1Q22, and detailed below:

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

25 

MARKETLETTER 1Q22

 

REFUND RIGHT

 

At a meeting held on September 28, 2021, the board of Aneel deliberated on the CCC inspection processes, still pending analysis, according to the inspection period of Ceron, Eletroacre and Boa Vista.

Thus, all eight inspection processes (first and second periods of the privatized distributors that were called Amazonas D, Eletroacre, Ceron and Boa Vista) were closed and the payment conditions were defined in the amount of R$ 2,670.5 million, updated by the IPCA of Aug/2021, which must be reimbursed by CCC to Eletrobras, as holder of the assumed credits of these distributors. This amount will be received in 60 months, in equal installments updated by the IPCA, with the first payment to be made in January 2022.

As for "inefficiency" credits, Law No. 14,182/2021 increased the scope of "inefficiency" by 14 months, from Jul/09 - Apr/16 (Law 13,299/2016) to Jul/09 - Jun/17, whose positive effect has already been reflected in the 3rd ITR of 2021. Additionally, CNPE Resolution No. 15/2021, later amended by CNPE Resolution No. 30/2021, issued on December 21, 2021, which defined the grant amount to be paid by Eletrobras for the new generation concessions in the company's capitalization process, informed the value of R$ 2,906,498,547.37 of "inefficiency" credits from Amazonas and Boa Vista, updated by the IPCA expectation until Dec/21, which will reduce the amount of grant to be paid by Eletrobras. As the CNPE updated the “inefficiency” credits by IPCA, Eletrobras has already made the adjustment in the 3rd ITR, changing the update of the “inefficiency” credits from Selic to IPCA. Thus, the positive impact of the 14-month increase in the coverage of “inefficiency” credits was partially neutralized by the negative impact of the exchange of the adjustment of these credits from Selic to IPCA, leaving a positive net value of R$ 341.5 million (position Sep/21), already recorded in 3Q21.

However, as can be seen in the two CNPE Resolutions, the amount of the “inefficiency” credit, which will deduct the grant amount to be paid by Eletrobras for the new generation concessions, has already been defined providing for inflation until December 31, 2019. 2021, with no possibility to change the defined value, with the inclusion of the real inflation for the period.

In 1Q22, Eletrobras has recorded the total amount of R$ 6,032.3 million in credits assumed by the distributors in their privatization processes. The amount of R$ 2,683.3 million will be paid by the CCC Fund to Eletrobras. The amount of R$ 2,906.5 million in “inefficiency” credits will be used for Eletrobras to deduct the grant amount to be paid for the new generation concessions in the company's capitalization process. The amount of R$ 442.4 million recorded in the loans and financing account referring to the current credit return agreement signed with Amazonas Energia, which is still in the grace period for payment of the principal, must be paid by Amazonas Energia. It is important to highlight that in 3Q21 Eletrobras made a provision in the amount of R$ 340.1 million referring to current credits owed by Ceron, Eletroacre and Boa Vista Energia (credits made before the transfer of the right to Eletrobras, and, therefore, need to be returned to the Eletrobras) as contracts have not yet been signed with these three distributors for the return of the amount. Currently, Eletrobras has been discussing with the three companies the amount to be paid to Eletrobras. After defining the amounts and payment terms, the contracts will be signed and Eletrobras will be able to reverse part or all of this provision of R$ 340.1 million. The total amount received from CCC credits in 1Q22 was R$140 million, of which R$6.5 million refers to monetary restatement.

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

26 

MARKETLETTER 1Q22

 

RBSE REPROFILING

 

In September 2021, the reprofiling of the financial component of the RBSE was recorded. ANEEL's decision caused a reduction in the payment curve of the amounts related to the periodic review of the Permitted Annual Revenues - RAP associated with transmission facilities for the 2021/2022 and 2022/2023 cycles and an increase in the flow of payments in the cycles after 2023, extending such installments until the 2027/2028 cycle, preserving, however, the remuneration for the cost of equity – Ke.

 

Table 21: RBSE reprofiling R$ million:  

 

REPROFILED Financial Component Period 2021-2022 2022-2023 2023-2024 2024-2025 2025-2026 2026-2027 2027-2028
CHESF 639 886 1.648 1.648 1.648 1.648 1.648
ELETRONORTE 278 393 769 769 769 769 769
ELETROSUL 161 215 360 360 360 360 360
FURNAS 806 1.199 2.635 2.635 2.635 2.635 2.635
Total 1,884 2,693 5,411 5,411 5,411 5,411 5,411
Economic Component Period 2021-2022 2022-2023 2023-2024 2024-2025 2025-2026 2026-2027 2027-2028
CHESF 1.091 1.091 654 654 654 654 654
ELETRONORTE 562 562 242 242 242 242 242
ELETROSUL 187 187 69 69 69 69 69
FURNAS 1.785 1.785 1.136 1.136 1.136 1.136 1.136
Total 3,625 3,625 2,102 2,102 2,102 2,102 2,102
Total RBSE after REPROFILING Period 2021-2022 2022-2023 2023-2024 2024-2025 2025-2026 2026-2027 2027-2028
CHESF 1.730 1.976 2.302 2.302 2.302 2.302 2.302
ELETRONORTE 841 955 1.011 1.011 1.011 1.011 1.011
ELETROSUL 348 402 430 430 430 430 430
FURNAS 2.590 2.984 3.771 3.771 3.771 3.771 3.771
Total 5,509 6,318 7,513 7,513 7,513 7,513 7,513

 

The above amounts include TFSEE (Electric Energy Services Inspection Fee) charges and resources for R&D and Energy Efficiency, and do not include PIS and Cofins. In addition, the data refer to the tariff cycle and not to the calendar year.

