Message from Management
GRI 1.1, 1.2
The year 2013 was a major milestone for CTEEP and strengthened our conviction that the Company has a unique ability to seize opportunities to improve efficiency even in adverse situations, such as the time when the Brazilian electric power industry is adapting to the change in the contract system to extend the concession, based on Law 12783/2013.
The rules recently introduced by the government had an impact on the industry's regulation, with a significant effect on our business. Despite greater challenges, we reaffirm our commitment to profitable growth, conservative financial management, operational excellence, sustainable business and sound corporate governance practices.
The first impact of this change required a careful examination to find a balance between a sharp drop in revenue and financial obligations connected with capital projects under way. However, we managed to extend our average debt maturity by redeeming short-term debentures ahead of maturity, issuing new debentures and obtaining long-term financing from BNDES (the Brazilian Development Bank).
Concerning our operational performance, we recorded our best indicators in eight years-with our lowest ENS (Non-Supplied Energy) index ever-in 2013. In addition, we invested R$ 815.4 million in the Company, its subsidiaries and associates. We launched 50 projects, highlighting the first transmission line in the Madeira Complex, a project of utmost importance for the Brazilian electric energy infrastructure. Our construction projects in São Paulo State, designed to increase capacity and reliability, will enable us to cope with the increasing demand for energy, in addition to having an impact on the 2014 World Cup.
As far as our financial performance is concerned, there was a drop in income in 2013 due to the decision to extend CTEEP's main concession contract. Our net operating revenue amounted to R$ 981.2 million, versus R$ 2,015.0 million in 2012. In turn, our net income totaled R$ 31.9 million, vs. R$ 843.5 million in 2012.
In 2013, our majority shareholder ISA, as an organization committed to innovation and corporate excellence, redefined its vision for 2020 and redesigned the organizational structure by creating the holding company, which will be focusing on achieving this vision and making its subsidiaries-including CTEEP-grow in a sustainable manner. We seek to reaffirm our commitment to sustainability in a coordinated manner, through relevant initiatives related to the issues covered by the Global Compact, which help society as a whole develop.
In 2014, we are going to stick to our conservative asset management policy and maintain our operational excellence, with sustainability serving as a guideline for us to build solid foundations for growth and long-term results. Important initiatives lie ahead, and some are related to the concession extension, such as the unpaid compensation connected with the assets prior to May 2009, which corresponds to a sizable percentage of our current shareholders' equity and will allow us to recover our ability to grow.
We would like to-once more-thank our shareholders for their trust and support amid an atmosphere of uncertainty and our employees for their clear commitment and dedication, essential for the Company to build its next cycle of development.
Reynaldo Passanezi Filho
Chief Executive Officer
¹ Debt securities
