AXIA Energia S.A 6-K/A, filed May 19, 2021
AXIA Energia S.A. (AXIAY)
About this 6-K/A
AXIA Energia S.A filed this 6-K/A on May 19, 2021.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K/A
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934
For the month of May, 2021
Commission File Number 1-34129
CENTRAIS ELÉTRICAS BRASILEIRAS S.A.- ELETROBRÁS
(Exact name of registrant as specified in its charter)
BRAZILIAN ELECTRIC POWER COMPANY
(Translation of Registrant's name into English)
Rua da Quitanda, 196 – 24th floor,Centro, CEP 20091-005,Rio de Janeiro, RJ, Brazil
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F ___X___ Form 40-F _______
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 _______ No___X____
INTRODUCTION
Rio de Janeiro, May 12, 2021
Eletrobras (Centrais Elétricas Brasileiras S.A.)[B3: ELET3 and ELET6 – NYSE: EBR and EBR-B – LATIBEX: XELTO and XELTB]
Eletrobras, the largest company in the electric energy sector in Latin America, active in the generation, transmission and commercialization segment, parent of 6 operational subsidiaries, a holding company - Eletropar - a research center - Cepel and with a 50% stake in the Itaipu Binacional's Capital Stock and direct and indirect participation in 83 Special Purpose Companies, on this date, announces its results for the period.
1st QUARTER OF 2021
Eletrobras presented, in the first quarter of 2021 (1Q21), a net profit of R$ 1,609 million, 31% higher than the profit of R$ 1,228 million of profit obtained in the first quarter of 2020 (1Q20). The 1Q21 profit was positively impacted by results in transmission, as a result of the Periodic Tariff Review with effect from July 2020, and negatively by the provisions for contingencies of R$ 932 million, highlighting R$ 436 million related to legal contingencies that discuss the monetary restatement of the compulsory loan, especially as a result of judicial ratifications of calculations that differ from the Company's understanding of the treatment of the incidence of 6% pa interest, which is based on Special Appeal 1,003,955 / RS, which has repetitive feature effect.
Net Operating Revenue went from R$ 7,604 million in 1Q20 to R$ 8,208 million in 1Q21, an increase of 8%, influenced by the effect on the transmission revenue of the aforementioned tariff review. Ebtida IFRS, in the amount of R$ 3,463 million in 1Q20, grows to an amount of R$ 3,858 million in 1Q21, impacted by the effects on the aforementioned revenues and provisions. Recurring Net Operating Revenue grew by 8.0%, from R$ 7,595 million in 1Q20 to R$ 8,200 million in 1Q21. Recurrent Ebtida increased 30%, from R$ 3,811 million in 1Q20 to R$ 4,938 million in 1Q21.
Considering the Circular Letter CVM/SNC/SEP 04/2020, issued on December 1, 2020, Eletrobras made retrospective adjustments in the measurement of its: (i) transmission assets - Existing Basic System Network (RBSE), up to then classified as financial assets, starting to treat them as contract assets under CPC 47 / IFRS 15 - Revenue from Contracts with Customers; and (ii) changes in the remuneration rate of its other transmission assets, considering the new criteria established in the guidance issued by CVM. Retrospective adjustments (1Q20) were made to maintain the comparative basis. More information in note 4.4 of the 1Q21 Financial Statements.
| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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OTHER 1Q21 HIGHLIGHTS
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TABLE 01: MAIN INDICATORS (R$ MILLION) | ||
|---|---|---|---|
| 1Q21 | 1Q20 | % | |
| --- | --- | --- | --- |
| Energy Sold - Generation GWh (1) | 51.4 | 53.5 | -3.9% |
| Gross Revenue | 9,821 | 9,121 | 8% |
| Recurring Gross Revenue (2) | 9,820 | 9,112 | 8% |
| Net operating revenue | 8,208 | 7,604 | 8% |
| Recurring Net Operating Revenue (2) | 8,200 | 7,595 | 8% |
| EBITDA | 3,858 | 3,463 | 11% |
| Recurring EBITDA (3) | 4,938 | 3,810 | 30% |
| Ebitda Margin | 47% | 46% | 146% |
| Recurring Ebitda Margin | 60% | 50% | 1005% |
| Gross debt without third party RGR | 46,608 | 49,481 | -6% |
| Recurring Net Debt | 20,565 | 21,047 | -2% |
| Recurring Net Debt / Recurring LTM EBITDA | 1,4 | 1,6 | -24% |
| Net Profit | 1,609 | 1,228 | 31% |
| Investments | 519 | 329 | 58% |
| Employees | 12,221 | 12,650 | -3% |
(1) Does not consider the energy allocated to quotas, from the plants renewed by Law 12,783 / 2013 (2) Does not consider Revenue from Generation Construction and Reversal of Revenue energy interconnection between Brazil and Uruguay; (3) Excludes item (2) and Adjustments Deductions from Candiota Revenue; (4) Excludes item (3) and fuels not consumed due to the Candiota stop, expenses with Fuel and Generator for Amapá crisis, Generation Construction Costs, costs of the Extraordinary Retirement Plan (PAE) and the consensual Dismissal Plan ( PDC), Costs and expenses with layoffs at Eletronorte, Reversal of foundations contributions (CVM 600 adjustment), ELOSAUDE retroactive administration fee CGT Eletrosul, costs and expenses with Furnas tericeirados, Additional services in Candiota, Write-off of assets (Eletronorte x Energisa Acre) , Judicial agreements Inepar, Camargo Correa, CIEN; Recovery of expenses related to the Eletrosul tax lawsuit, Recovery of expenses at Eletrosul, Amazonas GT gains on the sale of assets and rights; provisions for contingency, onerous contracts, impairment, provision for losses on investments, provision for losses on investments classified as held for sale, provisions for adjustment to market value of preferred shares to be delivered related to reserve requirements, ANEEL CCC provision; Rap Adjustment Portion; Inflexibility Provision for Usina Candiota III, and PCLD Estimated prospective credit loss (CPC 48) due by privatized distributors, Provision for Expiry of the Concession; (5) Excludes item (4) plus monetary restatement for the compulsory loan contingency; retroactive monetary restatement of compulsory loan liabilities not yet converted and activation of non-recurring tax credit, Income from loans by the Distributors, Bonus Premium + FIDC Commission, financial expense with fine on the payment of withheld income tax, financial expense with Fine and Tax Notices Infringement.
| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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1 ANALYSIS OF THE
CONSOLIDATED RESULT (R$ MILLION)
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TABLE 02: CONSOLIDATED RESULTS | |
|---|---|---|
| Financial Statements | 1Q21 | 1Q20 |
| --- | --- | --- |
| Generation Revenue | 5,846 | 5,949 |
| Transmission Revenue | 3,801 | 3,043 |
| Others Revenue | 173 | 129 |
| Gross Revenue | 9,821 | 9,121 |
| Deductions from Revenue | -1,612 | -1,517 |
| Net Operating Revenue | 8,208 | 7,604 |
| Operational costs | -1,641 | -1,751 |
| Personnel, Material, Services and Others | -2,034 | -2,144 |
| Depreciation and amortization | -458 | -469 |
| Operating Provisions | -1,105 | -392 |
| 2,970 | 2,847 | |
| Effect of Periodic Tariff Review | 0 | 0 |
| Shareholding | 430 | 122 |
| Others Revenues and Expenses | 0 | 25 |
| 3,400 | 2,994 | |
| Financial Result | -584 | -1,172 |
| Income before tax | 2,817 | 1,822 |
| Income tax and social contribution | -1,207 | -594 |
| Net Income for the year | 1,609 | 1,228 |
| Profit (Loss) Net of Taxes from Discontinued Operation | 0 | 0 |
| NET INCOME FOR THE PERIOD | 1,609 | 1,228 |
| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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| | TABLE 03: RECURRING CONSOLIDATED RESULT |
| --- | --- |
| Recurring Financial Statement * | 1Q21 | 1Q20 |
| --- | --- | --- |
| Generation Revenue Recurring | 5,837 | 5,941 |
| Transmission Revenue Recurring | 3,801 | 3,043 |
| Others Revenue Recurring | 181 | 129 |
| Gross Revenue Recurring | 9,820 | 9,112 |
| Deductions from Revenue Recurrent | -1,619 | -1,517 |
| Net Operating Revenue Recurring | 8,200 | 7,595 |
| Operational costs Recurring | -1,632 | -1,743 |
| Personnel, Material, Services and Others Recurring | -1,933 | -1,968 |
| Depreciation and amortization Recurring | -458 | -469 |
| Operating Provisions Recurring | -127 | -196 |
| | 4,050 | 3,219 |
| Shareholdings Recurring | 430 | 122 |
| | 4,480 | 3,341 |
| Financial Result Recurring | -540 | -900 |
| Income before tax Recurring | 3,940 | 2,441 |
| Income tax and social contribution Recurring | -1,198 | -594 |
| Net Income for the year Recurring | 2,741 | 1,847 |
* Non-recurring adjustments mentioned in the Highlights.
| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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1.1 MAIN VARIATIONS OF FINANCIAL STATEMENTS
HIGHLIGHTS IN ANALYSIS OF VARIATION 1Q20 X 1Q21
OPERATING INCOME
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TABLE 04: GENERATION REVENUE | ||
|---|---|---|---|
| Operating Revenue - Generation | 1Q21 | 1Q20 | % |
| --- | --- | --- | --- |
| Generation Revenue | |||
| Energy supply to distribution companies | 3,623 | 4,002 | -9% |
| Supply | 719 | 673 | 7% |
| CCEE | 465 | 353 | 32% |
| Operation and Maintenance Revenue | 1,034 | 930 | 11% |
| Construction Revenue | 9 | 8 | 5% |
| Itaipu Transfer | -4 | -17 | -79% |
| Generation Revenue | 5,846 | 5,949 | -2% |
| Non-recurring events | |||
| (-) Construction Generation | -9 | -8 | 5% |
| Recurring Generation Revenue | 5,837 | 5,941 | -2% |
Variation Analysis 1Q20 X 1Q21
Energy supply to distribution companies
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At subsidiary Eletronorte (-R$ 245 million): (i) a 27% decrease (R$ 196 million) in sales revenue at ACL<br>(free market), from R$ 729 million to R$ 533 million, as a result of the 4% reduction in the amount of energy sold, from 1,730MWmed in<br>1Q20 to 1,659MWmed in 1Q21, in addition to the 23% lower price in the comparison between quarters, R$ 193 / MWh, against R$ 149 / MWh;<br>(ii) a 96% decrease (R$ 49.2 million) in sales revenue in the ACR (regulated market) from R$ 51 million to R$ 1.8 million, due to the<br>end of the 18th products and the beginning of the billing of the 23rd auction , with lower prices (from R$ 175 / MWh to R$ 167.31 / MWh)<br>and a 96% reduction in energy sold, from 133 MWmed in 2020 against 5 MWmed in 2021. |
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At subsidiary Furnas (-R$ 159 million): (i) Lower amount of energy traded in the ACL (2,581 GWh in 1Q20<br>to 2,319 GWh in 1Q21, representing a decrease of R$ 45 million. (Ii) Lower dispatch from the Santa Cruz thermal plant Cruz in 2021, representing<br>a decrease of R$ 65 million. (Iii) positive non-recurring effect, in January 2020, as R$ 49 million was recorded from the MCSD of the<br>product ended in Dec / 19 (1 month accounting shift), affecting positively, the commercial revenue of Jan / 20, which was, therefore,<br>R$ 49 million lower than the accounting, partially offset by (iv) Price adjustment of the ACR quantity contracts (3%). |
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In the subsidiary Eletronuclear (-R$ 75 million): (i) reduction of -R$ 75.5 million (-8.1%) in the Fixed<br>Revenue of the Angra 1 and 2 Plants, according to ANEEL Homologatory Resolution No. 2,821 of 15 / 12/2020, especially due to the impact<br>of the negative adjustment portion related to Nuclear Fuel (R$ 76.0 million in the quarter). |
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| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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| | At subsidiary CGT Eletrosul (-R$ 11 million): (i) reduction in ACR revenue by R$ 3.8 million due to an<br>increase in the provision for reimbursement for insufficient generation of TPP Candiota by R$ 9 million, partially offsetting by adjusting<br>average prices by 3% in the regulated market, increasing revenue by R$ 5.3 million; and (ii) a decrease in ACL revenue of R$ 7.2 million<br>due to the -9% variation in the average sale price, which generated a R$ 14 million decrease in revenues, partially offset by an increase<br>of 4 % in energy sold (322 average MW in 1Q20 and 336 average MW in 1Q21), generating an increase of R$ 6.9 million in revenues. |
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Partially offset by:
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At the subsidiary Amazonas GT (+ R$ 109 million), in particular due to: (i) an increase of R$ 69 million<br>in PIE revenue, due to an average increase of 13% due to the annual readjustment of Contract Prices linked to the IGPM of the Supply Portion,<br>of which R$ 43 million refer to the supply portion and R$ 26 million to fuel. The accumulated IGPM variation of 23.4% affects the supply<br>share, which in terms of energy has an accumulated variation of 0.3% [670 GWh (2021) - 668 GWh (2020)] in the total energy of the PIE;<br>(ii) a R$ 30 million increase in revenue from Mauá 03 due to the higher level of dispatch requested by ONS, approximately 72.9<br>MW / average; (iii) an increase of R$ 6 million in UTE Aparecida due to the higher level of dispatch requested by ONS, approximately 23.1<br>MW / average; and (vi) an increase of R$ 2 million due to the update of the sale price of energy (IPCA 3.4%), based on the seasonality<br>curves of the contracted energy for each year registered and validated by the buyer at CCEE. |
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In the subsidiary Chesf (+ R$ 40 million): Variation due to the increase of 71 average MW sold in the<br>accumulated in March / 2021 in relation to the same period of the previous year, resulting in an increase in revenue of approximately<br>R$ 35 million. |
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SUPPLY FOR END CONSUMERS
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At subsidiary Eletronorte (+ R$ 42 million): (i) change in revenues with Albras in the amount of R $ 40.8<br>million due to the derivative component associated with the price of Aluminum and Dollar: (a) 16% increase in the average aluminum prices,<br>US$ 1,761 in 2020, against US$ 2,040 in 2021; (b) a 23% increase in the average dollar conversion rate, R$ 4.46 / US$ in 2020, compared<br>to R$ 5.47 / US$ in 2021). These parameters directly influence the calculation of the sale price of energy to Albras. |
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At subsidiary Furnas (+ R$ 13 million): readjustments in unit prices for supply contracts, linked to HPP<br>Itumbiara (Law 13,182). Uniform readjustment for all contracts by 4.5%, representing an increase of R$ 13 million in the period. |
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In subsidiary Chesf (+ R$ 2 million): Increase in the period by 8 average MW in the consumption of industrial<br>customers reached by Law 13,182 / 2015 in the accumulated until March / 2021, in comparison with the same period of the previous year,<br>influenced by the resumption of activities of an industrial consumer in the state of Alagoas, which offset the reduction caused by technical<br>problems at the plant of an industrial consumer in the state of Bahia, from March / 2020 and that lasted until March / 2021, without basis<br>of comparison in the accumulated of Mar / 2020. |
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CCEE
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At the holding company (+ R$ 101 million): the volume of imported energy of 89,710 MW in the first quarter<br>of 2021 amounting to R$ 103.7 million settled in the short-term market was significantly higher than the 11,949 MW imported in the quarter<br>of 2020, whose impact was R$ 1.9 million in the result. |
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| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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| | In the subsidiary Furnas (+ R$ 92 million) It is justified, despite the variation of GSF in the period,<br>which had a decrease of approximately 16% (average of 105% in 2020 and 89% in 2021) and the decrease in the average PLD of approx. 8%<br>(1Q20: R$ 187.89 / 1Q21: R$ 172.57), due to the lower sale in the period, which added to the seasonalization of the ACR contracts, provided<br>a greater amount of energy to be settled compared to the previous period and consequently greater result in the MCP. |
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| | At subsidiary Eletronorte (+ R$ 13 million): (i) the 45 MWmed increase in available energy, reflecting:<br>(a) a 296 MWmed increase in the Seasonal Physical Guarantee in the period, 3,207 MWmed in 2020, against 3,503 MWmed in 2021; (b) reduction<br>of 206 MWmed of energy sold through bilateral contracts, from 2,747MWmed in 2020 to 2,541 MWmed in 2021. On the other hand, there was<br>(ii) a reduction in the average price from R$ 200 / MWh in 1Q20 to R$ 161 / MWh in 1Q21. |
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| | Partially offset by, in the subsidiary Chesf (-R$ 74 million): The variation is mainly due to the increase<br>in energy sold by 79 average MW, reducing the energy surplus in relation to the same period in 2020. Additionally, there was a reduction<br>from the average PLD of R$ 187 / MWh (accumulation Mar / 2020) to R$ 172 / MWh (accum. Mar / 2021). |
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| | In the subsidiary Amazonas GT (+ R$ 14 million): (i) in 1Q20 UHE Balbina, due to the seasonality curve,<br>showed an increase in sales of approximately R$ 23 million, while in 1Q21 this value was only R$ 8 million ; (ii) the rest of the R$ 1<br>million variation is distributed among the thermal plants. |
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Operation and Maintenance Revenue - Plants Renewed by Law 12.783/2013
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In subsidiary Chesf (+ R$ 64 million): (i) annual adjustment of RAG of about 10%, in accordance with Homologatory<br>Resolution No. 2746/2020 (cycle 2020-2021). Additionally, there was an increase in the indemnity revenue for the payment of the CFURH<br>by approximately R$ 15 million. |
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At subsidiary Furnas (+ R$ 41 million), Impacted by the annual readjustment of RAG (approximately 11%)<br>which reflects an increase of R$ 36 million, in accordance with Aneel Homologatory Resolution No. 2,746 / 2020, as well as the entry of<br>the Jaguari in Jan / 21, temporarily operated by Furnas, representing a revenue of more than R$ 3 million, without comparison in 2020.<br>The variation of CFURH and, consequently, of PIS / COFINS, which represented an increase in revenue in the order of R$ 1 million for the<br>period. |
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Construction Revenue
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Lower level of investment made in 1Q21, but with no effect on results as it has an equivalent value in<br>construction expenses. |
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Transfer Itaipu
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In the Holding (-R$ 13 million): (i) Variation in the tariff on which the monetary restatement calculated<br>based on the American price indices Commercial Price and Industrial goods, levied on Itaipu's financial assets that offset the exchange<br>rate variation on said asset, recognized by interim ministerial decree 04/2018 of the MME and the Ministry of Finance that determines<br>Itaipu's revenue. |
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| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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| | TABLE 05: TRANSMISSION REVENUE |
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| Operating Transmission Revenue | 1Q21 | 1Q20 | % |
| --- | --- | --- | --- |
| Transmission Revenue | 3,801 | 3,043 | 25% |
| O&M Revenue - Renewed Lines | 1,038 | 841 | 23% |
| O&M Revenue - Regime Exploration | 304 | 247 | 23% |
| Construction Revenue | 120 | 153 | -22% |
| Contractual Revenue - Transmission | 2,340 | 1,801 | 30% |
| Recurring Transmission Operating Revenue | 3,801 | 3,043 | 25% |
ANALYSIS OF VARIATION 1Q20X1Q21
O&M Revenue
- Renewed Lines Law 12.783/13
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At subsidiary Furnas (+ R$ 98 million): (i) Increase due to the change in tariff cycles, since in addition<br>to the annual adjustment, we had the tariff review, based on the current regulation - Technical Note 119/2020-SGT / ANEEL - which details<br>the readjustments of the Broadcasting Companies' RAPs and the effects of the review. The Tariff Review alone represents something around<br>18%, not counting the Adjustment Portion, which for this cycle was positive. |
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In the subsidiary Chesf (+ R$ 84 million): (i) the effect of the tariff revision of CC 061 retroactive<br>to 2018, including in the caption of the installment of the calculation, divided into 3 years, considered in REH Aneel 2,725 / 20; annual<br>readjustment, entry into operation of new facilities, reinforcements without prior RAP authorized included by Aneel for the 2020/2021<br>cycle, smaller variable portions, adjustment portion of previous cycles, since there are two distinct Homologatory Resolutions in one<br>year. |
