UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

Form 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO
RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE
ACT OF 1934

 

For the Month of November 2003

 

EDP- Electricidadé de Portugal

 

Praça Marquês de Pombal, 12
1250-162  Lisbon, Portugal

(Address of principal executive offices)

 

(Indicate by check mark whether the registrant files or will file annual reports under cover of
Form 20-F or Form 40-F.)

 

Form 20-F  ý   Form 40-F  o

 

(Indicate by check mark whether the registrant by
furnishing the information contained in this form
is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.)

 

Yes  o   No  ý

 

 



 

 

Financial Results

 

9M2003

 

Investor Relations Department

 

Pedro Pires, Head of IR
Gonçalo Santos
Elisabete Ferreira
Cristina Requicha
Rui Antunes
Tel:  +351 21 001 2834
Fax: +351 21 001 2899
Email: ir@edp.pt
Site:    www.edp.pt

 

 

Reuters:

EDPP.IN / EDP.N

Bloomberg:

EDP PL / EDP US

 

 

Lisbon, 30 October 2003

 

EDP - Electricidade de Portugal, S.A.    Headquarters: Praça Marquês de Pombal, 12      1250-162 Lisboa        Portugal

 



 

Table of Contents

 

9M2003 Financial Results

 

Results Overview

 

Investments and Financial Debt

 

EDP Produção

 

EDP Distribuição

 

Hidrocantábrico

 

Bandeirante

 

Escelsa

 

Enersul

 

Telecoms

 

Information Technology

 

Consolidated Financial Results & Consolidated Extraordinary Results

 

Consolidated Income Statement

 

Adjusted Cash Flow and Consolidated Balance Sheet

 

Income Statement by Business Areas

 

Balance Sheet by Business Areas

 



 

9M2003 Financial Results

 

Financial Results Summary (€ m)

 

9M2003

 

9M2002

 

D%

 

 

 

 

 

 

 

 

 

Operating Revenues

 

5,186.7

 

4,650.0

 

11.5

%

Operating Costs

 

3,866.5

 

3,546.0

 

9.0

%

EBITDA

 

1,320.2

 

1,104.0

 

19.6

%

Operating Results

 

582.3

 

493.4

 

18.0

%

Financial Results

 

(287.1

)

(204.8

)

-40.2

%

Extraordinary Results

 

84.7

 

63.9

 

32.5

%

Net Profit

 

257.6

 

267.3

 

-4

%

Earnings per share

 

0.086

 

0.089

 

-3.6

%

 

 

 

 

 

 

 

 

Cash Flow (1)

 

995.6

 

877.9

 

13.4

%

Adjusted Cash Flow (2)

 

1,113.2

 

823.3

 

35.2

%

 

 

 

 

 

 

 

 

Operating Investment

 

547.0

 

740.4

 

-26.1

%

 

Financial Debt (€ m)

 

9M2003

 

YE2002

 

D%

 

 

 

 

 

 

 

 

 

Financial Debt

 

7,727.5

 

7,994.1

 

-3.3

%

Net Debt

 

7,495.5

 

7,780.1

 

-3.7

%

 

Financial Results Summary (€ m)

 

D HC

 

D Escelsa

 

D Enersul

 

9M2003 (3)

 

9M2002

 

D%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Revenues

 

288.1

 

193.0

 

115.2

 

4,590.4

 

4,650.0

 

-1.3

%

Operating Costs

 

231.0

 

147.4

 

82.4

 

3,405.7

 

3,546.0

 

-4.0

%

EBITDA

 

57.1

 

45.6

 

32.8

 

1,184.7

 

1,104.0

 

7.3

%

Operating Results

 

28.7

 

25.1

 

17.8

 

510.7

 

493.4

 

3.5

%

 

General Indicators

 

9M2003

 

9M2002

 

D%

 

Number of electricity clients

 

 

 

 

 

 

 

Portugal

 

5,715,178

 

5,637,612

 

1.4

%

Hidrocantábrico (4)

 

558,872

 

548,364

 

1.9

%

Brazil

 

2,797,920

 

2,751,525

 

1.7

%

 

 

 

 

 

 

 

 

Electricity sales (GWh)

 

 

 

 

 

 

 

Portugal

 

28,030

 

27,467

 

2.1

%

Hidrocantábrico (4)

 

8,836

 

8,264

 

6.9

%

Brazil

 

13,596

 

14,256

 

-4.6

%

 

 

 

 

 

 

 

 

Number of employees (core business)

 

 

 

 

 

 

 

Portugal

 

8,928

 

9,365

 

-4.7

%

Hidrocantábrico (4)

 

1,645

 

1,361

 

20.9

%

Brazil

 

3,604

 

3,669

 

-1.8

%

 

The EDP Group reported a significant growth at the operating level in the first nine months of 2003. EBITDA improved by €216.2 million or 19.6%, and EBIT was up €88.9 million or 18.0%. The change in the Group’s consolidation perimeter was a major reason for this increase in EBITDA. Hidrocantábrico contributed an additional €57.1 million, while Escelsa and Enersul added €45.6 million and €32.7 million respectively.

 

Excluding the above effect, EDP’s EBITDA still increased by 7.3% or €80.7 million.  The Group’s generation business EDP Produção (‘EDPP’) contributed €10.9 million as a result of the company’s successful effort in maintaining operating costs strictly under control. ONI had a positive impact of €40.0 million due to the increase in voice traffic, lower interconnection tariffs, rigorous cost cutting and the closure of its mobile venture ONI Way.

 

The positive contribution of these businesses was partly offset by Bandeirante’s €11.9 million fall in EBITDA due to the devaluation of the Real. In local currency terms, the company’s EBITDA was up 9.8%.