The values approved in the reprofiling were updated by the IPCA.Amortizações RBSE 2022- R$ mil

  Chesf CGT Eletrosul Eletronorte Furnas Total
2022 432,510 87,120 210,138 647,571 1,377,339

Note: TFSEE and R&D values are included. PIS and COFINS are not included.

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

27 

MARKETLETTER 1Q22

 

1.4. Investment

Table 22: INVESTMENTS BY SEGMENT - R$ million

 

Investiment  (Corporate + Partnerships) Realized 1Q22 Budgeted PDNG 1Q22 % Budgeted 1Q22
       
Generation Corporate 98 301 33%
Implantation /Ampliation 37 178 21%
Maintenance 62 123 50%
Transmission 240 259 93%
Reinforcements and improvements               69                97 70%
Maintenance             152             126 121%
Ampliation               19                36 53%
SPES - 193 -
Others* 43 64 66%
Total without Eletronuclear 381 817 47%
Eletronuclear 142 243 59%
Total 523 1,060 49%
 

 

Others: Research, Infrastructure, Environmental Quality

* For further details on investments, by subsidiary or by project, see attachment 3 to this Investor Notice, to be released shortly.

 

IN 2022, R$523 MILLION OF THE R$1,060 MILLION BUDGETED FOR THE QUARTER WAS INVESTED.

 

In Generation, investment totaled BRL 239 million, considering the investment in Eletronuclear's Angra-3 Nuclear Power Plant: BRL 106 million carried out, referring to the resumption of works after bidding in 2021. of R$ R$ 35 million referring to maintenance. It is noteworthy that in the consolidated PDNG of Eletrobras, there was an investment forecast for Eletronuclear only for the month of Jan/22, given the previous perspective of privatization occurring within this period, which is why it is presented separately in the table above. At the Santa Cruz Thermoelectric Power Plant, in Furnas, R$ 24 million was invested in the implementation of the combined cycle. In maintenance, there was an investment of R$47 million at Chesf at the Sobradinho plant and others, R$11 million at Furnas and R$3 million at Eletronorte.

There were no investments in generation SPES.

In Transmission, investment totaled R$ 240 million, of which R$ 69 million in reinforcements and improvements, with emphasis on R$ 34 million at Chesf related to video monitoring and tele-assistance projects in several substations, among others, R$ 15 million at CGT Eletrosul and BRL 16 million at Eletronorte, with BRL 12 million more than expected for energization at the end of 2021, whose payments were made in 2022. In maintenance, there was a total realization of BRL 152 million, which was 21% higher of the R$ 126 million budgeted, with emphasis on R$ 132 million at Chesf referring to equipment, revitalization of transmission lines, among other small-scale reinforcement and improvement projects, with associated revenue and R$ 13 million at Eletronorte. Chesf, Eletronorte and CGT Eletrosul performed above the budget for the period by R$ 44 million. In expansion, BRL 19 million was realized, of which BRL 12 million at CGT Eletrosul and BRL 3 million more than planned at Chesf due to achievements at LT São Luiz II and São Luiz III and LT Paraiso-Açu C3.

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

28 

MARKETLETTER 1Q22

 

There were no investments in transmission SPES.

INVESTMENT FRUSTRATIONS

 

In generation, there was a total frustration of R$304 million, in 2022, with emphasis on the Santa Cruz plant, with a total of R$107 million, due to adjustments made to the physical and financial schedule of the project. In Maintenance at the Angra I and II plants, there was frustration of R$ 106 million due to problems with raw materials and delays in the delivery of imported equipment; At Furnas, there was frustration of R$ 42 million due to delays in bidding processes, changes in budget guidelines, changes in project scopes.

In Transmission, there was a total frustration of only BRL 19 million in 2022, having achieved 93% of the budget for the period. In reinforcements and improvements, there was frustration of R$ 29 million, of which R$ 28 million in Furnas due to delays in internal processes, failed bids and synergy with other projects; R$ 9 million at CGT Eletrosul also for delays in bids. In terms of maintenance, although the overall consolidated performance was higher than planned, there was frustration of R$18 million in Furnas due to delays in internal processes and changes in budget guidelines. In expansion, there was frustration of R$ 17 million, of which R$ 20 million at CGT Eletrosul due to delays in executive projects, mobilization of works to supply transformers to SE Blumenau and Siderópolis.