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At the subsidiary Eletronorte (+ R$ 76 million): (i) increase in the RAP ratified for the 2020/2021 cycle<br>(REH nº 2,725 / 2020), which contributed to the increase in revenue billed by R$ 64.8 million; (ii) a reduction of R$ 8.2 million<br>due to the increase in the amortization of the contractual asset (also due to the new approved revenue, which caused the increase in the<br>balance of the contractual asset); |
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At subsidiary CGT Eletrosul (+ R$ 26 million (i) increase of R$ 23 million in revenue resulting from different<br>effects, highlighting the Prepayment Apportionment with R$ 4.5 million, the Calculation Adjustment Portion with R$ 5 million and the additional<br>new works totaling R$ 8.3 million; (ii) reduction of approximately 53% of the O&M RAP related to MP 579/2012, converted into Law 12,783<br>/ 2013, which will occur gradually in 1/5 per cycle during the period 2018/19 to 2022/23, as stipulated by ANEEL in the periodic tariff<br>review process.This review is retroactive to the cycle started in July / 2018, a fact that generated the requirement to return part of<br>the RAP received, through Parcel Adjustment - PA The decrease in RAP, caused by the tariff review, reduced the renewed O&M Revenue<br>by R$ 49 million in 1Q21. |
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O&M Revenue
- Exploration Regime
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In the subsidiary Chesf (+ R$ 36 million): revenue of a higher anticipation apportionment, a smaller variable<br>portion, an adjustment portion of smaller previous cycles, as in the year there are the determination of two different Homologation Resolutions,<br>the start of operation of new works in greater amount , annual tariff readjustment and tariff review of the 007/2005 and 006/2009 contracts<br>with positive IRTs for the 2020/2021 cycle, in addition to the tariff readjustment on 7/1/20. |
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| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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| | At subsidiary CGT Eletrosul (+ R$ 10 million): (i) repricing O&M, in 2020, of concession 004/2004,<br>when the periodic tariff review was made at 10 million. In addition to this highlighted effect, the set of non-renewed concessions showed<br>a balance between additions and reductions, considering tariff reviews, new works and other RAP items. |
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| | At subsidiary Eletronorte (+ R$ 4 million), mainly due to: (i) increase in billed revenue by R$ 13.2 million<br>(REH nº 2,725 / 2020); (ii) a reduction of approximately R$ 2.2 million related to the increase in the amortization of contractual<br>assets. |
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Construction Revenue – Transmission
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Variation in Revenue reflects the lower volume of transmission projects being built by the company in<br>2021, linked to the authoritative resolutions of, with emphasis on the lower investment in contract 062/01 in Furnas (-R$ 48 million)<br>and Chesf (-R$ 5 million), partially offset by subsidiary Eletronorte (+ R$ 19 million). |
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Contractual Revenue – Transmission
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Variation in Revenue reflects: (i) increase in inflation indexes in 2021; and (ii) the increase in the<br>balance of contractual assets due to the adjustments made in June / 2020, due to ANEEL's tariff reviews. The balance of contractual assets<br>increased significantly due to the approval of the tariff review of the transmission concessions extended under the terms of Law 12.783<br>/ 2013, granted by Aneel in June 2020, which approved the new Permitted Annual Revenue ("RAP") these concessions for the 2020-2021<br>tariff cycle, bringing the following changes to RBSE: (a) retrospective change to wacc for the years 2018 and 2019; (b) changes in the<br>asset base, incorporating the write-offs occurred in the 2013-2018 cycle and the readjustment of the new replacement value of the assets<br>associated with RBSE; (c) Incorporation of the payment of the controversial installment "Ke" that had been under judgment since<br>2017; and (d) 3-year split of differences between the amount effectively received between 2018 and 2019 and the installments now revised<br>via the adjustment portion updated by IPCA. Highlight for increase in furnas of R$ 236 million, Chesf of R$ 114 million, Eletronorte R$<br>105 million and CGT Eletrosul of R$ 83 million. | ||
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TABLE 06: OTHER OPERATING REVENUE | ||
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| Operating Income | 1Q21 | 1Q20 | % |
| --- | --- | --- | --- |
| Others Revenues | 173 | 129 | 35% |
| Non-recurring events | |||
| Procel retroactive chargeback | 8 | 100% | |
| Other recurring income | 181 | 129 | 41% |
Others Revenues
Variation Analysis 1Q20X1Q21
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At subsidiary Eletronorte (+ R$ 24 million): (i) Proinfa: R$ 14.5 million; (ii) Provision of services<br>in the country: R$ 6.5 million; (iii) other revenues: R$ 5.4 million. On the other hand, the operation and maintenance service account<br>registered a drop of R$ 3 million. |
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At subsidiary Chesf (+ R$ 11 million): (i) revenue from the provision of infrastructure sharing services<br>in consolidated SPEs in the amount of R$ 9 million. |
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| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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OPERATIONAL COSTS and expenses
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TABLE 07: OPERATIONAL COSTS AND EXPENSES | ||
|---|---|---|---|
| Operational costs | 1Q21 | 1Q20 | % |
| --- | --- | --- | --- |
| Energy purchased for resale | -499 | -646 | -23% |
| Charges on use of the electricity grid | -456 | -446 | 2% |
| Fuel for production electric power | -537 | -468 | 15% |
| Construction | -149 | -190 | -22% |
| Personnel, Material, Services and Others | -2,034 | -2,144 | -5% |
| Depreciation and amortization | -458 | -469 | -2% |
| Operating Provisions | -1,105 | -392 | 182% |
| Total Operating Costs and Expenses | -5,238 | -4,757 | 10% |
| Non-recurring events | |||
| (-) Non-recurring PMSO events | 101 | 176 | -43% |
| (-) Non-recurring provisions | 978 | 196 | 399% |
| (-) Generation Construction | 9 | 8 | 5% |
| Total Recurring Operating Costs and Expenses | -4,151 | -4,376 | -5% |
Variation Analysis 1Q20X1Q21
Energy purchased for resale
|
At subsidiary Furnas (-R$ 207 million): (i) purchases made in 1Q20, to reduce the negative exposure in<br>MCP (short market) taking advantage of the negative goodwill existing in short-term bilateral operations, as well as the tax benefit on<br>settlement at CCEE, without comparison in 2021, totaling a decrease of R$ 102 million for the period; partially offset by (b) the price<br>adjustment of the current purchase contracts of approximately 6% in the period, representing an increase of approximately R$ 13 million;<br>and (ii) in the case of Energy Purchased for Resale in the Short Term, there was a reduction of R$ 106 million, due to the MCP strategy<br>adopted by Furnas in 1Q20, as it had amounts retained at CCEE due to the judicialization of the sector and the amounts negative energy<br>purchases presented in 1Q20 led to the use of such credit. |
|---|---|
|
In the subsidiary Chesf (-R$ 55 million): (i) termination of the purchase contract in December / 2020<br>(reduction of 64 average MW), representing a reduction of R$ 15.8 million; (ii) change in purchasing strategy in 1Q21 (reduction of 138<br>average MW), with a reduction of R$ 46.5 million; Readjustment of existing contracts with an increase of R$ 4.8 million. |
| --- | --- |
Partially offset by:
|
In the Holding (+ R$ 98 million): mainly due to the expansion of international energy exchange at the<br>request of the National Interconnected System (SIN) in the same period in 2021. This situation was caused by the reduction in the volumes<br>of the main hydrographic basins that comprise interconnected system and the drop in prices offered by Uruguay to the SIN. |
|---|---|
|
At subsidiary Amazonas GT (+ R$ 4 million (i) The increase in costs in 1Q21 was due to the annual readjustment<br>of contract prices that occur in November of each year of the contract. The index used for the readjustment of PIE contracts is the IGPM<br>index, which in November 2020 had an accumulated increase of 23.14%. |
| --- | --- |
|
At subsidiary CGT Eletrosul (+ R$ 5 million): (i) increase of 5.7% in the amount of energy purchased,<br>which generated an additional cost of R$ 8.4 million, due to the seasonality of the period and consequently will have a<br>lower amount for the other quarters of the year, since the annual purchase quantity is fixed; (ii) a 4% increase in the average acquisition<br>price, increasing the cost by R$ 6.2 million. On the other hand, there was (iii) a reduction of R$ 10 million in the Short Term Market<br>due to the energy purchased from CCEE in 1Q20, totaling R$ 6.9 million, without occurring in 1Q21, and (iv) negative variation of tax<br>effects and financial costs of the PIS / COFINS discount of approximately R$ 3.1 million. |
| --- | --- |
| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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|  |
| --- |
Charges on use of the electricity grid
|
In the subsidiary Furnas (+ R$ 26 million): the Tariffs for Use of the Transmission System in force in<br>T1 2020 refer to ANEEL Approval Resolution No. 2,562 of 06/25/2019; the tariffs in force in T1 of 2021 refer to ANEEL Approval Resolution<br>No. 2,726 of 07/14/2020. Between these two resolutions, some tariffs underwent significant readjustments, such as: Furnas HPP with 22.13%<br>increase, Estreito HPP with 22.2% increase, Marimbondo HPP with 23.4% and Corumbá HPP with 20.6% increase. |
|---|---|
|
At subsidiary Chesf (+ R$ 25 million): (i) readjustment of approximately 14% of TUST, determined by ANEEL<br>Approval Resolution No. 2748/2020 (cycle 2020-2021). |
| --- | --- |
|
At the subsidiary Eletronuclear (-R$ 5 million): (i) reduction of 4% in the transmission cost (R$ 1.4<br>million); (ii) 32% reduction in the Distribution cost (R$ 3.6 million) in the compared quarters considering that part of the Distribution<br>cost was allocated in April 2021, due to pending clarifications on the invoice to be paid to Enel .Fuel for prod. electric power |
| --- | --- |
|
In the subsidiary Amazonas GT (+ R$ 58 million): A) increase of R$ 63<br>million in the purchase of fuels, mainly due to a 12% increase in the price of raw materials, added to the 2% increase in the consumption<br>of natural gas, caused by account of the increase in consumption at UTE Mauá 03, partially offset by the reduced expense recovery<br>account that had B) R$ 5.5 million increase in the period, via CCC subsidy, due to (i) an increase of R$ 12.2 million, by UTE Mauá<br>3, due to the 13% increase in natural gas consumption; increase partially offset by (ii) a reduction of R$ 6.5 million, by UTE Aparecida,<br>due to the low consumption of natural gas due to the unavailability of its generating units, due to the accident of two turbines, which<br>led to the reduction -23% in natural gas consumption. The generating units in Block 1, suffered a loss in their driving machines, reaching<br>the region of the high pressure compressor, and which will be recovered in a specialized workshop.; |
| --- | --- |
|
At subsidiary Eletronuclear (+ R$ 24 million): (i) 22% increase in consumption of fissile uranium equivalent<br>(Kg Ueqv), being 254.348 Kg Ueqv in 1Q20 and 310.747 Kg Ueqv in 1Q21, since in 1Q20 there was a halt in Angra 1 plant (1P25) for 61 days. |
| --- | --- |
|
At subsidiary CGT Eletrosul (+ R$ 22 million): A) an increase of R $ 4 million caused by: (i) an increase<br>of 18 thousand tons of coal, a variation of 3.4%, following the average generation, which grew by 4,0%. (ii) Readjustment in the main<br>coal supply contract of 6.7%, which resulted in an increase of R$ 1.6 million between the periods, this contract represents 65% of the<br>plant's consumption, and (iiI) from March a second supplier was hired in 2020 to guarantee the supply of fuel and not affect the generation<br>of the plant with an additional cost of R$ 2.7 million, increases partially offset by (iv) a 22.3% reduction in consumption Fuel Oil,<br>about R$ 2 million in the period; B) decrease of R$ 18 million in the fuel expense reimbursement reduction account, via CCC subsidy, caused<br>by: (i) Order No. 2616/2020 / ANEEL, which established that the fuels used at the Candiota Plant will not be reimbursed in its entirety,<br>leading to less recognition of fuel reimbursement as of September / 2020.<br>In 2021, the reimbursement of coal is around 50% while in 1Q2020, 100% of the reimbursement with fuel was being accounted for. |