 

The Group’s EBIT improved by €88.9 million or 18.0%. The “new subsidiaries” contributed €71.6 million. However, consolidated EBIT was negatively affected by higher amortisation charges and an increase in provisions at EDP Distribuição. Total provisions at EDPD increased €15.6 million from the 9M2002 figure. Provision charges for bad debts went up from €20.5 million in the 9M2002 to €37.0 million in the 9M2003 – a €16.5 million increase - mostly due to a higher level of doubtful debtors and to interests charged but not received on overdue electricity bills. However, the slight improvement in the economic environment experienced in the third quarter of 2003 allowed for the recovery of some of these debts and EDPD recorded an extraordinary gain of €14.7 million in the 3Q2003 (or €16.0 million for the 9M2003).

 

(.../...)

 


(1) Cash flow = Net Income + Depreciation + Provisions

(2) Adjusted Cash flow = Cash Flow + Tariff Adjustment + Hydrological Correction + Hydrological Account Interest

(3) Excluding the changes in the consolidation perimeter

(4) Hidrocantábrico is proportionally consolidated in accordance with EDP’s stake in Hidrocantábrico (40%). Figures presented above correspond to Hidrocantábrico 100%.

 

Note: The accounts presented in this document are non-audited.

 

1



 

Results Overview

 

Revenues (€ m)

 

9M2003

 

9M2002

 

D%

 

 

 

 

 

 

 

 

 

EDP Produção (1)

 

1,004.1

 

1,095.4

 

-8.3

%

EDP Distribuição

 

2,686.2

 

2,603.3

 

3.2

%

Hidrocantábrico

 

473.1

 

185.0

 

155.7

%

Bandeirante

 

345.9

 

444.4

 

-22.2

%

Escelsa

 

193.0

 

 

 

Enersul

 

115.2

 

 

 

ONI

 

247.8

 

222.9

 

11.1

%

Information Technology

 

143.6

 

159.4

 

-9.9

%

Other & Adjustments

 

(22.2

)

(60.4

)

63.2

%

 

 

 

 

 

 

 

 

Consolidated

 

5,186.7

 

4,650.0

 

11.5

%

 

 

EBITDA (€ m)

 

9M2003

 

9M2002

 

D%

 

 

 

 

 

 

 

 

 

EDP Produção (1)

 

602.9

 

592.0

 

1.8

%

EDP Distribuição

 

396.1

 

363.0

 

9.1

%

Hidrocantábrico

 

105.3

 

48.2

 

118.3

%

Bandeirante

 

45.3

 

57.1

 

-20.7

%

Escelsa

 

45.6

 

 

 

Enersul

 

32.8

 

 

 

ONI

 

2.2

 

(37.8

)

 

Information Technology

 

29.5

 

29.6

 

-0.6

%

Other & Adjustments

 

60.5

 

51.8

 

16.9

%

 

 

 

 

 

 

 

 

Consolidated

 

1,320.2

 

1,104.0

 

19.6

%

 

 

EBIT (€ m)

 

9M2003

 

9M2002

 

D%

 

 

 

 

 

 

 

 

 

EDP Produção (1)

 

421.2

 

408.1

 

3.2

%

EDP Distribuição

 

76.8

 

73.6

 

4.4

%

Hidrocantábrico

 

60.7

 

31.9

 

90.0

%

Bandeirante

 

19.1

 

35.7

 

-46.5

%

Escelsa

 

25.1

 

 

 

Enersul

 

17.8

 

 

 

ONI

 

(51.3

)

(92.8

)

44.7

%

Information Technology

 

11.9

 

16.2

 

-26.7

%

Other & Adjustments

 

1.0

 

20.7

 

-95.2

%

 

 

 

 

 

 

 

 

Consolidated

 

582.3

 

493.4

 

18.0

%

 

 

(.../...)

 

Cost control is still a key management target. In the 9M2003 supplies and services on a consolidated basis, stripping out the impact of first time consolidations, went down 6.5%. Personnel costs were down 4.8%. EDP will continue to focus on cost cutting through operational savings and early retirements and particularly now that an agreement has been reached with the regulator. Up to €485.7 million of the costs incurred in early retirement program of 2003 and 2004 will be passed through to the electricity tariff over the next 20 years as from 2005. This will allow the company to implement a thorough modernization program in order to reach the desired efficiency levels.

 

EDP’s pre-tax profit went up 7.7% to €379.9 million following a 40.2% or €82.3 million net increase in financial charges versus the first nine months of 2002. Once again, the change in the consolidation perimeter was important. It had an impact on net interest costs of €47.8 million and €38.4 million in increased goodwill amortisation. The balance is due to the increase in debt at the holding level following the acquisition of Escelsa dollar denominated debt, the 40% stake in Hidrocantábrico and the first time appropriation of the accumulated losses since 2000 (€7.2 million) from Electra, Cabo Verde’s distribution company in which the Group owns 30.6%.

 

Despite the Group’s excellent operating performance, net profit for the period decreased from €267.3 million in the 9M2002 to €257.6 million in the 9M2003. This 3.6% drop is due to the minority items, which were €35.8 million lower due lower net losses at Oni and the positive contribution of the Brazilian subsidiaries following their full consolidation.

 


(1) Excludes the Special Regime Producers (SRP) Enernova and EDP Bioeléctrica (Renewable Energy)

 

2



 

Investments and Financial Debt

 

Operating Investments (€ m)

 

9M2003

 

YE2002

 

9M2002

 

 

 

 

 

 

 

 

 

EDP Produção (1)

 

127.6

 

239.4

 

145.8

 

Renewables

 

25.5

 

47.1

 

5.6

 

 

 

 

 

 

 

 

 

EDP Distribuição

 

218.0

 

371.2

 

211.7

 

(-) Subsidies in cash

 

43.4

 

56.9

 

42.9

 

(-) Edinfor asset transfer

 

 

 

80.5

 

42.8

 

(=) EDP Distribuição cash investments

 

174.6

 

233.8

 

126.1

 

 

 

 

 

 

 

 

 

Hidrocantábrico (40%)

 

47.1

 

84.8

 

56.5

 

 

 

 

 

 

 

 

 

Brazil

 

103.2

 

202.8

 

117.2

 

 

 

 

 

 

 

 

 

Telecoms

 

31.9

 

312.0

 

219.4

 

 

 

 

 

 

 

 

 

Information Technology

 

26.8

 

41.8

 

31.2

 

