FORM 6-K
securities
and exchange commission
washington, d.c.
20549
report
of foreign private issuer
pursuant to rule 13a-16 or 15d-16 of
the securities exchange act of 1934
For the month of September, 2006
Commission File Number 1-15224
Energy Company of Minas Gerais
(Translation of Registrants Name Into English)
Avenida Barbacena, 1200
30190-131 Belo Horizonte, Minas Gerais, Brazil
(Address of Principal Executive Offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F |
x |
Form 40-F |
o |
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes |
o |
No |
x |
If Yes is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A
Index
Item |
|
Description of Item |
|
|
|
1. |
|
Summary of Minutes of the 368th meeting of the Board of Directors, December 21, 2005 |
|
|
|
2. |
|
Summary of Minutes of the 381st meeting of the Board of Directors, April 12, 2006 |
|
|
|
3. |
|
Material Announcement, August 10, 2006 |
|
|
|
4. |
|
Fundamentals Ensure Sustainable Growth Results for the First Half 2006 |
|
|
|
5. |
|
Earnings Release Q2 2006 Cemig Geração e Transmissão |
|
|
|
6. |
|
Earnings Release Q2 2006 Cemig D |
|
|
|
7. |
|
Earnings Release Q2 2006 CEMIG |
1
COMPANHIA ENERGÉTICA DE MINAS GERAIS CEMIG
Listed company CNPJ 17.155.730/0001-64 NIRE 31300040127
Summary of the Minutes of the 368th meeting of the Board of Directors.
Date, time and place: December 21, 2005, at 3 p.m., at the companys head office, Av. Barbacena 1200, 18th Floor, Belo Horizonte, Minas Gerais, Brazil.
Meeting Committee: Chairman: Wilson Nélio Brumer; Secretary: Anamaria Pugedo Frade Barros.
Summary of business:
I- The Board approved:
a) The Annual Budget for 2006, and also the Corporate Guidelines for Execution of Budgets, contained in Part III of the Annual Budget: 12 Guidelines for capital expenditure; 13 Guidelines for execution of the expenses budget; and 14 Guidelines for inventories of materials and equipment.
b) The content of the Memorandum of Agreement which establishes the relationship between the parties for presentation of the bid for acquisition, in an auction to be held on a securities exchange, of the stockholding interest owned by the government of São Paulo State in CTEEP (Companhia de Transmissão de Energia Elétrica Paulista); and also for joint management of the business of that company, if the bid made is successful.
c) The content of the Memorandum of Agreement establishing the relationship between the parties for the process of preparation and delivery of a final binding proposal, in the event of being admitted by EDF Internacional S.A. to the subsequent phase, and also for the management of the business of, UTE Norte Fluminense S.A., if the bid is successful.
d) The Economic and Financial Opinion valuing WAY TV Belo Horizonte S.A., prepared by the specialized independent entity Ernst & Young Consultores Associados Ltda.
e) Payment of Interest on Equity, on account of the minimum obligatory dividend, in the amount of R$ 157 million, to stockholders on the companys Nominal Stockholder Registry on January 2, 2006, in two equal installments on June 30 and December 30, 2006, it being the duty of the Executive Board to obey these payment periods, and decide the locations and processes of payment.
f) The Minutes of this meeting.
II- The Board authorized:
a) Payment of an Advance against future capital increase, up to a limit of R$3 million, to cover costs associated with the economic-financial valuation of Light Serviços de Eletricidade S.A.
b) Signing of a Confidentiality Agreement with CTEEP (Companhia de Transmissão de Energia Elétrica Paulista) and with CESP (Companhia
2
Energética de São Paulo), with confidentiality obligation for two years from the date of signing, so that Cemig may have access to confidential information making possible the economic-financial valuation of CTEEP, for the purposes of a potential acquisition of a stake in that company.
c) Disposal, through an auction on a securities exchange, of the totality of the shares owned by Empresa da Infovias S.A. in Way TV Belo Horizonte S.A., establishing a minimum value for the disposal of said shares, such authorization being conditional upon the sale of 100% of the shares of that company by all its stockholders, through an auction on a securities exchange.
III- The Chairman; the Vice-Chairman; the Board members Andréa Paula Fernandes Pansa, Carlos Augusto Leite Brandão, Haroldo Guimarães Brasil, José Augusto Pimentel Pessôa, Andréa Leandro Silva and Alexandre Heringer Lisboa; the Directors Flávio Decat de Moura and Celso Ferreira; and the Superintendents Pedro Carlos Hosken Vieira and Manoel Bernardino Soares made comments on general subjects and matters of interest to the company. The following were present: Board members: Wilson Nélio Brumer, Djalma Bastos de Morais, Aécio Ferreira da Cunha, Alexandre Heringer Lisboa, Andréa Paula Fernandes Pansa, Carlos Augusto Leite Brandão, Francelino Pereira dos Santos, Haroldo Guimarães Brasil, José Augusto Pimentel Pessôa, Nilo Barroso Neto, Andréa Leandro Silva and Luiz Henrique de Castro Carvalho; Members of the Audit Board: Directors: Itamaury Teles de Oliveira, Flávio Decat de Moura and Celso Ferreira; Superintendents: Pedro Carlos Hosken Vieira and Manoel Bernardino Soares; and Anamaria Pugedo Frade Barros, Secretary.
Anamaria Pugedo Frade Barros
3
COMPANHIA ENERGÉTICA DE MINAS GERAIS - CEMIG
Listed Company CNPJ (corporate taxpayer number) 17.155.730/0001-64; NIRE
(business registration number) 31300040127
Extract of the minutes of the 381st meeting of the Board of Directors.
Date, time and place: 12 April 2006, 1pm, company headquarters at Av. Barbacena, 1.200, 18th floor, Belo Horizonte (Minas Gerais state).
Presiding officers: Chairman: Wilson Nélio Brumer / Secretary: Anamaria Pugedo Frade Barros.
Summary: I- The Board approved the minutes of this meeting.
II- The Board authorized: a) the resubmittal to Banco Itaú BBA S.A., together with Brascan Energética S.A. and the Brasil Energia Private Equity Fund, of a preliminary and non-binding proposal to acquire 100% of the capital stock of Usina Termelétrica Juiz de Fora S.A.. Submittal of the definitive proposal, by CEMIG, will depend on prior authorization from the Board, and its terms and conditions will prevail, in all circumstances, over the terms and conditions of the preliminary and non-binding proposal, including the price; and b) filing an action for rescission (i.e. to overrule a final judgment), with request for anticipated judicial protection, against Rima Industrial S.A., with the aim of achieving the total or partial rescission of the decision condemning CEMIG to reimburse that consumer in the amounts related to the tariff additions resulting from DNAEE Order 045/86, adjusted by TR (reference rate) inflation + 2% and delinquent interest, and the installation of a Non-Requirement of Bid Tender Administrative Process and the hiring of Professor João Dácio Rolim, through the law firm Escritório Gaia, Silva, Rolim & Associados Advocacia e Consultoria Jurídica, to support said lawsuit. III- The Vice-Chairman; the Board members Andréa Paula Fernandes Pansa, Antônio Luiz Barros de Salles, Carlos Augusto Leite Brandão, Haroldo Guimarães Brasil and José Augusto Pimentel Pessôa; the Director Flávio Decat de Moura; and the Superintendent Manoel Bernardino Soares made comments on general matters and businesses in the interest of the Company. Present: Board members Wilson Nélio Brumer, Djalma Bastos de Morais, Andréa Paula Fernandes Pansa, Antônio Adriano Silva, Antônio Luiz Barros de Salles, Alexandre Heringer Lisboa, Carlos Augusto Leite Brandão, Francelino Pereira dos Santos, Haroldo Guimarães Brasil, José Augusto Pimentel Pessôa, Nilo Barroso Neto, Eduardo Lery Vieira, Guy Maria Villela Paschoal, Luiz Henrique de Castro Carvalho and Fernando Lage de Melo; Flávio Decat de Moura, Director; Manoel Bernardino Soares, Superintendent; and, Anamaria Pugedo Frade Barros, Secretary.
Anamaria Pugedo Frade Barros
4
COMPANHIA ENERGÉTICA DE MINAS GERAIS - CEMIG
BRAZILIAN LISTED COMPANY - CNPJ 17.155.730/0001-64
MATERIAL ANNOUNCEMENT
Cemig (Companhia Energética de Minas Gerais), a listed company holding public service concessions, with share securities traded on the stock exchanges of New York, Madrid and São Paulo, in accordance with its commitment to best corporate governance practices, and Instructions 358 and 359 (of 3 and 22 January, 2002) of the Brazilian Securities Commission (CVM), hereby informs the public that the shares held by EDF International S.A. (EDFI) in Light S.A. (Light) and in Lidil Comercial Ltda. (Lidil) were today transferred to RME Rio Minas Energia Participações S.A (RME), in which Cemig holds 25% (twenty five per cent) of the registered capital.
RME, a corporation with head office at Avenida Rio Branco 123, Suite 1901, in Rio de Janeiro, Brazil, registered as in the Brazilian Registry of Corporate Taxpayers under N° (CNPJ) 07.925.628/0001-47, is a holding company whose objects are to invest in companies operating in the electricity sector. Its present stockholders are: Companhia Energética de Minas Gerais Cemig; Andrade
Gutierrez Concessões S.A.; Pactual Energia Participações; and Luce Brasil Fundo de Investimento em Participações (Luce). Luce acquired the shares in RME until then held by JLA Participações S.A.(JLA), and has the same controlling stockholder as JLA.
The transaction involved the purchase of 100,719,912,442 common shares in Light and the totality of the shares of Lidil, a company which holds 5,584,685,447 common shares in Light, resulting in the transfer of a total of 106,304,597,889 commons hares in Light, representing, on todays date, 79.39% of the registered capital, and of the voting stock, of Light.
The total price was R$ 697,953,064.46, corresponding to US$319,809,871.91, for the purchase of 106,304,597,889 common shares in Light, representing an approximate price of R$ 6.56 per share, corresponding to US$3.01 per thousand shares. The price was paid in full by RME in cash, on todays date, and the shares were also transferred on todays date.
Also today an amendment was signed to the Stock Purchase Agreement providing that in the event that RME disposes of shares in Light acquired from EDFI within one year, it will, under such amendment, have to pay EDFI 50% of the amount of profit obtained on the sale of such shares.
5
Additionally, on a date to be announced, RME will carry out a public offering for acquisition of the shares of Light S.A that are in circulation in the market, in accordance with Law 6404/76, CVM Instruction 361/2002 and the Regulations of the Novo Mercado, thus guaranteeing to the other stockholders of Light the same treatment accorded to EDFI.
Light is a holding company which indirectly operates in electricity generation, transmission and distribution in Rio de Janeiro State. Thus, for RME and its stockholders, the transaction to purchase Light represents an opportunity to invest in a market with great growth potential, and which is at present the third largest electricity distribution market in Brazil.
Belo Horizonte, August 10, 2006
Flávio Decat de Moura
Chief Financial and Investor Relations Officer
6
Fundamentals Ensure Sustainable Growth
Results for the First Half 2006
7
Disclaimer
Some statements in this presentation may be regarded under U.S. Securities law as forward-looking statements, i.e., statements that are subject to risks and uncertainties.
Forward-looking statements are forecasts which may differ from the final figures and which are not under our control.
For a discussion of the risks and uncertainties as they relate to us, please see our 20-F form for 2005, and in particular item 3 which contains Basic Information Risk Factors.
All figures are expressed in Brazilian GAAP.
8
Agenda
1. Strategy and Results
Fundamentals ensure sustainable growth
2. Outlook of the Businesses
Generation
Transmission
Distribution
Investment Program
3. Financial Condition
Debt Profile
Ratios
Cash Flow
4. Review of Results
9
1. Strategy and Results
Fundamentals ensure sustainable growth
10
Net Income and EBITDA Impacted by Non-Recurring Items
Net Income reached R$ 665 million in the first half of 2006:
R$ 4.10 per lot of 1,000 shares
Net in come declined 36% compared to R$ 1,042 million reported in the same period of 2005.
Cash flow generation, measured by EBITDA, decreased 29% to R$ 1,198 million.
Non-Recurring Items:
Investment in the purchase of salaried bonus increase of employees (R$177 million).
Recomposition of CVA for TUST in 2006 (R$93 million).
Deferred Tariff Re adjustment in the first quarter of 2005 (R$583 million).
11
Fundamentals Ensure Sustainable Growth
We are implementing our strategy to attain the maximum market share in the segments in which we operate:
Acquisition of controlling stake of Light S.A. through Rio Minas Energia Participações S.A. in which we have a 25% ownership.
Acquisition of stakeholding of Grupo Schahin on five transmission companies, in partnership with private investors.
Commenced operations at Irapé and Capim Branco I plants;
We are focusing on our main business-electricity:
Sale of participation of Infovias in Way for R$91 million;
We sold our generation capacity for the highest value permitted in the second new energy auction:
355 MW average
Average price of R$125.48 / MWh
Contract term of 30 years
12
Record sales of 24,331 GWh in the first half of 2006
Increase of 4.7% in sales to final customers;
Sales to other utilities, as the Initial Contracts expired.
17% growth of the network revenues compared to the first half of 2005
62% increase of network transmission revenue (TUST);
3% increase of TUSD network revenue.
