ELETROBRAS: Losses On Distribution Segment Reduce Profit In The 2Q17

(RTTNews) - Brazil's state-owned power company Eletrobras reported a net income of R$ 306 million (US$ 96.55 million) in the second quarter of this year, down 98% from the same period in 2016.

Eletrobras results were hurt by a R$ 391 million (US$ 123.36 million) loss from its electricity distribution division and also by an adjustment in the so-called "compulsory loan" debt.

The compulsory loans were an extra charge in consumers' electricity bill which generated credits to finance the Brazilian power sector expansion. The loans, however, bear a 6% annual interest rate.

According to Eletrobras, the adjustments to the unpaid compulsory loans total amount generated a net negative financial result of R$ 2.021 billion (US$ 637.64 million) in the second quarter, and that weighed on the company's results.

Net operating revenue totaled R$ 9.094 billion in the quarter, down 72% year-on-year. Net management revenue, meanwhile, grew 15% to R$ 7.413 billion. The consolidated EBITDA (earnings before interest, taxes, depreciation, and amortization) in the quarter amounted to R$ 3.005 billion, 87% lower than in the same period of the previous year. The managerial EBITDA in the period was R$ 1.923 billion, an 83% increase.

Sales of power generated by the state-owned company totaled 38.4 gigawatt-hours (GWh) in the second quarter of this year, down 3% against the same period last year. Power sales from utilities fell 9% to 3.9 GWh on a yearly basis. The cost of electricity purchased for resale reached R$ 2.755 billion in the period, 13.4% higher than in the same basis of comparison.