Economic and Financial Performance
With a solid structure and wise strategic decisions, CTEEP was able to overcome the impacts on its economic and financial performance and adapt itself to the new industry situation.
(GRI EC1)
The uncertainty surrounding the world economy in previous periods persist in 2013, at least in the first half of the year. This situation, coupled with inflationary pressure and concerns about the fiscal policy, impacted the Brazilian economy. However, energy consumption in Brazil rose by 3.5% - vs. a GDP growth of 2.3% - to 463,740 GWh in 2013, driven by higher residential and commercial consumption.
OResidential consumption totaled 124.8 thousand GWh in 2013, up 6.1% year-over-year. Commercial consumption came to 83.7 thousand GWh, rising by 5.7% against 2012. Higher consumption in both cases can be attributed to a larger number of business days and higher temperatures in the year. The industrial class was outperformed by the other classes and recorded a slight increase in consumption, which amounted to 184.6 thousand GWh in 2013. This is largely explained by a GDP growth below expectations in the year.
CTEEP's performance is directly connected with regulatory issues. An extension of Concession Contract 059/2001, between CTEEP and ANEEL (Concession Contract), was approved under the terms and conditions established by Provisional Measure (PM) 579/2012, governed by Executive Order 7805, of September 14, 2012, and amended by PM 591/2012, which will give rise to a proposed addendum to the Concession Contract.
As a result, the Company's concession contract was extended for another 30 years in December 2012 and the Allowed Annual Revenue (RAP) as determined by contract 059/2001 fell by about 73%, from R$ 2,149.6 million to R$ 568.2 million. This new RAP affected the year-over-year comparisons of the Company's financial indicators.
Consequently, the Company's net operating revenues amounted to R$ 981.2 million, EBITDA (not including the São Paulo State Department of Finance (SEFAZ-SP) provision) to R$ 346.5 million and net income to R$ 31.9 million in 2013.
