[GRUPO EDP logo] [ESCELSA logo]
QUARTERLY FINANCIAL STATEMENTS AS OF JUNE 30, 2003
- --------------------------------------------------------------------------------
BALANCE SHEETS
(In thousands of Brazilian reais)
(ConvenienceTranslation into English from the Original Previously Issued in Portuguese)
ASSETS PARENT COMPANY CONSOLIDATED
--------------------------------------------------
JUN-03 MAR-03 JUN-03 MAR-03
--------------------------------------------------
CURRENT:
Cash and banks 4,465 6,337 5,966 9,118
Accounts receivable 257,785 267,427 447,326 420,623
Other accounts receivable 4,435 11,027 8,474 9,571
Recoverable taxes 20,420 6,811 42,028 28,869
Allowance for doubtful accounts (30,584) (27,227) (45,443) (40,983)
Material and supplies 3,364 3,585 5,540 5,741
Marketable securities 240,047 285,544 250,608 294,448
Escrow deposits - 39,382 - 39,382
Deposits 1,266 529 1,266 529
Services in progress 7,519 5,008 9,615 6,665
Accounts receivable - UTE Campo Grande - - 48,824 39,485
Other credits 1,289 2,984 6,284 7,535
Prepaid expenses 16,497 7,869 53,517 47,734
--------------------------------------------------
526,503 609,276 834,005 868,717
--------------------------------------------------
LONG-TERM ASSETS:
Accounts receivable 185,197 184,379 279,270 290,054
Tariff bonus and surcharges 5,833 5,833 5,833 9,718
Affiliates and subsidiaries 1,980 21,220 72,053 68,766
Escrow deposits 81,410 78,090 109,000 102,459
Deposits - - 5,738 6,699
Debt issuance costs 2,305 2,498 2,305 2,498
Deferred income taxes 122,789 149,846 235,711 266,337
Other credits - low income consumers 8,094 18,818 12,378 26,669
Other credits 7,351 4,808 11,398 8,942
Prepaid expenses 119,427 105,765 169,366 148,984
--------------------------------------------------
534,386 571,257 903,052 931,126
--------------------------------------------------
PERMANENT ASSETS:
Investments 852,570 771,265 374,275 374,332
Property, plant and equipment 743,362 750,097 1,476,446 1,476,761
Deferred charges - - - 79
--------------------------------------------------
1,595,932 1,521,362 1,850,721 1,851,172
--------------------------------------------------
TOTAL ASSETS 2,656,821 2,701,895 3,587,778 3,651,015
==================================================
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QUARTERLY EARNINGS RELEASE - JUNE 2003 1
[GRUPO EDP logo] [ESCELSA logo]
QUARTERLY FINANCIAL STATEMENTS AS OF JUNE 30, 2003
- --------------------------------------------------------------------------------
BALANCE SHEETS
(In thousands of Brazilian reais)
(ConvenienceTranslation into English from the Original Previously Issued in Portuguese)
LIABILITIES AND SHAREHOLDERS'S EQUITY PARENT COMPANY CONSOLIDATED
--------------------------------------------------
JUN-03 MAR-03 JUN-03 MAR-03
--------------------------------------------------
CURRENT:
--------------------------------------------------
CURRENT LIABILITIES:
Suppliers 89,810 90,986 141,560 135,172
Payroll 1,850 1,940 3,446 3,602
Accrued interest and fees 62,985 37,654 73,865 50,456
Loans and financing 167,634 161,374 349,321 357,885
Accrued taxes and social contributions 69,705 21,873 99,402 43,187
Dividends 21 21 33 30
Postretirement benefits 1,652 1,886 1,652 1,886
Accrued obligations 10,170 7,322 19,834 14,916
Regulatory charges 8,719 9,129 15,094 16,302
Provision for contingencies - 39,382 - 39,382
Variation of Parcel A items 22,766 10,059 31,893 20,353
Other accounts payable 18,160 17,522 27,673 27,066
--------------------------------------------------
453,472 399,148 763,773 710,237
--------------------------------------------------
LONG - TERM LIABILITIES:
Suppliers 57,602 60,640 82,132 86,868
Accrued interest and fees - - -
Loans and financing 1,477,194 1,708,642 1,864,652 2,117,842
Postretirement benefits 28,212 28,212 28,212 28,212
Deferred income taxes - -
Affiliates and subsidiaries 67 150 133 86
Provision for contingencies 129,996 114,510 178,466 156,811
Variation of Parcel A items 43,958 30,762 46,055 31,698
Other accounts payable 60,038 54,683 63,880 58,395
--------------------------------------------------
1,797,067 1,997,599 2,263,530 2,479,912
--------------------------------------------------
MINORITY INTEREST - - 154,193 155,718
--------------------------------------------------
SHAREHOLDERS' EQUITY:
Capital stock 153,947 153,947 153,947 153,947
Capital reserves 65,688 65,688 65,688 65,688
Retained earnings 183,260 82,126 183,260 82,126
--------------------------------------------------
402,895 301,761 402,895 301,761
--------------------------------------------------
Credits for capital increase 3,387 3,387 3,387 3,387
--------------------------------------------------
406,282 305,148 406,282 305,148
--------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 2,656,821 2,701,895 3,587,778 3,651,015
==================================================
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QUARTERLY EARNINGS RELEASE - JUNE 2003 2
[GRUPO EDP logo] [ESCELSA logo]
QUARTERLY FINANCIAL STATEMENTS AS OF JUNE 30, 2003
- --------------------------------------------------------------------------------
STATEMENTS OF INCOME
(In thousands of Brazilian reais, except income per share)
(Convenience Translation into English from the Original Previously Issued in Portuguese)
PARENT COMPANY CONSOLIDARED
------------------------------------------------------------
1st Half 2003 1st Half 2002 1st Half 2003 1st Half 2002
------------------------------------------------------------
OPERATING REVENUES:
Electricity sales to final customers 566,972 480,787 889,953 745,313
Contingency fee 22,478 - 31,721 -
Electricity sales to distributors 12,425 29,967 12,040 11,599
Use of transmission and distribution system 18,258 6,344 19,326 6,353
Other revenues 14,259 4,169 26,764 12,998
------------------------------------------------------------
634,392 521,267 979,804 776,263
------------------------------------------------------------
Deductions from operating revenues:
State value-added taxes - ICMS (136,712) (122,714) (193,425) (167,965)
PIS and COFINS tax (24,292) (19,033) (37,504) (27,328)
Global reserve for reversion quota - RGR (8,024) (8,136) (13,475) (13,842)
Contingency fee (22,478) - (31,721) -
Tax on services (ISSQN) (32) (39) (430) (302)
------------------------------------------------------------
(191,538) (149,922) (276,555) (209,437)
------------------------------------------------------------
Net operating revenues 442,854 371,345 703,249 566,826
------------------------------------------------------------
OPERATING EXPENSES:
Electricity purchased for resale (244,851) (224,563) (359,014) (321,476)
Depreciation and amortization (29,332) (28,343) (58,144) (59,912)
Personnel (33,243) (29,699) (59,679) (54,269)
Material (3,603) (3,210) (9,746) (7,664)
Third-party services (15,181) (15,103) (30,520) (29,341)
Fuel usage quota - CCC (21,070) (26,464) (32,916) (38,167)
Provision for contingencies (14,001) (1,256) (19,877) (2,029)
Other (22,973) (17,807) (35,136) (25,674)
------------------------------------------------------------
(384,254) (346,445) (605,032) (538,532)
------------------------------------------------------------
INCOME FROM OPERATIONS 58,600 24,900 98,217 28,294
------------------------------------------------------------
EQUITY IN SUBSIDIARIES 3,787 (14,452) - -
------------------------------------------------------------
FINANCIAL REVENUES:
Income from temporary cash investments 29,586 33,653 37,917 39,822
Increase in overdue collections 8,183 4,770 14,301 7,224
Hedge (2,176) 7,335 (2,176) 17,970
Regulatory assets - SELIC 23,173 13,766 45,172 23,131
Other 7,911 4,496 11,885 9,544
------------------------------------------------------------
66,677 64,020 107,099 97,691
------------------------------------------------------------
FINANCIAL EXPENSES:
Monetary variation - electricity purchase (12,807) (3,874) (13,121) (5,002)
Monetary and exchange variation
on loans and financing 289,823 (235,572) 303,034 (266,797)
Interest on loans and financing (95,889) (74,042) (138,606) (100,248)
Other (22,014) (9,619) (31,872) (12,863)
------------------------------------------------------------
159,113 (323,107) 119,435 (384,910)
------------------------------------------------------------
FINANCIAL RESULTS 225,790 (259,087) 226,534 (287,219)
------------------------------------------------------------
OPERATING PROFIT (LOSS) 288,177 (248,639) 324,751 (258,925)
------------------------------------------------------------
NON-OPERATING REVENUES 308 263 407 512
NON-OPERATING EXPENSES (1,810) (3,319) (24,927) (5,303)
------------------------------------------------------------
NON-OPERATING INCOME(LOSS), NET (1,502) (3,056) (24,520) (4,791)
------------------------------------------------------------
INCOME(LOSS) BEFORE TAXES 286,675 (251,695) 300,231 (263,716)
------------------------------------------------------------
Social contribution (26,387) 18,786 (30,578) 20,546
Income tax (77,028) 58,541 (89,238) 64,129
------------------------------------------------------------
(103,415) 77,327 (119,816) 84,675
------------------------------------------------------------
INCOME(LOSS) AFTER TAXES 183,260 (174,368) 180,415 (179,041)
------------------------------------------------------------
MINORITY SHARE IN PROFIT - - 2,845 4,673
------------------------------------------------------------
NET INCOME(LOSS) FOR THE PERIOD 183,260 (174,368) 183,260 (174,368)
============================================================
Net Income(loss) per share - R$ 40.27 (38.31) - -
============================================================
- --------------------------------------------------------------------------------
QUARTERLY EARNINGS RELEASE - JUNE 2003 3
[GRUPO EDP logo] [ESCELSA logo]
QUARTERLY FINANCIAL STATEMENTS AS OF JUNE 30, 2003
- --------------------------------------------------------------------------------
QUARTERLY FINANCIAL STATEMENTS AS OF JUNE 30, 2003
STATEMENTS OF CASH FLOWS an thousands of Brazilian reais)
(Convenience Translation into English from the Original
Previously Issued in Portuguese)
PARENT COMPANY CONSOLIDATED
------------------------------------------------------------
1st Half 2003 1st Half 2002 1st Half 2003 1st Half 2002
------------------------------------------------------------
From operations:
Net Income(loss) for the period 183,260 (174,368) 183,260 (174,368)
Adjustments to reconcile income to cash provided by operating activities:
Operating activities:
Long term interest and monetary and exchange variation (284,993) 235,572 (301,330) 254,153
Equity in subsidiaries (3,787) 14,452 - -
Depreciation and amortization 29,332 28,343 58,144 59,912
Disposal of property, plant and equipment 1,441 2,330 2,434 5,070
Provision for losses - UTE Campo Grande - - 19,794 -
Provision for contingencies 2,927 5,764 11,835 6,797
Regulatory assets - (60) (11,028) (12,976)
Liabilities adjustments 5,691 4,541 5,691 4,541
Deferred income taxes 39,699 (75,712) 43,304 (83,130)
Minority share in profit - - (2,845) (4,673)
Remuneration on construction work in progress - - (561) (745)
------------------------------------------------------------
(26,430) 40,862 8,698 54,581
------------------------------------------------------------
Changes in current assets and liabilities:
Accounts receivable 19,777 (36,339) (2,014) (35,199)
Other accounts receivable 27,299 6,498 25,862 (1,901)
Other credits-UTE Campo Grande - - (42,727) -
Other credits 45,931 (9,971) 44,545 (16,703)
Prepaid expenses (10,718) (20,960) (29,040) (23,580)
Suppliers (14,930) (25,123) (13,797) (21,762)
Accrued taxes and social contributions 203 4,670 11,517 972
Accrued obligations (2,848) (3,194) (2,736) (2,938)
Regulatory charges 1,570 (2,443) 1,259 (3,619)
Postretirement benefits (390) - (390) -
Variation of Parcel A items 16,805 28,825 20,977 29,212
Other 7,548 1,201 12,275 1,721
------------------------------------------------------------
90,247 (56,836) 25,731 (73,797)
------------------------------------------------------------
Change in non-current assets and liabilities:
Accounts receivable 5,643 3,565 13,987 3,565
Escrow deposits (9,235) (5,346) (14,447) (8,575)
Tariff bonus and surcharges - 2,407 - 2,856
Affiliates and subsidiaries 4,731 891 208 (41,502)
Prepaid expenses (25,862) 2,409 (26,993) (5,410)
Variation of Parcel A items 14,416 - 14,036 -
Other credits - low income 4,940 - 6,340 -
Suppliers (744) 7,357 (744) 7,357
Other 17,538 5,929 22,949 7,313
------------------------------------------------------------
11,427 17,212 15,336 (34,396)
------------------------------------------------------------
Net cash provided (use in) operating activities 75,244 1,238 49,765 (53,612)
------------------------------------------------------------
Investing activities:
Additions to property, plant and equipment (22,504) (22,828) (59,841) (87,240)
Additions to investments (101,133) (66,996) 2 (102)
Obligations related to the concession 3,913 1,868 5,400 1,950
------------------------------------------------------------
Net cash used in investing activities (119,724) (87,956) (54,439) (85,392)
------------------------------------------------------------
Financing activities:
Loans and financing (5,578) 39,767 (51,913) 60,367
Accrued interest and fees (12,955) 11,055 (13,176) 11,939
Dividends - - (291) (4,531)
Affiliates and subsidiaries (70) - - 34,687
------------------------------------------------------------
Net cash provided by (used in) financing activities (18,603) 50,822 (65,380) 102,462
------------------------------------------------------------
Net increase(decrease)in cash and cash equivalents (63,083) (35,896) (70,054) (36,542)
------------------------------------------------------------
Cash and cash equivalents at the beginning of the period 307,595 257,765 326,628 259,497
------------------------------------------------------------
Cash and cash equivalents at the end of the period 244,512 221,869 256,574 222,955
------------------------------------------------------------
(63,083) (35,896) (70,054) (36,542)
------------------------------------------------------------
- --------------------------------------------------------------------------------
QUARTERLY EARNINGS RELEASE - JUNE 2003 4
[GRUPO EDP logo] [ESCELSA logo]
QUARTERLY FINANCIAL STATEMENTS AS OF JUNE 30, 2003
- --------------------------------------------------------------------------------
1. OPERATIONAL CONTEXT
ESPIRITO SANTO CENTRAIS ELETRICAS S.A. - ESCELSA is a public Brazilian
corporation controlled by the Group Eletricidade de Portugal S.A. - EDP, through
IVEN S.A. Engaged in the generation, transmission, distribution and the sale of
electric energy, the Company's activities are regulated by the National Electric
Energy Agency (Agencia Nacional de Energia E16trica - ANEEL), part of the
Ministry of Mines and Energy.