| --- | --- |
| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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|  |
| --- |
| | Partially offset by, in the subsidiary Furnas (-R$ 32 million): (i) variation in the dispatch of the Santa<br>Cruz plant, which presented in 1Q20 a generation of 534,918 MWh and in the same period of 2021 a generation of 272,552 MWh, representing<br>a decrease of approximately 262,000 MWh. |
| --- | --- |
Construction
|
At subsidiary Eletronorte (+ R$ 18 million): the resumption of investments in reinforcements and improvements<br>after the low realization during 1Q20 due to the impacts of COVID-19. |
|---|---|
|
Partially offset by subsidiary Furnas (-R$ 48 million): (i) Construction expenses in the Generation of<br>March20 totaled 4.18 Million and in March 21 the amount was 7.63 Million. In transmission, the values for contract 062/01 in 2020 were<br>103.84 million and in 2021 it was 31 million. In the other contracts, the values of March 20 and March 21 totaled -25.25 million and 522<br>thousand, respectively. |
| --- | --- |
OPERATIONAL EXPENSES
|
TABLE 08: PERSONNEL, MATERIAL, SERVICES AND OTHER | ||
|---|---|---|---|
| Personnel, Material, Services and Others | 1Q21 | 1Q20 | % |
| --- | --- | --- | --- |
| Personnel | -1,247 | -1,127 | 11% |
| Material | -60 | -102 | -41% |
| Services | -379 | -467 | -19% |
| Others | -349 | -449 | -22% |
| PMSO total | -2,034 | -2,144 | -5% |
| Non-Recurring Items | |||
| Incentive Plans (PAE, PDC) | -2 | -4 | -43% |
| Eletronorte resignation | 64 | 0 | - |
| Foundations contributions reversal - CVM 600 adjustment | -8 | 0 | - |
| FGTS and INSS at Eletronorte - Early launch of April 2020 | 0 | 23 | -100% |
| CGT Eletrosul Retroativo Tx by ADM ELOSAUDE | 2 | 0 | - |
| Outsourced Furnas / Additional services Candiota | 0 | 25 | -100% |
| Write-off of assets (Energisa Acre) | 29 | 0 | - |
| Generator group rental (emergency service to Amapá) | 28 | 0 | - |
| Expense recovery (Debentures Commissions transferred to Liabilities) | -8 | 0 | - |
| AmazGT gain from sale | -3 | 0 | - |
| Camargo Correa Furnas Case | 0 | 98 | -100% |
| Installments of the agreement between Furnas and Inepar | 0 | 13 | -100% |
| Furnas-CIEN Payment | 0 | 23 | -100% |
| PMSO Recurrent | -1,933 | -1,968 | -1.8% |
Variation Analysis 1Q20X1Q21
Personel
|
Salary readjustment, as of 12.1.2020, with no retroactive effect of 2.4%, as provided for in the Collective<br>Bargaining Agreement; |
|---|---|
|
At subsidiary Eletronorte (+ R$ 49 million): (i) non-recurring expenses of approximately R$ 64.3 million<br>due to the dismissal of 241 employees that occurred between January and March 2021. It was planned to terminate 314 employees<br>at the cost of termination of R$ 109 million. However, 1Q21 expenses include approximately R$ 64 million due to the dismissal of 241 employees<br>between January and March 2021. |
| --- | --- |
| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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|  |
| --- |
| | At subsidiary Furnas (+ R$ 19 million): i) Labor claim R$ 10.16 million (impacted by the payment of four<br>lawsuits in Jan21); ii) CVM 600 adjustment R$ 8.2 million, due to the recognition of the sponsor's contribution to the BD Plan (transferred<br>to ORA), in accordance with the new accounting procedure adopted in 2Q20. |
| --- | --- |
| | In subsidiary Chesf (+ R$ 41 million): (i) increase in interest costs due to the actuarial liabilities<br>of the CD and BD benefit plans (+ R$ 34 million), which has this liability linked to the; (ii) the value of Personnel not allocated to<br>Investment in the period estimated at R$ 22 million. On the other hand, there was a reduction of R$ 7 million in medical expenses. |
| --- | --- |
| | At subsidiary Eletronuclear (+ R$ 8 million): (i) adjustment to the vacation provision in 1Q20 in the<br>amount of + R$ 21.5 million; offset by: (ii) reduction in Overtime + R$ 7 million and Dangerous Work + R$ 3 million, motivated by the<br>non-occurrence of stoppage in 1Q21; (iii) reduction of Meal Ticket + R$ 3 million. |
| --- | --- |
Material
|
At subsidiary Eletronuclear (-R$ 23 million): (i) in 1Q20, Angra 1 (1P25) stopped, in which there was<br>a problem due to a short circuit in the connection of the excitratrix to the electric generator. The plant was stopped in the programmed<br>period from 11/01/2020 until 02/14/2020, and beyond the programmed time, for another 26 days (from 02/15/2020 to 03/12/2020). Altogether,<br>the 1P25 stop lasted 61 days, which affected 1Q20; (II) there was no plant shutdown in 1Q21. |
|---|---|
|
At the subsidiary Amazonas GT (-R$ 17 million): (i) reduction of R$ 16 million in 1Q21 in the acquisition<br>of direct application materials, used in the planned large maintenance of UTE Mauá 03, in 1Q20 these acquisitions added up to a<br>value total of R$ 23 million while in 1Q21 this amount was only R$ 7 million; (ii) a reduction of R$ 1.3 million due to the variation<br>in the adjustments account due to lack of inventory; |
| --- | --- |
|
At subsidiary CGT Eletrosul (-R$ 6 million): (i) a 35% reduction in inputs from UTE Candiota III, mainly<br>lime, which was partially offset by the average exchange rate variation of the dollar in 1Q21, which was 20% higher than in 1Q20 ; (ii)<br>contractual renegotiation of the supply of lime, which took place in Aug / 20, resulting in a reduction of 178 R$/ ton, equivalent to<br>a reduction of 18%, which is an important initiative of OBZ 2020. |
| --- | --- |
ServiCES
|
At subsidiary Furnas (-R$ 23 million): (i) Reduction in the following items: (a) Accommodation by R$ -2.17<br>million; (b) Medical, Hospital and Dental Assistance in the amount of R$ -3.43 million; (c) Hired labor with approximately R$ -25 million<br>- due to the launching of the termination amount of one of the PCC1 contracts in 1Q20, which was not repeated in 1Q21 and; (d) Consulting<br>services in R$ -1.61 million. |
|---|---|
|
At subsidiary Eletronuclear (-R$ 23 million): (i) in 1Q20, Angra 1 (1P25) stopped due to a short circuit<br>caused by the connection of the excitratrix to the electric generator. The plant was stopped in the programmed period from 11/01/2020<br>until 02/14/2020, and beyond the programmed time, for another 26 days (from 02/15/2020 to 03/12/2020). Altogether, the 1P25 stop lasted<br>61 days; (II) there was no plant shutdown in 1Q21, therefore reducing service expenses. Savings from OBZ initiatives in the amount of<br>R$ 8.9 million in the quarter. The estimated OBZ target for the period was R $ 10.2 million. In the subsidiary<br>Chesf (-R$ 13 million): (i) decrease in consulting expenses [-3 million]; (ii) decrease in expenses with contracted labor [-R$ 5 million];<br>(iii) decrease in expenses with utilities and services [-R$ 2 million]; (iv) decrease in expenses with daily rates, travel and accommodation<br>[-R$ 2 million]. |
| --- | --- |
| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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| --- |
| | In the subsidiary Eletronorte (-R$ 11 million): (i) reduction of expenses with Food Ticket of R$ 8.8 million,<br>since these ticket expenses started to be recorded in the Personnel item; (ii) Accommodation: R$ 2 million; (iii) Consultancies: R$ 1.4<br>million. |
| --- | --- |
Partially offset by:
|
At subsidiary CGT Eletrosul (-R$ 7 million): (i) increase of expenses with legal offices by R$ 4.4 million,<br>mainly due to arbitration proceedings abroad whose expenses were impacted by the 20% exchange variation for the period to the dollar and<br>31% for the euro; (ii) environmental consultancies R$ 300 thousand and (IV) adhesion of new versions of Microsoft OFFICE 365 and Autocad<br>3D in the amount of R$ 1.7 million, partially offset by (iv) a reduction of R$ 440 thousand in travel in relation to the same period last<br>year due to the effects of the Covid pandemic 19. |
|---|
OtHERS
|
At subsidiary Furnas (-R$ 134 million), mainly due to (i) The Indemnities, losses and damages account,<br>which in 1Q20 was impacted by the settlement of the Camargo Correa process (R$ 98 million) and by three installments of the agreement<br>between Furnas and Inepar (R$ 13 million). In addition, (ii) R$ 20 million in court costs - fees also in 1Q20 notably, the fees paid in<br>the Civil Procedure (Contractual Collection) 0150142-62.2010.8.19.0001 - CIEN Cia. De Interconexão Energética and in process<br>0155660-53.1998.8.19.0001 - Camargo Correa. |
|---|---|
|
In the subsidiary CGT Eletrosul (–R$ 13 million): (i) a reduction of R$ 8 million related to commissions<br>on debentures to be amortized; (ii) reduction of court costs by R$ 2.9 million in 1Q21 given that in 1Q20 there was an expense with costs<br>related to international lawsuits. In 2021, the total amount of miscellaneous legal costs was only R$ 90 thousand, with the main R$ 38<br>thousand referring to the lawsuit involving the municipality of Águas Claras / MS, R$ 20 thousand related to labor lawsuits and<br>R$ 12 thousand of indemnity process. The costs referred are those related to the costs of handling cases in the judiciary, while legal<br>expenses are allocated to services (consultancy) refer to expenses with law firms, consultancies and specialists hired to produce material<br>for the process (technical analysis , opinions, defense, etc.); (iii) reduction of R $ 860 thousand in contribution to CEPEL; (iv) a reduction<br>of R$ 1.8 million related to expenses associated with fiber optic swap contracts, as per CPC 06 guidelines, these factors were partially<br>offset by (v) an increase of R$ 2.3 million with Insurance and Facilities of Equipment due to the increase in costs observed in this sector. |
| --- | --- |
|
In the subsidiary Eletronuclear (-R$ 18 million): (i) in 1Q20, there were higher expenses with taxes and<br>contributions on financial revenues linked to the income of the Decommissioning Fund in the amount of R$ 14.0 million; (ii) postponement<br>of commitments in affiliations in 1Q21, especially to the EPRI - Eletric Power Research Institute, in the amount of R$ 4.0 million, (iii)<br>Contribution to ONS of R$ 0.1 million, which, as of 1Q21, became be classified in that group of accounts |
| --- | --- |
Compensated, in part, by:
|
At subsidiary Eletronorte (+ R$ 22 million): (i) Write-off of assets: R $ 28.7 million (Energisa Acre);<br>(ii) Rental of Generator Sets: R$ 27.8 million (Emergency assistance to the state of Amapá); (iii) Insurance - facilities, equipment<br>and inventories: R$ 5.9 million; (iv) Expense recovery (reduction account): R$ 5.5 million. On the other<br>hand, there was a reduction in: (v) Court costs: R$ 25.9 million; (vi) Insurance: R$ 4.4 million; (vii) Taxes: R$ 3 million; (vii) Car<br>rental: R$ 2.4 million. |
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| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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| --- |
| | At subsidiary Chesf (+ R$ 52 million): (i) increase in labor costs by [+ R$ 6 million]; (ii) increase<br>in expenses with indemnities, losses and damages by [+ R$ 29 million] with customers - provisional reduction of credits; (iii) expense<br>recovery record at SPE TDG in 1Q20, which did not occur in 1Q21 [R$ 18 million]. |
| --- | --- |
Depreciation and Amortization
| Depreciation and Amortization | 1Q21 | 1Q20 | % |
|---|---|---|---|
| Depreciation and Amortization | -458 | -469 | -2% |
|
TABLE 09: OPERATING PROVISIONS | ||
| --- | --- | ||
| Operating Provisions | 1Q21 | 1Q20 | % |
| --- | --- | --- | --- |
| Operational provisions / reversals | -1,105 | -392 | 182% |
| Operational provisions / reversals | |||
| Contingencies | -932 | 73 | -1380% |
| Provisão/Reversão PCLD RGR de Terceiros/ Estimativa de perda de crédito prospectiva (CPC 48)/ Reversão PCLD CIEN | 0 | -146 | -100% |
| Provision/reversal for investment losses | -15 | -116 | -87% |
| ANEEL Provision - CCC | -31 | -7 | 326% |
| Usina Candiota III - Fuel | -6 | 0 | - |
| Provision for Implantation of Shares - Compulsory Loan | 7 | 0 | - |
| Non-recurring provisions / reversals | -978 | -196 | 399% |
| Recurring provisions / reversals | |||
| Guarantees | 18 | -7 | 18 |
| PCLD (excluding PCLD prospective credit loss estimate CPC 48) | -99 | -116 | -99 |
| GAG Improvement | -51 | -57 | -51 |
| Others | 5 | -16 | 5 |
| Recurring provisions / reversals | -127 | -196 | -127 |
The positive values in the table above signify a reversal of the provision.