90 thousand newly connected customers
13
Consolidated Results R$ thousands
Company |
|
Net Income |
|
EBITDA |
|
Cemig Geração/Transmissâo |
|
292,650 |
|
619,971 |
|
Cemig Distribuição |
|
343,905 |
|
548,417 |
|
Cemig Holding ** |
|
(38,860 |
) |
(74,367 |
) |
Gasmig |
|
17,299 |
|
24,091 |
|
Infovias |
|
3,958 |
|
23,101 |
|
Sá Carvalho |
|
11,004 |
|
15,605 |
|
Efficientia |
|
7 |
|
(10 |
) |
Ipatinga |
|
3,300 |
|
5,727 |
|
Horizontes |
|
5,747 |
|
6,667 |
|
Pai Joaquim |
|
111 |
|
(87 |
) |
Transleste |
|
1,539 |
|
2,257 |
|
Cogeração |
|
1,572 |
|
1,680 |
|
Rosal Energia |
|
11,281 |
|
11,209 |
|
Capim Branco |
|
7,127 |
|
8,218 |
|
Cemig PCH |
|
5,455 |
|
5,686 |
|
UTE Barreiro |
|
(1,018 |
) |
(434 |
) |
Cemig Consolidated |
|
665,077 |
|
1,197,731 |
|
Earnings per Share
(lots of 1,000 shares)
Consolidated EBITDA Margin (%)
14
Accelerated Growth through Acquisitions: Transmission - TBE
ANEEL: approved on 07/18/06
BNDES: approval date 07/27/06
CADE: moving forward
Eletrobrás was notified without restrictions
Payment on the part of Brascan depends on the sale approval of its PCHs in Proinfa
15
Accelerated Growth through Acquisitions: Distribution - Light
In France
Approved by the EDF Board
Approved by CPT on 06/15/06 with amendment that partitions future profits with the eventual sale of shares within one year
Decree from the Ministry of Finance published on July 31
In Brazil
BNDES: Approved on 06/14/06
ANEEL: Approved on 07/25/2006
16
Agenda
2. Outlook of the Businesses
Generation
Transmission
Distribution
Investment Program
17
First Half Sales Volume: 29% higher year-on-year
1st Half 2006 (MWh)
|
|
|
|
|
|
Change |
|
|
|
2006 |
|
2005 |
|
% |
|
Residential |
|
3,310,420 |
|
3,293,423 |
|
0.5 |
% |
Industrial |
|
11,892,578 |
|
11,060,150 |
|
7.5 |
% |
Commercial |
|
1,947,818 |
|
1,888,914 |
|
3.1 |
% |
Rural |
|
859,973 |
|
828,961 |
|
3.7 |
% |
Others |
|
1,332,325 |
|
1,280,526 |
|
4.0 |
% |
Wholesale |
|
4,988,425 |
|
521,583 |
|
856.4 |
% |
TOTAL |
|
24,331,539 |
|
18,873,557 |
|
28.9 |
% |
Results reflect the accelerated growth of the industrial class, the end of initial contracts and the migrations of free consumers in January 2005.
Growth has continued in the last 5 quarters.
18
Sales GWh CEMIG Consolidated
19
Outlook for Generation
We are expanding our generation capacity by 455 MW in 2006.
The addition of the last UHE de Capim Branco I machine and two UHE Irapé machines contributed to the increase of 257 MW of installed capacity.
Secured the concession of UHE de Baguari of 140 MW.
We are already the fifth largest generator in Brazil.
Plant |
|
Installed Capacity |
|
Assured Energy |
|
|
|
(MW) |
|
(MW médios) |
|
Major Hydroelectric plants |
|
|
|
|
|
São Simão |
|
1,710 |
|
1,281 |
|
Emborcação |
|
1,192 |
|
497 |
|
Nova Ponte |
|
510 |
|
276 |
|
Jaguara |
|
424 |
|
336 |
|
Miranda |
|
408 |
|
202 |
|
Três Marias |
|
396 |
|
239 |
|
Volta Grande |
|
380 |
|
229 |
|
Aimorés |
|
162 |
|
84 |
|
Outras |
|
1,036 |
|
603 |
|
|
|
|
|
|
|
Total hydroelectrics |
|
6,218 |
|
3,609 |
|
Total thermoelectrics |
|
184 |
|
115 |
|
Eólica |
|
1 |
|
0 |
|
Total |
|
6,403 |
|
3,724 |
|
20
Results of the 2nd New Energy Auction
Sale Prices obtained were the maximum permitted by the auction.
2nd New Energy Auction of MME
CEMIG GT
Undertaking |
|
Mwave. |
|
Sale Price |
|
|
|
|
|
R$/MWh |
|
UHE Aimorés |
|
84 |
|
125.00 |
|
UHE Irapé |
|
206 |
|
125.00 |
|
UHE Porto Estrela |
|
18 |
|
134.42 |
|
UHE Queimado |
|
47 |
|
125.00 |
|
Total |
|
355 |
21.11% of the energy negotiated in the auction |
|
|
|
|
|
R$/MWh |
|
Average Sale Price |
|
|
|
125.48 |
|
CEMIG D
Fonte |
|
MWmed |
|
R$/MWh |
|
Hydro |
|
60.45 |
|
126.77 |
|
Thermo |
|
19.23 |
|
132.39 |
|
Total |
|
79.68 |
5.88% of the energy negotiated in the auction |
|
Prices |
|
R$/MWh |
|
||
Average |
|
|
|
128.13 |
|
Marginal |
|
|
|
134.42 |
|
Total Energy Negotiated in the Leilão: 1.682 MWave. |
21
CEMIG GT Regional Sales Distribution
22
Perspectives of Energy Distribution
Most extensive distribution network
Operational performance
Losses are minimal
DEC/FEC below regulatory limits
We supply 96% of the needs of Minas Gerais state
We attend to a concession area greater than any European country
567 thousand Km2
5.415 cities and towns
774 municipalities
Concession expires 2/18/16
It can be prolonged by 20 years
Next tariff revision : 2008
Extense of Subtransmission Network - Km
|
|
2003 |
|
2004 |
|
2005 |
|
06/2006 |
|
Total |
|
16,185 |
|
16,086 |
|
16,040 |
|
16,080 |
|
161 KV |
|
55 |
|
55 |
|
55 |
|
55 |
|
138 KV |
|
10,500 |
|
10,504 |
|
10,521 |
|
10,556 |
|
69 KV |
|
4,647 |
|
4,544 |
|
4,481 |
|
4,513 |
|
Under 69 KV |
|
983 |
|
983 |
|
983 |
|
956 |
|
Extense of Distribution Network - Km
|
|
2003 |
|
2004 |
|
2005 |
|
06/2006 |
|
Total |
|
359,304 |
|
367,437 |
|
379,400 |
|
386,785 |
|
Urban Distribution Networks |
|
82,160 |
|
82,819 |
|
83,826 |
|
84,667 |
|
Subterranean Distribution Networks |
|
707 |
|
708 |
|
759 |
|
759 |
|
Rural Distribution Networks |
|
276,437 |
|
283,910 |
|
294,815 |
|
301,359 |
|
Transformation Capacity of Distribution Sites
|
|
2003 |
|
2004 |
|
2005 |
|
06/2006 |
|
Number of Substations |
|
348 |
|
350 |
|
354 |
|
355 |
|
MVA |
|
7,987 |
|
8,050 |
|
8,070 |
|
8,085 |
|
23
Investment Program R$ million
|
|
|
|
|
|
1st sem. |
|
|
|
Business |
|
2005 |
|
2006 |
|
2006 |
|
2007 |
|
Generation |
|
397 |
|
130 |
|
60 |
|
98 |
|
Transmission |
|
20 |
|
93 |
|
40 |
|
16 |
|
Distribution |
|
691 |
|
1,136 |
|
546 |
|
1,335 |
|
Distribution |
|
665 |
|
1,009 |
|
507 |
|
1,005 |
|
|
|
|
|
|
|
|
|
|
|
Extention and reinforcement of existing networks |
|
276 |
|
288 |
|
122 |
|
544 |
|
Light for All |
|
291 |
|
711 |
|
379 |
|
461 |
|
Other |
|
98 |
|
10 |
|
6 |
|
|
|
Sub-transmission |
|
26 |
|
127 |
|
39 |
|
330 |
|
Holding |
|
57 |
|
40 |
|
12 |
|
82 |
|
Subtotal |
|
1,165 |
|
1,399 |
|
658 |
|
1,531 |
|
Other Businesses |
|
|
|
|
|
|
|
|
|
Reconciliation to Cash Flow* |
|
191 |
|
|
|
|
|
|
|
Subtotal |
|
1,356 |
|
1,399 |
|
658 |
|
1,531 |
|
INVESTMENT IN ADQUISITIONS |
|
|
|
528 |
|
|
|
|
|
LIGHT |
|
|
|
184 |
|
|
|
|
|
TBE |
|
|
|
344 |
|
|
|
|
|
TOTAL (1 + 2) |
|
1,356 |
|
1,927 |
|
658 |
|
1,531 |
|
* Includes advancement of suppliers and warehouse.
Light for All Program:
We connected 94,000 low-income families;
Total investment: R$ 694,6 million.
UHE Capim Branco II
24
Agenda
3. Financial Condition
Debt profile
Ratios
Cash Flow
25
Financial Management Strictly Obeying Strategic Plan
Our strategic plan resulted in are vision of risk classification:
Elevationo four Fitch rating, from A- to A+ (6/29/06);
Moodys is preparing to review its classification;
We are revolving our debts, lengthening the maturity and reducing costs:
Emission of CEMIG D (R$300 MM) and CEMIG GT (R$ 900 MM) in Promissory Notes, at a cost of 103% of CDI (26/06/06).
On January 27, 2006, CRC credits placed in a FIDC in the value of R$ 1.659 million:
R$ 900 million in senior shares
R$ 759 million in subordinate shares
26
Cemig Consolidated Debt June 2006
Main Indexers
Principal Creditors
Banco ItaúBBA |
|
R$ |
1.290 million |
|
(22 |
)% |
Debenturistas |
|
R$ |
1.287 million |
|
(22 |
)% |
Unibanco |
|
R$ |
701 million |
|
(12 |
)% |
Bradesco |
|
R$ |
616 million |
|
(11 |
)% |
Banco do Brasil |
|
R$ |
592 million |
|
(10 |
)% |
Eletrobrás |
|
R$ |
274 million |
|
(5 |
)% |
BNDES |
|
R$ |
234 million |
|
(4 |
)% |
Average cost of debt is 10.96% p.a., as of June 06
27
Lengthened Debt Maturity Profile
R$ million
Values referring to June 2006
28
CEMIG Debt
June 2006
The indicators of debt continue rising, therefore, for a satisfactory credit quality of the Company
Description |
|
CEMIG Consolidated |
|
CEMIG GT |
|
CEMIG D |
|
|
|
|
|
|
|
|
|
Debt |
|
R$ 5.852 million |
|
R$ 2.684million |
|
R$ 2.068 million |
|
Debt in foreign currency |
|
R$ 701 million (12%) |
|
R$ 196 million (7%) |
|
R$ 463 million (22%) |
|
Net Debt |
|
R$ 4.563 million |
|
R$ 2.082 million |
|
R$ 1.695 million |
|
EBITDA/interest |
|
2.96 |
|
2.54 |
|
3.70 |
|
Debt/EBITDA |
|
3.00 |
|
2.75 |
|
1.98 |
|
Debt / (shareholders equity + Debt) |
|
43.51 |
% |
46.34 |
% |
44.77 |
% |
(1) Net Debt = Total Debt cash and equivalents Regulatory Assets (RTE/BNDES)
29
Strong Cash Flow Guarantees Expansion
Income
Statement (consolidated)
Values in millions of Reais
|
|
2nd Q, 06 |
|
1st Q 06 |
|
1st Sem 06 |
|
2nd Q 05 |
|
1st Sem 05 |
|
2005 |
|
Cash at start of period |
|
1,440 |
|
1,344 |
|
1,344 |
|
919 |
|
896 |
|
896 |
|
Cash from operations |
|
474 |
|
411 |
|
885 |
|
96 |
|
394 |
|
1,657 |
|
Net Income |
|
325 |
|
340 |
|
665 |
|
487 |
|
1,042 |
|
2,003 |
|
Depreciation and amoritization |
|
152 |
|
151 |
|
303 |
|
147 |
|
295 |
|
595 |
|
Suppliers |
|
22 |
|
(111 |
) |
(89 |
) |
(1 |
) |
18 |
|
91 |
|
Deferred tariff adjustment |
|
|
|
|
|
|
|
-8 |
|
(591 |
) |
(591 |
) |
Other adjustments |
|
(31 |
) |
31 |
|
|
|
(308 |
) |
(149 |
) |
(220 |
) |
ICMS (IVA) on TUSD |
|
|
|
|
|
|
|
(221 |
) |
(221 |
) |
(221 |
) |
Financing activity |
|
(521 |
) |
(93 |
) |
(614 |
) |
207 |
|
108 |
|
147 |
|
Financing obtained |
|
58 |
|
912 |
|
970 |
|
776 |
|
776 |
|
1,556 |
|
Payment of loans and financing |
|
(76 |
) |
(59 |
) |
(135 |
) |
(255 |
) |
(350 |
) |
(818 |
) |
Other |
|
(503 |
) |
(946 |
) |
(1,449 |
) |
(314 |
) |
(318 |
) |
(591 |
) |
Investment activity |
|
(338 |
) |
(222 |
) |
(560 |
) |
(251 |
) |
(427 |
) |
(1,356 |
) |
Investments outside of concession area |
|
(6 |
) |
(9 |
) |
(15 |
) |
(23 |
) |
(32 |
) |
(69 |
) |
Investments in concession area |
|
(413 |
) |
(233 |
) |
(646 |
) |
(242 |
) |
(420 |
) |
(1,360 |
) |
Special obligations - consumer contributions |
|
82 |
|
19 |
|
101 |
|
14 |
|
25 |
|
73 |
|
Other |
|
(1 |
) |
1 |
|
|
|
|
|
|
|
|
|
Cash at the end of the period |
|
1,055 |
|
1,440 |
|
1,055 |
|
971 |
|
971 |
|
1,344 |
|
30
Agenda
4. Analysis of Results
31
Fundamentals Ensure Recovery after the impact of Non-Recurring Items
Statement
of Results (Consolidated)
Values in millions of Reais
|
|
2º Tri 2006 |
|
1º Tri 2006 |
|
1º Semestre 06 |
|
2º Tri 2005 |
|
1º Semestre 05 |
|
2005 |
|
Net Revenue |
|
2,128 |
|
2,243 |
|
4,371 |
|
2,007 |
|
4,202 |
|
8,236 |
|
Operating Expenses |
|
(1,783 |
) |
(1,693 |
) |
(3,476 |
) |
(1,341 |
) |
(2,695 |
) |
(6,342 |
) |
EBIT |
|
345 |
|
550 |
|
895 |
|
666 |
|
1390 |
|
1,894 |
|
EBITDA |
|
497 |
|
701 |
|
1,198 |
|
814 |
|
1685 |
|
2,488 |
|
Financial Result |
|
(108 |
) |
(15 |
) |
(123 |
) |
(316 |
) |
(166 |
) |
(3 |
) |
Non-operating Result |
|
(8 |
) |
(12 |
) |
(20 |
) |
(12 |
) |
(20 |
) |
(53 |
) |
Provision for Income Taxes, Social Cont and Deferred Income Tax |
|
(73 |
) |
(183 |
) |
(256 |
) |
(134 |
) |
(445 |
) |
(471 |
) |
Interest on own Capital Reversal |
|
169 |
|
|
|
169 |
|
283 |
|
283 |
|
635 |
|
Minority Shareholders |
|
|
|
|
|
|
|
|
|
1 |
|
|
|
Net Income |
|
325 |
|
340 |
|
665 |
|
487 |
|
1,042 |
|
2,003 |
|
Investment made by the first annual salary increase brought into consideration:
Elimination of benefits not related to discharge
Compatible return with a policy of investments in the company (TIR = 16%)
32
Earnings/Losses NPV and cost of annual salary increase
Alternative cost - R$ |
|
|
|
NPV |
|
|
|
|
|
12 |
% |
Purchased annual salaries increase |
|
600,289,636 |
|
|
|
Total NPV |
|
|
|
349,886,200 |
|
|
|
|
|
|
|
Purchased annual salaries increase new employees |
|
1,252,591,437 |
|
|
|
Total NPV |
|
|
|
222,667,219 |
|
|
|
|
|
|
|
Purchased annual salaries increase - total |
|
1,852,881,073 |
|
|
|
Total NPV |
|
|
|
222,667,219 |
|
IRR = 16.05 %
33
Net Profit adjusted to reach 22%
Values in millions of R$ |
|
1st Sem 2006 |
|
1st Sem 2005 |
|
Net Profit |
|
665.077 |
|
1.041.590 |
|
(a) Deferred Adjusted Payment |
|
|
|
(412.597 |
) |
(b) CVA Recomposition of TUST |
|
61.555 |
|
|
|
(c) Annual Salary Increase |
|
117.040 |
|
|
|
(d) Reversal of Provision of RGR |
|
(43.402 |
) |
|
|
(e) Income from overdue bills Ind. clients. |
|
(31.869 |
) |
|
|
Adjusted Net Profit |
|
768.401 |
|
628.993 |
|
|
|
|
|
|
|
EBITDA |
|
1.197.732 |
|
1.684.895 |
|
(a) Deferred Tarrif Adjustment |
|
|
|
(487.576 |
) |
(b) CVA Recomposition of TUST |
|
93.265 |
|
|
|
(c) Annual Salary Increase |
|
177.333 |
|
|
|
(d) Reversal of Provision of RGR |
|
(65.760 |
) |
|
|
Adjusted EBITDA |
|
1.402.570 |
|
1.197.319 |
|
Adjusted EBITDA grew 17%.