Escelsa's activities cover 70 of the 77 municipalities within 41,372 Km2
(concession area), which represent 90% of the total area of the State of
Espirito Santo (ES). Within the concession area, the Company serves 93,97% of
Espirito Santo consumers.
ESCELSA is the majority shareholder of (1) MAGISTRA PARTICIPA(~OES S.A., which
is the controlling shareholder of EMPRESA ENERGETICA DE MATO GROSSO DO SUL S.A.
- - ENERSUL (concessionary of generation, transmission and distribution of
electric energy in the State of Mato Grosso do Sul) and 100% shareholder of
CASTELO ENERGETICA S.A. - CESA (company incorporated to operate in the
exploitation of water resources, thermal energy generation and exploitation of
transmission network) of (2) TV A CABO VIT6RIA S.A. - TVIX, a Pay TV company
servicing residential condominiums in the municipalities of Vit6ria and Vila
Velha - ES and of (3) ESCELSA PARTICIPA(;6ES S.A. - ESCELSAPAR, which provides
various services in the area of information technology.
ESCELSAPAR signed, on March 31, 2003, an agreement with Universo on Line - UOL
to promote the transfer of part of ESCELSAPAR customers to UOL during the period
from April 1, 2003 to June 30, 2003. It will result in the discontinuance of
ESCELSAPAR internet provider services in some areas located in Espirito Santo
and Mato Grosso do Sul.
Based on the Agreement, UOL will pay ESCELSAPAR an amount, which will be
determined directly by the number of migrated subscribers and the cession of its
subscribers portfolio.
ESCELSAPAR will continue to render services specially to ESCELSA and ENERSUL, in
the attendance of electric energy consumers, via internet.
The subsidiary ENERSUL has taken steps to raise funding through long-term
obligations with domestic and international banks due to its liquidity position
and to improve its overall debt profile, both in terms of costs and maturity.
2. PRESENTATION OF FINANCIAL STATEMENTS
The financial statements were prepared in accordance with accounting practices
set forth by the Brazilian Corporate Law, specific legislation applicable to
electric utility concessionaires established by National Electric Energy Agency
- - ANEEL and regulations of the Brazilian Securities Commission - CVM, which are
basically the same adopted in the December 31, 2002 financial statements,
published on March 28, 2003.
3. MARKETABLE SECURTTES PARENT COMPANY
PARENT COMPANY
-------------------------------------------------------------
FINANCIAL INSTITUTION TYPE MATURITY Jun-2003 Mar-2003
----------------------------- ---------- -------------------- ---------- ----------
Banco Pactual S.A NBC-E Nov-2005 21,747 24,126
Citibank S.A NBC-E Dec-2003 to Oct-2006 20,740 28,027
Banco Itau S.A. NBC-E Nov-2006 50,428 54,639
Credit Suisse NBC-E Nov-2006 50,023 54,639
Banco BBA Credtanstalt S.A. NBC-E Mar-2004 a Nov-2006 96,884 123,931
Other Other - 225 182
FINANCIAL INSTITUTION TYPE ---------- ---------
240,047 285,544
========== =========
CONSOLIDATED
-----------------------------------------------------
FINANCIAL INSTITUTION TYPE MATURITY Jun-2003 Mar-2003
----------------------------- ---------- ----------------- ---------- --------
Banco Pactual S.A. NBC-E Nov-2005 21,747 24,126
Citibank S.A. NBC-E Dec-2003 to Oct-2006 20,740 28,027
Banco Itau S.A. NBC-E Nov-2006 50,428 54,639
Credit Suisse NBC-E Nov-2006 50,023 54,639
Banco BBA Credtanstalt S.A. NBC-E Mar-2004 a Nov-2006 96,884 123,931
Citibank S.A. NA - 259 26
Banco do Brasil S.A. Investments Funds - 9,124 8,625
Other Other - 1,403 435
---------- ---------
250,608 294,448
========== =========
In June 2002, the Company set-up provisions for the reduction to market value of
its entire NBC-E portfolio. Since then, the provision has been adjusted
according to official market indicators, when the market value is lower than
acquisition cost. By the end of the quarter, the provision was fully reversed
and the NBCE portfolio is now recorded at acquisition cost plus contractual
updating.
- --------------------------------------------------------------------------------
QUARTERLY EARNINGS RELEASE - JUNE 2003 5
[GRUPO EDP logo] [ESCELSA logo]
QUARTERLY FINANCIAL STATEMENTS AS OF JUNE 30, 2003
- --------------------------------------------------------------------------------
4. ACCOUNTS RECEIVABLE
PARENT COMPANY
-------------------------------------------------------------
Current Past due up Past due Total Total
to 90 days over 90 days June-2003 Mar-2003
---------- ---------- ------------ --------- --------
CURRENT
FINAL CUSTOMERS
Residential 28,256 22,758 2,909 53,923 59,173
Industrial 28,312 3,880 3,413 35,605 40,307
Commercial, services and
other activities 17,056 7,230 2,392 26,678 28,554
Rural 6,328 2,200 660 9,188 8,743
Public authority:
Federal 595 313 543 1,451 1,253
State 1,067 1,260 14,772 17,099 16,851
Municipal 1,542 1,307 1,313 4,162 4,222
Public lighting 3,446 1,741 2,887 8,074 9,074
Public service 2,392 93 132 2,617 2,571
Regulatory assets:
Recoverable losses 32,772 - - 32,772 33,681
Free energy 8,605 - - 8,605 10,778
Installment debts 10,921 1,449 2,254 14,624 13,250
Other credits 8,836 843 290 9,969 7,528
------- ------ ----- ------- --------
150,128 43,074 31,565 224,767 235,985
------- ------ ------ ------- --------
WHOLESALE
Installment 2,898 - - 2,898 3,599
Spot-Market-Short term 29,573 - 76 29,649 27,394
Other credits 471 - - 471 449
------ ------ ------ ------- -------
32,942 - 76 33,018 31,442
------- ------ ------ ------- -------
TOTAL 183,070 43,074 31,641 257,785 267,427
======= ====== ====== ======= =======
LONG-TERM
FINAL CUSTOMERS
Regulatory assets
Recoverable losses 93,921 - - 93,921 93,433
Free engery 56,377 - - 56,377 55,410
State VAT (Value do Rio Doce) 33,501 - - 33,501 31,229
Other credits 1,398 - - 1,398 4,307
------- ------ ----- ------- -------
TOTAL 185,197 - - 185,197 184,379
======= ====== ===== ======= =======
CONSOLIDATED
---------------------------------------------------------------
Current Past due up Past due Total Total
----------------------
to 90 days over 90 days June-2003 Mar-2003
--------- ---------- ------------ --------- -----------
CURRENT
FINAL CUSTOMERS
Residential 49,145 36,217 3,371 88,733 89,387
Industrial 39,485 5,965 3,762 49,212 49,347
Commercial, services and
other activities 29,480 12,749 7,671 49,900 48,909
Rural 12,353 3,144 885 16,382 13,637
Public authority:
Federal 1,686 1,008 803 3,497 3,200
State 1,753 1,289 14,785 17,827 17,928
Municipal 3,813 2,446 2,642 8,901 7,513
Public lighting 7,594 3,379 13,550 24,523 22,726
Public service 4,606 112 162 4,880 6,106
Regulatory assets:
Recoverable losses 54,712 - - 54,712 48,410
Free energy 13,852 - - 13,852 15,259
Installment debts 26,200 2,311 5,749 34,260 34,785
Other credits 33,670 1,816 389 35,875 19,950
------- ------ ------ ------- -------
278,349 70,436 53,769 402,554 377,157
------- ------ ------ ------- -------
WHOLESALE
Other Distributors 3,874 3,874 4,544
Spot Market 40,351 76 40,427 38,473
Other credits 471 - - 471 449
------- ------ ------ ------- -------
44,696 - 76 44,772 43,466
------- ------ ------ ------- -------
TOTAL 323,045 70,436 53,845 447,326 420,623
======= ====== ====== ======= =======
LONG-TERM ASSETS
- --------------------------------------------------------------------------------
QUARTERLY EARNINGS RELEASE - JUNE 2003 6
[GRUPO EDP logo] [ESCELSA logo]
QUARTERLY FINANCIAL STATEMENTS AS OF JUNE 30, 2003
- --------------------------------------------------------------------------------
FINAL CUSTOMERS
Regulatory assets
Recoverable losses 154,621 - - 154,621 160,939
Free energy 80,907 - - 80,907 81,638
Wholesale - spot market 3,068 - - 3,068 5,882
State VAT (Vale do Rio Doce) 33,501 - - 33,501 31,229
Other credits 7,173 - - 7,173 10,366
------- ------- ------- ------- -------
TOTAL 279,270 - - 279,270 290,054
======= ======= ======= ======= =======
Tariff Recovery
On April 8, 2003 the tariffs for ENERSUL's supply of electric energy were
restored by 32.5%, part of the 42.26% established by the National Agency for
Electric Energy - ANEEL (Resolution No. 167, of April 7, 2003).
ENERSUL recorded in the account Other Credits R$11,028, revenue for 2"d quarter
of 2003, related to the difference of 9.67%, which will be considered in the
annual tariff readjustments to be granted for the years 2004 to 2007, plus
"Portion B" of each year.
5. GENERAL AGREEMENT-ELECTRIC ENERGY SECTOR
5.1 - Regulatory Assets
Based on Provisional Measure no. 14, issued on December 21 2001, converted into
Law 10,438 on April 26 2002, and on other pertinent legislation, the Company
calculated the amount of the revenue recomposition through extraordinary tariff
applicable to all electric energy distribution companies, for the purpose of
neutralizing the margin losses resulting from the Emergency Program for Reducing
Electric Energy Consumption - PERCEE, in effect from June 2001 to February 2002.
Under the terms of ANEEL Resolutions no. 480 e 481 (related to energy
consumption losses), 482 (related to Parcel "A") e 483 (related to Free Energy),
all issued on August 29, 2002, the amounts related to revenue recomposition were
approved. The extraordinary tariffs are as follows:
o 2.9% for residential clients (except low income users), rural (except low
income users) and public lighting;
o 7.9% for all other clients.
Under the terms of ANEEL Resolution no. 484, also dated August 29, 2002, the
tariff recomposition will take place over a maximum period of 70 months (82
months - for Enersul), starting after December 2001.
Studies undertaken by the Company indicate that these assets will be fully
collected over the maximum term established, for which reason no provision for
losses was set-up.