 

 

 

 

 

 

 

 

Other

 

10.3

 

53.9

 

38.7

 

 

 

 

 

 

 

 

 

Total

 

547.0

 

1,215.4

 

740.4

 

 

 

 

 

 

 

 

 

Financial Debt (€ m)

 

9M2003

 

YE2002

 

9M2002

 

 

 

 

 

 

 

 

 

Holding (2)

 

5,529.9

 

5,879.4

 

5,593.9

 

 

 

 

 

 

 

 

 

EDP Produção (1)

 

59.3

 

54.3

 

58.1

 

Renewables

 

15.9

 

14.8

 

14.5

 

 

 

 

 

 

 

 

 

EDP Distribuição

 

 

 

83.9

 

 

 

 

 

 

 

 

 

Hidrocantábrico (40%)

 

831.2

 

816.6

 

805.5

 

 

 

 

 

 

 

 

 

Brazil

 

591.5

 

550.2

 

321.1

 

 

 

 

 

 

 

 

 

Telecoms

 

668.6

 

622.1

 

644.2

 

 

 

 

 

 

 

 

 

Information Technology

 

23.5

 

25.6

 

34.3

 

 

 

 

 

 

 

 

 

Other

 

7.6

 

31.0

 

11.7

 

 

 

 

 

 

 

 

 

Total Financial Debt

 

7,727.5

 

7,994.1

 

7,567.2

 

Cash and cash equivalents

 

232.0

 

214.0

 

68.0

 

 

 

 

 

 

 

 

 

Net Debt

 

7,495.5

 

7,780.1

 

7,499.2

 

 

Operating investment totalled €547.0 million in the 9M2003. If we exclude ONI Way’s investment in the 9M2002 (€154.3 million), operating investment would have gone down 6.7%.

 

EDPP’s investment in the new TER CCGT (non-binding generation) amounted to €68.0 million in 9M2003. Total planned investment (at technical cost) amounts to €675.0 million, of which 57% has already been concluded. In the 9M2003 EDPP also invested €21.8 million in additional capacity at the Venda Nova hydro power plant (binding generation). Total investment in increasing Venda Nova’s capacity (at technical costs) is expected to be €139.0 million of which 70% has already been completed. Investment in renewables will be to increase installed capacity (+ 18MW) at Enernova’s wind farms. The company plans to invest around €400 million in a further 550MW capacity in wind generation until 2008.

 

The bulk of recurring investment at EDPD was related to the expansion and improvement of the distribution network.

 

40% of Hidrocantábrico’s investment, amounting to an extra €47.1 million in EDP Group’s capex, was mostly in wind farms. The P.E. Albacete wind farm (64 MW installed capacity) started operating in the 3Q2003 and P.E. Arlanzón (34 MW installed capacity) should start operating in April 2004.

 

ONI invested €31.9 million in the 9M2003, or 6% of the EDP Group’s total investment. 71.8% of ONI’s investments were in the Spanish fixed line operations.

 

At the end of the third quarter of 2003, the EDP Group’s total financial debt amounted to €7,727.5 million. Vis-à-vis the YE2002, the holding company’s debt decreased by €349.5 million, in great part thanks to the sale of part of EDP’s stake in Iberdrola (70% of the 3% stake), amounting to €284.1 million.

 

The full consolidation of Escelsa and Enersul contributed a €304.8 million net increase to EDP’s consolidated debt (net of EDP S.A.’s portion of the purchased Escelsa’s Senior Notes - approximately 83%).

 

In the 9M2003, ONI and the Brazilian subsidiaries, account for 16% or €1,260.1 million of total EDP Group’s consolidated debt. Stripping out the minorities’ share of the financial debt of these subsidiaries, ONI and Brazil represent €797.8 million. In Brazil it is worth mentioning that the electricity utilities are financing State receivables through special loans contracted with BNDES to compensate for the rationing losses and “Parcela A” costs. The €41.3 million increase in Brazilian subsidiaries debt since YE2002 is strongly influenced by the 8.7% Brazilian Real appreciation against the Euro in the period.

 

Following the year-on-year debt increase, total debt over total capital, increased from 55.6% in the 9M2002 to 58.0% in the 9M2003 or from 55.4% to 57.3% if we consider net debt.

 


(1) Excludes the Special Regime Producers (SRP) Enernova and EDP Bioeléctrica (Renewable Energy)

(2) Net of overdrafts and deposits

 

3



 

EDP Produção (1)

 

Energy emission (GWh)

 

9M2003

 

9M2002

 

D%

 

 

 

 

 

 

 

 

 

Hydroelectric

 

10,164

 

3,767

 

169.8

%

Thermoelectric

 

9,717

 

14,158

 

-31.4

%

Binding Generation

 

19,881

 

17,925

 

10.9

%

HDN

 

92

 

41

 

122.4

%

Hidrocenel

 

196

 

126

 

55.3

%

EDP Energia

 

198

 

63

 

212.3

%

Non-Binding Generation

 

485

 

231

 

110.4

%

Biomass

 

29

 

26

 

10.6

%

Wind Farms

 

78

 

77

 

1.5

%

Cogeneration

 

520

 

446

 

16.6

%

Small Hydro (2)

 

139

 

76

 

83.7

%

Special Regime Producers

 

766

 

625

 

22.6

%

Total EDP emission

 

21,133

 

18,780

 

12.5

%

 

 

 

 

 

 

 

 

Pego thermal power station (SEP)

 

3,046

 

3,757

 

-18.9

%

Tapada thermal power station (SEP)

 

4,045

 

5,744

 

-29.6

%

Auto-producers (SEI)

 

2,209

 

1,669

 

32.3

%

Import / (Export) net

 

2,044

 

924

 

121.2

%

Direct sales to Ind. Clients (included in Cogeneration)

 

(401

)

(343

)

17.0

%

Pumping

 

(370

)

(513

)

-27.8

%

Gross demand

 

31,706

 

30,019

 

5.6

%

 

 

 

 

 

 

 

 

Synchronous compensation

 

(24

)

(29

)