34
Integrated Business Structure Drives Results
Statement
of Results (Consolidated)
Values in millions of Reais
|
|
Ist Half, 2006 |
|
|
|
|
|
|
|
Cemig H |
|
Cemig D |
|
Cemig GT |
|
Net Revenue |
|
4.371 |
|
3.063 |
|
1.114 |
|
Operating Expenses |
|
(3.476 |
) |
(2.699 |
) |
584 |
|
EBIT |
|
895 |
|
364 |
|
530 |
|
EBITDA |
|
1.198 |
|
548 |
|
620 |
|
Financial Result |
|
(123 |
) |
76 |
|
(211 |
) |
Non-Operating Result |
|
(20 |
) |
(15 |
) |
(1 |
) |
Provision for Income Taxes, Social Cont and Deferred Income Tax |
|
(256 |
) |
(147 |
) |
(108 |
) |
Interest of Own Capital Reversal |
|
169 |
|
66 |
|
83 |
|
Minority Shareholders |
|
|
|
|
|
|
|
Net Income |
|
665 |
|
344 |
|
293 |
|
35
Cemig Geração e Transmissão
Statement
of Results
Values in millions of Reais
|
|
1º Sem. 2006 |
|
1º Sem. 2005 |
|
Net Revenue |
|
1,113,902 |
|
933,135 |
|
Operating Expenses |
|
(583,838 |
) |
(392,696 |
) |
EBIT |
|
530,064 |
|
540,439 |
|
EBITDA |
|
619,971 |
|
631,378 |
|
EBITDA Margin (%) |
|
55.7 |
% |
67.7 |
% |
Financial Result |
|
(211,387 |
) |
(299,501 |
) |
Non-operating Result |
|
(1,347 |
) |
(1,773 |
) |
Provision for Income Taxes, Social Cont & Deferred Income Tax |
|
(107,822 |
) |
(81,480 |
) |
Interest on Own Capital |
|
83,142 |
|
137,000 |
|
Net Income |
|
292,650 |
|
294,685 |
|
Net Margin |
|
26.3 |
% |
31.6 |
% |
36
Net Sales
Revenue
Values in millions of Reais
|
|
2º Q 2006 |
|
1º Q 2006 |
|
1º Sem. 06 |
|
2º Q 2005 |
|
1º Sem. 05 |
|
2005 |
|
Sales to end consumers |
|
366 |
|
325 |
|
691 |
|
355 |
|
717 |
|
1,489 |
|
Wholesale supply |
|
194 |
|
179 |
|
373 |
|
154 |
|
278 |
|
597 |
|
Network transmission revenue |
|
138 |
|
148 |
|
286 |
|
94 |
|
178 |
|
396 |
|
Other |
|
3 |
|
2 |
|
5 |
|
3 |
|
5 |
|
11 |
|
Subtotal |
|
701 |
|
654 |
|
1,355 |
|
606 |
|
1,178 |
|
2,493 |
|
Deductions |
|
(109 |
) |
(132 |
) |
(241 |
) |
(134 |
) |
(245 |
) |
(529 |
) |
Net Revenues |
|
592 |
|
522 |
|
1,114 |
|
472 |
|
933 |
|
1,964 |
|
37
Operational
Expenses
Values in millions of Reais
|
|
2º Q 2006 |
|
1º Q 2006 |
|
1º Sem. 06 |
|
2º Q 2005 |
|
1º Sem. 05 |
|
2005 |
|
Bought Energy |
|
|
|
|
|
|
|
|
|
|
|
|
|
Personnel, managers, Board, profit shares |
|
103 |
|
47 |
|
150 |
|
48 |
|
93 |
|
235 |
|
Depreciation and amoritization |
|
45 |
|
45 |
|
90 |
|
44 |
|
91 |
|
181 |
|
Fuel Consumption Account - CCC |
|
11 |
|
20 |
|
31 |
|
14 |
|
15 |
|
29 |
|
Energy Development Account - CDE |
|
7 |
|
13 |
|
20 |
|
7 |
|
8 |
|
17 |
|
Charges for Use of the Basic Transmission Network |
|
56 |
|
52 |
|
108 |
|
30 |
|
58 |
|
157 |
|
Third Party Services |
|
20 |
|
15 |
|
35 |
|
15 |
|
25 |
|
78 |
|
Pension Fund (Forluz) - employee, post-retirement benefits |
|
9 |
|
8 |
|
17 |
|
9 |
|
17 |
|
35 |
|
Materials |
|
5 |
|
3 |
|
8 |
|
|
|
3 |
|
17 |
|
Royalties |
|
29 |
|
30 |
|
59 |
|
27 |
|
56 |
|
109 |
|
Operational Provisions |
|
1 |
|
1 |
|
2 |
|
(5 |
) |
(8 |
) |
200 |
|
Other Expenses |
|
31 |
|
33 |
|
64 |
|
17 |
|
24 |
|
95 |
|
Total |
|
317 |
|
267 |
|
584 |
|
206 |
|
382 |
|
1,153 |
|
38
Cemig Distribuição
Statement
of Results
Values in thousands of Reais
|
|
1º Sem. 2006 |
|
1º Sem. 2005 |
|
Net Revenue |
|
3.062.787 |
|
3.302.124 |
|
Operating Expenses |
|
(2.698.972 |
) |
(2.467.201 |
) |
EBIT |
|
363.815 |
|
834.923 |
|
EBITDA |
|
548.417 |
|
1.014.507 |
|
Margin EBITDA |
|
17,9 |
% |
30,7 |
% |
Financial Result |
|
75.796 |
|
80.224 |
|
Non-Operating Result |
|
(14.571 |
) |
(13.761 |
) |
Provision for Income Taxes, Social Cont & Deferred Income Tax |
|
(146.946 |
) |
(308.471 |
) |
Interest on Own Capital |
|
65.811 |
|
107.000 |
|
Net Income |
|
343.905 |
|
699.915 |
|
Net Margin |
|
11,2 |
% |
21,2 |
% |
39
Sales
Revenue
Values in millions of Reais
|
|
2º Q 2006 |
|
1º Q 2006 |
|
1º Sem. 06 |
|
2º Q 2005 |
|
1º Sem. 05 |
|
2005 |
|
Sales to end users |
|
1,923 |
|
1,920 |
|
3,843 |
|
1,877 |
|
3,397 |
|
7,335 |
|
TUSD |
|
287 |
|
301 |
|
588 |
|
389 |
|
572 |
|
1,201 |
|
Subtotal |
|
2,210 |
|
2,221 |
|
4,431 |
|
2,266 |
|
3,969 |
|
8,536 |
|
Wholesale |
|
|
|
6 |
|
6 |
|
8 |
|
30 |
|
95 |
|
Other |
|
13 |
|
13 |
|
26 |
|
6 |
|
31 |
|
53 |
|
Subtotal |
|
2,223 |
|
2,240 |
|
4,463 |
|
2,280 |
|
4,030 |
|
8,684 |
|
Deferred Tariff Adjustment (RTD) |
|
|
|
|
|
|
|
8 |
|
591 |
|
591 |
|
Deductions |
|
(707 |
) |
(693 |
) |
(1,400 |
) |
(731 |
) |
(1,319 |
) |
(2,878 |
) |
Net Revenue |
|
1,516 |
|
1,547 |
|
3,063 |
|
1,557 |
|
3,302 |
|
6,397 |
|
Revenue related to industrial customers fell 12% as a result of migration from contracted consumers
Supply adjusted from the second quarter: R$87 million
40
Operational
Expenses
Value in millions of Reais
|
|
2º Tri 2006 |
|
1º Tri 2006 |
|
1º Semestre 06 |
|
2º Tri 2005 |
|
1º Semestre 05 |
|
2005 |
|
Personnel |
|
277 |
|
158 |
|
435 |
|
157 |
|
308 |
|
595 |
|
Profit Shares |
|
|
|
14 |
|
28 |
|
16 |
|
30 |
|
188 |
|
Pension Fund |
|
|
|
27 |
|
54 |
|
2 |
|
55 |
|
111 |
|
Materials |
|
15 |
|
14 |
|
29 |
|
(499 |
) |
34 |
|
74 |
|
Third-Party Services |
|
84 |
|
72 |
|
156 |
|
39 |
|
129 |
|
312 |
|
Electric Energy Purchased for Resale |
|
459 |
|
561 |
|
1,020 |
|
943 |
|
953 |
|
1,890 |
|
Depreciation and Amoritization |
|
93 |
|
92 |
|
185 |
|
139 |
|
180 |
|
364 |
|
Operational Provisions |
|
16 |
|
42 |
|
58 |
|
19 |
|
47 |
|
133 |
|
Fuel Consumption Account (CCC) |
|
102 |
|
76 |
|
178 |
|
103 |
|
181 |
|
387 |
|
Charges for the Use of the Bassic Transmission Network |
|
114 |
|
196 |
|
310 |
|
152 |
|
334 |
|
554 |
|
Energy Development Account (CDE) |
|
75 |
|
56 |
|
131 |
|
123 |
|
138 |
|
279 |
|
Provision for Losses - tariff recomposition |
|
3 |
|
3 |
|
6 |
|
(64 |
) |
|
|
82 |
|
Energy Efficiency R&D |
|
23 |
|
|
|
23 |
|
|
|
|
|
173 |
|
PROINFA |
|
25 |
|
|
|
25 |
|
|
|
|
|
|
|
Other Expenses |
|
23 |
|
37 |
|
60 |
|
54 |
|
78 |
|
165 |
|
Total |
|
1,309 |
|
1,348 |
|
2,698 |
|
1,341 |
|
2,467 |
|
5,307 |
|
41
Fundamentals Ensure Sustainable Growth
Results for the First Half 2006
42
Companhia Energética de Minas Gerais - Cemig
CNPJ 06.981.176/0001-58
|
EARNINGS RELEASE |
|
|
|
Q2 2006 |
43
Net Profit
Cemig Geração e Transmissão posted Q2 2006 net profit of R$ 172mn, 11% higher year on year.
Net profit in H1 2006 was R$ 293mn, slightly lower (0.68%) than the R$ 295mn recorded in H1 2005.
The decline in profit basically reflects the increase in operational costs, including non requiring items, which rose 51%, mainly due to:
higher regulatory costs
higher personnel expenses
EBITDA
Cemig G/T posted EBITDA of R$ 620mn in H1 2006, 1.81% lower year on year.
This decline was due to the increase in the companys operational costs, which mainly impacted EBITDA in Q2 2006, when EBITDA totaled R$ 319mn still 4.6% higher than the R$ 305mn posted in Q2 2005.
As a result, Cemig G/Ts EBITDA margin fell: from 67.7% in H1 2005 to 55.7% in H1 2006. If we exclude the effects of non-recurring items, EBITDA margin would be 59.4%
44
Despite the decline in EBITDA in Q2 2006, we highlight the significant increase (+19.6%) in net revenues in this period versus last year.
Net revenue grew to R$ 592mn in Q2 2006, signaling the success of the management of the generation/transmission business, which has successfully been consolidating itself within the new Brazilian electricity sector model.
Gross Supply of Electricity
In H1 2006, revenue from the gross supply of electricity of Cemig G/T totaled R$ 1.064bn, almost 7% higher year on year.
The main factor that influenced this growth was the revenue from the supply of energy to other concession holders, which posted strong growth in H1 2006 (+44.2% year on year).
This amount totaled R$ 337mn in H1 2006, versus R$ 234mn in H1 2005.