5.1.1- Recovery of electric energy consumption losses
The consumption losses used to calculate the extraordinary tariff
recomposition were established as follows:
PARENT COMPANY CONSOLIDATED
-------------------- -----------------
DESCRIPTION CURRENT LONG-TERM CURRENT LONG-TERM
------- --------- ------- ---------
Balance as of 03/31/2003 33,681 93,433 48,410 160,939
Recover through tariff increases (7,965) - (13,234) -
Transfers 7,056 (7,056) 19,536 (19,536)
SELIC index adjustment - 7,544 - 13,218
------ ------ ------ -------
Balance as of 06/30/2003 32,772 93,921 54,712 154,621
====== ====== ====== =======
5.1.2 - Free Energy
ANEEL Resolution no. 36/2003, issued on January 29, 2003, updated by ANEEL
Resolution no. 89/2003, issued on February 25, 2003, established procedures for
the free energy loss reimbursement, which have been paid to generators since
February, 2003, as follows:
PARENT COMPANY CONSOLIDATED
-------------------- -----------------
DESCRIPTION CURRENT LONG-TERM CURRENT LONG-TERM
------- --------- ------- ---------
Balance as of 03/31/2003 10,778 55,410 15,259 81,638
Recover through tariff increases (3,431) - (5,410) -
Transfers 172 (172) 2,917 (2,917)
SELIC index adjustment 1,086 1,139 1,086 2,186
------ ------ ------ ------
Balance as of 06/31/2003 8,605 56,377 13,852 80,907
====== ====== ====== ======
5.1.3 - Parcel "A"
- --------------------------------------------------------------------------------
QUARTERLY EARNINGS RELEASE - JUNE 2003 7
[GRUPO EDP logo] [ESCELSA logo]
QUARTERLY FINANCIAL STATEMENTS AS OF JUNE 30, 2003
- --------------------------------------------------------------------------------
The Parcel "A" amounts used to calculate the extraordinary tariff
recomposition were established as follows:
LONG-TERM
---------------------------
DESCRIPTION PARENT COMPANY CONSOLIDATED
- -------------------------------------------------------------------------
Balance as of 03/31/2003 52,199 87,139
SELIC index adjustment 2,891 5,948
PIS/COFINS 138 288
------ -------
Balance as of 06/30/2003 55,228 93,375
====== =======
5.1.4 - CVA
Amounts registered as CVA are cost variations that are not part of the
extraordinary tariff recomposition from October 26, 2001 onwards and are the
following:
PARENT COMPANY CONSOLIDATED
----------------- --------------
June-03 Mar-03 June-03 Mar-03
---------------------------------------
ASSETS
Current
Prepaid expenses
CVA 15,296 6,878 51,815 46,259
Other 1,201 991 1,702 1,475
------ ----- ------- -------
16,497 7,869 53,517 47,734
------ ----- ------- -------
Long-Term Assets
Prepaid expenses
CVA 64,199 53,566 75,991 61,845
------ ------ ------ ------
LIABILITIES
Current
Variation of Parcel A items CVA 22,076 10,059 31,203 20,353
------ ------ ------ ------
Long-Term Liabilities
Variation of Parcel A items CVA 43,958 30,762 46,055 31,698
------ ------ ------ ------
In accordance with the provisions of Inter Ministerial Ordinance No. 116, of
April 4, 2003, the balance of the CVA will be integrated into the tariffs for
the supply of electric energy for the 24 months subsequent to the annual tariff
readjustment to occur between April 8, 2004 and April 7, 2005, also comprising
ENERSUL, which was subject to a review. Management has maintained the balance in
current assets in view of the expectation of release of the short-term
financing, for adjustment of the financial effect of this measure.
6. TARIFF BONUS AND SURCHARGES
Implemented through Provisional Measure no. 2,147, issued on May 15, 2001, the
Emergency Program for Reducing Electric Energy Consumption - PERCEE, determined,
from June 1, 2001, the collection of a surtax from customers who have exceeded
their consumption quotas and granted bonuses in cases in which customers have
reduced consumption to levels below their quotas.
Based on Resolution GCE no. 117, of 02/19/2002, the Emergency Program for
Reduction of Electrical Energy Consumption was extinguished, being determined
that the rules above mentioned were no longer applicable.
The balance of payments for bonuses granted, including the concessionaire costs,
versus the balance of surtaxes billed - collected from consumers during the
Program shows the following position of accounts receivable with the Ministry of
Mines and Energy as of June 30, 2003:
o Parent Company: R$ 6,805 (03/31/2003-R$ 7,257);
o Consolidated: R$ 10,140 (03/31/2003-R$ 12,203).
Of the above amounts, R$5,809 (parent company) and R$9,144 (consolidated)
related to costs determined by the Company in the application of the above
Program will be compensated via tariffs in accordance with Dispatches SFF/ANEEL
no. 154 and 155, of March 28, 2003.
The above mentioned amounts comprise current and long-term receivables.
7. RECOVERABLE TAXES
- --------------------------------------------------------------------------------
QUARTERLY EARNINGS RELEASE - JUNE 2003 8
[GRUPO EDP logo] [ESCELSA logo]
QUARTERLY FINANCIAL STATEMENTS AS OF JUNE 30, 2003
- --------------------------------------------------------------------------------
The credits to be recovered, recorded in current assets, are comprised of the
following:
PARENT COMPANY CONSOLIDATED
-------------- ------------
RECOVERABLE TAXES June-03 Mar-03 Jun-03 Mar-03
- ----------------- ------- ------ ------ ------
Withholding income tax 16,689 5,057 31,340 20,168
Social contribution income 2,383 - 2,681 274
ICMS to be recovered 1,059 1,419 4,162 5,110
Other 289 335 3,845 3,317
------ ----- ----- -----
20,420 6,811 42,028 28,869
====== ===== ====== ======
8. DEFERRED INCOME AND SOCIAL CONTRIBUTION TAXES
Tax credits classified as long-term assets, as listed below, generated by fiscal
losses, negative basis of social contribution and other amounts that constitute
temporary adjustments for reduction of future taxation, were recorded based on
Company' s estimated future profitability, considering that the realization
period will not exceed 10 years.
As a result of the rules laid down by CVM Instruction no. 371, of June 27, 2002,
the Company did not record new tax credits as from July 1, 2002.
Once these conditions had been complied with, the amounts of the fiscal assets
recorded were as follows:
PARENT COMPANY CONSOLIDATED
------------------ ----------------
ASSETS Jun-03 Mar-03 Jun-03 Mar-03
------ ------ ------ ------
Tax loss 228,600 278,057 560,538 620,800
Temporary additions 135,740 175,126 178,185 217,571
------- ------- ------- -------
364,340 453,183 738,723 838,371
Statutory rate 25% 25% 25% 25%
------- ------- ------- -------
Income tax 91,085 113,296 184,681 209,593
------- ------- ------- -------
Negative basis of social contribution 306,693 367,280 533,945 604,179
Temporary additions 89,608 89,605 115,982 115,979
------- ------- ------- -------
396,301 456,885 649,927 720,158
Statutory rate 8% 8% 8% 8%
------- ------- ------- -------
Social contribution 31,704 36,550 51,994 57,612
------- ------- ------- -------
Adjustments - - (964) (868)
------- ------- ------- -------
TOTAL 122,789 149,846 235,711 266,337
======= ======= ======= =======
Expectations as to the realization of these deferred tax credits, including
balances not recorded, are shown as follows:
Amounts recorded:
PARENT COMPANY
- ------------------------------------------------------------------------------------------------------------------
EXPECTATION 2010
OF A TOTAL
REALIZATION 2003 2004 2005 2006 2007 2008 2009 2012
- -------------------- ------ ----- ----- ----- ------ ------ ------ ------ -------
Income tax 3,105 - 4,371 8,501 12,402 15,421 20,482 26,803 91,085
Social contribution 1,118 - 1,574 3,060 4,465 5,552 7,373 8,562 31,704
----- ----- ----- ------ ------ ------ ------ ------ -------
4,223 - 5,945 11,561 16,867 20,973 27,855 35,365 122,789
===== ===== ===== ====== ====== ====== ====== ====== =======
CONSOLIDATED
- -------------------------------------------------------------------------------------------------------------------
EXPECTATION 2010
OF A TOTAL
REALIZATION 2003 2004 2005 2006 2007 2008 2009 2012
- -------------------- ------ ----- ----- ----- ------ ------ ------ ------ -------
Income tax 3,105 5,894 14,510 22,940 29,974 34,405 42,535 31,318 184,681
Social contribution 1,118 1,886 4,818 7,680 10,088 9,505 7,373 8,562 51,030
----- ----- ------ ------ ------ ------ ------ ------ -------
4,223 7,780 19,328 30,620 40,062 43,910 49,908 39,880 235,711
===== ===== ====== ====== ====== ====== ====== ====== =======
Amounts not recorded:
AFTER 2012
----------------------------------
EXPECTATION OF REALIZATION PARENT COMPANY CONSOLIDATED
-------------------------- -------------- ------------
Income tax 72,103 101,464
Social contribution 23,210 33,257
-------------- ------------
95,313 134,721
============== ============
The fiscal credits' expectation of realization is determined based on
projections prepared by the Company's Administration on December 31, 2002.
9. AFFILIATES AND SUBSIDIARIES
- --------------------------------------------------------------------------------
QUARTERLY EARNINGS RELEASE - JUNE 2003 9
[GRUPO EDP logo] [ESCELSA logo]
QUARTERLY FINANCIAL STATEMENTS AS OF JUNE 30, 2003
- --------------------------------------------------------------------------------
PARENT COMPANY CONSOLIDATED
- ---------------- ------------------------------- ----------------- -------------------
COMPANIES TRANSACTION Jun-03 Mar-03 Jun-03 Mar-03
- ---------------- ------------------------------- ----------------- -------------------
MAGISTRA Pass-through of costs and loans 23 15 71,410 68,188
ENERSUL Pass-through of costs 848 2,422 - -
ESCELSAPAR Pass-through of costs 80 167 - -
CESA Pass-through of costs 386 18,040 - -
OTHER SUBSIDIARIES Pass-through of costs 643 576 643 578
----- ------ ------ ------
1,980 21,220 72,053 68,766
===== ====== ====== ======
The Company does not engage in transactions or agreements with related companies
under terms or conditions more/less favorable than would be exercised with third
parties. The transactions refer essentially to pass-through of costs to/from
related companies.
The consolidated financial statements show primarily the balance of
inter-company loans between related company MAGISTRA and the subsidiary ESC90,
as detailed below, which were made at similar terms to those current in the
Brazilian financial market. The terms and conditions of the main obligations are
as follows:
1.*) Interest rate: TJLP + 4% p.a.;
Maturity: November, 2004;
Balance: R$ 5,744 (R$ 5,530 on 03/31/2003)
2.*) Interest rate: 100% of CDI;
Maturity: several dates through December 31, 2003;
Balance: R$ 65,666 (R$62,658 on 03/31/2003)
MAGISTRA's financial income from subsidiary ESC90 totaling R$ 6,986 (R$ 4,449 on
June 30,2003) in the consolidated statement is recorded as "Other financial
income". The guarantees are promissory notes corresponding to 125% of principal.
10. OTHERS CREDITS - UTE CAMPO GRANDE
In view of the decision of ENERSUL's Administration to sell these assets, an
appraisal was undertaken of all the costs incurred with the project, including
the thermoelectric plant itself, substations and associated distribution lines,
for the purpose of accounting for these as part of current assets, and a
provision in 2003 in the amount of R$19,794 (R$ 51,828 in 2002) was set-up to
reduce the assets to their market value.
CONSOLIDATED
----------------------
Jun-03 Mar-03
----------------------
Balance as of begin of the quarter 39,485 25,891
Payment in the quarter 29,133 13,594
Market value adjustment (19,794) -
======================
Balance as of end of the quarter 48,424 39,485
======================
11. INVESTMENTS
The investments in subsidiary companies are stated based on the equity
adjustment method. The other investments, including investments in ESC 90, are
stated at cost plus monetary restatement, until December 31, 1995, net of
provision for loss, when applicable.
PARENT COMPANY CONSOLIDATED
----------------- -------------------
Jun-03 Mar-03 Jun-03 Mar-03
-------- -------- -------- -------
Investments in subsidiary companies:
Stated by the equity method:
MAGISTRA PARTICIPACOES S.A 847,729 764,566 - -
TV A CABO VITORIA - TVIX S.A - 3 - -
ESCELSA PARTICIPACOES S.A. - ESCELSAPAR 3,102 4,826 - -
-------- ------- ------- -------
850,831 769,395 - -
-------- ------- ------- -------
Goodwill on investments:
Goodwill - - 393,618 393,618
Amortization - - (21,272) (21,212)
-------- ------- ------- -------
- - 372,346 372,406
-------- ------- ------- -------
Stated at adjusted cost:
Other 37 37 37 37
-------- ------- ------- -------
37 37 37 37
-------- ------- ------- -------
Projects, studies and other investments 1,702 1,833 1,892 1,889
-------- ------- ------- -------
TOTAL 852,570 771,265 374,275 374,332
======== ======= ======= =======
- --------------------------------------------------------------------------------
QUARTERLY EARNINGS RELEASE - JUNE 2003 10
[GRUPO EDP logo] [ESCELSA logo]
QUARTERLY FINANCIAL STATEMENTS AS OF JUNE 30, 2003
- --------------------------------------------------------------------------------
The goodwill recorded by the wholly-owned subsidiary MAGISTRA, generated by the
difference between the amount paid and the book value of ENERSUL stocks,
acquired on 11/25/1997, is based on the company's future profitability and is
being amortized proportionally to the company's projected results, during the
term of ENERSUL's concession, of thirty years beginning 01/01/1998.