ANALYSIS OF VARIATION 1Q20X1Q21
The variation is mainly explained by:
|
Provision for Contingencies of R$ 932 million: (i) In the Holding, R$ 450 million of provisions for contingencies,<br>highlighting R$ 436 million of provision for compulsory loan lawsuits, especially as a result of judicial approvals of calculations that<br>differ from the Company's understanding about the treatment of the incidence of interest of 6% pa, which is based on Special Appeal 1,003,955<br>/ RS, which has the effect of repetitive appeal; (ii) In the Subsidiary Chesf, R$ 363 million of provisions for contingencies, with emphasis<br>on the update of the GSF provision of R$ 185 million, impacted, to a large extent, by the increase in PLD and hydrological situation between<br>the periods compared and by the update of the Factor process K, in the amount of R $ 96 million, due to the correction of the process, mostly by<br>IGPM, without the occurrence of a new provision; (iii) In the subsidiary Furnas, provision for contingencies in the amount of R $ 78 million,<br>with emphasis on the lawsuit filed by Engevix in the amount of R$ 41.7 million and Acciona Concessões Rodovia do Aço, in<br>the amount of R$ 19 million. |
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| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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| --- |
| | PCLD Consumers and resellers Chesf, in the amount of R$ 93 million in 1Q21, mainly due to: (i) Ligas do<br>Brasil - Libra, R$ 39 million; (ii) Energisa Sergipe, R $ 10 million; and (iii) Companhia Energética de Alagoas - CEAL, R$ 3 million,<br>indexed by the IGPM; |
| --- | --- |
| | Partially offset by the reversal in 1Q21 of R$ 39.1 million related to the default allowance for loan<br>losses of Amazonas D against Amazonas GT. |
| --- | --- |
SHAREHOLDINGS
|
TABLE 10: SHAREHOLDINGS | ||
|---|---|---|---|
| Shareholdings | 1Q21 | 1Q20 | % |
| --- | --- | --- | --- |
| Shareholdings | 430 | 122 | 252% |
ANALYSIS OF VARIATION 1Q20X1Q21
Shareholdings
|
The main highlights were: (i) positive variation in the equity pickup of associates in the amount of R$<br>260 million, with emphasis on CTEEP and CEEE; partially offset by the worsening of the equivalence result in SPEs Madeira Energia (-R$<br>33 million) and Norte Energia (-R$ 18 million). |
|---|
FINANCIAL RESULT
|
TABLE 11: FINANCIAL INCOME AND EXPENSES | ||
|---|---|---|---|
| Financial Result | 1Q21 | 1Q20 | % |
| --- | --- | --- | --- |
| Financial Income | |||
| Interest, commission and fee income | 139 | 227 | -39% |
| Income from financial investments | 91 | 558 | -84% |
| Additional moratorium on electricity | 128 | 55 | 132% |
| Active monetary updates | 326 | 50 | 556% |
| Exchange rate variations | -601 | -602 | 0% |
| Net Derivative gains | 285 | -119 | -340% |
| Financial expenses | |||
| Debt charges | -493 | -1,039 | -53% |
| Leasing charges | -114 | -93 | 22% |
| Charges on shareholder resources | -143 | -46 | 210% |
| Other net financial income and expenses | -201 | -162 | 24% |
| Financial Result | -584 | -1,172 | -50% |
| Non-recurring adjustments | |||
| (-) Revenue from loans owed by privatized distributors | -81 | -113 | -28% |
| (-) Bonus Award + FIDC Commission | 68 | 298 | -77% |
| (-) credit update Emp. Comp. not converted | 0,2 | 0 | - |
| (-) Monetary update. emp. compulsory | 56 | 87 | -35% |
| Recurring Financial Result | -540 | -900 | -40% |
| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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|  |
| --- |
FINANCIAL RESULT
ANALYSIS OF VARIATION 1Q20X1Q21
In 1Q21, the financial result improved, with a negative result of R$ 584 million in 1Q21 and a negative result of R$ 1,172 million in 1Q20. The main variations were in the accounts of:
|
Debt Charges went from R$ 1,172 million in 1Q20 to R$ 493 million in 1Q21, mainly due to the reduction<br>in indebtedness and the lower rates of the indexes. |
|---|---|
|
Gains and losses on Derivatives went from a net expense of R$ 119 million in 1Q20 to a net revenue of<br>R$ 285 million in 1Q21, with emphasis on subsidiary Eletronorte, due to asset pricing as provided for in the energy sale agreement entered<br>into with Albras, which is mainly linked to the LME (Aluminum) and dollar quotation. |
| --- | --- |
Partially offset by:
|
Revenue from Financial Investments suffered a sharp reduction, from R$ 558 million in 1Q20 to R$ 91 million<br>in 1Q21, mainly due to the reduction in the cash balance in 1Q21 and the reduction in the rate of the indexes that remunerate investments. |
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| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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1.2 EBITDA Consolidated
|
TABLE 12: EBITDA DETAIL | ||
|---|---|---|---|
| EBITDA | 1Q21 | 1Q20 | (%) |
| --- | --- | --- | --- |
| Result of the Exercise | 1,609 | 1,228 | 31% |
| + Provision for Income Tax and Social Contribution | 1,207 | 594 | 103% |
| + Financial Result | 584 | 1,172 | -50% |
| + Amortization and Depreciation | 458 | 469 | -2% |
| = EBITDA | 3,858 | 3,463 | 11% |
| ADJUSTMENTS NON-RECURRING EVENTS | |||
| Interruption of Angra I and II Retroactive and Candiota Inflexibility and Deduction Adjustments Candiota Revenue | -7 | 0 | - |
| Other Income and Expenses | 0 | -25 | -100% |
| Reversal of Revenue energy interconnection between Brazil and Uruguay | 8 | 0 | - |
| Incentive Plans (PAE, PDC) | -2 | -4 | -43% |
| Eletronorte resignation | 64 | 0 | - |
| Foundations contributions reversal - CVM 600 adjustment | -8 | 0 | - |
| FGTS and INSS at Eletronorte - April launch | 0 | 23 | -100% |
| CGT Eletrosul Retroativo Tx by ADM ELOSAUDE | 2 | 0 | - |
| Outsourced Furnas / Additional services Candiota | 0 | 25 | -100% |
| Write-off of assets (Energisa Acre) | 29 | 0 | - |
| Generator group rental (emergency service to Amapá) | 28 | 0 | - |
| Expense recovery (Debentures Commissions transferred to Liabilities) | -8 | 0 | - |
| AmazGT gain from sale | -3 | 0 | - |
| Camargo Correa Furnas Case | 0 | 98 | -100% |
| Installments of the agreement between Furnas and Inepar | 0 | 13 | -100% |
| Furnas-CIEN Payment | 0 | 23 | -100% |
| Contingencies | 932 | -73 | -1380% |
| PCLD prospective credit loss estimate (CPC 48) | 0 | 146 | -100% |
| (Provision / (reversal) for investment losses | 15 | 116 | -87% |
| Provision for Implantation of Shares - Compulsory Loan | -7 | 0 | - |
| ANEEL Provision - CCC | 31 | 7 | 326% |
| Usina Candiota III – Fuel | 6 | 0 | - |
| = EBITDA RECURRING | 4,938 | 3,810 | 29,6% |
Note: As of 2019, the Company started to consider, in its recurring EBITDA, the RBSE revenue from concessions extended under Law 12,783 / 2013, in order to maintain a protocol similar to the debenture covenants issued in 2019. The Ebitda of the Recurring 2020 considers this adjustment of RBSE revenue to compare recurring EBITDA for 2019, for comparative purposes, and also the mandatory effects of IFRS 9 and 15 as explained in Explanation 4 to our financial statements. In addition, considering the privatization of the distributors was completed in April 2019, and these operations are no longer part of its core business, the company treated the material effects of financial income, expenses, PL reversals and allowances for loan losses as non-recurring. prospective (CPC 48) of loans contracted with them before or as a result of the privatization process, although revenues and eventual provisions arising from contracted loans may continue to affect the company's accounting result until its complete exhaustion. However, they were treated as recurring outstanding allowance for doubtful accounts of distributors and outstanding debts related to energy supply.
| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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|  |
| --- |
| | TABLE 13: 1Q20 EBITDA CONCILIATION |
| --- | --- |
| EBITDA | 1Q20<br><br> <br>Resubmitted | 1Q20<br><br> <br>Reported |
| --- | --- | --- |
| Net Profit (Loss) for the Year | 1,228 | 307 |
| + Provision for Income Tax and Social Contribution | 594 | 517 |
| + Financial Result | 1,172 | 1,509 |
| + Amortization and Depreciation | 469 | 469 |
| = EBITDA | 3,463 | 2,803 |
| ADJUSTMENTS NON-RECURRING EVENTS | | |
| Others - Expiry of Concessions | -73 | -18 |
| Non-recurring items without changes | 420 | 420 |
| = RECURRING EBITDA | 3,810 | 3,205 |
| | Recurring Cash Generation with Adjustment of Regulatory Transmission RAP |
| --- | --- |
| | 1Q21 | 1Q20 |
| --- | --- | --- |
| 1. EBITDA Recurrent | 4,938 | 3,810 |
| 2. (-) Total Corporate Revenue from Transmission | 3,801 | 3,043 |
| O&M Revenue | 1,038 | 841 |
| Construction Revenue | 304 | 247 |
| Finance - Return on Investment - RBSE | 120 | 153 |
| Contractual Revenue Transmission | 2,340 | 1,801 |
| Periodic Tariff Revenue | 0 | 0 |
| 3. (+)Total Payment of Allowed Annual Revenue | 3,531 | 2,698 |
| Revenue of RAP and indemnities | 2,494 | 1,857 |
| O & M Revenue | 1,038 | 841 |
| 4 = 1 - 2 + 3 : Approximate Cash Generation | 4,668 | 3,466 |
| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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1.3 Consolidated Results by Continued Operations segment:
|
TABLE 14: FINANCIAL STATEMENT BY SEGMENT – R$ THOUSAND | ||||
|---|---|---|---|---|---|
| 2021 | |||||
| --- | --- | --- | --- | --- | --- |
| Finacial Statement<br><br> <br>by Segment | Administration | Generation | Transmission | Eliminations | Total |
| Net Operating Revenue | 67 | 4,921 | 3,466 | -245 | 8,208 |
| Operating Costs | -119 | -2,487 | -575 | 242 | -2,939 |
| Operating Expenses | -1,505 | -587 | -211 | 3 | -2,300 |
| Operating Income Before Financial Result | -1,557 | 1,848 | 2,680 | 0 | 2,970 |
| Financial Result | -584 | ||||
| Result of Equity Interests | 430 | ||||
| Other income and expenses | 0 | ||||
| Income tax and social contribution | -1,207 | ||||
| Net income (loss) for the period | 1,609 | ||||
| 2020 | |||||
| --- | --- | --- | --- | --- | --- |
| Finacia lStatement<br><br> <br>by Segment | Administration | Generation | Transmission | Eliminations | Total |
| Net Operating Revenue | 51 | 5,023 | 2,782 | -253 | 7,604 |
| Operating Costs | -18 | -2,135 | -995 | 251 | -2,897 |
| Operating Expenses | -849 | -491 | -403 | -118 | -1,860 |
| Operating Income Before Financial Result | -816 | 2,398 | 1,384 | -119 | 2,847 |
| Financial Result | -1,172 | ||||
| Result of Equity Interests | 122 | ||||
| Other income and expenses | 25 | ||||
| Income tax and social contribution | -594 | ||||
| Net income (loss) for the period | 1,228 |
| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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1.3.1. INDEBTEDNESS AND RECEIVABLES
|
TABLE 15: GROSS DEBT AND NET DEBT |
|---|---|
| 03/31/2021 | |
| --- | --- |
| Gross Debt - R$ million | 46,608 |
| (-) (Cash and cash equivalents + marketable securities) | 14,654 |
| (-) Financing Receivable | 10,086 |
| (-) Net balance of Itaipu Financial Assets^1^ | 1,304 |
| Net debt | 20,565 |
|
TABLE 16: Debt Maturity Schedule, excluding RGR owed by third parties<br>(for which Eletrobras is a mere manager) and including the debentures of the Holding and the Subsidiaries: |
| --- | --- |
*For further information, see note 20 to ITR 1Q21.