This growth is the result of the energy auction held in 2005, with the energy being sold to distribution companies when the so-called initial contracts expire.
Revenue from network usage
Revenue from network usage in H1 2006 was R$ 286mn, 60.7% higher than the R$ 178mn obtained in H1 2005. This revenue relates to the charges imposed by Cemig Geração e Transmissão on the agents connected to the basic network.
The increase in network usage revenue is mainly a result of the following factors:
increase in the annual revenue of the transmission business (+18%)
increase in the following charges:
CCC (+106.7%)
CDE (+150%)
PROINFA
45
Operational costs and expenses
Operational costs and expenses in H1 2006 totaled R$ 584mn, 50.7% higher than the R$ 388mn posted in H1 2005.
This result is mainly due to the variation in the following costs:
Personnel (+64.7%)
CCC fuel consumption account (+106.7%)
CDE energy development account (+150.0%)
Network usage charges (+103.8%); and
Provision for losses in free energy amounts (R$ 26mn)
The main variations in the expenses are described below:
Personnel
Personnel expenses in H1 2006 totaled R$ 140mn, 64.7% higher than the R$ 85mn posted in H1 2005.
This result is mainly due to the annual wage increase of 7.6% in November 2005 and the provision for indemnity payments of future additional time-of-service payments of employees, made in June 2006, in the amount of R$ 42mn.
Depreciation / Amortization
Depreciation and amortization expenses did not vary significantly in the comparison between the two periods, totaling R$ 90mn in H1 2006 (1.10% lower than the R$ 91mn posted in H1 2005).
Post-Employment Obligations
Expenses incurred in post-employment obligations in H1 2006 totaled R$ 17mn, 2.3% lower than the R$ 17.4mn posted in H1 2005.
46
These expenses basically represent the interest incident on the actuarial obligations of Cemig Geração e Transmissão, net of the earnings expected from the assets of the plans, estimated by an external actuary. The decline in expenses is due to higher growth in assets than in obligations.
Fuel Consumption Account CCC
CCC expenses in H1 2006 were R$ 31mn, 106.7% higher than the R$ 15mn posted in H1 2005.
These expenses relate to the operating costs of the thermo plants of the Brazilian interlinked and isolated energy systems, divided up between energy concession holders as stipulated by an ANEEL Resolution. This is a non-controllable cost, and the expense recognized in the result corresponds to the amount effectively passed on to the tariff.
Transmission Network Usage Charges
Expenses related to these charges totaled R$ 108mn in H1 2006, 103.8% higher than the R$ 53mn level posted in H1 2005. These expenses relate to the charges owed by electricity distribution and generation players for use of the installations, components of the basic network, as established through an ANEEL Resolution.
The increase in expenses is mainly due to the average 18% adjustment in the transmission tariff in June 2005 and the start-up of the Aimorés plant.
Energy Development Account - CDE
CDE expenses totaled R$ 20mn in H1 2006, versus R$ 8mn in H1 2005. These expenses relate to the passthrough to Eletrobrás by transmission concessionaires of the levies charged on consumers connected to the basic network, as established by the ONS (National Grid Operator).
47
The increase in this expense is due to the growth in the number of consumers and retroactive charging, as previously mentioned in the CCC expense item.
Provision for Losses Free Energy Reimbursement Right
Based on its own studies, Cemig Geração e Transmissão recorded a provision for losses of R$ 26mn in H1 2006.
Considering that the assumptions used in this study may be altered during the reimbursement period, Management will periodically revise these forecasts and, consequently, the provision level.
Energy Efficiency and Research and Development
Spending on energy efficiency and research and development in H1 2006 was R$ 9mn, 200% higher than the R$ 3mn level posted in H1 2005. This increase was mainly due to the new criteria adopted at the start of 2006 for recognizing these expenses.
Starting this year, the Company provisions 1% of its net revenue for investment in energy efficiency and research and development programs.
Alternative Energy Sources Incentive Program PROINFA
PROINFA, implemented via Decree nº 5.025 of 30 March 2004, aims to increase the share of electricity produced by projects of Autonomous Independent Producers, involving wind-powered energy, small hydroelectric plants and biomass energy, in the National Interlinked System.
The amounts are paid by the transmission and distribution concessionaires to ELETROBRÁS, which administers the PROINFA account, in accordance with calculations made by ELETROBRÁS itself.
48
In H1 2006, Cemig Geração e Transmissão registered PROINFA expenses of R$ 2.4mn. This is a non-controllable cost, and the expense recognized in the result corresponds to the amount effectively passed on to the tariff.
Financial Revenues (Expenses)
The company went from a net financial expense of R$ 300mn in H1 2005 to a net financial expense of R$ 211mn in H1 2006 (a decline of 29.7%). The items comprising the financial result and that posted the strongest variations are listed below:
Increase in financial investment revenues, due to a greater volume of funds invested (R$ 34mn in H1 2006 versus R$ 3.3mn in H1 2005).
19.2% increase in charges on loans and financings in Brazil as a result of the Companys debt rollover criteria, with several foreign currency debt contracts being replaced by local currency debt contracts, starting in H2 2005.
Net gains from FX variation in H1 2006 of R$ 12mn, versus R$ 49mn in H1 2005, basically resulting from loans and financings in foreign currency.
The reduction in gains is due to the debt rollover criteria, with several foreign currency debt contracts being replaced by local currency debt contracts, and to FX rate variation. In H1 2006, the Brazilian Real appreciated 7.5% against the US$, versus 11.4% appreciation in H1 2005.
49
Charts 1 and 2: SALES (GWh) CEMIG Geração e Transmissão
Last Six Quarters
Half-Year Sales
50
Chart I
Breakdown by Consumption Segment
Cemig GT
Sales in H1 2006 |
|
GWh |
|
Free Consumers |
|
8.958 |
|
Supply |
|
5.308 |
|
- Cemig Group Supply |
|
448 |
|
- Bilateral Supply Contract |
|
4.860 |
|
Total |
|
14.266 |
|
Chart II
Income Statement
R$ 000
|
|
H1 2006 |
|
H1 2005 |
|
Net revenue |
|
1.113.902 |
|
927.972 |
|
Operational |
|
(583.838 |
) |
(387.533 |
) |
Operational result |
|
530.064 |
|
540.439 |
|
EBITDA |
|
619.971 |
|
631.378 |
|
EBITDA margin |
|
55,7 |
% |
68,0 |
% |
Financial result |
|
(211.387 |
) |
(299.501 |
) |
Non-operational result |
|
(1.347 |
) |
(1.773 |
) |
Income tax provision, social contribution and deferred income tax |
|
(107.822 |
) |
(81.480 |
) |
Reversal of interest on own equity |
|
83.142 |
|
137.000 |
|
Net profit |
|
292.650 |
|
294.685 |
|
Net margin |
|
26,3 |
% |
31,8 |
% |
51
Chart III
Operational revenues
R$ mn
|
|
Q2 2006 |
|
Q1 2006 |
|
H1 2006 |
|
Q2 2005 |
|
H1 2005 |
|
2005 |
|
Sales to Final Consumers |
|
366 |
|
325 |
|
691 |
|
355 |
|
717 |
|
1.489 |
|
Supply |
|
194 |
|
179 |
|
373 |
|
154 |
|
278 |
|
597 |
|
Revenue from Transmission Network Usage |
|
138 |
|
148 |
|
286 |
|
94 |
|
178 |
|
396 |
|
Others |
|
3 |
|
2 |
|
5 |
|
3 |
|
5 |
|
11 |
|
Subtotal |
|
701 |
|
654 |
|
1.355 |
|
606 |
|
1.178 |
|
2.493 |
|
Deductions |
|
(109 |
) |
(132 |
) |
(241 |
) |
(111 |
) |
(250 |
) |
(529 |
) |
Net revenue |
|
592 |
|
522 |
|
1.114 |
|
495 |
|
928 |
|
1.964 |
|
Chart IV
Operational Expenses R$ mn
|
|
Q2 |
|
Q1 |
|
H1 |
|
Q2 |
|
H1 |
|
|
|
|
|
2006 |
|
2006 |
|
2006 |
|
2005 |
|
2005 |
|
2005 |
|
Energy Purchased |
|
|
|
|
|
|
|
|
|
|
|
|
|
Personnel / Management / Board members / Profit-sharing |
|
103 |
|
47 |
|
150 |
|
49 |
|
94 |
|
235 |
|
Depreciation and Amortization |
|
45 |
|
45 |
|
90 |
|
44 |
|
91 |
|
181 |
|
Fuel Consumption Account - CCC |
|
11 |
|
20 |
|
31 |
|
14 |
|
15 |
|
29 |
|
Energy Development Account - CDE |
|
7 |
|
13 |
|
20 |
|
7 |
|
8 |
|
17 |
|
Charges from Use of the Basic Transmission Network |
|
56 |
|
52 |
|
108 |
|
25 |
|
53 |
|
157 |
|
Third-party Services |
|
20 |
|
15 |
|
35 |
|
15 |
|
27 |
|
78 |
|
Forluz Employees Post-Retirement Benefits |
|
9 |
|
8 |
|
17 |
|
9 |
|
17 |
|
35 |
|
Materials |
|
5 |
|
3 |
|
8 |
|
|
|
6 |
|
17 |
|
Royalties |
|
29 |
|
30 |
|
59 |
|
27 |
|
56 |
|
109 |
|
Operational Provisions |
|
1 |
|
1 |
|
2 |
|
4 |
|
1 |
|
200 |
|
Other Expenses and Provision for Losses from Tariff Rebuilding |
|
31 |
|
33 |
|
64 |
|
13 |
|
20 |
|
95 |
|
Total |
|
317 |
|
267 |
|
584 |
|
207 |
|
388 |
|
1.153 |
|
52
Companhia Energética de Minas Gerais - Cemig
CNPJ 06.981.180/0001-16
|
EARNINGS RELEASE |
|
|
|
Q2 2006 |
53
Net Profit
Cemig D posted net profit of R$ 199mn in Q2 2006, 32.5% lower year on year due to the impact of non-recurring items.
Net profit in H1 2006 was R$ 344mn, versus R$ 700mn in H1 2005.
The main factors that negatively affected the result were:
Recognition of revenue from the deferred tariff readjustment, in the amount of R $591mn in H1 2005.
A 14.6% year-on-year increase in operational expenses in H1 2006, mainly due to:
the transfer of R$ 93mn related to the CVA item (charges for usage of the transmission network), as described in the section Operational Costs and Expenses;
the increase in personnel expenses, due to the provision for indemnity payments to employees for future additional time-of-service payments, acquired by CEMIG in the approximate amount of R$ 127mn;
In terms of positive effects on H1 2006 results, we highlight the reversal of RGR expenses, retroactive to 2004, in the amount of R$ 28mn due to ANEEL approval of said expense in an amount less than that estimated by the Company.
54
EBITDA
EBITDA totaled R$ 258mn in Q2 2006, bringing H1 2006 EBITDA to R$ 548mn (45.9% lower year on year).
The chart below shows the behavior of EBITDA between H1 2005 and H1 2006:
This decline in EBITDA mainly stems from the extraordinary revenue of R$ 591mn posted in H1 2005.
Excluding this non-recurring item, EBITDA actually rose by 29.6%. EBITDA margin fell from 31.8% in H1 2005 to 17.9% in H1 2006. Excluding the non-recurring items this margin reaches 22.1%.
Gross Supply of Electricity
Revenue from gross supply of electricity totaled R$ 3.85bn in H1 2006, 12.3% higher than the R$ 3.43bn posted in H1 2005.
The main impacts on 2006 revenues stemmed from the following factors:
Average tariff increase of 23.9%, effective as of 8 April 2005 (with full impact in annual 2006 result);
Average tariff increase of 6.7%, effective as of 8 April 2006; and
55
3.5% decline in the volume of energy billed to final consumers (excluding own consumption).
Amount of Energy Sold to Final Consumers (MWh)
|
|
MWh |
|
||||
Breakdown |
|
2T06 |
|
2T05 |
|
Var. % |
|
|
|
|
|
|
|
|
|
Residential |
|
3.310.420 |
|
3.293.423 |
|
0,52 |
|
Industrial |
|
2.391.539 |
|
2.908.360 |
|
(17,77 |
) |
Retailing, Services, Others |
|
1.947.818 |
|
1.888.914 |
|
3,12 |
|
Rural |
|
859.973 |
|
828.961 |
|
3,74 |
|
Public Power |
|
294.581 |
|
276.657 |
|
6,48 |
|
Public Illumination |
|
523.272 |
|
506.271 |
|
3,36 |
|
Public Service |
|
499.600 |
|
483.399 |
|
3,35 |
|
Total |
|
9.827.203 |
|
10.185.985 |
|
(3,52 |
) |
56
The charts below show the breakdown of energy consumption in H1 2006 and in 2005.
Breakdown of energy consumption by segment in
H1 2006
Breakdown of energy consumption by segment in
H1 2005
The decline is mainly due to the migration of industrial consumers, who have become free clients of Cemig Geração e Transmissão. This change is illustrated above, showing that the share of the industrial sector declined from 29% to 24% between 2005 and 2006.
Despite the decline in energy sales, we stress that some segments posted growth (especially the commercial and residential segments: +3.1% and +0.51%, respectively).
57
Considering the seasonable load shape from Distribution, we expect H2 2006 results to show growth in energy consumption in the main segments in relation to the H1 2006.
Deferred Tariff Increase
The result of CEMIGs periodic tariff revision, retroactive to April 2003, was announced in April 2005, granting CEMIG the right to raise tariffs by 44.4%.
The average increase applied to CEMIGs tariffs on 8 April 2003 was 31.5%. To compensate CEMIG for the lower revenues billed from April 2003 to April 2005, sector regulator ANEEL is incorporating an additional percentage in the tariff increases for the 2004-2007 period.
The difference between the tariff increase to which Cemig Distribuição was entitled and the tariff effectively charged from consumers between 2003 and 2005 was recognized as a regulatory asset in counterpart to the result of 2005, in the amount of R$ 591mn.
Network usage revenues
The revenue obtained from charging for the use of the Electricity Distribution Systems (known as TUSD) was R$ 587mn in H1 2006, 2.7% higher year on year.
