Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Companhia Paranaense de Energia (ELP - Analyst Report), also known as COPEL, reported a 16.9% decline in its net earnings in the first quarter of 2012. Net income in the quarter settled at R$319.7 million (US$180.63 million) or R$1.17 per share (US$0.66 per ADR).

Revenue

Net operating revenues in the first quarter increased 10.9% year over year to R$2,024.6 million (US$1,143.8 million) due to higher sales volume.

Revenue improvement was witnessed in all the categories mentioned below: about 6.5% for Electricity sales to final customers; 16.5% for sales to distributors; 13.5% for use of main transmission grid; 9.2% for telecommunications revenue; 22.6% for distribution of piped gas and 43.3% for other operating revenues. However, construction revenue dipped 12.7% year over year.

Expenses/Income

During the quarter, operating costs and expenses went up 15.1% year over year to R$1,580.6 million (US$893.0 million), due primarily to a rise in expenses in almost all the categories including 10.8% in electricity purchased for resale, 11.8% in expenses related to use of main transmission grid, 22.7% in personnel and management, 26.6% in pension and healthcare, and 44.4% in natural gas and supplies for the gas business, among others.

However, higher costs in the above mentioned categories were partially offset by a 26.8% decline in material and supplies costs; 23.6% drop in raw material and supplies for electricity generation; and a 14.0% fall in construction costs.

EBITDA dipped slightly by 0.3% to R$585.4 million (US$330.7 million) with an EBITDA margin of 28.9% versus 32.2% in the year-ago quarter.

Balance Sheet

Exiting the first quarter 2012, COPEL’s cash and cash equivalents plummeted 21.7% sequentially to R$821.0 (US$451.1 million) while loans and financing increased 3% to R$2,118.8 million (US$1,164.2 million).

Cash Flow

Net cash flow from operating activities in the first quarter 2012 was R$59.0 million (US$33.3 million), down 69.8% year over year while capital spending was R$216.8 million (US$122.5 million), up 75.3% year over year.

For the fiscal year 2012, COPEL plans to spend approximately R$2,257.4 million, with roughly 47.4% on Generation and Transmission, 48.9% on Distribution and 3.7% on Telecommunications.

Companhia Paranaense de Energia is a fully integrated electric utility of Brazil engaged in the generation, transmission, and distribution of electricity to the State of Paraná. The provincial government of the State of Paraná controls about 58.6% of the shares of COPEL. The company faces stiff competition from Cia Energetica de Minas Gerais (CIG - Analyst Report) and Enersis S.A. (ENI).

We currently maintain a Neutral recommendation on the stock.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
ANI PHARMACE ANIP 29.82 +16.69%
ATLAS FINANC AFH 14.67 +3.02%
GREEN PLAINS GPRE 29.79 +2.90%
ALLIANCE FIB AFOP 17.73 +2.37%
VERTEX ENERG VTNR 7.49 +2.18%