Additional information on investments stated by the equity adjustment method:
MAGISTRA TVIX ESCELSAPAR
----------------------------- ----------------------- ---------------------
Jun-03 Mar-03 Jun-03 Mar-03 Jun-03 Mar-03
-------------- -------------- ----------- ----------- ----------- ---------
Class of shares Common Common Common Common Common Common
Total shares 473,203,348 473,203,348 1,540 1,540 1,000 1,000
Total shares of Escelsa 473,203,348 473,203,348 1,500 1,500 1,000 1,000
Participation % 100% 100% 97.40% 97.40% 100% 100%
Capital stock 668,483 668,483 1,540 1,540 2,800 2,800
-------------- -------------- ----------- ----------- ----------- ---------
Shareholders' equity 847,729 764,566 (135) 4 3,102 4,826
-------------- -------------- ----------- ----------- ----------- ---------
Net income (loss) 4,476 2,157 (188) (50) (505) 1,219
-------------- -------------- ----------- ----------- ----------- ---------
Investment 847,729 764,566 - 3 3,102 4,826
-------------- -------------- ----------- ----------- ----------- ---------
Results of equity adjustment in the end 4,476 2,157 (184) (49) (505) 1,219
period of six and three months -------------- -------------- ----------- ----------- ----------- ---------
In view of the accumulated negative results, for this quarter, the subsidiary
TVIX has since shown a negative net equity of R$135, reflected by the full
elimination of the investment.
12. PROPERTY, PLANT AND EQUIPMENT
PARENT COMPANY Annual average rates CONSOLIDATED
------------------------ ------------------------
Jun-03 Mar-03 of depreciation (%) Jun-03 Mar-03
------------ ----------- ----------------------- ------------ -----------
IN SERVICE
Generation 106,236 105,931 2.44% 202,961 201,434
Transmission 13,479 13,497 2.66% 13,479 13,497
Distribution 1,059,536 1,049,647 4.30% 2,014,563 1,995,488
Commercialization 4,301 4,301 9.26% 7,580 7,580
Administration 125,612 123,244 8.30% 249,206 247,342
------------ ----------- ----------------------- ------------ -----------
1,309,164 1,296,620 4.52% 2,487,789 2,465,341
------------ ----------- ----------------------- ------------ -----------
(-) DEPRECIATION
Generation (63,997) (63,354) (106,292) (104,702)
Transmission (7,230) (7,166) (7,230) (7,166)
Distribution (405,613) (395,540) (766,047) (747,263)
Commercialization (2,763) (2,660) (3,399) (3,217)
Administration (60,417) (57,926) (115,765) (111,382)
------------ ----------- ------------ -----------
(540,020) (526,646) (998,733) (973,730)
------------ ----------- ------------ -----------
769,144 769,974 1,489,056 1,491,611
------------ ----------- ------------ -----------
UNDER CONSTRUCTION:
Generation 1,482 1,666 81,137 69,549
Transmission 3,169 2,128 3,169 2,128
Distribution 67,116 70,227 87,871 95,012
Administration - - 23 8
3,104 4,257 9,472 9,117
------------ ----------- ------------ -----------
74,871 78,278 181,672 175,814
------------ ----------- ------------ -----------
TOTAL 844,015 848,252 1,670,728 1,667,425
------------ ----------- ------------ -----------
Obligations related to the concession (100,653) (98,155) (194,282) (190,664)
------------ ----------- ------------ -----------
743,362 750,097 1,476,446 1,476,761
============ =========== ============ ===========
Obligations related to the concession is comprised of the following balances:
PARENT COMPANY CONSOLIDATED
---------- ----------- ---------- ------------
Jun-03 Mar-03 Jun-03 Mar-03
---------- ----------- ---------- ------------
Consumer contributions 69,600 67,114 91,782 92,215
Donations and subsidies 25,795 25,795 91,054 91,054
Federal participation 5,258 5,246 7,407 7,395
---------- ----------- ---------- ------------
TOTAL 100,653 98,155 194,282 190,664
========== =========== ========== ============
13. SUPPLIERS
- --------------------------------------------------------------------------------
QUARTERLY EARNINGS RELEASE - JUNE 2003 11
[GRUPO EDP logo] [ESCELSA logo]
QUARTERLY FINANCIAL STATEMENTS AS OF JUNE 30, 2003
- --------------------------------------------------------------------------------
PARENT COMPANY CONSOLIDATED
------------------------ ------------------------
CURRENT Jun-03 Mar-03 Jun-03 Mar-03
- -------------------------------------------- ------------- ---------- ----------- ------------
Electricity suppliers:
FURNAS 24,933 26,237 24,933 26,237
ITAIPU 25,966 30,433 36,726 43,264
TRACTEBEL - - 10,815 8,879
ENERTRADE - - 3,834 2,611
ELETROSUL - - 1,668 1,333
MAE 18,043 12,622 27,839 17,383
Free energy 8,605 10,778 14,831 15,932
Other 3,780 3,372 5,332 6,798
------------- ---------- ----------- ------------
81,327 83,442 125,978 122,437
Materials and service providers 8,483 7,544 15,582 12,735
------------- ---------- ----------- ------------
TOTAL 89,810 90,986 141,560 135,172
============= ========== =========== ============
LONG-TERM
- --------------------------------------------
Electricity suppliers:
Free energy 56,377 55,410 80,907 81,638
Other 1,225 5,230 1,225 5,230
------------- ---------- ----------- ------------
57,602 60,640 82,132 86,868
============= ========== =========== ============
14. LOANS AND FINANCING
PARENT COMPANY
- ------------------------------------------------------------------------------------------------------------------------------------
AMORTIZATION JUN-03 MAR-03
--------------------------- ----------------------------------- ----------------------------------
AVERAGE
DESCRIPTION ANNUAL TYP PERIOD Interest Interest
INTEREST E MM/YY and other Current Long-term and other Current Long-term
RATE charges charges
- ------------------------------------------------------------- ----------------------------------------------------------------------
Local currency
ELETROBRAS 5.0%-7.0% M 05/99 to 08/07 - 2,168 5,512 - 2,276 13,377
BNDES TJLP + 3.8% M 11/99 to 10/10 487 35,807 99,693 514 35,313 107,145
BNDES-Ration. losses SELIC+1.0% M 03/02 to 01/06 1,005 26,776 111,186 985 26,036 112,988
Bank loan 107%-114% CDI U 03/03 to 05/03 - 31,055 - - 27,270 -
----------------------------------- ----------------------------------
1,492 95,806 216,391 1,499 90,895 233,510
Foreign currency ----------------------------------- ----------------------------------
BBA 19% U 01/03 to 08/03 4,536 61,080 - 5,012 58,981 -
BNDES 3.5%+UMBNDES M 09/01 to 10/10 229 10,748 23,092 1,038 11,498 30,087
Senior Notes 10.0% U 07/97 to 07/07 56,728 - 1,237,711 30,105 - 1,445,045
----------------------------------- ----------------------------------
61,493 71,828 1,260,803 36,155 70,479 1,475,132
----------------------------------- ----------------------------------
TOTAL 62,985 167,634 1,477,194 37,654 161,374 41,708,642
=================================== ==================================
CONSOLIDATED
- ------------------------------------------------------------------------------------------------------------------------------------
AMORTIZATION JUN-03 MAR-03
--------------------------- ----------------------------------- ----------------------------------
AVERAGE
DESCRIPTION ANNUAL TYP PERIOD Interest Interest
INTEREST E MM/YY and other Current Long-term and other Current Long-term
RATE charges charges
- ------------------------------------------------------------- ----------------------------------- ----------------------------------
Local currency:
ELETROBRAS-
ESCELSA 5.0%-7.0% M 05/99 to 07/07 - 2,168 5,512 - 2,276 13,377
ELETROBRAS-
ENERSUL 6.0%-12.0% M 12/97 to 05/22 258 15,162 44,893 184 14,616 48,530
BNDES-ESCELSA TJLP+3.8% M 11/99 to 10/10 487 35,807 99,693 514 35,313 107,145
BNDES-MAGISTRA TJLP+4.0% H 11/99 to 11/04 739 40,228 20,114 2,844 39,673 39,673
BNDES-ENERSUL TJLP+3.85% M 09/01 to 02/08 228 13,366 49,012 237 13,182 51,631
BNDES-ENERSUL TJLP+4.00% M 02/00 to 04/04 60 798 15,063 4 944 79
BNDES-Rationing losses. SELIC+l.0% M 02/02 to 06/06 1,566 35,491 190,680 1,705 34,150 192,817
BNDES-CESA TJLP+4.5% M 07/04 to 07/12 121 - 31,057 120 - 30,629
BCO BRASIL-FCO 11.20% M 11/04 to 11/13 591 - 30,000 553 - 30,000
BANK LOAN 107%-116.38%-CDI M 10/02 to 05/03 16 52,710 - 71 73,309
FUNDACAO ENERSUL 10% M 07/98 to 11/13 120 2,550 17,858 115 2,295 17,382
BBV-CDI 114% M 04/03 to 07/03 902 17,000 - - - -
OTHER 1.35% M 05/00 to 06/09 - - 1,340 - - 977
TOTAL ----------------------------------- --------------------------------
5,088 215,280 504,916 6,347 215,758 532,690
- --------------------------------------------------------------------------------
QUARTERLY EARNINGS RELEASE - JUNE 2003 12
[GRUPO EDP logo] [ESCELSA logo]
QUARTERLY FINANCIAL STATEMENTS AS OF JUNE 30, 2003
- --------------------------------------------------------------------------------
CONSOLIDATED
- ------------------------------------------------------------------------------------------------------------------------------------
AMORTIZATION JUN-03 MAR-03
--------------------------- ----------------------------------- ----------------------------------
AVERAGE
DESCRIPTION ANNUAL TYP PERIOD Interest Interest
INTEREST E MM/YY and other Current Long-term and other Current Long-term
RATE charges charges
- ------------------------------------------------------------- ----------------------------------- ----------------------------------
Foreign currency
SENIOR NOTES 10.0% U 07/97 to 07/07 56,728 - 1,237,711 30,105 - 1,445,045
BRADESCO (*) 6.5% U 07/03 to 11/04 25 14,169 5,909 72 24,630 -
UNIBANCO (*) 10.85%-11.40% U 03/04 3,718 15,435 - 3,872 14,834 -
EUROPEAN INVEST
BANK LIBORtri+4.0%-5.0% H 12/02 to 03/09 166 8,145 34,464 994 9,511 44,810
LIBORsem+4.5%-
STN-DMLP 8.2% H 10/96 to 04/24 417 2,278 38,113 1,077 1,582 46,364
BBA FMO (*) 8.90% H 03/02 a 09/07 374 5,200 9,828 100 4,524 9,945
ITAU (*) 27.30% U 07/03- 2,281 16,986 - 1,600 16,567 -
BNDES-ESCELSA 3.5%+UMBNDES M 09/01 to 10/10 229 10,748 23,092 - - -
BNDES-ENERSUL 4%+UMBNDES M 04/03 to 10/07 93 - 2,991 - - -
BNDES-CESA 4.5%+UMBNDES M 04/07 to 12/07 210 - 7,628 239 - 8,901
BBA (*) 16.0% U 01/03 to 08/03 4,536 61,080 - 5,012 58,981 -
--------------------------------------------------------------------
68,777 134,041 1,359,736 44,109 142,127 1,585,152
--------------------------------------------------------------------
73,865 349,321 1,864,652 50,456 357,885 2,117,842
====================================================================
Type:
U = unique
M = monthly
H = Half-year
(*) Loans protected by swap contracts against eventual exchange rate
oscillations.
A) ESCELSA and ENERSUL loans due to ELETROBRAS, BNDES and Banco do Brasil-FCO
are guaranteed by accounts linked to receivables. The ENERSUL loans from
Secretaria do Tesouro Nacional-STN are guaranteed by direct debt,
receivables, the Government of the State of Mato Grosso do Sul and part in
cash deposit. Other loans are covered by promissory notes in guarantee.
MAGISTRA's loan payable to BNDES is guaranteed by ENERSUL shares on escrow.
B) ESCELSA loan due to BBA is guaranteed by 44.000 NBC'E, amounting, on June
30, 2003 to R$ 75,589.
C) The issuance of bonds abroad refers to the financial funding through Senior
Notes in a total equivalent to US$430,958 thousand and has only one
maturity in 2007, yielding interest of 10% p.a., payable on a half-yearly
basis on January 15 and July 15 of each year. On May 21, 1998, these Notes
were registered with SEC-Securities and Exchange Committee in the United
States of America in accordance with the Securities Act of 1933.