The TUSD item is charged from unit generators on distribution voltage and free consumers located in Cemig Ds concession area.
58
Operational costs and expenses
Operational costs and expenses (excluding financial income) in H1 2006 totaled R$ 2.69bn, 14.6% higher than the R$ 2.35bn posted in H1 2005. This is mainly due to the 17% increase in energy bought for resale (equivalent to R$ 148mn), (from the end of the initial contracts) and the variation in personnel expenses due to the provision for indemnity payments to employees for future special additional payments (for time of service) made in June 2006 equivalent to R$ 127mn.
The differences between the sum totals of the non-controllable costs (also called CVA), used as a reference in calculating tariff increased, and the amounts effectively disbursed are compensated in the subsequent tariff revisions, and registered in Current Assets and Long-Term Liabilities as prepaid expenses.
OPERATIONAL COSTS AND EXPENSES ON 30 JUNE 2006 R$ Thousands
|
|
30/06/2006 |
|
||||||
|
|
|
|
|
|
CVA |
|
|
|
|
|
|
|
|
|
amounts |
|
Effective |
|
|
|
Operational |
|
CVA amounts |
|
excluded |
|
expense |
|
|
|
expenses |
|
transferred to |
|
from the |
|
recognized |
|
|
|
without |
|
the result of |
|
result of the |
|
in the result |
|
|
|
effects of |
|
the period |
|
period |
|
of the |
|
|
|
CVA |
|
(*) |
|
(**) |
|
period |
|
Personnel |
|
435.390 |
|
|
|
|
|
435.390 |
|
Profit-sharing |
|
28.483 |
|
|
|
|
|
28.483 |
|
Post-Employment Obligations |
|
54.315 |
|
|
|
|
|
54.315 |
|
Materials |
|
28.783 |
|
|
|
|
|
28.783 |
|
Third-party services |
|
156.055 |
|
|
|
|
|
156.055 |
|
Electricity purchased for resale |
|
884.287 |
|
165.053 |
|
(29.403 |
) |
1.019.937 |
|
Depreciation and amortization |
|
184.602 |
|
|
|
|
|
184.602 |
|
Operational Provisions |
|
57.526 |
|
|
|
|
|
57.526 |
|
Fuel Consumption Account CCC |
|
246.643 |
|
(26.276 |
) |
(29.528 |
) |
190.839 |
|
Transmission Network Usage Charges |
|
196.271 |
|
5.678 |
|
108.200 |
|
310.149 |
|
Energy Development Account CDE |
|
145.511 |
|
(7.349 |
) |
(7.296 |
) |
130.866 |
|
Provision for Losses in the Recovery of the RTE amounts |
|
6.402 |
|
|
|
|
|
6.402 |
|
Energy Efficiency and Research and Development |
|
35.801 |
|
|
|
|
|
35.801 |
|
PROINFA |
|
22.358 |
|
2.465 |
|
(12.049 |
) |
12.774 |
|
Other Operating Expenses |
|
53.157 |
|
(6.107 |
) |
|
|
47.050 |
|
Total |
|
2.535.584 |
|
133.464 |
|
29.924 |
|
2.698.972 |
|
(*) Relate to the non-controllable costs comprising the CVA that were transferred to the result due to their inclusions in the calculation of the tariff increase of Cemig Distribuição.
(**) Relate to the variations in the non-controllable costs comprising the CVA, and which were not included in the calculation of the tariff increase of Cemig D, thus being excluded from the result
59
The main variations in expenses are described below:
Personnel
Personnel expenses in H1 2006 were R$ 435mn, 41.2% higher than the R$ 308mn posted in H1 2005. This is mainly due to the provision for indemnity payments to employees for future additional time-of-service payments, as commented above, partially compensated by the increased transfer of personnel expenses to ongoing works (R$ 51mn in June 2006 versus R$ 16mn in 2005). This investment for future additional time-of-service payments will bring economy when the automatic adjustments of 1% for personnel salary will cease.
Electricity Purchased for Resale
Expenses related to electricity purchased for resale totaled R$ 1.02bn in H1 2006, 17% higher than expense of R$ 871mn recorded in H1 2005. This is a non-controllable cost, and the expense recognized in the result corresponds to the amount effectively passed through to the tariff.
Depreciation/Amortization
Depreciation and amortization expenses did not vary significantly between H1 2006 (R$ 184mn) and R$ 179mn (H1 2005), increasing only 2.8% - mainly due to the entry into operation of new distribution networks and lines.
Post-Employment Obligations
Expenses incurred in post-employment obligations in H1 2006 totaled R$ 54mn, 3.6% lower than expenses of R$ 56mn posted in H1 2005. These expenses basically represent the interest incident on the actuarial obligations of Cemig Distribuição, net of the earnings expected from the assets of the plans, estimated by an external actuary. The decline in expenses is due to higher growth in assets than in obligations.
60
Operational Provisions
Operational provisions in H1 2006 totaled R$ 58mn, 23.4% higher than the R$ 47mn posted in H1 2005. The main provision registered in 2006 relates to non-performing loans, in the amount of R$ 52mn.
Fuel Consumption Account CCC (a levy on all electricity distributors, to subsidize thermal plants)
CCC expenses in H1 2006 totaled R$ 191mn, 5.5% higher than the R$ 181mn level posted in H1 2005. These expenses relate to the operating costs of the thermo plants of the Brazilian interlinked and isolated energy systems, divided up between energy concession holders as stipulated by an ANEEL Resolution. This is a non-controllable cost, and the expense recognized in the result corresponds to the amount effectively passed on to the tariff.
Transmission Network Usage Charges
Expenses related to these charges totaled R$ 310mn in H1 2006, 2.1% higher than the R$ 303mn level posted in H1 2005. These expenses relate to the charges owed by electricity distribution and generation players for use of the installations, components of the basic network, as established through an ANEEL Resolution. This is a non-controllable cost, and the expense recognized in the result corresponds to the amount effectively passed on to the tariff.
Due to a new ANEEL ruling on the criteria for constituting the CVA related to basic transmission network usage charges, in H1 2006 Cemig Distribuição reversed part of the CVA item constituted as of April 2005, in the amount of R$ 93mn, ensuring an increase in these expenses in H1 2006.
61
Energy Development Account - CDE
CDE expenses totaled R$ 131mn in H1 2006, 5% lower than the R$ 138mn level obtained in H1 2005. Payments are defined by an ANEEL Resolution. This is a non-controllable cost, and the expense recognized in the result corresponds to the amount effectively passed on to the tariff.
Energy Efficiency and Research and Development
Spending on energy efficiency and research and development in H1 2006 totaled R$ 36mn, 414% higher than the R$ 7mn level posted in H1 2005. This increase was mainly due to the new criteria adopted at the start of 2006 for recognizing these expenses. Starting this year, the Company provisions 1% of its net revenue for investment in energy efficiency and research and development programs.
Alternative Energy Sources Incentive Program PROINFA
PROINFA, implemented via Decree nº 5.025 of 30 March 2004, aims to increase the share of electricity produced by projects of Autonomous Independent Producers, involving wind-powered energy, small hydroelectric plants and biomass energy, in the National Interlinked System.
The amounts are paid by the transmission and distribution concessionaires to ELETROBRÁS, which administers the PROINFA account, in accordance with calculations made by ELETROBRÁS itself.
In H1 2006, Cemig Distribuição registered PROINFA expenses of R$ 13mn. This is a non-controllable cost, and the expense recognized in the result corresponds to the amount effectively passed on to the tariff and the energy amount is related to Cemig Distribuição.
62
Financial Revenues (Expenses)
In H1 2006, Cemig Distribuidora posted net financial revenue of R$ 76mn, versus net financial revenue of R$ 80mn in H1 2005. The main factors that impacted the financial result are listed below:
In H1 2006, revenue from monetary variation and interest incident on the Deferred Tariff Increase totaled R$ 102mn, 34.6% lower than the R$ 156mn level obtained in H1 2005. In 2005, Cemig Distribuição posted higher revenue due to the announcement of the definitive result of CEMIGs tariff review, which led to the registering of a regulatory asset called Deferred Tariff Increase and to the updating of this asset retroactive to 2003.
Growth of R$ 53mn in revenue from interest on bills paid in arrears: R$ 82mn in H1 2006 versus R$ 29mn in H1 2005. This variation stems from the revenue registered in Q2 2006, in the amount of R$ 48mn, related to the write-off of accounts received from large industrial consumers related to previous years, whose principal amount was considerably less than the accrued amount related to financial charges.
63
Charts 1 and 2: SALES (GWh) - CEMIG Distribuição
Last Six Quarters
Half-Year Sales
64
Chart I
Breakdown by consumption segment
Cemig D
Sales breakdown for H1 2006 |
|
GWh |
|
Industrial |
|
2.392 |
|
Residential |
|
3.310 |
|
Rural |
|
860 |
|
Commercial |
|
1.948 |
|
Others |
|
1.332 |
|
Subtotal |
|
9.842 |
|
Supply |
|
|
|
Total |
|
9.842 |
|
Chart II
Income Statement
R$ 000
|
|
H1 2006 |
|
H1 2005 |
|
Net revenue |
|
3.062.787 |
|
3.190.026 |
|
Operational expenses |
|
(2.698.972 |
) |
(2.355.103 |
) |
Operational result |
|
363.815 |
|
834.923 |
|
EBITDA |
|
548.417 |
|
1.014.507 |
|
EBITDA margin |
|
17,9 |
% |
31,8 |
% |
Financial result |
|
75.796 |
|
80.224 |
|
Non-operational result |
|
(14.571 |
) |
(13.761 |
) |
Income tax provision, social contribution and deferred income tax |
|
(146.946 |
) |
(308.471 |
) |
Reversal of equity on own interest |
|
65.811 |
|
107.000 |
|
Net profit |
|
343.905 |
|
699.915 |
|
Net margin |
|
11,2 |
% |
21,9 |
% |
65
Chart III
Operating revenues
R$ mn
|
|
Q2 2006 |
|
Q1 2006 |
|
H1 2006 |
|
Q2 2005 |
|
H1 2005 |
|
2005 |
|
Sales to Final Consumers |
|
1.923 |
|
1.920 |
|
3.843 |
|
1.877 |
|
3.397 |
|
7.335 |
|
TUSD |
|
287 |
|
301 |
|
588 |
|
389 |
|
572 |
|
1.201 |
|
Sub-total |
|
2.210 |
|
2.221 |
|
4.431 |
|
2.266 |
|
3.969 |
|
8.536 |
|
Supply |
|
|
|
6 |
|
6 |
|
8 |
|
30 |
|
95 |
|
Others |
|
13 |
|
13 |
|
26 |
|
6 |
|
31 |
|
53 |
|
Sub-total |
|
2.223 |
|
2.240 |
|
4.463 |
|
2.280 |
|
4.030 |
|
8.684 |
|
Deferred Tariff Increase - RTD |
|
|
|
|
|
|
|
8 |
|
591 |
|
591 |
|
Deductions |
|
(707 |
) |
(693 |
) |
(1.400 |
) |
(777 |
) |
(1.431 |
) |
(2.878 |
) |
Net revenue |
|
1.516 |
|
1.547 |
|
3.063 |
|
1.511 |
|
3.190 |
|
6.397 |
|
Chart IV
Operational Expenses R$ mn
|
|
Q2 2006 |
|
Q1 2006 |
|
H1 2006 |
|
Q2 2005 |
|
H1 2005 |
|
2005 |
|
Personnel |
|
277 |
|
158 |
|
435 |
|
151 |
|
308 |
|
595 |
|
Profit-sharing |
|
14 |
|
14 |
|
28 |
|
15 |
|
30 |
|
188 |
|
Post-Employment Obligations |
|
27 |
|
27 |
|
54 |
|
28 |
|
55 |
|
111 |
|
Materials |
|
15 |
|
14 |
|
29 |
|
14 |
|
34 |
|
74 |
|
Third-party services |
|
84 |
|
72 |
|
156 |
|
53 |
|
129 |
|
312 |
|
Electricity purchased for resale |
|
459 |
|
561 |
|
1.020 |
|
483 |
|
871 |
|
1.890 |
|
Depreciation and amortization |
|
93 |
|
92 |
|
185 |
|
90 |
|
180 |
|
364 |
|
Operational provisions |
|
16 |
|
42 |
|
58 |
|
41 |
|
47 |
|
133 |
|
Quota for the Fuel Consumption Account CCC |
|
115 |
|
76 |
|
191 |
|
78 |
|
181 |
|
387 |
|
Transmission Network Usage Charges |
|
114 |
|
196 |
|
310 |
|
166 |
|
304 |
|
554 |
|
Energy Development Account - CDE |
|
75 |
|
56 |
|
131 |
|
64 |
|
138 |
|
279 |
|
Provision for Losses in Recovering Amounts from Extraordinary Tariff Rebuilding Process |
|
3 |
|
3 |
|
6 |
|
|
|
|
|
82 |
|
Energy Efficiency and Research and Development |
|
36 |
|
|
|
36 |
|
4 |
|
7 |
|
173 |
|
PROINFA |
|
13 |
|
|
|
13 |
|
|
|
|
|
|
|
Other Net Expenditures |
|
10 |
|
37 |
|
47 |
|
30 |
|
71 |
|
165 |
|
Total |
|
1.351 |
|
1.348 |
|
2.699 |
|
1.217 |
|
2.355 |
|
5.307 |
|
66
Companhia Energética de Minas Gerais - Cemig
Companhia Aberta - CNPJ 17.155.730/0001-64
CEMIG ANNOUNCED NET INCOME
OF R$ 325 MILLION IN 2Q 2006
Belo Horizonte, Brazil, August 9, 2006 Companhia Energética de Minas Gerais CEMIG (BOV: CMIG4, CMIG3; NYSE: CIG e LATIBEX: XCMIG), a leading concessionaire in Brazil, and its subsidiaries (CEMIG Companies), today announced net income of R$ 665 million in the period of January to June 2006, or R$ 4.10 per lot of 1,000 shares. In the second quarter 2006, net income was R$ 325 million, or R$ 2.01 per lot of 1,000 shares.