1.5. COMMERCIALIZATION

1.5.1. ENERGY SOLD IN 1Q22 – GENERATORS - TWH

In terms of energy market evolution, the Eletrobras Companies, in 1Q22, sold 42.7 TWh of energy, against 49.2 TWh traded in the same period of the previous year, which represents a decrease of 13%. These volumes include the energy sold from the plants under the quota regime, renewed by Law 12,783/2013, as well as by the plants under the exploration regime (ACL and ACR).

 

 

Sales: includes developments under Law 13,182/15

Average ACR Prices in the chart do not include Itaipu and Quotas (O&M). Include Electronuclear.

 

 

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

29 

MARKETLETTER 1Q22

 

1.5.2. ENERGETIC BALANCE

Table 23: Energetic Balance
Energetic Balance (MWmed) 2022 2023 2024 2025 2026    
   
 Ballast 9.314 9.270 9.291 8.798 4.819    
  Own resources (1) 8.098 8.180 7.878 7.878 4.113    
  Energy Purchase 1.215 1.111 920 920 705    
 Sales 7.008 6.411 4.994 3.514 3.149    
  ACL - Bilateral Contracts + MCP realized 4.934 2.843 1.590 1.590 1.224    
  ACR - Except quotas 2.074 2.152 1.925 1.925 1.925    
      Average Selling Price R$/MWh 250,72 247,47 241,26 241,26 219,56    
      Average Purchase Price R$/MWh 292,76 268,94 244,36 244,36 224,81    
      Average Selling Price R$/MWh (1) 196,93 178,06 183,69 183,69 187,66    
      Average Purchase Price R$/MWh (1) 251,45 217,37 218,45 218,45 221,90    
Balance (Ballast - Sales) 2.305 2.860 4.296 5.284 1.670    
Uncontracted Energy * 25% 31% 46% 60% 35%    

* The uncontracted portion includes energy reserved for the company's hedge, strategically defined according to the GSF estimate for the period.

Contracts entered into until 03/31/2022.

The consequences of Law 14.182/2021, the process of depricing the plants under the Physical Guarantee Quotas regime and the creation of the new state-owned company are not being considered in the balance sheet.

The installments of Physical Guarantee Quotas and Nuclear Energy Quotas are not included in the balance sheet.

The Average Sales Prices do not consider projects under the Physical Guarantee Quotas and Nuclear Energy Quotas regime.

In Own Resources, for the hydroelectric projects, an estimate of GFIS2 was considered, that is, the Physical Guarantee considering the Adjustment Factors in function of the Internal Losses, Losses in the Basic Grid and Availability.

The extension of the concession period for the Mascarenhas de Moraes and Tucuruí HPPs was considered, as established in ANEEL Homologatory Resolution No. 2,932, of September 14, 2021;

Regarding the PIEs from which Amazonas GT (merged by Eletronorte) purchases energy and transfers it to the Distributor, (1) The reversion of assets to Eletronorte was considered from the date of termination of the current contracts (May/2025), and considered new sales contracts for the Distributor as of that date, according to the instructions of MP 855/2018.

(2) The prices of the contracts of Amazonas GT (merged by Eletronorte), including the contracts of PIEs, arising from the process of de-verticalization of Amazonas Distribuidora, are not considered in the purchase and sale prices, it is worth noting that, in this case, energy purchase and sale transactions do not reflect an economic impact ("pass-through").

 

Physical and Nuclear Energy Guarantee Quotas (MWmed) 2022 2023 2024 2025 2026
Physical Guarantee Quotas for Hydroelectric Power Plants (3) 7.464 7.451 7.451 7.451 7.451
  Nuclear Energy Quotas 1.573 1.573 1.573 1.573 1.573

 

(3)     Total Physical Guarantee Values of the projects. The concession under provisional administration of HPP Jaguari was considered, remaining until 2022.

It only considers the existing CCGF, unlike the publications up to 2Q21, which considered the end of the contracts for UHE Mascarenhas de Moraes, in Jan/2024, and UHE Tucuruí, in Aug/2024, and from these dates, these plants were considered in the of Physical Guarantee Quotas.

With the developments of Law 14.182/2021 and the process of deducting the plants under the Physical Guarantee Quotas regime, the following scenario is presented considering its effectiveness:

Scenario Law 14.182/2021 (MWmed) 2022 2023 2024 2025 2026
  Physical Guarantee Quotas for Hydroelectric Power Plants (3) (4) 7.464 5.961 4.470 2.980 1.490
 Discounting (5) 0 1.332 2.663 3.995 5.327
New Grants (6) 0 5.728 5.728 5.728 5.728

1) Total Physical Guarantee Values of the projects. Discounting taking place gradually over a period of 5 years from 2023.

2) Total Physical Guarantee Values of the projects. In the decoupling, the plants currently under quota regime will have a new concession under the Independent Energy Producer - PIE regime, occurring gradually over a period of 5 years from 2023. The Physical Guarantee values were defined in the Ordinance GM/MME No. 544/21.

