Cash EBITDA was BRL 2.6 billion in 3Q23, and BRL 7.6 billion in the year to date, up by 4% and 6%, respectively

Neoenergia on Wednesday announced its financial and operating results for the third quarter of 2023 and the year to date. Net profit was BRL 1.5 billion in the quarter, up by 3% year on year. Cash EBITDA was BRL 2.6 billion in the quarter, and BRL 7.6 billion in the year, up by 4% and 6%, respectively, year on year.

"Besides this performance, we maintained cost discipline, and posted operating expense growth of only 4% in the quarter, below inflation. Year-to-date, we remain in line with inflation for the period, absorbing the expansion of the business with Transmission and Renewable assets which recently came into operation," said Eduardo Capelastegui, CEO of Neoenergia.  

Capex
Capex year to date for Neoenergia was BRL 6.5 billion, BRL 2.2 billion of it in the quarter. Investments focused on the digitalization of the networks and the expansion of the five distributors, as well as projects in the Transmission and Renewables businesses. In Transmission, the company advanced with the delivery of two more stretches, with a total of BRL 46 million in Annual Permitted Revenue (RAP).

Asset rotation
In the period, the company continued its asset rotation strategy, with attention paid to portfolio valuation and optimization. So, Neoenergia concluded the first stage of its partnership with the Sovereign Fund of Singapore (GIC), with the sale of 50% of eight operational transmission assets. This operation led to cash inflows of approximately BRL 1.1 billion in September.

In addition, the exchange of assets with Eletrobras was finalized, in an operation announced last December, which had a positive impact on the quarterly result, with BRL 1.5 billion in capital gains in the acquisition of 100% of the control of the Dardanelos hydroelectric plant (in Mato Grosso state, Brazil). The operation was also marked by the transfer to Eletrobras of the stake in the Teles Pires (Pará state and Mato Grosso state) and Baguari (Minas Gerais state) hydroelectric plants.

Neoenergia also entered into a partnership with Comerc for the development of distributed energy generation projects. The joint venture was approved in October, without restrictions, by Brazil’s antitrust body, Cade. 

Energy balance
The total volume of energy injected totaled almost 20,000 gigawatt-hours (GWh) in the third quarter, up by 4.7% year on year. Year to date, this was around 60,000 gigawatt-hours (GWh), up by 3.2% year on year, including distributed generation, reflecting the resumption of growth in the concession areas.

Customers
The five concession holders ended the third quarter with an increase of 317,000 new customers, totaling 16.3 million active customers. Neoenergia therefore maintains its leadership as the largest company in Brazil in terms of customers in energy distribution.

Networks
Highlights include the tariff revision for Neoenergia Elektro, with an average impact on consumers of 7.17%, and the tariff adjustment for Neoenergia Brasília, with an average impact on consumers of 9.32% (applied as of October 22), in recognition of investments and operating costs, reinforcing the sustainability of the concessions.

Quality
Regarding the quality of energy supply, four distributors – Neoenergia Coelba, Neoenergia Cosern, Neoenergia Elektro, and Neoenergia Pernambuco – were below the regulatory limit for both Equivalent Duration of Interruption per Consumer (DEC) and Equivalent Frequency of Interruption per Consumer (FEC). Neoenergia Brasília, which was covered by DEC in the fourth quarter of 2022, was below the limit defined in its concession contract of 6.43 times for FEC.

Another highlight was the Abradee 2023 Award won by Neoenergia Cosern and Neoenergia Elektro as the best distributors in Brazil. 

Losses
Total losses remain under control in the last 12 months, with four distributors – Neoenergia Coelba, Neoenergia Cosern, Brasília and Neoenergia Elektro – within the regulatory limit.