67
The Chairman of the Board of Directors, Dr. Wilson Nélio Brumer, commented, Second quarter results clearly demonstrate that our strategies, substantiated in our Strategic Plan, are correct and will enable us to attain our sustainable growth objectives, despite the impact caused by certain non-recurring items. The 67% increase our net income in the last three years proves that aligning with the interests of our shareholders has had a beneficial effect on everyone: shareholders, employees, and the communities we serve. During the first half of 2006, our shareholders have received, in accordance with our previously announced dividends, a total of R$ 8.92 per lot of 1,000 shares. In the first half of the year, we grew with added value. Our energy sales increased 29%, driven by the evolution of the Minas Gerais economy. In May 2006, the state industry grew 8.5% when compared with the month of May 2005 whereas the national industry grew 4.8% in the same period. The number of Cemig consumers increased 2.8% in the first half of the year. Cash flow measured by EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization) reached R$ 1,198 million, and net income was R$ 665 million. We look for the best opportunities to accelerate our growth and we have been successful with this initiative. Our two most recent acquisitions clearly show our continued focus on the electricity sector and on projects that create value, above and beyond our ability to evaluate opportunities that have attractive returns vis à vis their risk. Cash generation, due to operational improvements that we have implemented, especially in the case of Light SA, will continue to leverage our continued growth in line with our long-term strategy. We will make further advancements in this quarter, without doubt.
President and CEO, Dr. Djalma Bastos de Morais stated, In the first half of 2006, we achieved net income of R$ 665 million, or R$ 4.10 per thousand shares, a 36% reduction when compared to the same period of last year. It is important to note that a large portion of this reduction is from non-recurring items that will not affect our future results. In fact, a good example was the opportunity to obtain for our employees a salaried bonus that impacted our payroll by increasing it independently of performance. Although this is reflected in our results in the short-term, we treat this as a R$ 177 million investment in the Company, and for our shareholders, it provides the long-term benefit of significantly reducing personnel expenses. We estimate a return of more than 12%. We must also point out our ability to take on new projects. We are constructing two additional electricity
68
generation plants that, when completed, will add more than 455 MW to our installed capacity, representing a 7% increase. During this half, we started operating in two more units in Usina de Capim Branco and the units in Usina de Irapé. Usina de Irapé (Hidrelétrica Presidente Juscelino Kubitschek) started commercial operation on July 20, 2006. This is the most important venture realized in Jequitinhonha Valley, with installed capacity of 360 MW and investments of more than R$ 1.3 billion. This commitment to growth by the Company considers the desires of our shareholders who are looking for value in their investments and also the communities we serve through the installment of an essential service for social and economic development.
Chief Financial Officer and Director of Investor Relations, Dr. Flávio Decat de Moura, commented, Once again, we were successful in our strategy to sell our electricity generated capacity in the auctions organized by ANEEL, our regulatory agency. As everyone knows, on June 29, 2006 we were able to sell practically all of the generation capacity that we had. We negotiated an average of 355 MW that will generate annual revenue of R$ 390 million. Commercialized energy from hydroelectrics Aimorés (84 MW average), Irapé (206 MW average) and Queimado (47 MW average), at a price of R$ 125 per MWh. We also sold, for R$ 134.42 per MWh, energy from the Porto Estrela plant (18 MW average) with the recuperation of Uso de Bem Público UBP. Cemig D already purchased 98.90 MW average, being 60.50 MW average of hydraulic energy and 38.50 MW average for thermo energy. The demand by the Distributor for this auction was fully attended. In relation to the financial highlights, I can say that we are continuing to rollover our debt, with R$ 1.2 billion issued in promissory notes. Our strategy is to extend the maturity of our bonds and reduce the cost by optimizing the utilization of generated cash in the period generating overages to finance the acquisition of assets to attain the objectives established in our Strategic Plan.
2Q 2006 Highlights
Record sales volume in one quarter in the history of CEMIG
22.7% growth in the quantity of energy sold to final customers
90 thousand new consumers added in first half
Successful New Energy Auction
69
Significant Increase in Income from Wholesale
Economic Summary (R$ millions)
|
|
2T06 |
|
2T05 |
|
Change % |
|
|
|
|
|
|
|
|
|
Quantity of Energy Sold MWh |
|
12,457,770 |
|
10,148,745 |
|
22.8 |
|
Gross Revenue |
|
2,965 |
|
2,986 |
|
(0.70 |
) |
Net Revenue |
|
2,128 |
|
2,007 |
|
6.02 |
|
EBITDA |
|
497 |
|
701 |
|
(29 |
) |
Net Income |
|
325 |
|
487 |
|
(33 |
) |
Earnings per Share |
|
2.01 |
|
3.00 |
|
(33 |
) |
Number of Customers |
|
6,101,000 |
|
5,938,320 |
|
2.75 |
|
Share Performance in 2Q 2006
BOVESPA
Ticker |
|
2Q 2006 |
|
2005 |
|
Cmig 3 |
|
5.84 |
% |
50 |
% |
Cmig 4 |
|
- 4.72 |
% |
60 |
% |
IBOV |
|
-5.39 |
% |
30 |
% |
IEE |
|
-7.94 |
% |
45 |
% |
NYSE
Ticker |
|
2Q 2006 |
|
2005 |
|
CIG |
|
-8.85 |
% |
54 |
% |
DJIA |
|
0.047 |
% |
0 |
% |
Net Income
CEMIGs net income for the second quarter 2006 was R$ 325 million, in comparison with R$ 487 million reported in the second quarter of 2005, representing a 33% decline.
For the first six months of 2006, net income was R$ 665 million, a decrease of 36.2% in relation to the first half of 2005.
This reduction in net income was primarily due to the following factors:
Recognition of revenue due to the readjustment of the deferred tariff in the amount of R$591 million during the first half of 2005.
70
An increase of 23.6% in operational expenses in the first half of 2006 compared to the same period of the prior year. This increase is mainly due to:
as an extraordinary event that affected the results of the first quarter 2006, excluded from the sum results was R$ 93 million for the CVA charge of use of the transmission network, as described in the Operating Costs and Expenses section;
the increase in uncontrollable costs, principally in energy purchased for resale that increased 50.6% in the comparable periods;
the increased in personnel expenses, mainly due to the provision for the indemnity of employees for future salary increases, attained by CEMIG for the amount of approximately R$177 million.
The table below illustrates the individual contribution of each company to consolidated income for the 2Q 2006.
Company |
|
Net Income* |
|
EBITDA* |
|
Cemig Geração/Transmissâo |
|
171.739 |
|
319.478 |
|
Cemig Distribuição |
|
146.738 |
|
177.706 |
|
Cemig Holding ** |
|
(24.967 |
) |
(55.545 |
) |
Gasmig |
|
7.981 |
|
12.130 |
|
Infovias |
|
76 |
|
12.078 |
|
Sá Carvalho |
|
5.149 |
|
7.572 |
|
Efficientia |
|
91 |
|
89 |
|
Ipatinga |
|
1.358 |
|
2.852 |
|
Horizontes |
|
2.833 |
|
3.472 |
|
Pai Joaquim |
|
105 |
|
82 |
|
Transleste |
|
876 |
|
1.493 |
|
Cogeração |
|
1.239 |
|
1.227 |
|
Rosal Energia |
|
5.142 |
|
5.375 |
|
Capim Branco |
|
5.963 |
|
6.705 |
|
Cemig PCH |
|
2.650 |
|
2.749 |
|
UTE Barreiro |
|
(1.624 |
) |
(1.319 |
) |
Cemig Consolidado |
|
325.350 |
|
496.144 |
|
* In R$ thousands
71
When analyzing the table above, it is possible to observe that together, Cemig G/T as much as Cemig D are responsible for approximately 98% of total income. This participation has been constant in the most recent quarters, noting however an important increase in the contribution from Gasmig, who in the first half generated a net income of R$ 17 million.
At the end of July, Cemig sold its participation in Way TV, following the Companys strategy to concentrate and expand in synergistic operations, so that any obtained resources could then be used for business expansion.
EBITDA
Cash generation for Cemig reached R$ 1.197 billion in the first half of 2006, representing a 28.9% decline versus the same period last year. The reduction in EBITDA is primarily due to the extraordinary income registered in the first half of 2005 for the amount of R$591 million.
Excluding this extraordinary income, EBITDA would have been in line with the comparable period or 2005. EBITDA margin was 27.4% in June 2006 compared with 41.2% in June 2005.
72
In the second quarter 2006, EBITDA was R$ 495.7 million, representing a 30% decline when compared to the first quarter 2006. em relação ao 1ºTri 2006. It is important to note that the main negative impacts occur in the second quarter 2006.
Market
The quantity of energy sold in the second quarter 2006 was 12.5 million MWh, a record sales volume for one quarter in the history of Cemig. This volume represents an increase of 22.8% in relation to the same period of 2005.
|
|
Energy Sold (Consolidated) MWh - 2º Quarter |
|
||||
Consumption by Class |
|
2006 |
|
2005 |
|
Change % |
|
Residential |
|
1.653.546 |
|
1.676.101 |
|
-1,35 |
|
Industrial |
|
5.875.324 |
|
5.977.769 |
|
-1,71 |
|
Commercial |
|
958.053 |
|
957.081 |
|
0,10 |
|
Rural |
|
455.745 |
|
463.569 |
|
-1,69 |
|
Others |
|
676.672 |
|
655.906 |
|
3,17 |
|
Wholesale |
|
2.838.430 |
|
418.319 |
|
578,53 |
|
TOTAL |
|
12.457.770 |
|
10.148.745 |
|
23 |
|
In the first six months of 2006, the quantity of energy sold reached 24.4 million MWh, representing an almost 30% increase in only one year.
Factors that contributed to this increase included:
Economic Improvement: the economic improvement of Minas Gerais that has ocurred in the most recent quarters demonstrates a trend of continued growth, which is one of the most prominent in the country. It is interesting to note that through exports, the secondary sector continues to expand, especially in siderurgy, iron and metal industries. These sectors, which consume a significant amount of electricity, are contributing to the further increase in energy sold by Cemig.
Free Consumers: The amount of energy sold to free consumers was one of the principal sources that contributed to the energy sales volume growth in the first six months of 2006.
Wholesale: Wholesale energy reached 2.8 million MWh in the second quarter 2006. Thie increase of almost 580% in comparison with the same quarter of last year, was from energy sold to other utilities and also to commercial users.
73
An adjustment of R$ 87 million in the supply not billed that was registered in the 1Q 2006 as a part of the reevaluation of the calculated revenue registered in the aforementioned quarter. It was necessary to have a reclassification of the automatically improved values through the information system of the Company, making the adjustments in the second quarter 2006. Additionally, the calculation procedures were reevaluated with a revision by the internal auditor of the respective internal controls.
Wholesale Revenue
The quantitly of energy sold to other utilities reached 4.9 milhões MWh in the first half 2006.
This increase was mainly due to the energy sale from Cemig Generation and Transmission to other distributors in 2006.
In the past, a large portion of these sales were made between Cemig G/T e Cemig D, and by consolidating the Companys results, these activities were eliminated. It is interesting to note the optimal prices achieved by Cemig G/T for these contracts, accomplished in large part because of the Companys strategy to take advantage of market opportunities.
Revenues from Network Use
In the first half of 2006, revenues from network use increased 16.8% when compared with the same period of 2005. Of this R$ 875 million, Cemig Distribution contributed approximately 67% with the remaining contribution from Cemig G/T.
Also adding to this amount are the revenues from the use of the installations comprising the basic transmission network of Cemig Generation and Transmission by the electricity generators and distributors that are part of the Brazilian interconnected system, as per values defined through ANEEL Resolution (R$ 223 million in 2006 compared with R$ 157 million in 2005).
74
Operating Costs and Expenses
Operating costos and expenses (excluding financial results) were R$3.47 billion in the first six months of 2006, compared to R$2.69 million reported in the same period of 2005. This represents an increase of 28.9%.
This results is mainly due to the following factors:
Uncontrollable costs
Personnel expenses
Operational provisions
Costs and expenses are described in the below table:
Consolidated Operating Costs and Expenses as of June 30, 2006
|
|
|
|
|
|
CVA |
|
|
|
|
|
|
|
CVA Amounts |
|
amountsnot |
|
Effective |
|
|
|
Operating |
|
transferred to |
|
included in |
|
expense |
|
|
|
Expenses |
|
the periods |
|
the periods |
|
recognized in |
|
|
|
without |
|
results |
|
results |
|
the periods |
|
|
|
Effects of CVA |
|
(*) |
|
(**) |
|
results |
|
|
|
|
|
|
|
|
|
|
|
Personnel, Adminstrators and Board Members |
|
614.226 |
|
|
|
|
|
614.226 |
|
Employee Shares |
|
38.726 |
|
|
|
|
|
38.726 |
|
Post-employment benefits |
|
75.055 |
|
|
|
|
|
75.055 |
|
Materials |
|
38.302 |
|
|
|
|
|
38.302 |
|
Third-Party Services |
|
217.131 |
|
|
|
|
|
217.131 |
|
Electricity Purchased for Resale |
|
852.159 |
|
165.053 |
|
(29.403 |
) |
987.809 |
|
Depreciation and Amoritization |
|
302.812 |
|
|
|
|
|
302.812 |
|
Financial Compensation for Use of Hydro Resources |
|
61.156 |
|
(6.107 |
) |
|
|
55.049 |
|
Operating Provisions |
|
79.992 |
|
|
|
|
|
79.992 |
|
|
|
|
|
|
|
|
|
|
|
Fuel Consumption Account - CCC |
|
277.853 |
|
(26.276 |
) |
(29.528 |
) |
222.049 |
|
|
|
|
|
|
|
|
|
|
|
Charges for Transmission Network Usage |
|
307.857 |
|
5.678 |
|
108.200 |
|
421.735 |
|
Gas Purchased for Resale |
|
76.399 |
|
|
|
|
|
76.399 |
|
Energy Development Account - CDE |
|
165.780 |
|
(7.349 |
) |
(7.296 |
) |
151.135 |
|
Provision of Losses in the Recovery of RTE Values |
|
47.149 |
|
|
|
|
|
47.149 |
|
PROINFA |
|
24.726 |
|
2.465 |
|
(12.049 |
) |
15.142 |
|
Energy Efficiency Expenses |
|
45.276 |
|
|
|
|
|
45.276 |
|
Other |
|
88.433 |
|
|
|
|
|
88.433 |
|
Total |
|
3.313.032 |
|
133.464 |
|
29.924 |
|
3.476.420 |
|
( * ) Refers to the fixed costs that comprise the CVA that were transferred to the results as a function of their inclusion in the calculation of CEMIGs tariff adjustment
( ** ) Refers to the variation of fixed costs that comprise CVA that were not included in the calculations of CEMIGs tariff adjustment, and thus were excluded from the results
75
The main variations in expenses are described below:
Personnel
Personnel expenses in the first half of 2006 were R$ 614 million compared to R$ 440 million in the first half of 2005, an increase of 39.58%.