3) Total Physical Guarantee Values of the projects. Considered new concession grants as of 2023 for the Sobradinho, Itumbiara, Tucuruí, Curuá-Una and Mascarenhas de Moraes plants, whose Physical Guarantee values were defined in Ordinance GM/MME No. 544/21. Regardless of what was observed in item (1).

 

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

30 

MARKETLETTER 1Q22

 

 

2.
Result Analysis of
Parent Company

In 1Q22, Eletrobras Holding posted net income of R$ 2,708 million, an increase of 69% compared to the net income of R$ 1,601 million in 1Q21. The 1Q22 result was decisively influenced by: (i) an improvement in the financial result of R$ 1,116 million, mainly due to the positive effect of the exchange rate variation in 1Q22; (ii) revenue of R$ 121 million related to the tariff recognition associated with Fixed Assets in Progress – AIC, which were ratified by ANEEL through the extraordinary tariff review process and reimbursed to Eletrobras by the distributor Ceron; being partially offset by: (iii) provisions of R$648 million, of which R$300 million refer to compulsory loan and R$ 351 million to allowance for loan losses, of which R$ 359 million refer to Amazonas Energia.

 

EVOLUTION OF RESULT - R$ MILLION

 

Note: The analysis of the results of each subsidiary can be found in Appendix II of the Investor Report.

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

31 

MARKETLETTER 1Q22

 

 

2.1       Shareholdings in the Parent Company

In 1Q22, the result from Equity Investments had a positive impact on the Parent Company's result by R$ 2,671 million, resulting from the Equity Income from investments in subsidiaries and affiliates, while the result in 1Q21 was R$ 2,725 million. Highlight for the improvement in the results of Chesf (+R$408 million), CGT Eletrosul (+R$203 million), Furnas (+R$172 million), Eletronuclear (+R$121 million) and partially offset by the worsening of results at Eletronorte (-R$ 900 million).

2.2       Operating Provisions of Parent Company

In 1Q22, Operating Provisions negatively impacted the Parent Company's results by R$648 million, compared to a provision of R$471 million in 1Q21. This variation is mainly explained by: (i) negative effect on provisions for Provision for Litigation, with emphasis on compulsory loan lawsuits in the amount of R$300 million, compared to a provision of R$435 million in 1Q21 ; and (ii) R$351 million in allowance for loan losses, of which R$359 million in provision for receivables against Amazonas Energia, comprising R$169.7 million in overdue debt PECLD and R$189.8 million in estimated of prospective PECLD.

Table 24: Operating Provisions (R$ million)
 Operating Provisions    
1Q22 1Q21  
Guarantees - 3 - 18  
Contingencies 286 451  
PCLD - Financing and Loans 351 11  
Investment Losses 16 15  
Provision for Implantation of Shares - Compulsory Loan 11 - 7  
ANEEL Provision - CCC -   31  
Others - 13 - 11  
TOTAL 648 471  

2.3       Parent Company Financial Result

The financial result improved by R$1,116 million, mainly due to: (i) active exchange variation, which went from R$ -446 million in 1Q21 to R$839 million in 1Q22 due to the 8.4 % in 1Q21 and -15.1% in 1Q22; partially offset by the worsening of (ii) net monetary restatement, which went from R$311 million to R$-184 million, mainly due to the monetary restatement of the compulsory loan of R$306 million.

 

 

 

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

32 

MARKETLETTER 1Q22

 

 

Table 25: Financial Result (R$ million)

FINANCIAL RESULT 1Q22 1Q21
Financial income    
    Interest, commission and fee income 321 257
    Income from financial investments 87 75
    Additional moratorium on electricity 0 0
    Interest income on dividends 171 0
    Other financial income 117 74
     
Financial expenses    
    Debt charges - 450 - 280
    Leasing charges - 1 - 1
    Remuneration for Thermonuclear Plant Decommissioning Fund - -
    Charges on shareholder resources - 2 0
    Other financial expenses  - 63 - 270
     
Financial items, net    
    Monetary Variations - 184 311
    Exchange Variations 839 - 446
Financial Result 835 - 281

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

33 

MARKETLETTER 1Q22

 

 

3.
General

 

 

 

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

34 

MARKETLETTER 1Q22

 

 

 

 

 

Table 26: CAPITAL STRUCTURE

Eletrobras’s Social Capital  
Shareholding position on 03/31/2022      
Shareholders Quantity Value (R$) % Capital Total  
 
           
Common 1,288,842,596 32,084,698,524,00 100.00% 82.15%  
Government 667,888,884 16,626,555,917,17 51.82% 42.57%  
BNDESPAR 141,757,951 3,528,950,032,66 11.00% 9.04%  
BNDES 74,545,264 1,855,744,316,08 5.78% 4.75%  
Citibank 50,595,860 1,259,543,189,92 3.93% 3.22%  
Iberclear - Latibex 344,335 8,571,942,53 0.03% 0.02%  
FIA Dinâmica e Banclass 65,536,875 1,631,487,726,37 5.08% 4.18%  
FND 45,621,589 1,135,712,719,15 3.54% 2.91%  
FGHAB 1,000,000 24,894,194,70 0.08% 0.06%  
Banco do Nordeste 1,420,900 35,372,161,25 0.11% 0.09%  
Others 240,130,938 5,977,866,324,39 18.63% 15.31%  
           