-15.4

%

Own consumption - generation

 

(2

)

(3

)

-6.8

%

Own consumption - transmission grid

 

(7

)

(7

)

5.3

%

Losses

 

(576

)

(464

)

24.1

%

 

 

 

 

 

 

 

 

Energy delivered to distribution

 

31,095

 

29,517

 

5.3

%

Hydrological coefficient

 

1.28

 

0.50

 

 

 

 

Electricity sales (€ m)

 

9M2003

 

9M2002

 

D%

 

 

 

 

 

 

 

 

 

PPA Capacity Charge

 

662.9

 

648.2

 

2.3

%

PPA Energy Charge

 

222.8

 

371.3

 

-40.0

%

Total CPPE

 

885.7

 

1,019.5

 

-13.1

%

 

 

 

 

 

 

 

 

HDN

 

30.7

 

16.4

 

87.8

%

Hidrocenel

 

31.1

 

17.7

 

75.4

%

Total Small Hydro

 

61.8

 

34.1

 

81.4

%

 

 

 

 

 

 

 

 

Cogeneration (Soporgen & Energin)

 

30.9

 

18.0

 

71.3

%

 

 

 

 

 

 

 

 

Total EDP Produção

 

978.4

 

1,071.6

 

-8.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fuel costs (€ m)

 

9M2003

 

9M2002

 

D%

 

 

 

 

 

 

 

 

 

Coal

 

95.5

 

116.4

 

-17.9

%

Fuel-oil

 

104.3

 

222.4

 

-53.1

%

Natural Gas

 

17.0

 

15.8

 

7.1

%

Diesel

 

1.8

 

0.9

 

98.2

%

CPPE

 

218.6

 

355.5

 

-38.5

%

 

 

 

 

 

 

 

 

Natural Gas (Soporgen & Energin)

 

27.7

 

15.0

 

83.9

%

 

 

 

 

 

 

 

 

Total EDP Produção

 

246.3

 

370.5

 

-33.5

%

 

 

 

 

 

 

 

 

Electricity Purchases (€ m)

 

9M2003

 

9M2002

 

D%

 

 

 

 

 

 

 

 

 

HDN, Hidrocenel & Cogenerators

 

44.0

 

14.2

 

 

 

EDP’s total emission amounted to 21,133 GWh in 9M2003, of which 51% was hydro generation compared to 22% in 9M2002;

 

The 12.5% increase in EDP’s emission resulted from heavy rainfall during the first quarter of the year (hydrological coefficient of 1.28 in 9M2003, 0.5 in 9M2002) and a 5.6% increase in Gross Demand following a cold winter and an unusually hot summer;

 

The PPA capacity charge increased 2.3%, reflecting i) the higher availability factors at the CPPE’s hydro and thermal power plants and ii) the charge adjustment for inflation as foreseen in the PPA contracts;

 

The PPA energy charge dropped 40.0% due to a lower utilization of CPPE’s thermal plants, because of a wet first semester. CPPE continued to buy coal and fuel at a lower price than that reflected in the PPA energy charge (€218.6 million vs. €222.8 million). The increase in the natural gas’ cost in 9M2003 is artificial since only 8 months’ costs were accounted for in 9M2002 (September’s consumption amounting to €4.3 million was only booked in the 4Q2002);

 

EDPP’s electricity generation gross profit remained stable at €688.2 million in 9M2003 (€686,2 million in 9M2002).

 


(1) The Special Regime Producers (SRP) Enernova and EDP Bioeléctrica (Renewable Energy) were Excluded from the EDPP consolidation perimeter. For analisys purposes these two companies were deconsolidated from EDPP in both periods presented.

(2) HDN, Hidrocenel (HCL) and EDP Energia’s power stations with installed capacity of less than 10 MW operating in the Non-Biding system are remunerated as Special Regime Producers (“SRP”). SRP generation in HDN represented 96 GWh in 9M2003 and 51 GWh in 9M2002, in HCL represented 29 GWh in 9M2003 and 21 GWh in 9M2002 and in EDP Energia represented 13 GWh in 9M2003 and 4 GWh in

 

4



 

Operating Income Statement (€ m)

 

9M2003

 

9M2002

 

D%

 

 

 

 

 

 

 

 

 

Electricity Sales

 

978.4

 

1,071.6

 

-8.7

%

Services Provided

 

11.0

 

14.2

 

-22.8

%

Other Sales

 

14.7

 

9.5

 

53.9

%

Operating Revenues

 

1,004.1

 

1,095.4

 

-8.3

%

 

 

 

 

 

 

 

 

Electricity

 

44.0

 

14.2

 

210.8

%

Fuel for electricity generation

 

246.3

 

370.5

 

-33.5

%

Direct Activity Costs

 

290.3

 

384.7

 

-24.5

%

 

 

 

 

 

 

 

 

Gross Profit

 

713.8

 

710.7

 

0.4

%

Gross Profit/Revenues

 

71.1

%

64.9

%

6.2

p.p.

 

 

 

 

 

 

 

 

Sundry materials and goods for resale

 

2.7

 

3.6

 

-25.0

%

Supplies and services - Group

 

12.2

 

8.6

 

42.0

%

Supplies and services - Non-Group

 

32.2

 

34.7

 

-7.2

%

Personnel costs

 

91.2

 

90.5

 

0.8

%

Generation centre rentals

 

2.6

 

2.6

 

3.3

%

Other operating costs (or revenues)

 

(1.3

)

(3.0

)

56.8

%

Own work capitalised

 

(28.6

)

(18.1

)

-58.0

%

Operating Costs

 

110.9

 

118.7

 

-6.6

%

 

 

 

 

 

 

 

 

EBITDA

 

602.9

 

592.0

 

1.8

%

EBITDA / Revenues

 

60.0

%

54.0

%

6.0

p.p.

 

 

 

 

 

 

 

 

Depreciation and amortisation

 

174.3

 

168.6

 

3.4

%

Provisions

 

7.4

 

15.4

 

-52.1

%

 

 

 

 

 

 

 

 

EBIT

 

421.2

 

408.1

 

3.2

%

EBIT / Revenues

 

42.0

%

37.3

%

4.7

p.p.