This was substantially due to the provision for indemnity of future salaried bonus for employees, which represents R$ 177 million, with R$ 41 million being expensed by Cemig G/T and R$ 127 million by distribution, and the remaining amount allocated to other Cemig companies.
Electricity Purchased for Resale
The expense for electricity purchased for resale was R$ 987.8 million in the first half of this year. This compares with R$655.5 million reported in the period from January to June 2005, an increase of 50.6%.
This is an uncontrollable cost, and the expense recognized in the results corresponds with the amount effectively passed through the tariff.
Additionally, it needs to be pointed out that in 2005, a substantial portion of the electricity purchased for resale through Distribution was derived from Cemig Generation and Transmission, and as a result, in the presentation of consolidated results, were eliminated as operations between the companies.
Post-Employment Obligations
The expense for post-employment obligations was R$ 75 million in the 1H 2006 versus R$ 76.7 million in the first half of 2005, a 2.2% decline.
These expenses basically represent the interest on actuarial obligations, net of the income expected from plan assets, estimated by an outside actuary. The reduction of expenses shows a greater growth in assets in relation to obligations.
76
Operating Provisions
Operating provisions for the period from January to June 2006 were R$ 80 million, compared to R$15.2 million in the same period of 2005, an increase of 426.3%.
The principle provisions registered in 2006 originate from:
credits from doubtful accounts (R$ 43.5 million)
worker contingencies (R$16.7 million)
judicial contingencies civil actions (R$11.4 million)
Fuel Consumption Account CCC
The CCC expense in the period from January to June 2006 was R$ 222 million compared to R$195,6 million in the first half of 2005, representing an increase of 13.5%.
The CCC refers to the operating costs of the thermal plants on the Brazilian interconnected and isolated system, divided proportionately between the electricity concessionaries through the ANEEL Resolution. This is an uncontrollable cost, as the expense recognized in the result corresponds to the value effectively passed through to the tariff.
Charges for Transmission Network Use
The expense for transmission network use in the first six months of 2006 was R$ 421.7 million compared to R$ 357.2 million in the period from January June 2005, a variation of 18%.
This expense is related to the charges paid by electricity distribution and generation agents for use of installations and components of the basic network, as defined by the ANEEL Resolution. This is an uncontrollable cost, as the expense recognized in the result corresponds to the value effectively passed through the tariff.
77
In accordance with a new interpretation of ANEEL as it relates to the CVA criteria with reference to tariff to use the integrated transmission installations and the basic network, CEMIG returned, in the first half of 2006, a portion of the CVA constituted in the amount of R$ 93,2 million, which served to increase the value of the expense of the current semester.
Energy Development Account CDE
The CDE expense from the period of January to June 2006 was R$ 151.135 million compared to R$ 146.2 million in the first semester of 2005, representing an increase of 3.3%.
The payments are defined through the ANEEL Resolution. This is an uncontrollable cost, as the expense recognized in the results corresponds to the value effectively passed through the tariff.
Incentive Program for Sources of Alterative Energy PROINFA
PROINFA, instituted by Decree 5.025 from March 30, 2004, maintains the objectives to increase the use of energy produced by Autonomous and Independent Businesses, such as wind, small hydroelectric and biomass, within the National Interlinked System.
The values are captured by the concessionaries of tranmission and distribution to ELETROBRAS, adminstrator of the PROINFA Account, in accordance with values determined by the former.
CEMIG registered within the period of January June 2006, an expense with PROINFA in the amount of R$ 15 million. This is a uncontrollable cost, as the expense recognized in the result corresponds to the value effectively passed through to the tariff.
78
Energy Efficiency Research & Development
The expenses with energy efficiency within the period of January to June 2006 were R$ 45.2 million compared to R$ 10.2 million in the same period in 2005, representing an increas of 343.1%.
This expense originated principally from new criteria adopted at the beginning of 2006, for which the Company provisioned 1% of their net revenue for the creation of programs in energy efficiency research and development.
Other Operating Expenses
Other operating expenses in the first six months of 2006 were R$ 88.4 million compared to R$ 74.2 million in the same period in 2006, resulting in an increase of 19.1%.
Financial Revenues (Expenses)
The financial result from January to June 2006 was a net financial expense of R$ 123.4 million compared to a net financial expense of R$ 166.6 million in the first half of 2005.
The main factors impacting the financial result were the following:
Income from the monetary update and interest on accounts receivable from the State of Minas Gerais, was in the amount of R$ 41 million in the first half of 2006, compared to R$ 215.8 million from January to June of 2005, resulting in a reduction of 80.8%.
With the transfer of the CRC to the Direct Creditors Fund, this income will not be booked in the results for 2006, also considering that the income to be registered with FIDC will be less than the amount stipulated in the update.
Growth of R$ 52.6 million in the income from energy (R$ 83.7 million in the period of January June 2006 compared to R$ 31 million in the same period in 2005.)
This variation originates from the registered income in the second quarter of 2006, in the amount of R$ 48.2 million, referring to the decrease of accounts receivable from large industrial consumers related to previous years, whose value of principal was considerably inferior in the higher amount referring to financial charges.
79
Income from monetary variation and interest on the Deferred Tariff Adjustment (RTD) in the amount of R$ 102.9 million compared to R$ 155.6 million from January to June 2005.
In 2005, CEMIG reporterd higher income as a result of the tariff review being finalized, which led to the creation of the asset line item Deferred Tariff Adjustment and the realization of the asset back to 2003 resulted in the considerable amount of financial income booked in 2005.
Increase of 26.2% in charges related to loans and financing in the country due to the increase in the amount due as a function of the debt rollover criteria, with the substitution of various debt contracts in foreign currency to Brazilian currency, as of the second half of 2005.
Second New Energy Acution
In the second quarter 2006, the second auction for New Energy took place. The prices obtained by Cemig G/T were the maximum permitted, with the Generator attaining an average price of R$ 125.48/MWh, with UHE Porto Estrela attaining a selling price of R$ 134.42/MWh. Total energy sold by Cemig G/T reached 355 MW, or 21.11% of the energy sold in the auction.
Cemig D also was able to ensure a demand for its energy, attaining 79.68 MW, with an average price of R$ 128.13/MWh.
Investment Program
Investments made during the 2Q 2006 reached R$ 411 million, a 66% increase over the first three months of this year.
Investments made during the first six months of 2006 were R$ 658 million, part of the total of R$ 1.927 billion of investments slated for the year.
The majority of the investments made during the first half of 2006, or 83%, were in Cemig D, with the majority of this investment focused on the universalization of electricity consumption through the Luz Para Todos, or Light for Everyone program.
Additional details regarding investments can be seen in the following table.
80
Multiyear Investment Program
in millions of Reais
Description |
|
2005 |
|
2006 |
|
1º sem/06 |
|
2007 |
|
GENERATION |
|
397 |
|
130 |
|
60 |
|
98 |
|
TRANSMISSION |
|
20 |
|
93 |
|
40 |
|
16 |
|
DISTRIBUTION |
|
691 |
|
1,136 |
|
546 |
|
1,335 |
|
Distribution |
|
665 |
|
1,009 |
|
507 |
|
1,005 |
|
Extension and reinforcement of existing networks |
|
276 |
|
288 |
|
122 |
|
544 |
|
Light for All |
|
291 |
|
711 |
|
379 |
|
461 |
|
Others |
|
98 |
|
10 |
|
6 |
|
|
|
Sub-transmission |
|
26 |
|
127 |
|
39 |
|
330 |
|
HOLDING |
|
57 |
|
40 |
|
12 |
|
82 |
|
Other Businesses |
|
|
|
|
|
|
|
|
|
Cash Flow Reconciliation |
|
191 |
|
|
|
|
|
|
|
sub-total |
|
1,356 |
|
1,399 |
|
658 |
|
1,531 |
|
Investments in Acquisitions |
|
|
|
528 |
|
|
|
|
|
LIGHT |
|
|
|
184 |
|
|
|
|
|
TBE |
|
|
|
344 |
|
|
|
|
|
Total |
|
1,356 |
|
1,927 |
|
658 |
|
1,531 |
|
Included in this table are the values to be invested in 2006 for the Companys recent acuisitions which are a part of the strategy of Cemig to grow generation, transmission and distribution of electricity proportionately, with the objective of becoming one of the major players within the consolidation trend within the electricity sector.
Income Tax and Social Contribution
Cemig made provisions during the period from January to June 2006 for Income Tax and Social Contribution of R$ 255.6 million in relation to income of R$ 751.4 million, before fiscal effects, representing a 34% rate. In ther first half of 2005, the Company recorded Income Tax and Social Contribution expenses of R$445.2 million for income of R$ 1.203 billion, before fiscal effects, a rate of 37.0%.
Disclaimer
Some of the statements and assumptions contained herein are forecasts based on the views and assumptions of hte management, and involved both known and unknown risks and uncertainties. The actual results may be materially different from those expressed or implied in such statements.
81
Contact: Luiz Fernando Rolla
Director of Investor Relations
Tel. +55-31-3299-3930
Fax +55-31-3299-3933
lrolla@cemig.com.br
82
Chart I
Statement of Results (consolidated)
Values in millions of reais
|
|
2Q 2006 |
|
1Q 2006 |
|
1H 2006 |
|
2Q 2005 |
|
1H 2005 |
|
2005 |
|
Net Revenue |
|
2.128 |
|
2.243 |
|
4.371 |
|
1.956 |
|
4.085 |
|
8.236 |
|
Operating Expenses |
|
(1.783 |
) |
(1.693 |
) |
(3.476 |
) |
(1.290 |
) |
(2.695 |
) |
(6.342 |
) |
EBIT |
|
345 |
|
550 |
|
895 |
|
666 |
|
1390 |
|
1.894 |
|
EBITDA |
|
497 |
|
701 |
|
1.198 |
|
814 |
|
1685 |
|
2.488 |
|
Financial Result |
|
(108 |
) |
(15 |
) |
(123 |
) |
(316 |
) |
(166 |
) |
(3 |
) |
Non-Operating Result |
|
(8 |
) |
(12 |
) |
(20 |
) |
(12 |
) |
(20 |
) |
(53 |
) |
Provision for Income Taxes, Social Cont & Deferred Income Tax |
|
(73 |
) |
(183 |
) |
(256 |
) |
(134 |
) |
(445 |
) |
(471 |
) |
Interest on Own Capital Reversal |
|
169 |
|
|
|
169 |
|
283 |
|
283 |
|
635 |
|