PREF. A 146,920 3,657,455,00 100.00% 0.01%  
Victor Adler 52,200 1,299,476,96 35.53% 0.00%  
Shareholders to be identified 42,451 1,056,783,46 28.89% 0.00%  
Others 52,269 1,301,194,66 35.58% 0.00%  
           
PREF. B 279,941,394 6,968,915,567,00 100.00% 17.84%  
Citibank 5,177,287 128,884,391,00 1.85% 0.33%  
Iberclear - Latibex 137,753 3,429,250,00 0.05% 0.01%  
BNDESPAR 18,691,102 465,299,932,00 6.68% 1.19%  
BNDES 18,262,671 454,634,488,00 6.52% 1.16%  
3G Radar Funds 30,852,976 768,059,992,00 11.02% 1.97%  
Shareholders to be identified 2,035,995 50,684,456,00 0.73% 0.13%  
Government 494 12,298,00 0.00% 0.00%  
Others 204,783,116 5,097,910,761,00 73.15% 13.05%  
Total 1,568,930,910 39,057,271,546,52   100,00%  

 

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

35 

MARKETLETTER 1Q22

 

 

Stock Analysis

Shares

Table 27: B3, ELET3 and ELET6
Price and Volume (R$)
ELET3
(ON Shares)
(R$)
ELET6
(PN Shares)
(pts.)
IBOV
(Índex)
(pts.)
IEE
(Índex)
Closing Price on 03/31/2022  37.28  36.08 119,999 85,040
Maximum in the quarter  37.28  36.08 120,260 85,739
Average in the quarter  33.34  32.29 111,604 77,474
Minimum in the quarter  28.94  28.32 101,006 71,566
         
Variation in 1Q22 13.7% 13.6% 14.5% 11.4%
Change in the last 12 months 13.8% 10.9% 2.9% 5.1%
Average Daily Traded Volume 1Q212 (R$ million) 154.2 74.2 - -
         
Book Value per Share (R$)  50.42  50.42    
Price / Profit (P/E) (1)  8.22  7.96    
Price / Shareholders' Equity (P/B) (2)  0.74  0.72    
(1)Closing price of preferred and common shares at the end of the period / Net income per share. For the calculation, the accumulated net profit of the last 12 months was considered;
(2)Closing price of preferred and common shares at the end of the period / Book Value per share at the end of the period.

 

Evolution of Shares Traded at B3

 

Source: AE Broadcast

Index number 03/31/2021 = 100 and ex-dividend values.

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

36 

MARKETLETTER 1Q22

 

ADR PROGRAMS

Table 28: NYSE, EBRN and EBRB
Price and Volume (US$) NYSE
EBRN
(US$) NYSE EBRB
Closing Price on 03/31/2022 7.76 7.88
Maximum in the quarter 7. 76 7.88
Average in the quarter 6.36 6.39
Minimum in the quarter 5.11 5.15
     
Variation in 1Q22 30.0% 31.3%
Change in the last 12 months 32.6% 34.0%
Average Daily Trading Volume 1Q22 (US$ million) 8,938 74

 

Evolution of Shares Traded in ADR

Source: AE Broadcast

Index number 03/31/2021 = 100 and ex-dividend values.

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

37 

MARKETLETTER 1Q22

 

 

Latibex - MADRID MARKET

Table 29: LATIBEX, XELTO and XELTB
Price and Volume (€) LATIBEX
XELTO
(€) LATIBEX XELTB
Closing Price on 03/31/2022 6.80 6.25
Maximum in the quarter 6.80 6.25
Average in the quarter 6.22 5.42
Minimum in the quarter 4.92 4.58
     
Variation in 1Q22 29.5% 25.0%
Change in the last 12 months 33.3% 25.0%
Average Daily Trading Volume 1Q22 (US$ million) 13.4 10.0

 

Evolution of Foreign Currencies

Index number 03/31/2021 = 100.

