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8/9/2019 ENEVA Corporate Presentation ? February 2015
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Corporate PresentationFebruary, 2015
8/9/2019 ENEVA Corporate Presentation ? February 2015
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The material that follows is a presentation of general background information about ENEVA S.A. and its subsidiaries (collectively, “ ENE
the date of the presentation. It is information in summary form and does not purport to be complete. No representation or warranty,
concerning, and no reliance should be placed on, the accuracy, fairness, or completeness of this information.
This presentation may contain certain forward-looking statements and information relating to ENEVA that reflect the current view
Company and its management with respect to its performance, business and future events. Forward looking statements include, with
that may predict, forecast, indicate or imply future results, performance or achievements, and may contain words like “ may ” , “ p
“ expect ” , “ envisages” , “ will likely result ” , or any other words or phrases of similar meaning. Such statements are subject to a numb
assumptions. We caution you that a number of important factors could cause actual results to differ materially from the plans, object
and intentions expressed in this presentation. In no event, neither the Company, any of its affiliates, directors, officers, agents o
placement agents shall be liable before any third party (including investors) for any investment or business decision made or ac
information and statements contained in this presentation or for any consequential, special or similar damages.
This presentation does not constitute an offer, or invitation, or solicitation of an offer, to subscribe for or purchase any securities.
Neither this presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever.
Recipients of this presentation are not to construe the contents of this summary as legal, tax or investment advice and recipients shou
in this regard.
The market and competitive position data, including market forecasts, used throughout this presentation were obtained from intern
publicly available information and industry publications. Although we have no reason to believe that any of this information or these
material respect, we have not independently verified the competitive position, market share, market size, market growth or other dat
by industry or other publications. ENEVA, the placement agents and the underwriters do not make any representation as to the accurac
This presentation and its contents are proprietary information and may not be reproduced or otherwise disseminated in whole or in
written consent.
Disclaimer
8/9/2019 ENEVA Corporate Presentation ? February 2015
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ENEVA Overview
1
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A Brazilian thermal generator with asset exposure to energy fossil fuels (natural gas
ENEVA at a Glance
2.9GW inflation-protected long-term PPAs
Long-term PPAs guarantee R$2.3 billion in annual inflation-adjusted capacity payments
PPAs provide hedge against commodity price exposure
Integrated gas E&P assets supply ENEVA’s power plants
Competitive portfolio of licensed greenfield wind, coal and gas
fired capacity
Company Description
ENEVA ownership structure
Geographic Footp
Amapari EnergiaENEVA 51% / Eletronorte 49%
Diesel - 23MW
ItaqENEVCoal
Natural GasExploratory
blocksOperated by PGN
(Cambuhy PE, ENEVA andE.ON partnership)
Contracted production
of 8.4MM m3
/day
Free Float (37.1%)
42.9% 20.0%
Other
ENEVA ParticipaçõesENEVA/E.ON
Joint Venture
50%
50%
BNDES
8.6%
EikeBatista
Controlling Block
28.5%
NOTES: (1) Sale agreement of ENEVA’s interest for EDP executed on Dec 2014; (2) Ownership structure assumes future merger of ENEVA Participações
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Operations
2
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Coal FleetItaqui, Pecém I and Pecém II
2.1
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Pecém I¹
Capacity: 720MW
Fx. Rev.²: R$637.0MM /year
CVU: R$107/MWh
Auction: A-5/2007
COD: Dec 2012
Capacity: 360MW
Fx. Rev.²: R$336.7MM/year
CVU: R$111/MWh
Auction: A-5/2007
COD: Feb 2013
Itaqui
Capac
Fx. Re
CVU: R
Auctio
COD: O
Coal Generation Portfolio Overview1.4 GW of installed capacity in full operation
NOTES: (1) Sale agreement of ENEVA’s interest for EDP executed on Dec 2014; (2) Fixed revenues are indexed to inflation index – IPCA (Database: Nov 2014)
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79.7%
78.9%
79.6%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
F e b - 1 3
M a r - 1 3
A p r - 1 3
M a y - 1 3
J u n - 1 3
J u l - 1 3
A u g - 1 3
S e p - 1 3
O c t - 1 3
N o v - 1 3
D e c - 1 3
J a n - 1 4
F e b - 1 4
M a r - 1 4
A p r - 1 4
M a y - 1 4
J u n - 1 4
J u l - 1 4
A u g - 1 4
S e p - 1 4
O c t - 1 4
N o v - 1 4
D e c - 1 4
J a n - 1 5
Availability Historical Availab. 1 year Availab. 6 months Availab.