Minority Shareholders |
|
|
|
|
|
|
|
|
|
|
|
1 |
|
Net Income |
|
325 |
|
340 |
|
665 |
|
487 |
|
1.042 |
|
2.003 |
|
Chart II
Operating Revenues
(consolidated)
Values in millions of reais
|
|
2Q 2006 |
|
1Q 2006 |
|
1H 2006 |
|
2Q 2005 |
|
1H 2005 |
|
2005 |
|
Sales to end consumers |
|
2.225 |
|
2.362 |
|
4.587 |
|
2.237 |
|
4.156 |
|
8.919 |
|
TUSD |
|
286 |
|
301 |
|
587 |
|
389 |
|
572 |
|
1.201 |
|
Subtotal |
|
2.511 |
|
2.663 |
|
5.174 |
|
2.626 |
|
4.728 |
|
10.120 |
|
Supply |
|
197 |
|
177 |
|
374 |
|
68 |
|
109 |
|
237 |
|
Revenues from Trans. Network |
|
139 |
|
149 |
|
288 |
|
93 |
|
177 |
|
322 |
|
Gas Supply |
|
70 |
|
69 |
|
139 |
|
70 |
|
131 |
|
265 |
|
Others |
|
48 |
|
46 |
|
94 |
|
31 |
|
78 |
|
168 |
|
Subtotal |
|
2.965 |
|
3.104 |
|
6.069 |
|
2.888 |
|
5.223 |
|
11.112 |
|
Deferred Tariff Readjusment - RTD |
|
|
|
|
|
|
|
8 |
|
591 |
|
591 |
|
Deductions |
|
(837 |
) |
(861 |
) |
(1.698 |
) |
(940 |
) |
(1.729 |
) |
(3.467 |
) |
Net Revenues |
|
2.128 |
|
2.243 |
|
4.371 |
|
1.956 |
|
4.085 |
|
8.236 |
|
83
Chart III
Operating Expenses (consolidated)
Values in millions of reais
|
|
2Q 2006 |
|
1Q 2006 |
|
1H 2006 |
|
2Q 2005 |
|
1H 2005 |
|
2005 |
|
Purchased Energy |
|
443 |
|
545 |
|
988 |
|
271 |
|
656 |
|
1.455 |
|
Personnel/Administrators/Councillors/Employee Participation |
|
415 |
|
238 |
|
653 |
|
237 |
|
481 |
|
1.106 |
|
Depreciation and Amortization |
|
152 |
|
151 |
|
303 |
|
147 |
|
295 |
|
595 |
|
Fuel Consumption Account - CCC |
|
126 |
|
96 |
|
222 |
|
117 |
|
196 |
|
416 |
|
Energy Development Account - CDE |
|
82 |
|
69 |
|
151 |
|
81 |
|
146 |
|
296 |
|
Charges for Use of Basic Transmission Network |
|
173 |
|
249 |
|
422 |
|
163 |
|
357 |
|
641 |
|
Contracted Services |
|
116 |
|
101 |
|
217 |
|
106 |
|
176 |
|
423 |
|
Forluz Post-Retirement Employee Benefits |
|
37 |
|
38 |
|
75 |
|
39 |
|
77 |
|
153 |
|
Materials |
|
21 |
|
17 |
|
38 |
|
24 |
|
42 |
|
96 |
|
Royalties |
|
33 |
|
22 |
|
55 |
|
39 |
|
79 |
|
145 |
|
Gas Purchased for Resale |
|
37 |
|
39 |
|
76 |
|
39 |
|
76 |
|
156 |
|
Operating Provisions |
|
38 |
|
42 |
|
80 |
|
(24 |
) |
15 |
|
127 |
|
Other Expenses and Provision for Losses from Tariff Recomposition |
|
110 |
|
86 |
|
196 |
|
51 |
|
99 |
|
733 |
|
Total |
|
1.783 |
|
1.693 |
|
3.476 |
|
1.290 |
|
2.695 |
|
6.342 |
|
Chart IV
Ener Sales (Consolidated)
|
|
No. of consumers |
|
MWh |
|
R$ thousand |
|
||||||
|
|
1st half |
|
1st half |
|
1st half |
|
||||||
|
|
2006 |
|
2005 |
|
2006 |
|
2005 |
|
2006 |
|
2005 |
|
Residential |
|
4.984.274 |
|
4.877.730 |
|
3.310.420 |
|
3.293.423 |
|
1.670.582 |
|
1.459.696 |
|
Industrial |
|
69.496 |
|
68.690 |
|
11.892.579 |
|
11.190.243 |
|
1.377.865 |
|
1.390.210 |
|
Commercial |
|
541.673 |
|
534.358 |
|
1.947.818 |
|
1.888.914 |
|
831.074 |
|
717.521 |
|
Rural |
|
446.266 |
|
400.415 |
|
859.973 |
|
828.961 |
|
236.480 |
|
202.983 |
|
Others |
|
58.382 |
|
56.347 |
|
1.317.453 |
|
1.266.327 |
|
376.793 |
|
326.738 |
|
Own Consumption |
|
768 |
|
783 |
|
14.872 |
|
14.199 |
|
|
|
|
|
Low-Income Consumers Subsidy |
|
|
|
|
|
|
|
|
|
61.268 |
|
|
|
Unbilled Supply, Net |
|
|
|
|
|
|
|
|
|
32.818 |
|
12.533 |
|
Supply |
|
43 |
|
8 |
|
4.988.424 |
|
391.490 |
|
324.108 |
|
49.562 |
|
Transactions on the CCEE |
|
|
|
|
|
|
|
|
|
49.995 |
|
59.200 |
|
TOTAL |
|
6.100.902 |
|
5.938.331 |
|
24.331.539 |
|
18.873.557 |
|
4.960.983 |
|
4.264.435 |
|
Chart V
Financial Result Breakdown
Values in millions of reais
|
|
2Q 2006 |
|
1Q 2006 |
|
1H 2006 |
|
2Q 2005 |
|
1H 2005 |
|
2005 |
|
Financial Revenues |
|
321 |
|
310 |
|
631 |
|
336 |
|
693 |
|
1.706 |
|
Income from Investments |
|
49 |
|
50 |
|
99 |
|
24 |
|
56 |
|
197 |
|
Fines on Energy Accounts |
|
66 |
|
18 |
|
84 |
|
16 |
|
31 |
|
81 |
|
CRC Contract/State (interest + monetary variation) |
|
|
|
21 |
|
21 |
|
41 |
|
101 |
|
500 |
|
Monetary variation of Extraordinary Tariff Recomposition and RTD |
|
162 |
|
153 |
|
315 |
|
142 |
|
390 |
|
663 |
|
Exchange Rate Variations |
|
22 |
|
62 |
|
84 |
|
132 |
|
148 |
|
164 |
|
Others |
|
22 |
|
6 |
|
28 |
|
(19 |
) |
(33 |
) |
101 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
Charges on Loans and Financing |
|
(156 |
) |
(164 |
) |
(320 |
) |
(139 |
) |
(254 |
) |
(565 |
) |
Monetary variation of Extraordinary Tariff Recomposition and Suppliers |
|
(29 |
) |
(36 |
) |
(65 |
) |
(65 |
) |
(84 |
) |
(158 |
) |
Exchange Rate Variations |
|
(7 |
) |
|
|
(7 |
) |
(1 |
) |
(13 |
) |
(18 |
) |
Monetary Variarion Liabilities - Loans and Financing |
|
(6 |
) |
(6 |
) |
(12 |
) |
(5 |
) |
(27 |
) |
(16 |
) |
CPMF |
|
(14 |
) |
(21 |
) |
(35 |
) |
(23 |
) |
(28 |
) |
(66 |
) |
Provision for Losses from Derivatives |
|
(10 |
) |
(72 |
) |
(82 |
) |
(80 |
) |
(101 |
) |
(168 |
) |
Others |
|
(37 |
) |
(27 |
) |
(64 |
) |
(57 |
) |
(70 |
) |
(83 |
) |
Interest on Own Capital |
|
(169 |
) |
|
|
(169 |
) |
(283 |
) |
(283 |
) |
(635 |
) |
Financial Result |
|
(107 |
) |
(16 |
) |
(123 |
) |
(317 |
) |
(167 |
) |
(3 |
) |
84
Chart VI
Related party transactions
Values in millions of reais
|
|
State of Minas Gerais |
|
||
|
|
Government |
|
||
|
|
2nd Q. 2006 |
|
1st Q. 2006 |
|
ASSETS |
|
|
|
|
|
Current Assets |
|
|
|
|
|
Customers and distributors |
|
10 |
|
12 |
|
Tax Recoverable - |
|
|
|
|
|
State VAT recoverable |
|
12 |
|
21 |
|
Noncurrent assets |
|
|
|
|
|
Accounts receivable from Minas Gerais State |
|
1.619 |
|
1.571 |
|
Government |
|
|
|
|
|
Tax Recoverable - |
|
|
|
|
|
VAT recoverable |
|
238 |
|
212 |
|
Customers and distributors |
|
40 |
|
42 |
|
LIABILITIES AND SHAREHOLDERS EQUITY |
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
Taxes, fees and charges |
|
|
|
|
|
VAT - ICMS payable |
|
245 |
|
221 |
|
Interest on capital and Dividends |
|
177 |
|
261 |
|
Debentures |
|
104 |
|
104 |
|
Financing |
|
15 |
|
15 |
|
Chart VII
Share Ownership
|
|
Number of shares as of june 30, 2006 |
|
||||||||||
Shareholders |
|
Common |
|
% |
|
Preferred |
|
% |
|
Total |
|
% |
|
State of Minas Gerais |
|
36.125.857.399 |
|
51,0 |
|
2.392.006.570 |
|
2,6 |
|
38.517.863.969 |
|
23,8 |
|
Southern Electric Brasil Part. Ltda. |
|
23.362.956.173 |
|
33,0 |
|
|
|
|
|
23.362.956.173 |
|
14,4 |
|
Other: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Local |
|
7.043.833.357 |
|
9,9 |
|
27.148.129.505 |
|
29,7 |
|
34.191.962.862 |
|
21,1 |
|
Foreigners |
|
4.341.520.994 |
|
6,1 |
|
61.739.515.027 |
|
67,6 |
|
66.081.036.021 |
|
40,8 |
|
Total |
|
70.874.167.923 |
|
100,0 |
|
91.279.651.102 |
|
100 |
|
162.153.819.025 |
|
100,0 |
|
* Southern Electric Brasil Ltda
85
Chart VIII
BALANCE SHEETS
ASSETS
Values in millions of reais
|
|
2006 |
|
||
|
|
2nd Qtr |
|
1st Qtr |
|
CURRENT ASSETS |
|
6.014 |
|
5.615 |
|
Cash and Cash Equivalents |
|
1.005 |
|
1.440 |
|
Consumers and Distributors |
|
1.597 |
|
1.563 |
|
Consumers Rate Adjustment |
|
294 |
|
279 |
|
Dealership - Energy Transportation |
|
358 |
|
350 |
|
Dealers - Transactions on the MAE |
|
188 |
|
161 |
|
Tax Recoverable |
|
710 |
|
550 |
|
Materials and Supplies |
|
28 |
|
28 |
|
Prepaid Expenses - CVA |
|
506 |
|
440 |
|
Tax Credits |
|
155 |
|
130 |
|
Regulatory Assets |
|
181 |
|
66 |
|
Deferred Tariff Adjustment |
|
606 |
|
400 |
|
Other |
|
386 |
|
208 |
|
|
|
|
|
|
|
NONCURRENT ASSETS |
|
4.278 |
|
4.700 |
|
Account Receivable from Minas Gerais State Government |
|
1.619 |
|
1.571 |
|
|
|
|
|
|
|
Consumers Rate Adjustment |
|
944 |
|
980 |
|
Regulatory Assets |
|
233 |
|
378 |
|
Prepaid Expenses - CVA |
|
56 |
|
62 |
|
Tax Credits |
|
451 |
|
433 |
|
Deferred Tariff Adjustment |
|
|
|
|
|
|
|
|
|
|
|
Dealers - Transactions on the MAE |
|
43 |
|
100 |
|
Recoverable Taxes |
|
238 |
|
213 |
|
Escrow Account re: Lawsuits |
|
129 |
|
99 |
|
Consumers and Distributors |
|
57 |
|
61 |
|
Other Receivables |
|
19 |
|
15 |
|
|
|
|
|
|
|
PERMANENT ASSETS |
|
10.189 |
|
10.005 |
|
Investments |
|
990 |
|
985 |
|
Property, Plant and Equipment |
|
9.141 |
|
8.961 |
|
Deferred Charges |
|
58 |
|
59 |
|
|
|
|
|
|
|
TOTAL ASSETS |
|
20.481 |
|
20.320 |
|
86
|
|
2006 |
|
||
|
|
2nd Qtr |
|
1st Qtr |
|
CURRENT LIABILITIES |
|
5.422 |
|
4.934 |
|
Suppliers |
|
748 |
|
674 |
|
Taxes payable |
|
1.236 |
|
832 |
|
Loan, Financing and Debentures |
|
1.140 |
|
1.197 |
|
Payroll and related charges |
|
286 |
|
172 |
|
Interest on capital and dividends |
|
784 |
|
1.118 |
|
Employee post-retirement benefits |
|
124 |
|
120 |
|
Regulatory charges |
|
312 |
|
124 |
|
Other |
|
464 |
|
473 |
|
|
|
|
|
|
|
LONG-TERM LIABILITIES |
|
7.358 |
|
7.842 |
|
Loan, Financing and Debentures |
|
4.713 |
|
4.700 |
|
Employee post-retirement benefits |
|
1.278 |
|
1.301 |
|
Suppliers -wholesale |
|
303 |
|
336 |
|
Taxes and social charges |
|
549 |
|
780 |
|
Reserve for contingencies |
|
405 |
|
377 |
|
Other |
|
61 |
|
311 |
|
Prepaid expenses - CVA |
|
49 |
|
37 |
|
|
|
|
|
|
|
PARTICIPATION IN ASSOCIATE COMPANIES |
|
20 |
|
20 |
|
|
|
|
|
|
|
SHAREHOLDERS EQUITY |
|
7.681 |
|
7.524 |
|
Paid-in Capital |
|
1.622 |
|
1.622 |
|
Capital reserves |
|
4.059 |
|
4.059 |
|
Income reserves |
|
2.000 |
|
1.843 |
|
|
|
|
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY |
|
20.481 |
|
20.320 |
|
87
Chart IX
Income Statement (consolidated)
Values in millions of reais
|
|
2Q 2006 |
|
1Q 2006 |
|
1H 2006 |
|
2Q 2005 |
|
1H 2005 |
|
2005 |
|
Cash at start of period |
|
1.440 |
|
1.344 |
|
1.344 |
|
919 |
|
896 |
|
896 |
|
Cash from operations |
|
425 |
|
411 |
|
836 |
|
96 |
|
394 |
|
1.657 |
|
Net income |
|
325 |
|
340 |
|
665 |
|
487 |
|
1.042 |
|
2.003 |
|
Depreciation and amortization |
|
152 |
|
151 |
|
303 |
|
147 |
|
295 |
|
595 |
|
Suppliers |
|
22 |
|
(111 |
) |
(89 |
) |
(1 |
) |
18 |
|
91 |
|
Deferred tariff adjustment |
|
|
|
|
|
|
|
(8 |
) |
(591 |
) |
(591 |
) |
Other adjustments |
|
(31 |
) |
31 |
|
|
|
(308 |
) |
(149 |
) |
(220 |
) |
ICMS (IVA) on TUSD |
|
|
|
|
|
|
|
(221 |
) |
(221 |
) |
(221 |
) |
Financing activity |
|
(521 |
) |
(93 |
) |
(614 |
) |
207 |
|
108 |
|
147 |
|
Financing obtained |
|
58 |
|
912 |
|
970 |
|
776 |
|
776 |
|
1.556 |
|
Payment of loans and financing |
|
(76 |
) |
(59 |
) |
(135 |
) |
(255 |
) |
(350 |
) |
(818 |
) |
Other |
|
(503 |
) |
(946 |
) |
(1.449 |
) |
(314 |
) |
(318 |
) |
(591 |
) |
Investment activity |
|
(338 |
) |
(222 |
) |
(560 |
) |
(251 |
) |
(427 |
) |
(1.356 |
) |
Investments outside the concession area |
|
(6 |
) |
(9 |
) |
(15 |
) |
(23 |
) |
(32 |
) |
(69 |
) |
Investments in the concession area |
|
(413 |
) |
(233 |
) |
(646 |
) |
(242 |
) |
(420 |
) |
(1.360 |
) |
Special obligations - consumer contributions |
|
82 |
|
19 |
|
101 |
|
14 |
|
25 |
|
73 |
|
Other |
|
(1 |
) |
1 |
|
|
|
|
|
|
|
|
|
Cash at the end of period |
|
1.006 |
|
1.440 |
|
1.006 |
|
971 |
|
971 |
|
1.344 |
|
88
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
COMPANHIA
ENERGETICA DE MINAS |
|||
|
|
|||
|
|
|||
|
By: |
/s/ Flávio Decat de Moura |
|
|
|
|
Name: |
Flávio Decat de Moura |
|
|
|
Title: |
Chief
Financial Officer and Investor |
|
Date: September 12, 2006