The indirect controlling shareholder EDP-Eletricidade de Portugal S.A. made
a public offer for acquisition and request of renunciation related to the
notes, having acquired the principal of US$205,796 thousand, in liquidation
dated December 23, 2002. Before making such offer, EDP held a total of
US$151,575 thousand in Notes representing approximately 35% of the total
issuance. Thus EDP became the holder of a total of US$357,371 thousand in
Notes, representing around 83% of the total issuance.
With the success of the request of renunciation, ESCELSA carried out the
elimination of all the rights (covenants) inherent to the issuance.
D) The breakdown of loans and financing per currency is as follows:
PARENT COMPANY CONSOLIDATED
---------- ----------- ---------- ------------
Jun-03 Mar-03 Jun-03 Mar-03
---------- ----------- ---------- ------------
Local currency 312,197 324,405 720,196 748,448
Foreign currency 1,332,631 1,545,611 1,493,777 1,727,279
--------- --------- --------- ---------
TOTAL 1,644,828 1,870,016 2,213,973 2,475,727
========= ========= ========= =========
E) The percentage variation of the main indicators used for updating the loans
and financing are as follows:
Moedas / Indicadores 06/03 06/02
------------------------- ------------ -------------
US$ x R$ (18.72%) 22.58%
IGP-M 5.90% 3.48%
INPC 7.84% 3.43%
TJLP.(a.a.) 12.00% 9.50%
SELIC 11.82% 4.21
UMBNDES (18.27) 0.99%
LIBOR (media anual) 1.45% 2.00%
F) Maturity of short and long-term installments is as follows:
- --------------------------------------------------------------------------------
QUARTERLY EARNINGS RELEASE - JUNE 2003 13
[GRUPO EDP logo] [ESCELSA logo]
QUARTERLY FINANCIAL STATEMENTS AS OF JUNE 30, 2003
- --------------------------------------------------------------------------------
Maturity - PARENT COMPANY CONSOLIDATED
- ----------------------------------- --------------------------------- ---------------------------------
Currency
--------------------------------------------------------------------
Local Foreign Total Local Foreign Total
--------- ----------- ----------- ---------- ---------- ----------
2003 95.806 71.828 167.634 176.347 103.093 279.440
2004 - - - 38.933 30.948 69.881
--------- ----------- ----------- ---------- ---------- ----------
Current 95.806 71.828 167.634 215.280 134.041 349.321
--------- ----------- ----------- ---------- ---------- ----------
2004 33.420 5.468 38.888 72.078 27.341 99.419
2005 68.136 11.313 79.449 119.785 28.123 147.908
2006 54.966 4.147 59.113 106.105 18.088 124.193
2007 49.169 1,238,276 1,287,445 102.892 1,251,553 1,354,445
2008 3.891 565 4.456 44.284 7.469 51.753
2009 3.891 565 4.456 15.769 2.980 18.749
2010 2.918 469 3.387 14.796 2.313 17.109
2011 - - - 11.878 1.843 13.721
2012 - - - 8.514 1.356 9.870
After 2012 - - - 8.815 18.670 27.485
--------- ----------- ----------- ---------- ---------- ----------
TOTAL 312.197 1,332,631 1,644,828 720.196 1,493,777 2,213,973
========= =========== =========== ========== ========== ==========
15. PROVISION FOR CONTINGENCIES
PARENT COMPANY
---------------------------------------------------------------------------------
Jun-03 Mar-03
---------------------------------------------------------------------------------
Contingencies Provision Provision
----------------------------- Escrow --------------------------- Escrow
In the quarter Accumulated Deposits In the quarter Accumulated Deposits
- ------------------------------- ----------------- ----------- ----------- --------------- ----------- -----------
Current
MAE - - 1,266 - - 529
COFINS - - - - 39,382 39,382
----------------- ----------- ----------- --------------- ----------- -----------
TOTAL - - 1,266 - 39,382 39,911
================= =========== =========== =============== =========== ===========
Long-Term
Labor claims 1,402 17,405 11,063 42 16,003 10,781
Civil litigation (4,231) 10,572 8,482 (14,710) 14,803 7,918
Fiscal 18,315 102,019 61,865 2,109 83,704 59,391
----------------- ----------- ----------- --------------- ----------- -----------
TOTAL 15,486 129,996 81,410 (12,559) 114,510 78,090
================= =========== =========== =============== =========== ===========
CONSOLIDATED
---------------------------------------------------------------------------------
Jun-03 Mar-03
---------------------------------------------------------------------------------
Contingencies Provision Provision
----------------------------- Escrow ---------------------------- Escrow
In the quarter Accumulated Deposits In the quarter Accumulated Deposits
- ------------------------------- ----------------- ----------- ----------- --------------- ----------- -----------
Current
Fiscal - - 1,266 529
COFINS - - - - 39,382 39,382
----------------- ----------- ----------- --------------- ----------- -----------
TOTAL - - 1,266 - 39,382 39,911
================= =========== =========== =============== =========== ===========
Long-term
Labor Claims 2,542 24,359 13,653 876 21,817 13,246
Civil litigation (3,872) 18,491 8,647 (14,489) 22,363 7,934
Fiscal 22,985 135,616 86,700 4,057 112,631 81,279
----------------- ----------- ----------- --------------- ----------- -----------
TOTAL 21,655 178,466 109,000 (9,556) 156,811 102,459
================= =========== =========== =============== =========== ===========
Management understands that the provisions recorded are sufficient to cover
eventual losses from the ongoing litigations. Based on the opinion of the
Company's legal counsel, all litigation for which the probability of a favorable
outcome was estimated as remote for the Company was provided for.
Furthermore, there are labor, civil and fiscal cases pending in the total amount
of RS14,556, for which the probability of a favorable outcome was estimated as
possible and no provisions were recorded on the financial statements.
As a result of the decision issued by the 4th Federal Court of the State of
Espirito Santo, the COFINS tax contingency was extinguished in this quarter. The
payment of the debt was made to the Brazilian Federal Union by converting into
cash Escelsa's judicial deposit.
16. CAPITAL STOCK AND RESERVES
- --------------------------------------------------------------------------------
QUARTERLY EARNINGS RELEASE - JUNE 2003 14
[GRUPO EDP logo] [ESCELSA logo]
QUARTERLY FINANCIAL STATEMENTS AS OF JUNE 30, 2003
- --------------------------------------------------------------------------------
In accordance with its by-laws, the Company is authorized to operate with up to
RS1,000,000 in capital of which RS153,947 are subscribed and fully paid in.
Capital stock as of June 30, 2003, is represented by 4,550,833 common shares,
with no par value, with the following equity structure:
Quantity of %
---------------------------- ----------------
Shareholders Shares Shareholders of participation
- ------------------------------------ ------------ --------------- ----------------
IVEN S.A 2,378,671 1 52.27
GTD PARTICIPACOES S.A 1,137,709 1 25.00
Fundacao Banco Central -- CENTRUS 275,678 1 6.06
CINVES 66,366 1 1.46
Others 692,409 144 15.21
------------ --------------- ----------------
TOTAL 4,550,833 148 100.00
============ =============== ================
Composition of capital reserve:
PARENT COMPANY
---------------------------
Jun-03 Mar-03
---------------------------
CAPITAL RESERVE: 65,688 65,688
---------------------------
Remuneration on construction - work in progress 65,688 65,688
===========================
17. CHANGES IN SHAREHOLDERS' EQUITY - PARENT COMPANY
CREDITS
FOR
CAPITAL CAPITAL ACCUMULATED CAPITAL
BALANCE AS OF STOCK RESERVES INCOME SUBTOTAL INCREASE TOTAL
- -------------------------- ----------- ------------- ------------------ ---------------- --------------- -----------
March 31, 2003 153,947 65,688 82,126 301,761 3,387 305,148
Income for the period - 101,134 101,134 - 101,134
----------- ------------- ------------------ ---------------- --------------- -----------
June 30, 2003 153,947 65,688 183,260 402,895 3,387 406,282
=========== ============= ================== ================ =============== ===========
18. INCOME TAX AND SOCIAL CONTRIBUTION
PARENT COMPANY
-------------------------------------------------------
Jun-03 Mar-03
--------------------------- -------------------------
Income Tax Social Income Tax Social
Contribution Contribution
------------- ------------- ----------- -------------
Loss before income tax and social contribution 286,674 286,674 (251,694) (251,694)
Statutory rate 25% 9% 25% 9%
------------- ------------- ----------- -------------
71,669 25,801 (62,924) (20,136)
------------- ------------- ----------- -------------
Permanent additions (exclusions)
Interest on work in progress - - 2.404 2.404
Equity adjustment (3,787) (3,787) 14,452 14,452
Non deductible provisions 29,616 20,409 676 25
Non deductible reversal of provision 39.462 - - -
------------- ------------- ----------- -------------
13,633 16,622 17,532 16,881
------------- ------------- ----------- -------------
Statutory rate 25% 9% 25% 9%
------------- ------------- ----------- -------------
(3,408) 1,496 4.383 1.350
Difference in statutory rate - Negative basis - (910) - -
Reversal of temporary differences /
Tax credits realization 8,767 - - -
------------- ------------- ----------- -------------
Effect on results 77,028 26,387 (58,541) (18,786)
============= ============= =========== =============
- --------------------------------------------------------------------------------
QUARTERLY EARNINGS RELEASE - JUNE 2003 15
[GRUPO EDP logo] [ESCELSA logo]
QUARTERLY FINANCIAL STATEMENTS AS OF JUNE 30, 2003
- --------------------------------------------------------------------------------
19. PENSION PLANS
ESCELSA and its subsidiary ENERSUL are sponsors of foundations ESCELSOS and
ENERSUL, respectively, non profit organizations whose main purpose is to
complement the benefits granted by the official social security to the
Companies's employees through two benefit packages: defined benefit plan - PLAN
I and benefit PLAN 11 of the type "defined contribution".
These benefit plans are based on mathematical reserves calculated actuarially
according to the capitalization policy, which is revised annually.
The table below shows the number of participants in each plan:
PARENT COMPANY CONSOLIDATED
-------------------------------------------------
Plan I Plan II Plan I Plan II
------------ ----------- ------------ -----------
Contributing participants 32 1,390 38 2,321
Receiving participants:
Retirees 634 124 889 127
Pensioners 113 7 176 7
-------------------------------------------------
747 131 1,065 134
-------------------------------------------------
779 1,521 1,103 2,455
=================================================
As sponsors, the Companies matches monthly contribution from the members of
foundations corresponding to the amount established in each plan, limited to 7%
of the total payroll. In the first half of 2003, the parent company contributed
R$1,281 (R$1222 on 06/30/2002), and consolidated R$1,991 (R$2,114 on
06/30/2002).
As per CVM Ruling 371 of 12/13/2000, starting in fiscal year 2002, publicly
listed companies are required to record and disclose all liabilities related to
benefit payments to ex-employees, based on rules set forth by NPC Bulletin 26
from IBRACON.
In order to comply with that requirement, the Companies contracted independent
actuaries for the actuarial valuation of said benefits under the Projected
Credit Unit Method
ENERSUL does not have a post-employment benefit plan
Taking into consideration article 84 of mentioned Resolution, the present value
of actuarial liabilities, totally unsecured as of December 31, 2002 (medical
assistance, retirement allowance and life insurance), were recalculated for
ESCELSA. Balance activity for the second quarter 2003, as shown below: PARENT
COMPANY AND
PARENT COMPANY AND
CONSOLIDATED
--------------------
Present value of totally unsecured
actuarial liabilities (47,337)
Net value of non-recognized losses 17,083
--------------------
Recognized liabilities as of Dec. 31, 2002 (30,254)
Realizations in the period 156
Recognized liabilities as of March 31, 2003 (30,098)
Realizations in the period 234
Recognized liabilities as of June 30, 2003 (29,864)
====================
The net value of those non-recognized losses is equivalent to the net
value of the actuarial losses exceeding by 10% the present value of the
actuarial liabilities as of December 31, 2002, which will be charged on a
yearly basis, for a period equivalent to the remaining average labor time,
estimated for the employees participating in the Plan.
ESCELSA AND ENERSUL actuarial valuations also showed that the fair value
of the Private Pension Plans assets exceeds the present value of the
actuarial liabilities, totally or partially secured, as follows:
PARENT COMPANY CONSOLIDATED
------------------- ----------------
Present value of actuarial liabilities
Totally or partially secured (80,465) (132,340)
Fair value of Plans assets 108,634 177,362
------------------- ----------------
Subtotal 28,169 45,022
Value of actuarial losses (90) (971)
------------------- ----------------
Assets not recognized in the balance sheet 28,079 44,051
=================== ================
However, in a conservative way, Companies' management decided not to record
those assets, given that it is not ensured the reduction in contributions from
sponsors or future reimbursement to the sponsors.
The fair value of assets used for calculating the result of the actuarial
valuation of ENERSUL does not include amounts receivable from the sponsor
resulting from the acknowledgement of indebtedness amounting to R$19,250
(December 31, 2002). Given this Foundation right, in said calculation, assets
not recognized in the balance sheet as of December 31, 2002 would increase to
R$35,222.