Source: Banco Central

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

38 

MARKETLETTER 1Q22

 

 

Nº of Employees

PARENT COMPANY

Table 30: EMPLOYEES FOR WORKING TIME
Working time in the company (years) 1Q22
Up until 5 23
6 to 10 31
11 to 15 390
16 to 20 148
21 to 25 18
More than  25 60
Total 670
Table 31: EMPLOYEES BY FEDERATION STATE
Federation State 1Q22
Rio de Janeiro 653
Brasília 15
São Paulo 1
Expatriate 1
Total 670

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

39 

MARKETLETTER 1Q22

 

 

Balance Sheet

(R$ thousand)
Asset Parent Company Consolidated
03.31.22 03.31.21 03.31.22 12.31.21
CURRENT        
   Cash and cash equivalents 17,983 7,384 149,244 192,659
   Restricted cash 3,262,722 2,544,594 3,262,722 2,544,594
Marketable securities 5,254,879 6,026,365 15,305,244 15,640,776
Customers 534,349 719,906 5,252,773 5,094,976
Asset contractual transmission 0 0 7,473,599 7,356,356
Loans and financing 2,236,718 2,275,301 1,423,219 1,251,766
Remuneration of equity interests 5,312,202 5,028,731 554,961 443,142
Taxes to recover 60,719 456,725 410,866 755,906
Income tax and social contribution 959,100 640,191 1,841,844 1,487,777
Reimbursement rights 776,017 741,255 804,335 768,848
Warehouse 276 293 648,727 627,573
Nuclear fuel stock 0 0 515,244 487,895
Derivative financial instruments 0 0 655,066 690,333
Hydrological risk 0 0 0 0
Others 854,337 685,320 2,073,314 2,014,705
  Asset held for sale 937,602 289,331 1,033,184 387,690
TOTAL CURRENT ASSETS 20,206,905 19,415,396 41,404,342 39,744,996
         
NON CURRENT        
LONG-TERM REALIZABLE        
   Reimbursement rights 5,476,537 5,529,316 5,568,776 5,627,386
   Loans and financing 7,018,921 8,180,605 3,772,059 4,591,761
   Customers 0 0 495,433 993,080
   Marketable Securities 402,816 398,280 1,211,376 1,093,476
    Nuclear fuel stock 0 0 1,360,494 1,490,820
    Taxes to recover 3,365 3,365 458,146 449,258
   Current Income Tax and Social Contribution 0 0 1,419,829 1,500,987
   Escrow deposits 6,729,540 6,393,647 8,838,574 8,247,485
   Transmission contractual asset 0 0 52,934,098 52,158,612
   Financial assets - Concessions and Itaipu 400,234 428,865 2,572,814 2,601,027
   Derivative financial instruments 0 0 608,923 653,022
   Advances for future capital increase 4,016,378 3,932,463 0 0
   Remuneration of equity interests 0 0 0 0
   Hydrological risk 0 0 0 0
   Decommissioning Fund 2,101,589 2,055,713 2,101,589 2,055,713
   Others 1,985,643 2,024,412 1,124,225 1,087,508
  28,135,023 28,946,666 82,466,336 82,550,135
INVESTMENT 90,481,221 88,740,622 27,180,361 27,647,781
Fixed assets net 232,633 235,453 33,199,861 33,367,981
INTANGIBLE 61,385 61,387 4,801,212 4,992,176
TOTAL NON-CURRENT ASSETS 118,910,262 117,984,128 147,647,770 148,558,073
TOTAL ASSETS 139,117,167 137,399,524 189,052,112 188,303,069

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

40 

MARKETLETTER 1Q22

 

 

 

(R$ thousand)
Liabilities and Equity Parent Company Consolidated
03.31.22 12.31.21 03.31.22 12.31.21
CURRENT        
    Loans and financing and Debentures 5,240,728 5,310,178 8,184,832 8,234,753
    Compulsory loan 1,238,366 1,216,335 1,238,366 1,216,335
    Suppliers 675,646 773,858 3,200,908 4,031,532
    Advances from customers 1,393,684 1,370,946 1,483,193 1,460,455
    Taxes payable 207,861 259,336 578,154 804,485
    Income tax and social contribution 0 0 222,753 19,624
    Onerous contracts 0 0 10,517 10,517
    Remuneration to shareholders 1,413,515 1,381,111 1,435,014 1,406,891
    Financial liabilities - Concessions and Itaipu 1,064,344 578,626 1,064,344 578,626
    Estimated liabilities 155,157 153,568 1,489,237 1,602,947
    Reimbursement Obligations 1,199,689 836,744 1,199,689 859,003
    Post-employment benefits 0 0 231,637 233,304
    Provisions for contingencies 2,225,978 2,267,649 2,225,978 2,267,649
    Regulatory charges 0 0 905,885 542,913
    Lease 7,877 7,773 208,604 209,774
    Others 65,078 64,061 317,686 236,183
  14,887,923 14,220,185 23,996,797 23,714,991
   Liabilities associated with assets held for sale 0 0 169,383 168,381
  14,887,923 14,220,185 24,166,180 23,883,372
NON-CURRENT        
    Loans and financing and Debentures 17,662,186 19,294,960 33,453,966 35,780,892
    Suppliers 0 0 16,555 16,555
    Advances from customers 0 0 165,406 186,348
    Obligation for asset retirement 0 0 3,328,015 3,268,301
    Provisões para Provisão para Litígios 23,609,396 23,666,275 31,611,131 31,142,222
    Benefício pós-emprego 867,666 885,455 5,866,687 5,851,502
    Provisions for contingencies 0 0 731,266 708,516
    Onerous contracts 0 0 428,164 428,164
    Reimbursement Obligations 38,541 40,560 648,800 693,710
    Lease 0 0 83,179 81,655
    Concessions payable - Use of public goods 79,218 77,336 17,235 77,336
    Advances for future capital increase 0 0 0 0
    Derivative financial instruments 0 0 420,285 649,341
    Sector Charges 0 0 248,236 260,612
    Taxes payable 589,572 569,816 7,183,249 7,244,737
    Income tax and social contribution 2,566,566 2,523,733 1,563,043 1,613,042
    Others 45,413,145 47,058,135 85,765,217 88,002,933
TOTAL NON-CURRENT LIABILITIES        
         