 

 

Personnel costs (€ m)

 

9M2003

 

9M2002

 

D%

 

 

 

 

 

 

 

 

 

Total Personnel Costs

 

91.2

 

90.5

 

0.8

%

Pension Premiums

 

8.8

 

8.1

 

8.5

%

Early Retirement Correction

 

9.8

 

9.9

 

-0.4

%

Social benefits with early retirees

 

1.0

 

1.0

 

-0.4

%

Medical care with inactives

 

2.2

 

2.0

 

14.3

%

Adjusted Personnel Costs

 

69.3

 

69.5

 

-0.3

%

 

 

 

 

 

 

 

 

Number of employees

 

2,062

 

2,153

 

-4.2

%

MW/Employee

 

3.58

 

3.49

 

2.6

%

 

 

 

 

 

 

 

 

Investment (€ m)

 

9M2003

 

9M2002

 

D%

 

 

 

 

 

 

 

 

 

Binding Generation

 

36.5

 

27.6

 

32.5

%

Non-Binding Generation

 

69.3

 

105.9

 

-34.5

%

Special Regime Producers

 

1.4

 

2.6

 

-48.5

%

Other investments

 

5.0

 

2.9

 

73.4

%

Financial costs and Investments

 

17.1

 

7.0

 

144.1

%

Total investment

 

129.3

 

146.0

 

-11.4

%

 

 

 

 

 

 

 

 

Recurring investment

 

16.5

 

17.3

 

-4.9

%

Non-recurring investment

 

112.9

 

128.7

 

-12.3

%

 

The consolidation perimeter of EDP Produção (‘EDPP’) changed in July 2003 and now it excludes the special regime producers Enernova and EDP Bioeléctrica. On a stand-alone basis, these two companies amount to €7.6 million gross profit, €5.6 million EBITDA and €2.7 million Operating Profit in 9M2003;

 

Non-group supplies and services drop 7.2%. However 9M2002 includes the full year’s insurance charge. If we adjusted for this, non-group supplies and services would have remained unchanged;

 

Headcount went down 4.2% year-on-year. However, personnel costs went up following the 2003 actuarial study, which used more conservative assumptions, resulting in an increase in Pension premiums.

 


(1) The Special Regime Producers (SRP) Enernova and EDP Bioeléctrica (Renewable Energy) were Excluded from the EDPP consolidation perimeter. For analisys purposes these two companies were deconsolidated from EDPP in both periods presented.

 

5



 

EDP Distribuição

 

Energy Sales (GWh)

 

9M2003

 

9M2002

 

D%

 

 

 

 

 

 

 

 

 

Energy delivered to Distribution

 

31,096

 

29,517

 

5.3

%

Own consumption - distribution

 

(25

)

(20

)

23.6

%

Distribution losses

 

(2,140

)

(1,850

)

15.7

%

 

 

 

 

 

 

 

 

Total electricity sales (1)

 

28,930

 

27,647

 

4.6

%

 

 

 

 

 

 

 

 

Electricity sales - PES

 

26,209

 

27,091

 

-3.3

%

VHV (Very high voltage)

 

810

 

621

 

30.3

%

HV (High voltage)

 

2,657

 

2,540

 

4.6

%

MV (Medium voltage)

 

6,737

 

8,424

 

-20.0

%

SLV (Special low voltage)

 

2,275

 

2,157

 

5.5

%

LV (Low voltage)

 

12,857

 

12,555

 

2.4

%

PL (Public lighting)

 

873

 

793

 

10.1

%

 

 

 

 

 

 

 

 

Electricity sales - NBES

 

2,722

 

556

 

 

EDP

 

1,822

 

376

 

 

HV (High voltage)

 

38

 

59

 

-36.0

%

MV (Medium voltage)

 

1,784

 

317

 

 

Non-EDP

 

900

 

180

 

 

HV (High voltage)

 

57

 

76

 

-25.7

%

MV (Medium voltage)

 

843

 

103

 

 

 

 

 

 

 

 

 

 

Regulated Revenues (2)

 

9M2003

 

9M2002

 

 

 

 

 

 

 

Unit revenue for the UDGr: HV and MV (€ / MWh)

 

9.84

 

10.23

 

Electricity delivered to PES/NBES consumers: HV and MV (GWh)

 

28,835

 

28,200

 

Unit revenue for the UDGr: LV (€ / MWh)

 

24.55

 

25.29

 

Electricity delivered to binding/non-binding consumers: LV (GWh)

 

15,851

 

15,393

 

t-2 tariff adjustment (€ m)

 

(10.4

)

(10.5

)

URD total allowed revenues (€ m)

 

662.6

 

667.3

 

 

 

 

 

 

 

Allowed revenues for the NS activity: VHV; HV and MV (€ m)

 

17.5

 

8.4

 

Allowed revenues for the NS activity: SLV (€ m)

 

6.9

 

7.0

 

Allowed revenues for the NS activity: LV (€ m)

 

94.8

 

86.6

 

t-2 tariff adjustment (€ m)

 

 

 

CRedes total allowed revenues (€ m)

 

119.2

 

102.1

 

 

 

 

 

 

 

Allowed revenues for the SPS activity: VHV; HV and MV (€ m)

 

6.3

 

2.9

 

Allowed revenues for the SPS activity: SLV (€ m)

 

1.8

 

1.4

 

Allowed revenues for the SPS activity: LV (€ m)

 

59.1

 

54.5

 

t-2 tariff adjustment (€ m)

 

17.0

 

(4.3

)

CSEP total allowed revenues (€ m)

 

84.2

 

54.4

 

 

 

 

 

 

 

t-1 tariff adjustment for Energy Aquisition activity (€ m)

 

7.7

 

 

Total allowed revenues after tariff adjustment (€ m)

 

873.7

 

823.8

 

 

 

 

 

 

 

Electricity Sales & Gross Profit (€ m)

 

9M2003

 

9M2002

 

D%

 

 

 

 

 

 

 

 

 