 <br> Gross Consolidated Debt Total – R$ billion |
|---|
|
Parent Company Gross Debt | |||||||
|---|---|---|---|---|---|---|---|---|
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | After 2026 | Total (R$ million) | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Amortization with RGR and Debentures | 8,142 | 3,284 | 2,330 | 4,155 | 3,294 | 1,333 | 5,450 | 27,989 |
| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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| | Table 17: Foreign Exchange Exposure |
| --- | --- |
| Asset | US$ million | % | Liabilities * | US$ million | % |
| --- | --- | --- | --- | --- | --- |
| Itaipu Loans Receivables | 641,295 | 74% | Bônus 2021 - Eletrobras | 641,092 | 34% |
| Itaipu Financial Asset | 228,864 | 26% | Bônus 2025 - Eletrobras | 497,881 | 29% |
| TOTAL | 870,159 | 100% | Bônus 2030 - Eletrobras | 739,496 | 23% |
| | | | Others | 308,604 | 14% |
| | | | TOTAL | 2,187,074 | 100% |
| | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Após 2026 | TOTAL |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Asset (US$ million) | 622.55 | 216.24 | 31.37 | 0.00 | 0.00 | 0.00 | 0.00 | 870.16 |
| Liabilities (US$ million) | 709.96 | 45.85 | 46.32 | 19.76 | 517.65 | 19.97 | 827.76 | 2,187.07 |
| Foreign Exchange Exposure | -87.41 | 170.39 | -14.96 | -19.76 | -517.65 | -19.97 | -827.76 | -1,316.91 |
Due to the atypical scenario and potentially unpredictable characteristics, it is not possible to accurately predict the scenarios that could materialize in the coming months in the company's operations.
* In the balance of Bonuses 2030 and 2025, there is an accounting effect on the deferral of expenses with repurchase of the 2021 bonus due to the operation carried out in February.
Ratings
|
Table 18: Ratings | |
|---|---|---|
| Agency | National Classification / Perspective | Last Report |
| --- | --- | --- |
| Moody’s BCA | “Ba3”: / Estable | 09/16/2020 |
| Moody’s Senior Unsecured Debt | “Ba2”: / Estable | 09/16/2020 |
| Fitch - Issuer Default Ratings (Foreign Currency) | “BB-”: / Negative | 06/10/2020 |
| Fitch - Issuer Default Ratings (Local Currency) | “BB-”: / Negative | 06/10/2020 |
| S&P LT Local Currency | brAAA/ Estable | 03/12/2021 |
| S&P Issuer Credit Rating | BB-/ Estable | 03/122021 |
*CreditWatch
| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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Financing and loans granted (receivables)
|
Table 19: Receivables | |||
|---|---|---|---|---|
| Tx. Average | CONSOLIDATED | |||
| --- | --- | --- | --- | --- |
| 12/31/2020 | 12/31/2019 | 12/31/2020 | 12/31/2019 | |
| Itaipu | 6.86 | 6.93 | 3,653,653 | 4,200,471 |
| CEAL | 2.80 | 3.45 | 1,386,591 | 1,505,962 |
| Eletropaulo | 1.28 | 3.75 | 1,015,371 | 1,008,052 |
| Amazonas D | 5.23 | 5.78 | 3,984,432 | 3,998,324 |
| CEPISA | 2.38 | 2.50 | 515,345 | 571,127 |
| Boa Vista | 2.02 | 2.22 | 145,192 | 147,764 |
| Repasse RGR | - | - | - | - |
| Others | - | - | 143,376 | 248,201 |
| (-) PECLD | - | - | (758,278) | (755,002) |
| Total | 10,085,682 | 10,924,899 |
* For more information, see note 8 to ITR 1Q21.
The graphs and table below exclude charges, allowance for loan losses and financial assets of Itaipu.
| <br> Total Consolidated Loans and Financing Receivables – R$ billion |
|---|
Does not include: receivables from Itaipu's financial assets of R$ 1.3 billion and PCLD of R$ 758 million and current charges.
|
Loans and financing receivable Parent company - R$ million | |||||||
|---|---|---|---|---|---|---|---|---|
| Projection Receivables | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | After 2026 | TOTAL |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Controller | 4,646 | 2,749 | 2,098 | 1,476 | 1,012 | 810 | 3,844 | 16,634 |
Does not include charges and allowance for loan losses.
Table 20: CCC credits assigned by Privatized Distributors
In the privatization process of the distributors, CCC credits were assigned, which are still being analyzed and supervised by Aneel. These credits are activated in the Company's Financial Statements, of 03/31/2021, in two accounts, which are the Right of Reimbursement and Financing Receivable, according to Explanatory Notes 15 and 11 of 1Q21, and detailed below:
| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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REIMBURSEMENT RIGHT
|
Registered Net Assets | ||||
|---|---|---|---|---|---|
| R$ thousand | Amazonas | Ceron | Eletroacre | Boa Vista | Total |
| --- | --- | --- | --- | --- | --- |
| NT Aneel + Claims under analysis Aneel + "inefficiency" | 1,990,354 | 2,893,691 | 270,501 | 179,400 | 5,333,946 |
| Current Rights | 235,133 | 61,773 | 27,738 | 324,645 | |
| Total (a) | 1,990,354 | 3,128,824 | 332,274 | 207,139 | 5,658,591 |
* The balance of R$ 1,990 million from Amazonas consists of a return obligation to CCC in the order of R$ 481.6 million referring to the final inspection result of the first and second period carried out by Aneel, and a credit receivable from the Treasury National economic and energy “inefficiency” of R $ 2.47 billion. The credit for economic and energy inefficiency is updated by Selic. The amount to be returned to CCC must be discounted from the credit receivable from CCC in relation to the amounts assigned from the other distributors.
|
Explanatory Note 11 - Loan and Financing | ||||
|---|---|---|---|---|---|
| R$ thousand | Amazonas | Ceron | Eletroacre | Boa Vista | Total |
| --- | --- | --- | --- | --- | --- |
| Conversion into Loans (b) | 442,366 | 442,366 |
Note: The R $ 442.4 million credit in the table above originates from CCC credits assigned by Amazonas to Eletrobras, however, as it is not part of the inspection period mentioned above, and because it is a current credit, it has already been paid by CCC to Amazonas Distribuidora, then it was converted into the distributor's debt with Eletrobras.
|
Total Credits Granted (Note 11+ Note 15) | ||||
|---|---|---|---|---|---|
| R$ thousand | Amazonas | Ceron | Eletroacre | Boa Vista | Total |
| --- | --- | --- | --- | --- | --- |
| Credit assigned Net (1) | 2,432,720 | 3,128,824 | 332,274 | 207,139 | 6,100,957 |
| (1) | Credits restated up to 03/31/2021, through the IPCA, based on the taxable event, with the exception of<br>the portion of economic and energy “inefficiency” (R$ 2.51 billion) provided by Amazonas Energia and Boa Vista Energia , which<br>are updated by SELIC. | ||||
| --- | --- |
The National Electric Energy Agency - Aneel recognized, by decision of its collegiate board of directors, on March 10, 2020, (i) the right to receive credits from the Ceron Fuel Consumption Account, in the amount of R$ 1,904 million (a July 2019 prices), referring to the inspection of the benefits due in the period from July 30, 2009 to June 30, 2016, considered as the first period of the inspection process (“First Inspection Period”), credits assigned to Eletrobras at the time privatization of said distributor; and (ii) the right to receive credits from the Fuel Consumption Account - CCC to Companhia de Eletricidade do Acre (“Eletroacre”), in the amount of R $ 192 million (at July 2019 prices), related to the inspection of benefits due in the period from July 30, 2009 to June 30, 2016, credits also assigned to Eletrobras on the occasion of the privatization of said distributor.
| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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Aneel's Board of Directors also approved, on March 10, 2020, the obligation to return R$ 2,061 million (at March 2019 prices), referring to the CCC's monthly inspection and reprocessing process paid to Amazonas Distribuidora de Energia SA ( “Amazonas Energia”), from July 2016 to April 2017, referring to the Second Inspection Period. With this decision, Amazonas Energia had completed its entire inspection process, since Aneel's Board of Directors had already resolved, on March 19, 2019, the result of the First Inspection Period for CCC reimbursements to Amazonas Energia, with the company having the right to receive a credit of approximately R $ 1,592 million (at September 2018 prices), to be offset against credits to be returned. The net balance of Law credits assigned by Amazonas Energia, positive by R $ 2.43 billion, refers, in addition to the contract signed with the distributor with the payment of the amount of R $ 442 million in current credits, to the revenue of disallowances from CCC arising from the criteria of economic and energy efficiency, a right recognized by Law 13,299 / 2016, in the historical amount of R $ 1,358 million to be paid by the National Treasury. Eletrobras updated the value of economic and energy “inefficiency” by Selic until 03/31/2021.
Aneel has not yet completed the inspection processes for CCC reimbursements for the first and second periods of Boa Vista Energia, also assigned to Eletrobras and recorded in the Financial Statements, as well as the second inspection period for Ceron and Eletroacre. It was established by Aneel's Board of Directors that it is only after the completion of all of these inspection processes, and the approval of the results, that the total net value of the credits should be included in the annual budget of the sectorial fund CDE for payment to Eletrobras. It has not yet been determined by Aneel whether the final value of the CCC inspection processes will be paid to Eletrobras in a single or in installments. Aneel did not comply with Eletrobras' request to include in the CDE budget for the year 2021 the payment of installments of the total net value of the four CCC inspection processes already decided by the agency.
