The company specifies that the simplification of the structure begun in 2023 will continue this year, but does not envisage a new layoff program; For analysts, the results show the company on the “right path”
A Eletrobras reported a profit of R$4.395 billion in 2023, a result 21% higher than that recorded the previous year. The company closed the fourth quarter of last year with a net profit of R$893 million, reversing the loss of R$479 million recorded in the same period of 2022.
The company’s management will propose the distribution of dividends worth R$1.296 billion related to its 2023 results, according to its earnings report. “Our financial and capital allocation discipline has allowed us to propose the distribution of dividends worth R$1.296 billion related to the 2023 results,” the text reads, without providing further details.
Earnings before interest, taxes, depreciation and amortization (Ebitda) amounted to R$17.020 billion for the year, which represents an increase of 49% compared to the previous year. In the fourth quarter, EBITDA was R$1.055 billion, down 26% from a year earlier.
Recurring regulatory EBITDA in 2023 was R$21.522 billion, an increase of 19% compared to 2022, and stood at R$5.642 billion between October and December, an increase of 5% compared to one year ago.
At the end of the year, net operating revenues amounted to R$37.159 billion, up 9% compared to 2022. In the fourth quarter, they grew 10% compared to the same period last year to R$9.922 billion , mainly reflecting increased transmission revenues.
The adjusted financial result was negative R$2.269 billion in the last three months of the year, mainly due to increased debt, charges and monetary update of obligations with the CDE and watershed revitalization.
Eletrobras’ gross debt reached R$60.8 billion in the fourth quarter of last year, a reduction of R$9.7 billion compared to the third quarter and an increase of R$1.7 billion compared to the same period last year. Net debt stood at R$41.763 billion at the end of December, compared to net debt of R$39.107 billion at the end of the third quarter.
For the year, Eletrobras’ investments amounted to R$9.018 billion, up 60% compared to 2022. In the last three months of 2023, investments amounted to R$4.632 billion, an amount higher than 148% compared to that invested in the previous quarter.
Participation in auctions
Eletrobras is studying transmission and capacity reserve auctions scheduled for this year and plans to participate in the event scheduled for later this month, executive vice president of strategy and business development Élio Wolf said.
“We are working towards the end of March auction, just as we have already started working towards the September auction”, he commented during the conference call on the results.
Regarding the auction for the capacity reserve, he specifies that the company is also analyzing participation and that it has been working on it since last year. And he also commented that he had a positive reading of the public consultation opened by the National Electricity Agency (Aneel) to address the issue. “For the first time, hydroelectric plants are included. We have capacity, we are working and analyzing projects to be competitive,” she said.
Company structure
The president of Eletrobras, Ivan Monteiro, said that the company does not plan to announce new Voluntary Layoff Programs (PDV) and that the simplification of the corporate structure, carried out in 2023 and continuing this year, influenced the result of the PMSO ( Personnel, Materials, Third Party Services and Other Expenses).
He also stated that the cost reduction of the PMSO will continue throughout 2024 and also confirmed the budget guidelines for this year in this item, which amounts to R$7 billion. “This reduction will continue over the next few years, but this is our best forecast at the moment,” she said. He further stated that although there is a reduction in employees, the focus is on reducing the PMSO as a whole.
“The company pays great and special attention to the operational segment, because safety is the greatest asset of this company and we do not want at any time to jeopardize any procedures in the daily operations in the segment of the company,” he said.
The executive also stated that, during 2024, the collective labor agreement will be finalized. “We need to have a new dialogue with the unions on this issue,” he added.
Correct direction
Eletrobras’ operating result in the fourth quarter of 2024 was considered weak by Safra’s analytics team, which said that non-recurring items, such as provisions and write-downs (asset deterioration), “overshadow” the performance. Analysts Daniel Carabolante Travitzky, Carolina Carneiro and Mario Wobeto however said the company was “moving in the right direction, even if it still suffers from past problems”.
According to professionals, the adjusted numbers were good, benefiting from cost control initiatives, voluntary redundancy programs and new negotiations to reduce liabilities, with a focus on reducing the stock related to mandatory loans.
They mentioned that excluding construction and depreciation, total costs and expenses grew by 2.8% year-on-year and were 58.1% above Safra’s estimates, as a result of large provisions and several negative items non-recurring, such as expenses with profit sharing distribution for employees and additional expenses for the severance program; consultancy fees at the holding company; reduction in the recoverable value of assets; cancellations of onerous contracts; adjustment of the value of goods for sale; provisions for defaults and other contingencies.
“If we excluded these non-recurring items, adjusted manageable costs and other expenses would have been 11% lower than our estimate,” they said.
Professionals also commented that the results were negatively impacted by the lower investment income result, due to operational disruptions in some units, but the results were fueled by tax credits following the integration of Santo Antonio and the announcement of interest on capital.
On the other hand, analysts highlighted the negotiation of new contracts for the energy portfolio. Eletrobras published an updated energy portfolio showing an average increase of 645 megawatts (MW) of energy sold from 2024 to 2027. After considering coverage, non-contractual energy was revised to 29% in 2025, compared to the previous 33 % and to 40% in 2026, compared to the previous 40%.
“The company should benefit from good energy price momentum resulting from weaker hydrology,” they said.
Citi analysts Antonio Junqueira and Guilherme Bosso highlighted in a report that the company’s developments appear to be going in the right direction and stressed that there are still positive aspects that can generate value for the company, in areas such as asset management and liabilities, cost recovery and fiscal and organizational simplification process.
In a report they highlight that, in line with the costs manageable with PMSO, items such as the cost of purchasing fuel are linked to the thermal systems, which are for sale. The rumor weighed on Eletrobras’ PMSO in the fourth quarter of this year due to rising fuel costs.
Analysts also say that, in the last quarter of last year, the company’s energy portfolio grew, mainly thanks to the incorporation of three plants: Teles Pires, Baguari and Retiro. “Thus, own resources data increased, making the comparison imperfect.”
Junqueira and Bosso also reported that Eletrobras achieved a good performance mainly in two indicators: operating expenses (Opex), which were R$200 million better than the team’s estimates, and managed to complete some long-term power sales contracts (PPAs)./Beth Moreira, Wilian Miron, Ludmylla Rocha and Luciana Collet
Source: Terra
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