20. FINANCIAL INSTRUMENTS
- --------------------------------------------------------------------------------
QUARTERLY EARNINGS RELEASE - JUNE 2003 16
[GRUPO EDP logo] [ESCELSA logo]
QUARTERLY FINANCIAL STATEMENTS AS OF JUNE 30, 2003
- --------------------------------------------------------------------------------
The Company and its subsidiary's business entails the distribution and sale of
electric energy for customers within its concession area - the state of Espirito
Santo and the state of Mato Grosso do Sul - and therefore significant financial
instruments are related to the following transactions:
Balances of long-term accounts receivable and accounts payable related to the
extraordinary tariff recomposition and therefore not subject to adjustments
to market value;
Investments in short term mutual funds and/or fixed income investments recorded
at approximate market value as they are recorded with accrued interest on a
pro-rata basis;
Equity stakes in other companies are in most cases shares that are not publicly
traded;
Loans held by the Company are mainly long-term, and are from specific funding
sources.
20.1 Exchange Rate and Interest Risks
The account value of the principal financial instrument are:
PARENT COMPANY CONSOLIDATED
-------------------- --------------------
Jun-03 Mar-03 Jun-03 Mar-03
--------- ---------- --------- ----------
Marketable securities 240,047 285,944 250,608 294,448
Loans and financing-long-term 1,477,194 1,708,642 1,864,652 2,117,842
A portion of the loans and financing are comprised of financing from
government entities ELETROBRAS and BNDES.
As the market rate (or opportunity cost of capital) is set by these
government entities, taking into consideration the risk premium relative to
the sector's activities and that in the absence of other financing sources
or other market options and/or means to estimate the market value of such
options in light of the Company's business or sector-specific
circumstances, the market value of these domestic loans shall correspond to
their book value, as shall other financial assets and liabilities.
As mentioned in Note 14, foreign currency financing was obtained (in U.S.
dollars), and the indebtedness and earnings were significantly impacted by
the foreign exchange risk.
Such risk may cause the Company to incur losses due to foreign exchange
fluctuations, which may increase liabilities denominated in foreign
currency.
Net exposure to foreign currency risk:
BOOK VALUE FAIR VALUE
-----------------------------------------------------
Jun-03 Mar-03 Jun-03 Mar-03
---------- ------------- -------------- -------------
Senior Notes 1,237,711 1,445,045 1,052,054 944,076
BNDES 23,092 30,087 23,092 30,087
U.S. dollar assets (239,822) (285,362) (239,822) (285,362)
---------- ------------- -------------- -------------
Net Exposure 1,020,981 1,189,770 835,324 688,801
========== ============= ============== =============
The method used to determine the fair value of the Senior Notes obligation was
the average market price, as of June 30, 2003, by SunGard Power Data - Dow Jones
Reuters Business Interative LLC. For the US dollar assets, the contract market
price at the end of the fiscal period was used, which is equal to book value.
In addition, the Company held derivatives contracts aimed at reducing the
above-referred net exposure, which yielded credits to the income statement, in
the monetary variations account, for losses of RS 15,683 whose parameters are as
follows:
LOSSES
FINANCIAL DATE AMOUNT PARAMETERS (RATES %) TO
---------------------------- ------------------------------------------- BE
INSTITUTION TRANSACTION MATURITY BANKS ESCELSA REALIZED
- ----------------------------------------------------------------------------------------------------------------
4.02% p.a.+exchange variation
Banco Pactual 03/28/02 01/14/03 19,381 (v.s dollar) 100% CDI (2,176)
18.60% p.a.+exchange variation
Banco Itau 12/27/02 07/15/03 21,856 (v.s dollar) 100% CDI (4,986)
19.00% p.a.+exchange variation 100%CDI+3.55%
BBA 01/07/03 08/15/03 57,902 (v.s dollar) a.a (8,521)
------------
(15,683)
============
In the consolidated, the loans and financing of the companies in the ESCELSA
System were obtained at rates and charges usual in the Brazilian and the
international markets for funding of investments in the electric energy sector
in their concession areas of the electric energy public service.
- --------------------------------------------------------------------------------
QUARTERLY EARNINGS RELEASE - JUNE 2003 17
[GRUPO EDP logo] [ESCELSA logo]
QUARTERLY FINANCIAL STATEMENTS AS OF JUNE 30, 2003
- --------------------------------------------------------------------------------
The subsidiary MAGISTRA consolidates the foreign currency (US$) financial
liabilities of its subsidiaries ENERSUL and CESA. In order to reduce
foreign exchange-related risk, swap instruments were used to hedge a
portion of these liabilities, as shown in explanatory note no. 14. The
indexes used in these instruments are IGP-M plus interest of between 11.7%
p.a. and 12.01% p.a., and CDI, plus interest of between 0.95% p.a. and 3.0%
p.a.
Considering the fluctuations of the Real during the period, these hedge
transactions yielded gains of R$7,388, recognized in the income statement
in the monetary variations accounts.
This debt is broken-down as follows:
AMOUNT GAINS TO BE
-----------------------------
LIABILITIES BOOK VALUE SWAP REALIZED
------------------------------------ ------------- ------------
Loans and financing 66,537 73,925 7,388
In the consolidated statements, foreign currency debt totaling R$127,459 is
subject to terms and conditions which constitute a natural hedge, thus
reducing the currency risk to a minimum.
For the remaining contracts, it is estimated that their market value are
equal or near the amounts per the accounts in view of the specific
characteristics of these fundings and the impossibility of determining the
market value of this type of financial instrument.
For determination of this estimate the Company's administration considered
the evidence of risk inherent to the Company's business, the administrative
strategy and measures aimed at managing the debt service.
20.2 Credit Risk
There is a possibility that the Company will incur losses due to non-payment by
its customers. To mitigate this risk, the Company maintains the right to cut-off
the supply of electric energy in the event that a customer fails to make payment
in accordance with the time-periods defined by legislation and specific
regulations. A provision for doubtful account liquidations is established in an
amount deemed sufficient by Management to cover potential accounts receivable
risks.
21. EXPLANATION ADDED IN THE TRANSLATION INTO ENGLISH
These financial statements are presented on the basis of accounting principles
set forth by the Brazilian corporate law. Certain accounting practices followed
by the Company and its subsidiaries that conform to generally accepted
accounting principles in Brazil may not conform with generally accepted
accounting principles in other countries.
- --------------------------------------------------------------------------------
QUARTERLY EARNINGS RELEASE - JUNE 2003 18
[GRUPO EDP logo] [ESCELSA logo]
QUARTERLY FINANCIAL STATEMENTS AS OF JUNE 30, 2003
- --------------------------------------------------------------------------------
ESCELSA'S NUMBERS
PARENT COMPANY CONSOLIDATED
-------------------------------------------------------------------
1st Half 1st Half 1st 1st Half 1st Half 1st
FINANCIAL INFORMATION (In thousands of reais) 2003 2002 Quarter 2003 2002 Quarter
2003 2003
-------------------------------------------------------------------
Gross operating revenues 634,392 521,267 333,961 979,804 776,263 484,020
Net operating revenues 442,854 371,345 237,708 703,249 566,826 348,485
Income from operations 58,600 24,900 53,044 98,217 28,294 63,414
Net Income(loss) for the period 183,260 (174,368) 82,126 183,260 (174,368) 82,126
EBITDA (1) 87,932 53,243 67,617 156,361 88,206 92,743
Total Assets 2,656,821 2,633,001 2,701,895 3,587,778 3,561,715 3,651,015
Shareholders' equity 406,282 559,437 305,148 406,282 559,437 305,148
Shares outstanding(number) 4,550,833 4,550,833 4,550,833
Book value per share (R$) 89.28 122.93 67.05
Share price ( R$) 33.00 72.89 40.00
Market value 150,177 331,710 182,033
INDICATORS
Operating margin (%) 13.23 6.71 22.31 13.97 4.99 18.20
(Income from operations/Net operating revenues)
EBITDA margin (%) 19.86 14.34 28.45 22.23 15.56 26.61
(EBITDA)/Net operating revenues
Personnel expenses plus third party services/net oper.revenues(%) 10.93 12.06 9.93 12.83 14.75 12.50
Energy losses (%) (2) 11.66 11.71 11.20
DEC-Equivalent Outage Duration per Customer (hours) (2) 12.01 14.99 11.17
FEC- Equivalent Outage Frequency per Customer (number) (2) 9.95 11.23 9.32
TMA-Average Service Response Time (minutes)(2) 117 109 115
Number of customers per employee 718 678 710 674 634 664
MARKET
Maximum demand - MWh/h 1,199.3 1,078,6 1,199.2
Energy Sales - MWh 2,957,197 3,059,037 1,514,139 4,358,030 4,410,523 2,219,540
Number of customers 966,316 939,961 966,268 1,572,339 1,528,457 1,568,357
Average tariffto final customers - R$/MWh 158.16 132.97 158.56 - - -
Average cost of electricity purchased - R$/MWh 82.92 64.53 82.13 - - -
HUMAN RESOURCES
Number of employees 1,345 1,386 1,360 2,333 2,410 2,361
Number of trainees 40 87 36 72 108 77
Personnel expenses (thousands of reais) 33,243 29,699 15,817 59,679 54,269 28,629
Personnel expenses plus third party services (thousands of reais) 48,424 44,802 23,600 90,199 483,610 43,556
- ------------------------------------------------------------------------------------------------------------------------------------
(1) EBITDA = Income from operations plus depreciation and amortization
(2) Twelve-month period
- --------------------------------------------------------------------------------
QUARTERLY EARNINGS RELEASE - JUNE 2003 19
[GRUPO EDP logo] [ESCELSA logo]
QUARTERLY FINANCIAL STATEMENTS AS OF JUNE 30, 2003
- --------------------------------------------------------------------------------
Energy sold in the first half of 2003 totaled 2,957,197 MWh, or 3.3% less than
the 3,059,037 in the same period in 2002. The decline witnessed in the
industrial and commercial segment was due mainly to the discontinuation of Vale
do Rio Doce and Samarco as customers, as they elected to become free consumers
as of January 2003.
The remaining customer segments showed significant growth; however, January and
February of 2002 were rationing months, which distorts the year-on-year
comparison.
If we do not consider the customers that became free consumers, energy Sales
would have shown a growth of 8.4%.
MWh
- --------------------------------------------------------------------------------------------
PARENT COMPANY CONSOLIDATED
-------------------------------------------------------------------------
Class First Half First Half
- --------------------------------------------------------------------------------------------
Retail: 2003 2002 % change 2003 2002 % change
- --------------------------------------------------------------------------------------------
Residential 636,359 574,031 10.9 1,083,816 1,001,615 8.2
Industrial 1,334,977 1,533,620 (13.0) 1,654,260 1,857,634 (10.9)
Commercial 394,163 421,911 (6.6) 672,167 685,516 (1.9)
Rural 186,399 150,010 24.3 330,845 285,983 15.7
Other 254,120 227,534 11.7 450,951 415,182 8.6
- --------------------------------------------------------------------------------------------
2,806,018 2,907,106 (3.5) 4,192,039 4,245,931 (1.3)
Wholesale 151,179 151,931 (0.5) 165,991 164,592 0.8
- --------------------------------------------------------------------------------------------
TOTAL 2,957,197 3,059,037 (33) 4,358,030 4,410,523 (1.2)
CUSTOMER PROFILES
The sales volume and revenue breakdown among residential and industrial
customers underwent a significant change in the first half of 2003, mainly as a
result of customers that became free consumers and chose to obtain energy from
sources other than ESCELSA.
For the purposes of calculating revenue breakdown per segment, the effects of
the regulatory asset and short-term market sales were not considered.
PARENT COMPANY
---------------------------------------------------------
Class First half 2003 First half 2002
- --------------------------------------------------------------------------------
As a % of As a % of As a % of Sales As a % of
Sales Volume Revenues Volume Revenues
- --------------------------------------------------------------------------------
Retail:
Residential 21.52 35.76 18.77 32.21
Industrial 45.14 30.81 50.13 35.96
Commercial 13.33 18.58 13.79 18.37
Rural 6.30 4.68 4.90 4.07
Other 8.59 8.01 7.44 7.20
- --------------------------------------------------------------------------------
94.89 97.84 95.03 97.81
Wholesale 5.11 2.16 4.97 2.19
- --------------------------------------------------------------------------------
TOTAL 100.0 100.00 100.00 100.00
NUMBER OF CUSTOMERS
The number of customers on June 30, 2003 totaled 966,316, an increase of 2.8%
compared to the same period last year. During the first half of 2003, 11,935
customers were connected.