Availability¹
Technical improvements and additional spares totaling up
to an estimated R$40MM will allow for reduced downtime
EBITDA (R$MM)
Itaqui
Auction: 95%
3Q14 EBITDA hit by reimbu
unavailability cost overpayme
NOTE: (1) Based on Company and ONS data
-95.3
-31.3
5.924.2
1Q13 2Q13 3Q13 4Q13
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67.4%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
J a n - 1 3
F e b - 1 3
M a r - 1 3
A p r - 1 3
M a y - 1 3
J u n - 1 3
J u l - 1 3
A u g - 1 3
S e p - 1 3
O c t - 1 3
N o v - 1 3
D e c - 1 3
J a n - 1 4
F e b - 1 4
M a r - 1 4
A p r - 1 4
M a y - 1 4
J u n - 1 4
J u l - 1 4
A u g - 1 4
S e p - 1 4
O c t - 1 4
N o v - 1 4
D e c - 1 4
J a n - 1 5
Unit 1 Unit 2 Historical Availab.
Availability¹
Technical improvements and additional spares totaling up
to an estimated R$30MM will allow for reduced downtime
EBITDA (R$MM)
Pecém I
Auction: 90%
3Q14 EBITDA hit by reimbu
unavailability cost overpayme
NOTE: (1) Based on Company and ONS data
-151.2 -143.4
-63.8
40.161.7
4Q12 1Q13 2Q13 3Q13 4Q13
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91.3%
89.7%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Availability Historical Availab. 1 year Availab.
Availability¹
Improved commissioning resulted in more stable operations, incorporating lessons learne
Monitoring of auxiliary equipment to keep good performance
EBITDA (R$MM)
Pecém II
Auction: 95%
NOTE: (1) Based on Company and ONS data
55.4
46.3
33
4Q13 1Q14 2Q
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Natural Gas-fired AssetsParnaíba I, Parnaíba III and Parnaíba IV
2.2
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Parnaíba II2 GE GTs x 168,8MW+ 1 GE ST x 181MW
Parnaíba I4 GE GTs x 168,8MW
Parnaíba III1 GE GT x 168,8MW
+ 1 Wärtsilä GM x 7,3MWParnaíba IV
3 Wärtsilä GMs x 18MW
Capacity: 56MW
46% efficiency
Fix. Rev: R$54MM/year
CVU: R$69/MWh
Free market
COD: Dec 2013
Capacity: 178MW
38% efficiency
Fix. Rev²: R$104.9MM/year
CVU: R$171/MWh
Auction: A-5/2008
COD: Dec 2013
Capacity: 676MW
37% efficiency
Fix. Rev²: R$472.6MM/year
CVU: R$109/MWh
Auction: A-5/2008
COD: Apr 2013
Cap
51%
Fix.
CVU
Auc
Op.
Parnaíba IV Parnaíba III¹ Parnaíba I¹
Notes: (1) Bertin project developed by ENEVA; (2) Fixed revenues indexed to infl ation index – IPCA (Database: Nov 2014)
Parnaíba Complex overviewA unique case in Brazil power generation sector with 910MW already in operation
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94.1%93.0%88.3%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Availability Historical Availab. 1 year Availab. 6 months Availab.
Availability¹
All gas turbines in continuous operation for over 10,000 hours with high avai
First inspections on all gas turbines and generators executed by GE with no majo
EBITDA (R$MM)
Parnaíba I
NOTE: (1) Based on Company and ONS data*As a result of gas optimization of Parnaíba Thermoelectric Complex, Parnaíba II operates partially to substitute Parnaíba I since Dec / 14.
