The net profit of R$893 million reported by Eletrobras (ELET4) in the 4th quarter of 2023 reversed the loss of R$479 million suffered in the same period of the previous year. Higher revenues and an effect from income tax and social contribution offset the impacts of an increase in net financial expenses and provisions on net profit for the quarter, according to the balance sheet.
Earnings before interest, taxes, depreciation and amortization (EBITDA) totaled R$1.05 billion in the period, down 26% year on year. Calculated using regulatory metrics, the recurring company’s EBITDA reached R$5.6 billion in the quarter, an increase of 5%, due to higher transmission revenues and reduced operating expenses. According to Itaú BBA, the Ebitda result was below estimates.
In the year to date, profit was R$4.395 billion, 21% above that of 2022.
Operating provisions improved by 68%, from R$6.92 billion in 2022 to R$2.196 billion in 2023.
According to Felipe Moura, an analyst at Finacap, the quarter was marked by non-recurring items, such as revaluation of assets, expenses and a rise in energy prices – the latter item being the one that most influenced the good result.
The water condition of the reservoirs, which in a large part of the country was operating at a low level during the period due to the lack of rain, increased the price of energy, which, in the analyst’s opinion, tends to improve the company’s future revenues. Banco Safra echoes this by pointing out in a report that the “former state-owned company” should take advantage of the good moment in energy prices.
Dividends and cost efficiency
The electricity company, privatized under the Bolsonaro government, informed that it will distribute R$1.29 billion in dividends to shareholders based on the results of 2023. The figure is 39% higher than the R$863.4 million paid in 2022.
In a report to investors, Eletrobras stated that its 2023 operational and financial results reflected “the search for greater cost efficiency and process rationalization”, which enabled the resumption of its investment capacity.
In the last quarter of 2023, Eletrobras’ investments totaled R$4.63 billion, 190% above that recorded a year before, in works such as the Manaus-Boa Vista transmission line and the Coxilha Negra wind farm.
“Our financial and capital allocation discipline made it possible to propose the distribution of dividends in the amount of 1.297 billion reais relating to the 2023 results.”
Eletrobras, in a report to investors
The reduction in fixed costs, also cited by the company as the reason for the good quarterly result, covers two voluntary dismissal plans (PDV), with the participation of 4,066 employees. As a result, there was a reduction in costs of around 27% with “personnel, material, services and others”.
In a report, Itaú BBA highlighted the significant reduction from R$1.9 billion in compulsory loans to the current R$17.2 billion. According to the bank, this reduction was caused mainly by legal settlements in the quarter, “reflecting the ongoing recovery process”.
The electric company ended 2023 with a base of 469 customers, 393 of which in the free energy market, a significant growth compared to the 249 customers in the previous year. In terms of end consumers, Eletrobras went from 46 at the end of 2022 to 269 in the last quarter of 2023.
According to Safra, the results were obscured by many non-recurring items, although the adjusted numbers were good and benefited from cost control initiatives