VHV (Very High Voltage)

 

33.7

 

26.9

 

25.1

%

HV (High Voltage)

 

122.5

 

116.2

 

5.4

%

MV (Medium Voltage)

 

479.9

 

601.8

 

-20.3

%

SLV (Special Low Voltage)

 

215.8

 

206.1

 

4.7

%

LV (Low Voltage)

 

1,664.3

 

1,557.3

 

6.9

%

Public lighting

 

71.2

 

62.2

 

14.4

%

Interruptibility discounts

 

(19.7

)

(19.0

)

-3.9

%

Tariff correction discounts

 

(1.1

)

(3.8

)

71.9

%

Invoiced Sales - PES

 

2,566.7

 

2,547.9

 

0.7

%

Invoiced Sales - NBES (3)

 

47.3

 

7.4

 

 

Distribution 2000 Reposition

 

 

15.4

 

 

Distribution 2001 Reposition

 

(5.0

)

 

 

Distribution 2002 Reposition

 

(7.7

)

 

 

Distribution 2002

 

17.9

 

17.1

 

 

Distribution 2003

 

51.9

 

 

 

Tariff Adjustments

 

57.1

 

32.5

 

 

 

 

 

 

 

 

 

 

Electricity Revenues

 

2,671.1

 

2,587.8

 

3.2

%

Tariff adjustments’ reposition

 

5.2

 

15.4

 

 

Sales to customers before reposition

 

2,665.9

 

2,572.5

 

3.6

%

Electricity purchases

 

1,792.2

 

1,748.7

 

2.5

%

Electricity Gross Profit

 

873.7

 

823.8

 

6.1

%

 

In the non-binding system, EDP Energia achieved a 66.9% market share selling 1,822 GWh to its 1,174 clients. By the end of the 3Q2003, the number of clients with nonbinding customer status totalled 2,282 out of which 1,582 were actually acquiring energy in the liberalised market.

 

Electricity Revenues amounted to €2,671.1 million, up 3.2% year-on-year, benefiting from a 4.6% growth in consumption that followed both a cold winter and a particularly warm summer. VHV electricity revenues rose 25.1% due to additional energy needs from one of EDPD’s industrial clients (an iron-foundry that started operating a new furnace). The continued transfer of some MV clients from the binding (PES) to the nonbinding system led to a 20.3% decrease in this segment’s electricity revenues.

 

The bulk of the tariff adjustment comes from a €51.9 million benefit due to a lower than expected real consumption in the binding system as the number of MV clients that shifted to the liberalised market came above the regulator’s expectations. For the 2003 tariffs, the regulator (ERSE) estimated a 2.2% growth in PES consumption.

 

The Use of the Distribution Grid activity accounted for 76% of the company’s total allowed revenues. Despite the positive effect of higher consumption, translated into a 2.7% increase in allowed revenues for this activity, the 2003 tariff cuts led to a 0.7% decrease in the Use of the Distribution Grid’s allowed revenues.

 


(1) Figure presented include Sales to EDP Group.

(2) Allowed Revenues for the 9M2003 and 9M2002 were calculated on the basis of estimated consumption.

(3) In the 9M2002, part of these revenues was accounted under “services provided”. As such, for comparison purposes figures presented in the 9M2002 include the amount accounted under that item (€4,1 million).

 

6



 

Operating Income Statement (€ m)

 

9M2003

 

9M2002

 

D%

 

 

 

 

 

 

 

 

 

Electricity sales - Group

 

25.8

 

0.7

 

 

Electricity sales - Non-Group

 

2,645.3

 

2,583.0

 

2.4

%

Services provided

 

13.8

 

18.3

 

-24.7

%

Other sales

 

1.4

 

1.3

 

6.8

%

Operating Revenues

 

2,686.2

 

2,603.3

 

3.2

%

 

 

 

 

 

 

 

 

Direct Activity Costs

 

1,792.2

 

1,748.7

 

2.5

%

 

 

 

 

 

 

 

 

Gross Profit

 

894.0

 

854.6

 

4.6

%

Gross Profit/Revenues

 

33.3

%

32.8

%

0.5

p.p.

 

 

 

 

 

 

 

 

Sundry materials and goods for resale

 

77.3

 

50.8

 

52.2

%

Supplies and services - Group

 

57.0

 

56.4

 

1.1

%

Supplies and services - Non-group

 

79.7

 

90.9

 

-12.3

%

Personnel costs

 

300.8

 

289.7

 

3.8

%

Concession fees

 

128.5

 

115.3

 

11.5

%

Other operating costs (or revenues)

 

(15.7

)

(8.7

)

-80.3

%

Own work capitalised

 

(129.8

)

(102.8

)

-26.2

%

Operating Costs

 

497.9

 

491.6

 

1.3

%

 

 

 

 

 

 

 

 

EBITDA

 

396.1

 

363.0

 

9.1

%

EBITDA / Revenues

 

14.7

%

13.9

%

0.8

p.p.

 

 

 

 

 

 

 

 

Depreciation and amortization

 

260.9

 

246.7

 

5.8

%

Provisions

 

58.4

 

42.7

 

36.6

%

 

 

 

 

 

 

 

 

EBIT

 

76.8

 

73.6

 

4.4

%

EBIT/ Revenues

 

2.9

%

2.8

%

0.0

p.p.