Class PARENT COMPANY CONSOLIDATED
---------------------------------------------------------------------
June 30, %change June 30, % change
- --------------------------------------------- ---------------------
Retail: 2003 2002 2003 2002
- ---------------------------------------------------------------------------------------------
Residential 764,935 745,613 2.6 1,262,118 1,229,147 2.7
Industrial 10,923 11,035 (1.0) 15,545 15,727 (1.2)
Commercial 85,058 83,298 2.1 137,763 134,904 2.1
Rural 96,564 91,057 6.0 141,493 133,449 6.0
Other 8,834 8,956 (1.4) 15,415 15,225 1.2
- ---------------------------------------------------------------------------------------------
966,314 939,959 2.8 1,572,334 1,528,452 2.9
Wholesale 2 2 - 5 5 -
- ---------------------------------------------------------------------------------------------
TOTAL 966,316 939,961 2.8 1,572,339 1,528,457 2.9
AVERAGE TARIFF
- --------------------------------------------------------------------------------
QUARTERLY EARNINGS RELEASE - JUNE 2003 20
[GRUPO EDP logo] [ESCELSA logo]
QUARTERLY FINANCIAL STATEMENTS AS OF JUNE 30, 2003
- --------------------------------------------------------------------------------
The average tariff charged to retail customers in June 2003 was RS 159.90/MWh,
while the wholesale rate to other distributors was R$ 85.23/MWh, resulting in an
overall average tariff of R$ 155.77/MWh, an increase of 23.5%, compared to the
same month last year. The average tariffs per segment are as follows:
Class R$/MWh
------------------------------------------------------------------------------
PARENT COMPANY
- ---------------------------------------------------------------------------------------------------
JUN-2003 JUN-2002 % change ATE JUN-2003 ATE JUN-2002 % change
------------------------------------------------------------------------------
Retail:
Residential 238.81 206.35 15.7 240.46 216.67 11.0
Industrial 111.99 91.87 21.9 105.73 91.97 15.0
Commercial 217.45 172.85 25.8 213.84 171.08 25.0
Rural 144.89 128.97 12.3 145.79 128.88 13.1
Other 154.09 129.74 18.8 154.31 129.69 19.0
- ---------------------------------------------------------------------------------------------------
159.90 128.92 24.0 158.16 132.97 18.9
Wholesale 85.23 69.24 23.1 82.89 67.09 23.6
- ---------------------------------------------------------------------------------------------------
Average 155.77 126.09 23.5 154.31 129.70 19.0
QUALITY OF SERVICE RENDERED
In order to more accurately reflect service quality indicators, the amounts have
been presented on a 12-month basis in order to eliminate any effects of
seasonality.
Equivalent Outage Duration per Customer-DEC
Indicator that measures the average number of hours that customers remain
without the supply of electric energy.
For the period ended June 30, 2003, DEC was 12.01 hours, compared to 14.99
hours in the same period last year, an improvement of 19.9%. The DEC amount in
2002 was negatively impacted by the blackout that occurred in January of that
year, which had an impact of 2.55 hours.
Equivalent Outage Frequency per Customer-FEC
Indicator that measures the average number of interruptions in the supply of
electric energy, per customer.
For the period ended June 30, 2003, FEC was 9.95, compared to 11.23 in the
same period last year, an improvement of 11.4%. As in the case of the DEC
indicator, the blackout in January 2002 had a negative impact of 1.0
interruption.
Average Service Response Time-TMA
Indicator that measures the average time between a complaint of interruptions
in energy and the reestablishment of service.
For the period ended June 30, 2003, TMA was 117 minutes, compared to 109
minutes in the same period last year.
Energy losses
Energy losses were reduced slightly over the past 12 months from 11.71 % in
the 12-monnth period ended June 30, 2002 to 11.66% in the same period this
year, a difference of 0.4%. The Company has undertaken initiatives to reduce
losses, particularly among commercial customers.
FINANCIAL PERFORMANCE
INCOME FROM OPERATIONS
Income from operations in 1H03 totaled R$ 58,600 thousand compared to 9$24,900
in the same period last year, resulting in an EBITDA of R$ 87,932 thousand,
equal to an EBITDA margin of 19.9%. The main items of income from operations
were:
thousands of reais
- ---------------------------------------------------------------------------------------
First Half
-------------------------------------------
PARENT COMPANY CONSOLIDATED
-------------------------------------------
2003 2002 2003 2002
- ---------------------------------------------------------------------------------------
Gross operating revenues 634,392 521,267 979,904 776,263
Deductions from operating revenues (191,538) (149,922) (209,437) (276,555)
Net operating revenues 442,854 371,345 703,249 566,826
Operating expenses (384,254) (346,445) (605,032) (538,532)
Income from operations 58,600 24,900 98,217 28,294
EBITDA 87,932 53,243 156,361 88,206
EBITDA margin % 19.86% 14.34% 22.23% 15.56%
OPERATING REVENUES
- --------------------------------------------------------------------------------
QUARTERLY EARNINGS RELEASE - JUNE 2003 21
[GRUPO EDP logo] [ESCELSA logo]
QUARTERLY FINANCIAL STATEMENTS AS OF JUNE 30, 2003
- --------------------------------------------------------------------------------
Gross operating revenues in 11103 totaled R$ 634,392 thousand, 21.7% higher
compared to 11102. Revenue from the retail sector was R$ 589,450 thousand, 22.6%
higher than in 11102, due to rate increases implemented in 2002 as well as
higher sales volume.
Lower wholesale energy sales in 11103 compared to 11102 reflects short-term
supply sales of excess energy made the previous year.
The increase in other revenues is due to the growth in the utilization of the
transmission and distribution system by free consumers and revenues resulting
from the agreement with CST.
Net operating revenues in 1 H03 totaled R$ 442,854 thousand, 19.3% higher than
the same period in 2002.
thousands of reais
----------------------------------------------------
PARENT COMPANY CONSOLIDATED
----------------------------------------------------
First Half
----------------------------------------------------
2003 2002 2003 2002
----------------------------------------------------
Retail:
Residential 207,250 160,717 336,236 263,686
Industrial 178,539 179,450 231,095 222,111
Commercial 107,654 91,677 179,742 148,564
Rural 27,136 20,316 49,845 38,508
Other 46,393 35,924 82,007 63,453
Contingency fee 22,478 - 31,721
Regulatory assets/other - (7,297) 11,028 8,991
----------------------------------------------------
589,450 480,787 921,674 745,313
====================================================
Wholesale:
Other distributors 12,531 10,951 14,798 12,835
Short-term (106) 19,016 (2,758) (1,236)
----------------------------------------------------
12,425 29,967 12,040 11,599
----------------------------------------------------
Other operating revenues 32,517 10,513 46,090 19,351
----------------------------------------------------
Gross operating revenues 634,392 521,267 979,804 776,263
(-) Deductions from operating revenues (191,538) 149,922 (276,555) (209,437)
----------------------------------------------------
Net operating revenues 442,854 371,345 703,249 566,826
OPERATING COSTS
Operating costs, including operating expenses plus RGR quotas increased 10.6%
from R$ 354,581 thousand in 11102 to R$ 392,278 thousand in 1H03.
Operating costs outside Company control such as energy purchased, RGR and CCC
quotas increased 5.7%.
Costs managed by the Company such as personnel, material, third party services
and other expenses increased from R$ 65,060 thousand to R$ 86,843 thousand in
1H03, or 14.9%, while depreciation increased 33.5%.
The increase in costs outside Company control is a result of higher energy
expenses from Itaipu, a function of the currency devaluation between the two
periods.
The increase in costs managed by the Company was due to the following factors:
a) Personnel - lower transfer of costs to investments due to the reduction of
such costs in 1 H03 and to higher compensation as a result of the wage
agreement;
b) Materials - higher fuel costs for vehicles used for company transport and
to maintain electric system;
c) Others -higher expenses incurred with energy conservation programs,
software fees, contributions to the National Science and Technology
Development Fund and an adjustment in the provision for delinquent
accounts.
During 1H03 the Company conservatively provisioned R$14,001 thousand for
adjustments to employee and fiscal liability provisions.
PARENT COMPANY
---------------------------------------------------------------------
First Half
---------------------------------------------------------------------
2003 2002
----------------------------------------------------- % Change
R$ thousand % R$ thousand %
---------------------------------------------------------------------
Controlled Costs
Personnel 33,243 8.5 29,699 8.4 11.9
Material 3,603 0.9 3,210 0.9 12.2
Third party services 15,181 3.9 15,103 4.3 0.5
Provision for contingencies 14,001 3.6 1,256 0.4 1,014.7
Other 20,815 5.3 15,792 4.5 31.8
---------------------------------------------------------------------
86,843 22.1 65,060 18.3 33.5
Depreciation 29,332 7.5 28,343 8.0 3.5
---------------------------------------------------------------------
TOTAL ONTROLLED COSTS 116,175 29.6 93,403 26.3 24.4
---------------------------------------------------------------------
Non-controlled Costs: -
Energy purchased 244,851 62.4 224,563 63.3 9.0
- --------------------------------------------------------------------------------
QUARTERLY EARNINGS RELEASE - JUNE 2003 22
[GRUPO EDP logo] [ESCELSA logo]
QUARTERLY FINANCIAL STATEMENTS AS OF JUNE 30, 2003
- --------------------------------------------------------------------------------
CCC 21,070 5.4 26,464 7.5 (20.4)
Compensation for the use water resources 1,518 0.4 1,388 0.4 9.4
ANEEL fiscalization fee 640 0.2 627 0.2 2.1
RGR 8,024 2.0 8,136 2.3 (1.4)
---------------------------------------------------------------------
TOTAL NON-CONTROLLED COSTS 276,103 70.4 261,178 73.7 5.7
---------------------------------------------------------------------
GRAND TOTAL 392,278 100.0 354,581 100.0 10.6
ENERGY PURCHASED EXPENSES
PARENT COMPANY CONSOLIDATED
-------------------------------------------------------
First Half
-------------------------------------------------------
2003 2002 2003 2002
- -----------------------------------------------------------------------------------------------------
FURNAS / TRACTEBEL
Energy contracted- MWh 2,029,894 2,615,863 2,926,733 3,835,261
Expenses - thousands of reais 110,498 121,078 155,155 166,879
Average Tariff - R$/MWh 54.44 46.29 53.01 43.51
- -----------------------------------------------------------------------------------------------------
ITAIPU
Energy contracted- MWh 890,543 864,033 1,253,436 1,215,985
Expenses - thousands of reais 86,830 74,768 122,311 105,255
Average Tariff - R$/MWh 97.50 86.53 97.58 86.56
- -----------------------------------------------------------------------------------------------------
OTHER SUPPLIERS
Energy contracted- MWh 32,290 - 252,751 115,069
Cesa - MWh 11,164 11,164 - -
Expenses - thousands of reais 4,370 1,039 21,917 4,063
Average Tariff - R$/MWh 100.57 93.07 86.71 35.31
- -----------------------------------------------------------------------------------------------------
TRANSPORT FROM ITAIPU
Expenses - thousands of reais 3,267 2,931 4,599 4,124
Average Tariff - R$/MWh 3.67 3.39 3.67 3.39
- -----------------------------------------------------------------------------------------------------
TRANSPORT FROM OTHER
Expenses - thousands of reais 32,766 27,080 52,926 44,662
Average Tariff - R$/MWh 16.14 10.35 18.08 11.65
- -----------------------------------------------------------------------------------------------------
SECTOR AGREEMENT AND CVA
Expenses - thousands of reais 6,742 (10,221) 1,262 (11,690)
-------------------------------------------------------
OTHER EXPENSES
Expenses - thousands of reais 378 7,888 844 8,183
- -----------------------------------------------------------------------------------------------------
TOTAL
Energy contracted- MWh 2,952,727 3,479,896 4,432,920 5,166,315
Cesa - MWh 11,164 11,164 - -
Expenses - thousands of reais 244,851 224,563 359,014 321,476
Average Cost - R$/MWh 82.92 64.53 80.99 62.23
FINANCIAL RESULTS
The net financial result in 1H03 was positive R$ 225,790 thousand, while in the
same period last year was negative R$ 259,087 thousand.
This result was mainly due to the impact of the 5.1 % appreciation of the real
against the U.S. dollar during the period, which caused a significant reduction
in monetary variation and interest on the foreign currency debt obligations.