Auction: 95%
28.2
58.8
32.0
44
2Q13 3Q13 4Q13 1Q1
*
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86.3%
80.6%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Availability Historical Availab. 6 months Availab.
Availability¹ EBITDA (R$MM)
Parnaíba III
NOTE: (1) Based on Company and ONS data
Auction: 95%
Availability reduction as of May 2014 as a result of natural gas optimization run
Despite availability reduction, lower financial impact due to highest CVU among Parnaíb
1.1
14.4
1Q13 2Q13
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Availability¹
Ongoing project to improve the reliability of Parnaíba IV Wärtsilä engine
EBITDA (R$MM)
Parnaíba IV
NOTE: (1) Based on Company and ONS data
2.6
10.3
-
1Q13 2Q13 3
83.7%86.3%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Availability Historical Availab. 6 months Availab.
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Recent Highlights
3
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Background: Delayed 450MWa PPA, with initial supply date as of
Mar 2014
Balanced negotiation with Aneel, preserving the PPA and mitigating
potential high regulatory/contractual penalty
Final terms and conditions:
o 20-year PPAs start date postponed to Jul 1, 2016
o R$334MM, to be paid as tariff contribution
In installments starting in 2022
- 2022 to 2025: R$13.0MM/year
- 2026 to 2036: R$25.6MM/year
Through the partial reduction in annual fixed revenues over PPAs’ term
o Commitment to close the cycle of Parnaíba I OCGT in next 5 years
(extendable for +5 years by Aneel), subject to certain conditions
precedent, such as sale of energy in the regulated market
Parnaíba II Final Agreement with Aneel
Pecém II and Parnaíba I & III
Regulatory Developments (1)Parnaiba II PPA restructuring
Gas optimization of Parnaíba Thermoel
Aneel: Parnaíba I substituted by Parnaíavailable.
All plants PPAs terms and conditions f
production, as recommended by ANP u
other gas areas (4.4-4.8 million m³/day
Parnaíba Gas Optimization
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Unavailability charges were being paid on an hourly-based methodology, while PPAs provided for a 60-month rolling
In January 2014 and Sep 2014, Federal Court ruled in favor of ENEVA, in line with PPAs terms and conditions
All operating plants currently protected against hourly-based unavailability charges
Unavailability costs paid amount to +R$315MM1, 2
In Sep 2014, Aneel granted to Pecém I and Itaqui reimbursement of unavailability charges overpayment. On Nov 20
approx. R$336MM
Pecém II, Parnaíba I and Parnaíba III will request to Aneel to be also reimbursed for overpayment
Plant 100% Ownership adjusted
Itaqui R$100.6MM R$100.6MM
Pecém I R$247.4MM R$123.7MM
Pecém II R$61.0MM R$30.5MM
Parnaíba I R$61.9MM R$43.3MM
Parnaíba III R$39.6MM R$20.8MM
Total R$510.5MM R$318.9MM
Regulatory Developments (2)Unavailability charges (ADOMP) now calculated and paid as provided for in PPAs
NOTES: (1) Consider hourly-based methodology for unavailability charges until Aug 2014; (2) Does not consider amounts paid since Federal Court decisions
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Highlight to Personnel expenses reduction in the last 12 months (-15.8%)
o Headcount drop (-24.5%)
o Streamlining of organization structure
Ongoing HoldCo expenses cut and optimization program
o R$80MM/year targeted until 2015 year-end
o Further reductions in IT and consulting costs over the coming months
HoldCo Operational Expenses1/2/3
NOTES: (1) Does not include Depreciation & Amortization; (2) Does not include stock options cost; (3) Holding comprises ENEVA and ENEVA Participações
HoldCo Headcount3
HoldCo Expenses Reduction and Optimization Plan OngoingConsistent reduction of costs in recent quarters
33.2
27.9
29.8
1Q13 2Q13 3Q13
159
147
1Q13 2Q13
é
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Non-solicited proposal from EDP to acquire ENEVA interest in Pecém I
Proceedings: R$300.0MM
Involved assets
o ENEVA’s shares, corresponding to 50% of Pecém I share capital on the transaction signing date
o ENEVA credit conversion (R$409.9MM), comprised of:
- Intercompany loan: R$178MM
- Coal supply contract: R$208MM
- Electric energy contract: R$23.9MM
Release of ENEVA of future contributions in the asset
o Outstanding CAPEX and investments on operational stabilization plan; and
o Debt service
Next steps
o Brazilian anti-trust agency (CADE) approval; and
o ENEVA’s lenders approval, considering JR requested on Dec 2014
Pecém I SaleImmediate liquidity to move forward in challenging times
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Judicial Recovery Request
4
J di i l R R t
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Efforts made by officers of the Company in the last months
Judicial request reasons
o No renewal of agreement to suspend amortization and payment of interest on financial transactions, expired on N
o No agreement with financial institutions to implement a stabilization plan, comprised of:
- Capital structure strengthening; and
- Debt reprofiling
Involved assets
o ENEVA S.A.