 

 

 

 

 

 

 

 

Personnel Costs (€ m)

 

9M2003

 

9M2002

 

D%

 

 

 

 

 

 

 

 

 

Total personnel costs

 

300.8

 

289.7

 

3.8

%

Pension premiums

 

42.1

 

27.9

 

51.0

%

Early retirement correction

 

56.9

 

58.0

 

-1.8

%

Social benefits with early retirees

 

7.9

 

8.7

 

-8.6

%

Medical care with inactives

 

10.0

 

9.8

 

2.5

%

Adjusted personnel costs

 

183.8

 

185.4

 

-0.8

%

 

 

 

 

 

 

 

 

Number of employees

 

6,801

 

7,191

 

-5.4

%

 

 

 

 

 

 

 

 

Investment (€ m)

 

9M2003

 

9M2002

 

D%

 

 

 

 

 

 

 

 

 

Distribution grid

 

165.6

 

144.2

 

14.8

%

Public lighting

 

13.1

 

7.1

 

85.0

%

Information systems

 

12.2

 

42.8

 

-71.6

%

Other investments

 

27.1

 

17.7

 

52.8

%

Operating investment

 

218.0

 

211.8

 

2.9

%

 

 

 

 

 

 

 

 

Investment subsidies (cash)

 

43.4

 

42.9

 

1.3

%

Operating investment (excl. subsidies)

 

174.6

 

169.0

 

3.3

%

 

 

EDPD’s Gross Profit for the period rose 4.6% reflecting: (i) a 16.8% increase in the Network Services’ allowed revenues; (ii) a 54.7% increase in the Supply in the PES allowed revenues; which were partly offset by (iii) a decrease of 3.8% and 2.9% in unit revenues for the Use of the Distribution Grid for HV/MV and LV segments, respectively.

 

Sundry materials rose 52.2% year-on-year. However, note that the increased costs are being capitalised and accounted for under “own work capitalised”, and subsequently depreciated.

 

Non-group supplies and services fell 12.3% on the back of a 35.6% decrease in maintenance costs due to the renegotiation of some maintenance contracts which are no longer being billed on a retainer basis, and a higher recourse to internal resources.

 

Even though EDPD reduced its workforce by 390 employees, personnel costs for the period increased 3.8% due to a 51% increase in “pension premiums” following the 2003 actuarial study, which was made on the basis of more conservative assumptions.

 

Last year’s operating investment includes €42.8 million worth of assets relative to the transfer of the SAP/ISU platform from Edinfor to EDPD. Excluding this amount, EDPD’s operating investment would have increased 29% to €218.0 million, of which 76% was invested in the distribution grid. Investment subsidies for the period (cash & in kind) amounted to €83.2 million.

 

7



 

Hidrocantábrico (100%) - Generation

 

Spain Energy Balance (GWh)

 

9M2003

 

9M2002

 

D%

 

 

 

 

 

 

 

 

 

Generation

 

137,277

 

128,616

 

6.7

%

Special Regime

 

29,129

 

24,842

 

17.3

%

Imports

 

6,557

 

6,848

 

-4.2

%

 

 

 

 

 

 

 

 

System Demand - Coverage

 

172,963

 

160,306

 

7.9

%

 

 

 

 

 

 

 

 

Regulated Distribution

 

119,143

 

111,855

 

6.5

%

Supply

 

48,478

 

45,851

 

5.7

%

Exports

 

5,342

 

2,600

 

105.4

%

 

 

 

 

 

 

 

 

Source: OMEL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HC’s Net Electricity Generation (GWh)

 

9M2003

 

9M2002

 

D%

 

 

 

 

 

 

 

 

 

Hydroelectric

 

616

 

487

 

26.4

%

Nuclear

 

917

 

868

 

5.6

%

Aboño

 

4,902

 

5,254

 

-6.7

%

Soto de Ribera

 

2,935

 

3,574

 

-17.9

%

Coal

 

7,837

 

8,828

 

-11.2

%

Castejón CCGT

 

1,101

 

 

 

 

 

 

 

 

 

 

 

Total Generation

 

10,470

 

10,183

 

2.8

%

Pumping

 

(99

)

(94

)

5.4

%

 

 

 

 

 

 

 

 

Energy delivered to the Pool

 

10,371

 

10,089

 

2.8

%

 

 

 

 

 

 

 

 

HC’s Performance in the Pool

 

9M2003

 

9M2002

 

D%

 

 

 

 

 

 

 

 

 

Average HC Selling Price (1) (€/MWh)

 

36.56

 

46.98

 

-22.2

%

Average Pool Price (1) (€/MWh)

 

38.59

 

50.58

 

-23.7

%

HC’s market share in wholesale market

 

7.6

%

7.8

%

-0.3

p.p.

 

 

 

 

 

 

 

 

HC’s Fuel Costs

 

9M2003

 

9M2002

 

D%

 

 

 

 

 

 

 

 

 

Average HC Fuel Cost (€/MWh) (2)

 

15.6

 

16.0

 

-2.3

%

 

 

Demand in the Spanish electricity market grew 6.3% in comparison with the 9M2002 because of a harsh winter and an unusually hot summer.

 

Due to the hot and dry 3Q2003 thermal generation as a percentage of the total Spanish electricity emission had a strong increase in this period, leading to an increase of the pool prices from €34.07/MWh on the 1H2003 to €38.59/MWh on the 9M2003. Nevertheless, in the 9M2003 the pool prices dropped 23.7% vis-à-vis 9M2002 as a result of a higher hydrological coefficient in 2003 (1.07 in 9M2003 versus 0.48 in 9M2002).

 

Although Hidrocantábrico is heavily weighted on thermal power generation, it was able to increase its net emission by 2.8% under these hydrological conditions thanks to the start of Castejón CCGT’s operations in October 2002. In terms of market share in the wholesale market, the company fell 0.3 p.p. from 7.84% in the 9M2002 to 7.55% in the 9M2003 as a result of a higher rainfall in 2003.

 


(1) Includes wholesale market, ancillary services and capacity payment.

(2) Excluding hydroelectric emission.