EQUITY 39,057,271 39,057,271 39,057,271 39,057,271
    Share capital 13,867,170 13,867,170 13,867,170 13,867,170
    Capital reserves 30,890,165 30,890,165 30,890,165 30,890,165
    Profit reserves 0 0 0 0
   Other comprehensive income accumulated -7,913,071 -7,693,402 -7,913,071 -7,693,402
    Non controlling shareholdins 0 0 304,616 295,560
  2,914,564 0 2,914,564 0
TOTAL SHAREHOLDERS' EQUITY 78,816,099 76,121,204 79,120,715 76,416,764
TOTAL LIABILITIES AND  SHAREHOLDERS' EQUITY 139,117,167 137,399,524 189,052,112 188,303,069

 

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

41 

MARKETLETTER 1Q22

 

Income Statement

(R$ thousand)

  Parent Company Consolidated
  03.31.22 03.31.21 03.31.22 03.31.21
NET OPERATING REVENUE 19,206 90,281 9,181,318 8,208,426
Operating costs        
    Personnel, Material and Services 0 0 -935,350 -783,534
    Energy purchased for resale -15,967 -101,222 -482,958 -499,316
    Charges upon use of electric network 0 0 -621,119 -455,668
    Fuel for electricity production 0 0 -768,250 -537,337
    Construction 0 0 -195,256 -148,568
    Depreciation 0 0 -395,327 -403,351
    Amortization 0 0 -208,227 -14,008
    Operating Provisions /Reversals net 0 0 0 -6,097
    Others Costs 0 0 -88,390 -90,728
GROSS RESULT 3,239 -10,941 5,486,441 5,269,819
Operating expenses        
     Personnel, Supllies and Services -130,324 -126,055 -726,861 -902,096
    Depreciation -2,820 -3,041 -37,619 -32,466
    Amortization -3 -3 -3,972 -8,275
    Donations and contributions -33,277 -21,589 -47,068 -38,738
    Operating Provisions /Reversals net -648,111 -471,308 -2,070,442 -1,098,912
    Others -29,509 -79,655 -166,900 -219,131
  -844,044 -701,651 -3,052,862 -2,299,618
         
OPERATING INCOME BEFORE FINANCIAL RESULT -840,805 -712,592 2,433,579 2,970,201
Financial result        
Financial income        
    Income from interest, commissions and fees 320,681 256,658 199,449 138,746
    Income from financial investments 86,862 75,029 341,607 90,845
    Moratorium on electricity 0 0 112,536 127,529
    Active monetary updates 261,111 446,326 299,068 522,951
    Exchange rate variations 1,512,496 889,544 1,614,862 881,325
    Fair value adjustment 171,223 0 61,546 0
    Regulatory asset update 0 0 0 284,796
    Gains on derivatives 117,469 74,204 210,573 127,746
   Financial expenses        
    Debt charges -450,382 -280,011 -821,076 -492,628
    Leasing charges -1,106 -1,281 -140,700 -114,352
    Charges on shareholders' funds -1,882 -360 -2,293 -143,106
    Passive monetary updates -445,127 -135,459 -521,959 -196,661
    Passive exchange variations -673,629 -1,335,607 -484,622 -1,482,257
    Losses with derivatives 0 0 -79,366 0
    Other financial expenses -62,544 -269,673 -311,437 -328,705
  835,172 -280,630 478,188 -583,771
INCOME BEFORE EQUITY -5,633 -993,222 2,911,767 2,386,430
RESULTS OF EQUITY 2,671,385 2,725,339 552,441 430,075
OUTRAS RECEITAS E DESPESAS 121,033 0 121,033 0
OTHER REVENUE AND EXPENDITURE 2,786,785 1,732,117 3,585,241 2,816,505
    Current Income Tax and Social Contribution 0 -131,049 -788,564 -972,207
    Deferred Income Tax and Social Contribution -78,443 0 -80,302 -235,159
NET INCOME FOR THE PERIOD 2,708,342 1,601,068 2,716,375 1,609,139

 

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

42 

MARKETLETTER 1Q22

 

Cash Flow Statement

(R$ thousand)
  Parent Company Consolidated
  03.31.22 03.31.21 03.31.22 03.31.21
Operating Activities        
Income before income tax and social contribution 2,786,785 1,732,117 3,585,241 2,816,505
         