o ENEVA Participações S.A.
o None of operating subsidiaries were part of JR request
Judicial request approved by Court and confirmed by shareholders on Dec 2014
Judicial Recovery RequestNecessary protection to continue operations
Private capital increase: R$133MM (net proceedings)
Partial sale of Pecém II: R$408MM
Adjustment on calculation and payment of plants unavailability(ADOMP)
Unavailability cost overpayments reimbursement for Pecém Iand Itaqui: R$360MM
Agreement with Aneel to preserve Parn
Sale of ENEVA interest in Pecém I: R$3
Significant improvement in power plant
Significant reduction in HoldCo expense
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Brazilian Power Market and Greenfield Por
5
B ili E M t i
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Southeast Reservo
~70% of total storage ca
Source: ANEEL
Brazil’s Generation Capacity: 134GW
Breakdown by source – February 2015
Brazil is highly dependent on hydro generation with increasingly faster depletion of re
Brazilian Energy Matrix
67%
75%
38%
43%39% 40%
43% 42% 43% 40%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Jan Feb Mar Apr May Jun Jul
Average 2007-2011 2012
66.5%
16.0%
9.5%
3.8%
2.7%1.5%
Hydro Others Gas Wind Coal Nuclear
ENEVA’s Greenfield Portfolio
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ParnaíbaComplex
Integrated to natural gas resources
Located in a tax-advantaged region
Ventos WindComplex
Located in one Brazil’s best wind resource areas
Attractive load factor
Just 30km from grid connection
Land ownership assured
Açu(Coal + Gas)
Located at a port with a regasification terminal buildlicense
150km from Campos Basin natural gas accumulations
Environmental licensed to both coal and gas operations
Sul & Seival Integrated to the Seival Mine (proven reserves: 152 Mton)
Low operation costs
Power
supply-demand
unbalanced
Hydropower
concentrated
matrix
Spot prices at
historical highs
Demand for base-
load generation2 3 4 51
Sul727 MW
ParnaíbaComplex
2,166 MW
Se600
Solar 1 MW
ENEVA’s Greenfield PortfolioAttractive licensed greenfield projects in various development stages
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Parnaíba I: Closing of the Cycle (2)
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Net power output: 352,8 MW
Plant’s upside efficiency: 51% (previously 37%)
Additional gas consumption: zero
Contractor: TBD (first phase performed by Duro Felguera)
Implementation schedule: 36 months
CAPEX: approx. R$1.75 billion
Target capital structure: 70/30, with BNDES financing
Target IRR: 15% real
Main equipment/delivery time
o Steam Turbine + Generator: 18 months
o Heat Recovery Steam Generator (boilers): 14 months
o Cooling Tower: 13 months
o Pumps (feed water, condensate, cooling water): 13 months
New equipment
Parnaíba I: Closing of the Cycle (2)Highly competitive expansion to existing site
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