 

8



 

Hidrocantábrico (100%) - Distribution & Supply

 

Distribution

 

Energy Sales - GWh

 

Electricity

 

9M2003

 

9M2002

 

D%

 

Low Voltage

 

1,566

 

1,445

 

8.4

%

Medium Voltage

 

728

 

615

 

18.4

%

High Voltage

 

4,093

 

4,106

 

-0.3

%

Total

 

6,387

 

6,166

 

3.6

%

of which: access clients

 

899

 

798

 

12.7

%

 

 

 

 

 

 

 

 

Gas (1)

 

9M2003

 

9M2002

 

D%

 

Total

 

4,976

 

1,206

 

312.8

%

of which: access clients

 

1,795

 

250

 

616.6

%

 

# of Customers

 

Electricity

 

9M2003

 

9M2002

 

D%

 

Low Voltage

 

556,437

 

545,960

 

1.9

%

Medium Voltage

 

686

 

624

 

9.9

%

High Voltage

 

18

 

19

 

-5.3

%

Total

 

557,141

 

546,603

 

1.9

%

of which: access clients

 

1,166

 

531

 

119.6

%

 

 

 

 

 

 

 

 

Gas (1)

 

9M2003

 

9M2002

 

D%

 

Total

 

548,338

 

154,075

 

255.9

%

of which: access clients

 

736

 

12

 

6033.3

%

 

Revenues - € m

 

Electricity

 

9M2003

 

9M2002

 

D%

 

Transmission tariff

 

4.6

 

2.5

 

85.3

%

Distribution tariff

 

69.2

 

67.1

 

3.2

%

Commercialisation tariff

 

5.7

 

5.4

 

5.8

%

Regulated revenues

 

79.6

 

75.0

 

6.1

%

 

 

 

 

 

 

 

 

Gas

 

9M2003

 

9M2002

 

D%

 

Transport tariff

 

1.6

 

0.2

 

804.4

%

Distribution tariff

 

33.4

 

17.1

 

95.8

%

Commercialisation tariff

 

2.7

 

1.4

 

94.4

%

Regulated revenues

 

37.7

 

18.6

 

102.5

%

 

Supply

 

Energy Sales - GWh

 

Electricity

 

9M2003

 

9M2002

 

D%

 

Asturias

 

745

 

838

 

-11.1

%

Rest of Spain

 

2,603

 

2,058

 

26.5

%

Total

 

3,348

 

2,896

 

15.6

%

 

 

 

 

 

 

 

 

Gas

 

9M2003

 

9M2002

 

D%

 

Asturias/Basque Country

 

1,253

 

137

 

814.8

%

Rest of Spain

 

1,758

 

1,052

 

67.1

%

Total

 

3,011

 

1,189

 

153.2

%

 

# of Customers

 

Electricity

 

9M2003

 

9M2002

 

D%

 

Asturias

 

1,048

 

473

 

121.6

%

Rest of Spain

 

1,849

 

1,819

 

1.6

%

Total

 

2,897

 

2,292

 

26.4

%

 

 

 

 

 

 

 

 

Gas

 

9M2003

 

9M2002

 

D%

 

Asturias/Basque Country

 

166

 

11

 

1409.1

%

Rest of Spain

 

80

 

72

 

11.1

%

Total

 

246

 

83

 

196.4

%

 

Revenues - € m

 

Electricity

 

9M2003

 

9M2002

 

D%

 

Asturias

 

41.8

 

44.6

 

-6.3

%

Rest of Spain

 

143.8

 

109.5

 

31.4

%

Sales

 

185.6

 

154.0

 

20.5

%

 

 

 

 

 

 

 

 

Gas

 

9M2003

 

9M2002

 

D%

 

Asturias/Basque Country

 

17.4

 

2.0

 

779.9

%

Rest of Spain

 

26.7

 

15.2

 

75.1

%

Sales

 

44.1

 

17.2

 

156.3

%

 

Electricity Distribution: Hidrocantábrico’s regulated revenues for the electricity distribution activity increased 6.1% to €79.6 million. This is mainly explained by the increase of the transmission remuneration as a result of expansion of the activity to outside Asturias.

 

Gas Distribution: The 9M2003 figures of Hidrocantábrico’s gas distribution activity include Naturcorp’s figures as from the 1st August 2003. It is important to note that Naturcorp is fully consolidated in Hidrocantábrico. Naturcorp contributed with 3,619 GWh of gas distributed and 383 thousand clients. In terms of regulated revenues Naturcorp represented €11.5 million. Note that the presented operating data considers 100% of Naturcorp’s gas distribution subsidiaries figures, while in the financial data is being considered the consolidation method of Naturcorp’s subsidiaries into Naturcorp. If we apply the same methodology to the operating data (Gas de Euskadi and Donostigas fully consolidated, and GasNalsa and Bilbogas proportionally consolidated at 50%) the contribution of Naturcorp would be 3,395 GWh and 326 thousand clients.

 

Electricity Supply: The electricity supply activity has benefited from the liberalisation for all customers as of January 2003 and the 6.3% growth in electricity demand. In this activity, the company was able to increase its average sales price 4.2% to €55.4/MWh in the 9M2003.

 

Gas Supply: The strong year-on-year growth in the gas supply activity is explained by the fact that Hidrocantábrico initiated this activity at the beginning of 2002 and by the inclusion of Naturcorp since 1 August 2003. Naturcorp has contributed with 947 GWh of gas sold and 100 clients.

 


(1) Considering 100% of Naturcorp’s gas distribution subsidiaries

 

9



 

Hidrocantábrico (100%)

 

Business Areas
Breakdown

 

Generation & Supply

 

Electricity Distribution

 

Gas Distribution

 

Special Regime

 

9M2003

 

9M2002

 

D%

 

9M2003

 

9M2002

 

D%

 

9M2003

 

9M2002

 

D%

 

9M2003

 

9M2002

 

D%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

693.2

 

656.4

 

5.6

%

320.2

 

384.0

 

-16.6

%

98.5

 

41.0

 

140.4

%

25.0

 

14.7

 

69.8

%

Direct Costs

 

451.9

 

390.2

 

15.8

%

237.8

 

308.1

 

-22.8

%

53.2

 

16.3

 

226.9

%

15.6

 

9.5

 

64.2

%

Gross Profit

 

241.3

 

266.2

 

-9.3

%

82.4

 

76.0

 

8.4

%

45.3

 

24.7

 

83.4

%

9.4

 

5.2

 

80.0

%

Gross Profit/Revenues

 

34.8

%

40.6

%

-5.7

p.p.

25.7

%

19.8

%

5.9

p.p.

46.0

%

60.3

%

-14.3

p.p.

37.6

%

35.4

%

2.1

p.p.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personnel Costs

 

26.3

 

25.0

 

5.0