During the years 2020 and 2021, in addition to voting on the three aforementioned processes closed by the Agency, the only movement in the inspection processes was the disclosure by Aneel, dated April 6, 2020, of a new technical note (NT nº 49 / 2020 – SFF-SFG-SRG / ANEEL) referring to Boa Vista's first inspection period. The previous NT was from April 2018. In this new NT issued, in addition to updating the base date of the information for February 2020, the Agency accepted Eletrobras' request regarding the withdrawal of the return of amounts received by the distributor regarding the initial tanking, which according to Order No. 2,793 / 2015, the amount must be returned in the last month of operation of the Monte Cristo and Novo Paraíso TPPs, the day before the connection to the SIN. As the State of Roraima has not yet been interconnected, Aneel accepted the request to withdraw the return of funds from the distributor to the CCC account during the inspection period. As the agency accepted exactly the amount of Eletrobras' claim, considered as a probable claim by Aneel, there was no change in the recorded value of credits assumed by Boa Vista, only monetary restatement of credits by IPCA and Selic (“inefficiency” credits) ). Thus, due to the information contained in Aneel's NT 49/2020, Eletrobras would have credits receivable from CCC ceded by Boa Vista, in the amount of R $ 104 million (at Feb / 20 value), referring to the first inspection period of this distributor .
Accordingly, all changes in the 1Q21 of CCC / CDE credits assigned to Eletrobras and recorded in the Right of Reimbursement were due to the monetary adjustment of the credits by IPCA and SELIC, with no new impacts. Aneel has committed to issue technical notes for the second inspection period
|
Table 21: Receivables RBSE Transmission |
|---|
On June 30, 2020, the National Electric Energy Agency - ANEEL approved the tariff review of the transmission concessions extended under the terms of Law 12,783 / 2013. Consequently, it approved the new Permitted Annual Revenue (“RAP”) of these concessions for the 2020-2021 tariff cycle, which brought the following summarized changes, with an impact in relation to the cash flow projection of RBSE receivables:
| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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| --- | | · | Retrospective change to the wacc for the years 2018 and 2019; | | --- | --- | | · | Change in the asset base incorporating the write-offs occurred in the 2013-2018 cycle and the readjustment<br>of the new replacement value of the assets associated with RBSE; | | --- | --- | | · | Incorporation of the payment of the controversial installment "Ke" that had been under judgment<br>since 2017; | | --- | --- | | · | 3 years' redistribution of the differences between the amount effectively received between 2018 and 2019<br>and the portions now revised via the adjustment portion updated by IPCA. | | --- | --- |
In April 2021, ANEEL approved the re-profiling of the financial component of RBSE, of the subsidiaries Furnas, Eletronorte, CGT Eletrosul and Chesf. The decision provides for a reduction in the payment curve of the amounts relating to the periodic review of the RAPs associated with transmission facilities for the 2021/2022 and 2022/2023 cycles and an increase in the payment flow in the cycles after 2023, extending such installments until the end of the year. cycle 2027/2028, preserving, however, the remuneration for the WACC, more details see note 36.1 of 1Q21. The effects of profiling will only impact the Company's Financial Statements in 3Q21.
|
Reprofiling RBSE: Impact as of 3Q21 | |||||||
|---|---|---|---|---|---|---|---|---|
| Current Financial Component BEFORE the Reprofiling with sector charges - Ref Jun / 20 | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 20/21 | 21/22 | 22/23 | 23/24 | 24/25 | 25/26 | 26/27 | 27/28 | |
| Chesf | 1.8 | 1.8 | 1.8 | 1.5 | 1.5 | 1.5 | - | - |
| Eletornorte | 0.9 | 0.9 | 0.9 | 0.7 | 0.7 | 0.7 | - | - |
| CGT Eletrosul | 0.4 | 0.4 | 0.4 | 0.3 | 0.3 | 0.3 | - | - |
| Furnas | 2.9 | 2.9 | 2.9 | 2.3 | 2.3 | 2.3 | - | - |
| TOTAL | 6.0 | 6.0 | 6.0 | 4.8 | 4.8 | 4.8 | - | - |
| REPERFILED Financial Component with sector charges - Ref Jun / 20 | ||||||||
| 20/21 | 21/22 | 22/23 | 23/24 | 24/25 | 25/26 | 26/27 | 27/28 | |
| Chesf | 1.8 | 0.5 | 0.7 | 1.5 | 1.5 | 1.5 | 1.5 | 1.5 |
| Eletornorte | 0.9 | 0.2 | 0.3 | 0.7 | 0.7 | 0.7 | 0.7 | 0.7 |
| CGT Eletrosul | 0.4 | 0.1 | 0.2 | 0.3 | 0.3 | 0.3 | 0.3 | 0.3 |
| Furnas | 2.9 | 0.8 | 1.1 | 2.4 | 2.4 | 2.4 | 2.4 | 2.4 |
| TOTAL | 6.0 | 1.6 | 2.4 | 5.0 | 5.0 | 5.0 | 5.0 | 5.0 |
| Componente Econômico com encargos setoriais - Ref Jun/20 | ||||||||
| 20/21 | 21/22 | 22/23 | 23/24 | 24/25 | 25/26 | 26/27 | 27/28 | |
| Chesf | 1.0 | 1.0 | 1.0 | 0.7 | 0.7 | 0.7 | 0.7 | 0.7 |
| Eletornorte | 0.5 | 0.5 | 0.5 | 0.3 | 0.3 | 0.3 | 0.3 | 0.3 |
| CGT Eletrosul | 0.2 | 0.2 | 0.2 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 |
| Furnas | 1.6 | 1.6 | 1.6 | 1.2 | 1.2 | 1.2 | 1.2 | 1.2 |
| TOTAL | 3.2 | 3.2 | 3.2 | 2.3 | 2.3 | 2.3 | 2.3 | 2.3 |
| Economic Component with sector charges - Ref Jun / 20 | ||||||||
| 20/21 | 21/22 | 22/23 | 23/24 | 24/25 | 25/26 | 26/27 | 27/28 | |
| Chesf | 2.8 | 1.5 | 1.7 | 2.2 | 2.2 | 2.2 | 2.2 | 2.2 |
| Eletornorte | 1.4 | 0.7 | 0.8 | 1.0 | 1.0 | 1.0 | 1.0 | 1.0 |
| CGT Eletrosul | 0.6 | 0.3 | 0.3 | 0.4 | 0.4 | 0.4 | 0.4 | 0.4 |
| Furnas | 4.5 | 2.4 | 2.7 | 3.6 | 3.6 | 3.6 | 3.6 | 3.6 |
| TOTAL Eletrobras | 9.2 | 4.8 | 5.6 | 7.3 | 7.3 | 7.3 | 7.3 | 7.3 |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
The above amounts include TFSEE charges (Electricity Service Inspection Fee) and resources for R&D and Energy Efficiency, and do not include PIS and Cofins. In addition, the data refer to the tariff cycle and not to the calendar year.
| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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1.4. Investment
|
Table<br> 22: INVESTMENTS BY SEGMENT - R$ million | ||||
|---|---|---|---|---|---|
| Investiment (Corporate + Partnerships) | Realized 1Q21 | Budgeted 1Q21 | % | Budgeted 2021 | % |
| --- | --- | --- | --- | --- | --- |
| Generation Corporate | 273 | 734 | 37% | 4,311 | 6% |
| Implantation /Ampliation | 145 | 535 | 27% | 3,173 | 5% |
| Angra 3 | 133 | 943 | 14% | 2,813 | 5% |
| Santa Cruz | 9 | 84 | 11% | 188 | 5% |
| Casa Nova | 1 | 8 | 16% | 18 | 7% |
| Others | 2 | - 499 | 0% | 154 | 1% |
| Maintenance | 128 | 199 | 64% | 1,138 | 11% |
| Transmission Corporate | 142 | 340 | 42% | 1,818 | 8% |
| Ampliation | 16 | 66 | 24% | 124 | 13% |
| Eletronorte | - | - | - | - | |
| Chesf | 15 | 66 | 23% | 99 | 16% |
| Furnas | 1 | - | 25 | 3% | |
| CGT Eletrosul | - | - | - | - | |
| Reinforcements and improvements | 96 | 230 | 42% | 1,379 | 7% |
| Maintenance | 30 | 43 | 70% | 315 | 10% |
| Infraestructure and Others* | 64 | 147 | 44% | 684 | 9% |
| SPES | 40 | 77 | 53% | 1,432 | 3% |
| Total | 519 | 1,297 | 40% | 8,245 | 6% |
Others: Research, Infrastructure, Environmental Quality
* For more details on investments, by subsidiary or project, see annex 3 to this Investor Information, to be released in May 2021.
IN 1Q21 R $ 519 MILLION WAS INVESTED OF THE R$ 1,297 MILLION BUDGETED FOR THE QUARTER.
In generation, total investments amounted to R$ 312 million, of which R$ 273 million related to corporate ventures, with an emphasis on: Angra 3 R$ 133 million, Angra 1 and 2 R$ 88 million. In generation SPEs, the highlight was R$ 21 million for the Pindaí Complex. In maintenance of generation, R$ 88 million was realized at Eletornuclear and R$ 31 million in Furnas,
In transmission, total investments were R$ 142 million in corporate ventures, with emphasis on:
Chesf R$ 70 million, Furnas R$ 30 million, CGT Eletrosul R$ 22 million, Eletronorte R$ 20 million. There was no emphasis on achievements in SPEs.
As for the non-realization of investments, there was frustration of R$ 778 million, of which -R$ 461 million in corporate generation, with emphasis on the non-realization of -R$ 349 million in Angra 3 due to the end of Renuclear. In addition, there was a frustration of -R$ 44 million in maintenance of Angra 1 and 2 and of -R$ 33 million in UTE Santa Cruz.
In transmission, the non-realization of corporate investments was R$ 198 million, with emphasis on: -R$ 65 million due to delays in bids and licenses, -R$ 30 million due to impacts from COVID-19 and -R$ 32 due to optimization of costs.
In SPES, the total non-realization was R$ 36 million, being: (i) -R$ 13 million in Chapada do Piauí and Teles Pires Participações, in the amount of -R$ 26 million, both due to the postponement of investments.
| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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1.5. COMMERCIALIZATION
1.5.1. ENERGY SOLD IN 1Q21 – GENERATORS - TWH
In terms of the evolution of the energy market, Eletrobras Companies, in 1Q21, sold 51.4 TWh of energy, against 53.5 TWh traded in the same period of the previous year, which represents a decrease of 4%. These volumes include the energy sold from the plants under the quota regime, renewed by Law 12.783 / 2013, as well as by the plants under the exploration regime (ACL and ACR).
Sales: includes projects under Law 13,182 / 15
Average ACR Prices in the chart do not include Itaipu and O&M. Include Eletronuclear.