Depreciation and amortization 2,822 3,043 645,144 458,100
Net foreign exchange rate variations -654,851 135,196 -907,349 274,642
Financial charges -38,534 24,994 703,074 611,340
Equivalence equity results -2,671,385 -2,725,339 -552,441 -430,075
Other Income and Expenses -121,033 0 -121,033 0
Revenue from the contractual asset - transmission 0 0 -4,235,234 -3,801,242
Construction Revenue 0 0 -3,418 -8,790
Contractual revenue - Transmission 0 0 191,838 139,778
Regulatory Remeasurements - Transmission Contracts 0 0 0 0
Operating provisions (reversals) 648,111 471,308 2,070,442 1,105,009
Participation of non-controlling shareholders 0 0 -11,998 -12,220
Ressarcimento GSF 0 0 0 0
Financial instruments - derivatives 0 0 79,366 -284,796
Others -120,194 -83,640 -176,581 -9,209
  -2,955,063 -2,174,437 -2,318,190 -1,957,463
(Increases) / decreases in operating assets        
Customers 0 1 154,292 355,090
Marketable securities 771,485 2,445,649 222,168 -322,549
Reimbursement rights -79,948 -1 -74,843 1,559
Warehouse 17 1 -21,154 2,682
Nuclear fuel stock 0 0 102,977 36,704
Financial assets - Itaipu 514,349 593,802 514,349 593,802
Assets held for sale 0 0 24,657 0
Hydrological risk 0 0 0 7,218
Credits with subsidiaries - CCD 0 0 0 0
Others 91,189 185,197 -139,136 328,041
  1,297,092 3,224,649 783,310 1,002,547
Increases/(decreases) in operating liabilities        
Suppliers -3,633 -247,769 -736,045 -1,043,673
Advances 0 0 -20,942 -19,933
Lease -1,915 -1,924 136,159 114,529
Estimated liabilities 1,589 -736 -118,001 -68,747
Indemnification obligations 0 0 -22,259 -44,518
Sectorial charges 0 0 133,916 -18,835
Liabilities associated with assets held for sale 0 0 1,002 0

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

43 

MARKETLETTER 1Q22

 

 

Others 0 0 0 0
  -51,322 -127,798 -498,889 -334,395
         
         
Payment of financial charges -252,448 -256,634 -612,625 -493,055
Payment of financial charges - arrendamentos 0 0 -986 -1,156
Revenue of RAP and indemnities 0 0 3,342,505 4,251,176
Revenue of financial charges 186,700 292,335 83,814 202,696
Payment of income tax and social contribution -28,195 -52,352 -772,458 -741,543
Revenue of remuneration for investments in equity interests 67,541 413,675 140,802 426,826
Supplementary pension payment -17,789 -3,717 -118,004 -75,506
Payment of legal contingencies -760,725 -213,681 -819,249 -675,483
Bonds and related deposits -268,619 -48,670 -485,287 -69,830
Net cash provided by (used in) financing activities -3 2,535,058 1,683,814 3,270,142
         
Investing activities        
Loans and financing obtained and debentures obtained -836,102 -1,059,032 -1,397,057 -1,530,616
Payment of loans and financing and debentures - principal -108 -2,281,924 -193 -2,312,224
Payment of remuneration to shareholders 0 0 0 0
Payment of finance leases 0 0 -182,239 -159,992
Others 0 0 -56,377 -3,907
Net cash provided by (used in) financing activities -836,210 -3,340,955 -1,635,866 -4,006,739
         
Investing activities        
Lending and financing 0 0 0 0
Loans and financing receivables 846,812 1,555,558 367,966 1,213,310
Acquisition of fixed assets 0 0 -266,102 -279,298
Acquisition of intangible assets 0 -9,139 -9,390 -27,664
Acquisition / contribution of capital in equity interests 0 0 -396 -2,244
Acquisition / capital investment in equity 0 -759,218 0
Advance concession for future capital increase 0 0 0 1,687
Transmission infrastructure - contractual asset 0 0 -191,838 -139,778
Others 0 0 8,397 -24,073
Net cash provided by (used in) investing activities from continuing operations 846,812 787,202 -91,363 741,940
         
Increase (decrease) in cash and cash equivalents 10,599 -18,696 -43,415 5,343
         

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

44 

MARKETLETTER 1Q22

 

 

Cash and cash equivalents at the beginning of the year for continued operations 7,384 21,630 192,659 286,607
Cash and cash equivalents at year-end of continuing operations 17,983 2,934 149,244 291,950
  10,599 -18,696 -43,415 5,343

 

 

 

 

 

MARKETLETTER 1Q2022

Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed.

45 

 

SIGNATURE

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: May 16, 2022

CENTRAIS ELÉTRICAS BRASILEIRAS S.A. - ELETROBRÁS
     
By:

/SElvira Baracuhy Cavalcanti Presta


 
 

Elvira Baracuhy Cavalcanti Presta

CFO and Investor Relations Officer

 

 

 

FORWARD-LOOKING STATEMENTS

 

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 offuture 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.