CASH AND EQUIVALENTS
- --------------------------------------------------------------------------------
QUARTERLY EARNINGS RELEASE - JUNE 2003 23
[GRUPO EDP logo] [ESCELSA logo]
QUARTERLY FINANCIAL STATEMENTS AS OF JUNE 30, 2003
- --------------------------------------------------------------------------------
ESCELSA has funds deposited in banks or invested in financial instruments in the
amount of RS 244,512 thousand (R$ 256,574 thousand on a consolidated basis) as
shown below:
PARENT COMPANY CONSOLIDATED
---------------------------------------------------
June 30, 2003
---------------------------------------------------
thousands US$ thousands US$
of reais thousand of reais thousand
---------------------------------------------------
Investments in Reais:
Cash and bank 4,465 - 5,966 -
Investments funds - - 9,124 -
Other 225 - 1,662 -
---------------------------------------------------
Total real denominated investments 4,690 - 16,752 -
===================================================
Investments in Dollars:
Currency Exchange Securities- NBC's 239,822 83,503 239,822 83,503
---------------------------------------------------
Total Dollar denominated investments 239,822 83,503 239,822 83,503
===================================================
Total cash and equivalents 244,512 83,503 256,574 83,503
===================================================
US dollar = 2.8720 Real
STATEMENTS OF CASH FLOWS
(In thousands of Brazilian reais)
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QUARTERLY EARNINGS RELEASE - JUNE 2003 24
[GRUPO EDP logo] [ESCELSA logo]
QUARTERLY FINANCIAL STATEMENTS AS OF JUNE 30, 2003
- --------------------------------------------------------------------------------
PARENT COMPANY CONSOLIDATED
------------------------------ ----------------------------
1st 1st 1st 1st 1st 1st
Half Half Quarter Half Half Quarter
2003 2002 2003 2003 2003 2003
-----------------------------------------------------------
From operations:
Net Income(loss) for the period 183,260 (174,368) 82,126 183,260 (174,368) 82,126
Adjustments to reconcile income to cash provided by
operating activities:
Operating activities:
Long term interest and monetary and exchange variation (284,993) 235,572 (77,659)(301,330) 254,153 (71,723)
Equity in subsidiaries (3,787) 14,452 (3,327) - - -
Depreciation and amortization 29,332 28,343 14,573 58,144 59,912 29,329
Disposal of property, plant and equipment 1,441 2,330 1,046 2,434 5,070 1,530
Provision for losses - UTE Campo Grande - - - 19,794 - -
Provision for contingencies 2,927 5,764 (12,559) 11,835 6,797 (9,687)
Regulatory assets - (60) - (11,028) (12,976) -
Liabilities adjustments 5,691 4,541 2,598 5,691 4,541 2,598
Deferred income taxes 39,699 (75,712) 12,642 43,304 (83,130) 12,678
Minority share in profit - - - (2,845) (4,673) (1,180)
Remuneration on construction work in progress - - - (561) (745) (307)
-----------------------------------------------------------
(26,430) 40,862 19,440 8,698 54,581 45,364
-----------------------------------------------------------
Changes in current assets and liabilities:
Accounts receivable 19,777 (36,339) 6,778 (2,014) (35,199) 9,434
Other accounts receivable 27,299 6,498 34,316 25,862 (1,901) 37,953
Other credits-UTE Campo Grande - - - (42,727) - (13,594)
Other credits 45,931 (9,971) 8,102 44,545 (16,703) 7,570
Prepaid expenses (10,718) (20,960) (2,090) (29,040) (23,580) (23,258)
Suppliers (14,930) (25,123) (13,754) (13,797) (21,762) (20,444)
Accrued taxes and social contributions 203 4,670 (8,247) 11,517 972 (5,295)
Accrued obligations (2,848) (3,194) (5,696) (2,736) (2,938) (6,402)
Regulatory charges 1,570 (2,443) 1,980 1,259 (3,619) 3,416
Postretirement benefits (390) - (156) (390) - (156)
Variation of Parcel A items 16,805 28,825 4,788 20,977 29,212 10,127
Other 7,548 1,201 6,089 12,275 1,721 8,993
-----------------------------------------------------------
90,247 (56,836) 32,110 25,731 (73,797) 8,344
-----------------------------------------------------------
Change in non-current assets and liabilities:
Accounts receivable 5,643 3,565 23,924 13,987 3,565 23,924
Escrow deposits (9,235) (5,346) (5,915) (14,447) (8,575) (7,905)
Tariff bonus and surcharges - 2,407 - - 2,856 -
Affiliates and subsidiaries 4,731 891 (14,509) 208 (41,502) (42,292)
Prepaid expenses (25,862) 2,409 (12,200) (26,993) (5,410) (6,611)
Variation of Parcel A items 14,416 - 1,220 14,036 - (321)
Other credits - low income 4,940 - (5,784) 6,340 - (7,951)
Suppliers (744) 7,357 - (744) 7,357 -
Other 17,538 5,929 2,649 22,949 7,313 2,700
-----------------------------------------------------------
11,427 17,212 (10,615) 15,336 (34,396) (38,456)
-----------------------------------------------------------
Net cash provided (use in) operating activities 75,244 1,238 40,935 49,765 (53,612) 15,252
-----------------------------------------------------------
Investing activities:
Additions to property, plant and equipment (22,504) (22,828) (11,586) (59,841) (87,240) (27,044)
Additions to investments (101,133) (66,996) (20,288) 2 (102) 1
Obligations related to the concession 3,913 1,868 1,415 5,400 1,950 1,782
-----------------------------------------------------------
Net cash used in investing activities (119,724) (87,956) (30,459) (54,439) (85,392) (25,261)
-----------------------------------------------------------
Financing activities:
Loans and financing (5,578) 39,767 12,276 (51,913) 60,367 (9,714)
Accrued interest and fees (12,955) 11,055 (38,479) (13,176) 11,939 (36,778)
Dividends - - - (291) (4,531) (294)
Affiliates and subsidiaries (70) - 13 - 34,687 33,733
-----------------------------------------------------------
Net cash provided by (used in) financing activities (18,603) 50,822 (26,190) (65,380) 102,462 (13,053)
-----------------------------------------------------------
Net increase(decrease) in cash and cash equivalents (63,083) (35,896) (15,714) (70,054) (36,542) (23,062)
-----------------------------------------------------------
Cash and cash equivalents at the beginning of the period 307,595 257,765 307,595 326,628 259,497 326,628
Cash and cash equivalents at the end of the period 244,512 221,869 291,881 256,574 222,955 303,566
-----------------------------------------------------------
(63,083) (35,896) (15,714) (70,054) (36,542) (23,062)
-----------------------------------------------------------
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QUARTERLY EARNINGS RELEASE - JUNE 2003 25
[GRUPO EDP logo] [ESCELSA logo]
QUARTERLY FINANCIAL STATEMENTS AS OF JUNE 30, 2003
- --------------------------------------------------------------------------------
STATEMENTS OF INCOME BY QUARTER - UNCONSOLIDATED
(in thousands of Brazilian Reais)
-------------------------------------------------------------------------------------------------
2003 2002
-------------------------------------------------------------------------------------------------
1st Quarter 2nd Quarter Total 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
-------------------------------------------------------------------------------------------------
NET OPERATING REVENUES 237,708 205,146 442,854 208,163 163,182 218,287 247,616
-------------------------------------------------------------------------------------------------
OPERATING EXPENSES (184,664) (199,590) (384,254) (176,949) (169,496) (194,567) (201,271)
-------------------------------------------------------------------------------------------------
Electricity purchased for resale (122,881) (121,970) (244,851) (108,323) (116,240) (132,396) (142,881)
Depreciation and amortization (14,573) (14,759) (29,332) (14,131) (14,212) (14,278) (14,460)
Personnel (15,817) (17,426) (33,243) (14,225) (15,474) (17,527) (15,879)
Material (1,936) (1,667) (3,603) (1,557) (1,653) (1,937) (1,701)
Third party services (7,783) (7,398) (15,181) (7,698) (7,405) (8,074) (8,772)
Fuel usage quota - CCC (10,522) (10,548) (21,070) (12,907) (13,557) (11,631) (10,439)
Provision for contingencies (140) (13,861) (14,001) 0 (1,256) 1,256.00 (3,246)
Other expenses (11,012) (11,961) (22,973) (18,108) 301 (9,980) (3,893)
-------------------------------------------------------------------------------------------------
Income from operations 53,044 5,556 58,600 31,214 (6,314) 23,720 46,345
-------------------------------------------------------------------------------------------------
EQUITY IN SUBSIDIARIES 3,327 460 3,787 8,268 (22,720) (19,997) (30,849)
-------------------------------------------------------------------------------------------------
FINANCIAL REVENUES 60,952 5,725 66,677 19,215 44,805 34,552 39,200
-------------------------------------------------------------------------------------------------
FINANCIAL EXPENSES 8,591 150,522 159,113 (37,757) (285,350) (522,010) 101,198
-------------------------------------------------------------------------------------------------
Monetary variation-electricity
purchased (7,091) (5,716) (12,807) (305) (3,569) (194) (4,958)
Monetary and exchange variation
on loans and financing 74,488 215,335 289,823 (2,821) (232,751) (466,210) 157,413
Interest on loans and financing (50,486) (45,403) (95,889) (32,037) (42,005) (50,456) (45,829)
Other (8,320) (13,694) (22,014) (2,594) (7,025) (5,150) (5,428)
-------------------------------------------------------------------------------------------------
Financial results 69,543 156,247 225,790 (18,542) (240,545) (487,458) 140,398
-------------------------------------------------------------------------------------------------
NON-OPERATING REVENUES(EXPENSES),
net (1,303) (199) (1,502) (2,974) (82) (952) (9,545)
-------------------------------------------------------------------------------------------------
INCOME(LOSS) BEFORE TAXES 124,611 162,064 286,675 17,966 (269,661) (484,687) 146,349
Social contribution and income tax (42,485) (60,930) (103,415) (3,811) 81,138 616 2,838
-------------------------------------------------------------------------------------------------
NET INCOME(LOSS) FOR THE PERIOD 82,126 101,134 183,260 14,155 (188,523) (484,071) 149,187
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL RATIOS AND OTHER INFORMATION
- ------------------------------------------------------------------------------------------------------------------------------------
EBITDA 67,617 20,315 87,932 45,345 7,898 37,998 60,805
-------------------------------------------------------------------------------------------------
(+)Financial revenues 60,952 5,725 66,677 19,215 44,805 34,552 39,200
(+)Non-operating revenues
(expenses), net (1,303) (199) (1,502) (2,974) (82) (952) (9,545)
-------------------------------------------------------------------------------------------------
=Adjusted EBITDA 127,266 25,841 153,107 61,586 52,621 71,598 90,460
CAPEX 11,586 11,586 12,241 10,587 13,525 14,538
TOTAL DEBT 1,870,016 1,644,828 1,644,828 1,242,033 1,479,253 2,078,711 1,935,399
INTEREST ON LOANS AND FINANCING 50,486 45,403 95,889 32,037 42,005 50,456 45,829
EBITDA margin 28.4% 9.9% 19.9% 21.8% 4.8% 17.4% 24.6%
EBITDA/Interest on loans
and financing 1,3x 0,4x 0.9 1,4x 0,2x 0,8x 1,3x
- ------------------------------------------------------------------------------------------------------------------------------------
(Table Continued)
- -------------------------------------------------------------------
---------------- LTM ended
Total June 2003
- -------------------------------------------------------------------
NET OPERATING REVENUES 837,248 908,757
--------------------------------
OPERATING EXPENSES (742,283) (780,092)
--------------------------------
Electricity purchased for resale (499,840) (520,128)
Depreciation and amortization (57,081) (58,070)
Personnel (63,105) (66,649)
Material (6,848) (7,241)
Third party services (31,949) (32,027)
Fuel usage quota - CCC (48,534) (43,140)
Provision for contingencies (3,246) (15,991)
Other expenses (31,680) (36,846)
--------------------------------
Income from operations 94,965 128,665
--------------------------------
EQUITY IN SUBSIDIARIES (65,298) (47,059)
--------------------------------
FINANCIAL REVENUES 137,772 140,429
--------------------------------
FINANCIAL EXPENSES (743,919) (261,699)
--------------------------------
Monetary variation-electricity
purchased (9,026) (17,959)
Monetary and exchange variation
on loans and financing (544,369) (18,974)
Interest on loans and financing (170,327) (192,174)
Other (20,197) (32,592)
--------------------------------
Financial results (606,147) (121,270)
--------------------------------
NON-OPERATING REVENUES(EXPENSES),
net (13,553) (11,999)
--------------------------------
INCOME(LOSS) BEFORE TAXES (590,033) (51,663)
Social contribution and income tax 80,781 (99,961)
--------------------------------
NET INCOME(LOSS) FOR THE PERIOD (509,252) (151,624)
- -------------------------------------------------------------------
FINANCIAL RATIOS AND OTHER INFORMATION
- -------------------------------------------------------------------
EBITDA 152,046 186,735
-----------------------------------
(+)Financial revenues 137,772 140,429
(+)Non-operating revenues
(expenses), net (13,553) (11,999)
-----------------------------------
=Adjusted EBITDA 276,265 315,165
CAPEX 50,891 39,649
TOTAL DEBT 1,935,399 1,644,828
INTEREST ON LOANS AND FINANCING 170,327 192,174
EBITDA margin 18.2% 20.5%
EBITDA/Interest on loans
and financing 0,9x 1,0x
- -------------------------------------------------------------------
- --------------------------------------------------------------------------------
QUARTERLY EARNINGS RELEASE - JUNE 2003 26
[GRUPO EDP logo] [ESCELSA logo]
QUARTERLY FINANCIAL STATEMENTS AS OF JUNE 30, 2003
- --------------------------------------------------------------------------------
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QUARTERLY EARNINGS RELEASE - JUNE 2003 27