1.5.2. ENERGETIC BALANCE
|
TABLE 23: ENERGETIC BALANCE | ||||
|---|---|---|---|---|---|
| Energetic Balance (MWmed) | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | --- | --- | --- | --- | --- |
| Ballast | 9,083 | 9,056 | 9,047 | 7,443 | 4,684 |
| Own resources | 8,061 | 8,070 | 8,070 | 6,409 | 3,830 |
| Energy Purchase | 1,022 | 986 | 977 | 1,033 | 855 |
| Sales | 6,661 | 5,270 | 4,758 | 4,272 | 2,819 |
| ACL - Bilateral Contracts + MCP realized | 4,564 | 3,165 | 2,657 | 2,172 | 1,124 |
| ACR - Except quotas | 2,096 | 2,105 | 2,101 | 2,101 | 1,695 |
| Average Selling Price R$/MWh | 217.60 | 220.41 | 224.79 | 230.87 | 230.63 |
| Average Purchase Price R$/MWh | 235.34 | 229.44 | 226.51 | 216.59 | 203.28 |
| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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| --- | | Average Selling Price R$/MWh | 217.60 | 220.41 | 224.79 | 230.87 | 230.63 | | --- | --- | --- | --- | --- | --- | | Average Purchase Price R$/MWh | 235.34 | 229.44 | 226.51 | 216.59 | 203.28 | | Average Selling Price R$/MWh (1) | 175.25 | 168.76 | 167.24 | 166.62 | 175.08 | | Average Purchase Price R$/MWh (1) | 207.72 | 204.23 | 200.14 | 188.63 | 188.63 | | Balance (Ballast - Sales) | 2,422 | 3,786 | 4,288 | 3,170 | 1,865 | | Uncontracted Energy * | 27% | 42% | 47% | 43% | 40% | | * The uncontracted portion includes energy reserved for the company's hedge, strategically defined according to the GSF estimate for the period. | | | | | | | Not included in installments of Physical Guarantee Quotas and Nuclear Energy Quotas. | | | | | | | Physical Guarantee Quotas for Hydroelectric Plants | 7,451 | 7,451 | 7,451 | 9,111 | 11,759 | | Nuclear Energy Quotas | 1,573 | 1,573 | 1,573 | 1,573 | 1,573 |
Contracts signed up to 03/31/2021. It considers the end of the contracts for UHEs Mascarenhas de Moraes, in Jan / 2024, and UHE Tucuruí, in Aug / 2024, and from the respective dates, both started to be considered in the Physical Guarantee Quota regime. The Average Sales Prices do not include undertakings under the terms of Physical Guarantee Quotas and Nuclear Energy Quotas.
(1) The prices of the Amazonas GT contracts, including the PIEs contracts, arising from the unbundling process of Amazonas Distribuidora, are not considered in the average prices marked with the number (1), worth noting that, in this case, the purchase operations and energy sales do not reflect an economic impact for Amazonas GT.
| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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2.
Result Analysis of
Parent Company
In 1Q21, Eletrobras Holding posted net income of R$ 1,601 million, an increase of 33% compared to net income of R$ 1,202 million in 1Q20. The 1Q21 result was decisively influenced by: (i) Income from equity interests, of R$ 2,725 million, influenced mainly by the result of the subsidiaries. Partially offset by: (ii) the negative impact of the Financial Result in the amount of R$ 281 million in 1Q21, mainly due to the negative effect of exchange rate fluctuation in the period; (iii) negative effect on provisions for legal contingencies, in the amount of R$ 471 million in 1Q21, resulting from the provisions related to the compulsory loan lawsuits in the amount of R$ 436 million.
| <br> EVOLUTION OF RESULT - R$ MILLION |
|---|
Note: The analysis of the results of each subsidiary can be found in Appendix II of the Investor Report.
| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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2.1 Shareholdings in the Parent Company
In 1Q21, the result of Equity Holdings positively impacted the Company's result by R$ 2,725 million, mainly due to the equity in results of investments in subsidiaries, while the result in 1Q20 was R$ 1,904 million (the value of 1Q20 was restated due to the remeasurement of transmission assets - see Note 4.4 to the Financials. Highlight for improvement in Eletronorte's results (+ R$ 485 million), Furnas (+ R$ 323 million), partially offset by the lower result in Eletronuclear (-R$ 241 million).
2.2 Operating Provisions of Parent Company
In 1Q21, Operating Provisions had a negative impact on the Parent Company's result by R$ 471 million, compared to a provision of R$ 76 million in 1Q20. This variation is mainly explained by the (i) negative effect on provisions for legal contingencies, in the amount of R$ 451 million in 1Q21, with the compulsory loan lawsuits in the amount of R$ 436 million, against a reversal of R$ 141 million in 1Q20; There are also other events that occurred in 1Q20 and that had less impact in 1Q21, such as: (ii) reversal of the provision in the unsecured liability in subsidiaries in the amount of R$ 119 million (without impact in 1Q21); (iii) provision for Investment Losses in the amount of R$ 116 million in 1Q20 and R$ 15 million in 1Q21; and the provision for allowance for loan losses of R$ 195 million in 1Q20 and R$ 11 million in 1Q21.
|
Table 24: Operating Provisions (R$ million) | |
|---|---|---|
| Operating Provisions | ||
| --- | --- | --- |
| 1Q21 | 1Q20 (Resubmitted) | |
| Guarantees | -18 | 7 |
| Contingencies | 451 | -155 |
| PCLD - Financing and Loans | 11 | 195 |
| Overdraft liabilities in subsidiaries | - | -119 |
| Investment Losses | 15 | 116 |
| Provision for Implantation of Shares - Compulsory Loan | -7 | - |
| ANEEL Provision - CCC | 31 | 7 |
| Others | -11 | 25 |
| TOTAL | 471 | 76 |
| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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2.3 Parent Company Financial Result
In 1Q21, the Financial Result had a negative impact on the Parent Company's result by R$ 281 million, as well as in 1Q20, with a negative result of R$ 377 million. The result was mainly influenced by: (i) exchange rate fluctuation in the period, given the passive exchange exposure. The result of the net foreign exchange variation went from a negative amount of R$ 165 million in 1Q20 to a negative result of R$ 446 million in 1Q21; (ii) Interest, commission and fee income went from R$ 411 million in 1Q20 to R$ 257 million in 1Q21, due to the prepayment of part of the debt by Furnas and Eletronorte in February 2020 and the drop in the interest rate interest between periods; (iii) Revenue from financial investments went from R$ 478 million in 1Q20 to R$ 75 million in 1Q21 due to a drop of R$ 1.7 billion in cash and, mainly, due to the reduction in profitability indexes. On the other hand: iv) Debt charges went from a negative result of R$ 729 million in 1Q20 to a negative result of R$ 280 million in 1Q21 due to: (a) a reduction in the balance of Eletrobras Holding's debt by approximately R$ 2.9 billion; (b) decrease of 1.5 p.p. in the Selic / CDI rates; and (c) the effect of the costs of issuing bonds in 1Q20; (v) net monetary restatements had a positive result in the amount of R$ 311 million in 1Q21 and R$ 46 million in 1Q20;
|
Table 26: Financial Result (R$ million) | |
|---|---|---|
| FINANCIAL RESULT | 1Q21 | 1Q20 |
| --- | --- | --- |
| Financial income | ||
| Interest, commission and fee income | 257 | 411 |
| Income from financial investments | 75 | 478 |
| Additional moratorium on electricity | 0 | 1 |
| Monetary updates | 311 | 46 |
| Exchange variations | -446 | -165 |
| Other financial income | 74 | 95 |
| Financial expenses | ||
| Debt charges | -280 | -729 |
| Leasing charges | -1 | -1 |
| Charges on shareholder resources | 0 | -23 |
| Other financial expenses | -270 | -489 |
| -281 | -377 |
| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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3.
General Information
Data of 03/31/2021
| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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SHARE CAPITAL
Eletrobras' capital stock, on March 31, 2021, totaled R$ 39,057 billion, represented by 1,568,930,910 shares, of which 1,288,842,596 are common shares and 280,088,314 are preferred shares.
|
TABLE<br> 27: CAPITAL STRUCTURE | |||
|---|---|---|---|---|
| Shareholding position on 03/31/2021 | % Capital | |||
| --- | --- | --- | --- | --- |
| Shareholders | Quantity | Value(R$) | % | Total |
| Common | 1,288,842,596 | 32,084,698,524 | 100.00% | 82.15% |
| Government | 667,888,884 | 16,626,555,917,17 | 51.82% | 42.57% |
| BNDESPAR | 141,757,951 | 3,528,950,032,66 | 11.00% | 9.04% |
| BNDES | 74,545,264 | 1,855,744,316,08 | 5.78% | 4.75% |
| Iberclear - Latibex | 363,135 | 9,039,953,39 | 0.03% | 0.02% |
| FND | 45,621,589 | 1,135,712,719,15 | 3.54% | 2.91% |
| FGHAB | 1,000,000 | 24,894,194,70 | 0.08% | 0.06% |
| Others | 357,665,773 | 8,903,801,391 | 27.75% | 22.80% |
| PREF. A | 146,920 | 3,657,455 | 100.00% | 0.01% |
| Others | 146,920 | 3,657,455,09 | 100.00% | 0.01% |
| PREF. B | 279,941,394 | 6,968,915,567 | 100.00% | 17.84% |
| Citibank (Banco Depositário ADR's) | 5,097,809 | 126,905,850 | 1.82% | 0.32% |
| Iberclear - Latibex | 134,953 | 3,359,546 | 0.05% | 0.01% |
| BNDESPAR | 18,691,102 | 465,299,932 | 6.68% | 1.19% |
| BNDES | 18,262,671 | 454,634,488 | 6.52% | 1.16% |
| União | 494 | 12,298 | 0.00% | 0.00% |
| Others | 237,754,365 | 5,918,703,453 | 84.93% | 15.15% |
| Total | 1,568,930,910 | 39,057,271,546,52 | 100.00% |
| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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Stock Analysis
Shares
|
Table 28: B3, ELET3 and ELET6 | |||
|---|---|---|---|---|
| Price and Volume | (R$)ELET3(ON Shares) | (R$)ELET6(PN Shares) | (pts.)IBOV(Índex) | (pts.)IEE(Índex) |
| --- | --- | --- | --- | --- |
| Closing Price on 03/31/2021 | 33.37 | 33.82 | 116634 | 80913 |
| Maximum in the quarter | 33.37 | 33.82 | 125077 | 83742 |
| Average in the quarter | 30.67 | 31.09 | 116925 | 78978 |
| Minimum in the quarter | 25.39 | 26.36 | 110035 | 72998 |
| Variation in 1Q21 | -2.1% | -1.2% | -2.0% | -6.5% |
| Change in the last 12 months | 56.8% | 46.9% | 59.7% | 47.9% |
| Average Daily Traded Volume 1Q21 (R$ million) | 274.5 | 126.9 | - | - |
| Book Value per Share (R$) | 46.41 | 46.41 | - | - |
| Price / Profit (P/E) (1) | 32.70 | 33.14 | - | - |
| Price / Shareholders' Equity (P/B) ^(2)^ | 0.72 | 0.73 | - | - |
| (1) | Closing price of preferred and common shares at the end of the period / Net income per share. For the<br>calculation, the accumulated net profit of the last 12 months was considered; | |||
| --- | --- | |||
| (2) | Closing price of preferred and common shares at the end of the period / Book Value per share at the end<br>of the period. | |||
| --- | --- | |||
| <br> Evolution of Shares Traded at B3 |
||||
| --- |
Source: AE Broadcast
Index number 03/31/2020 = 100 and ex-dividend values.
| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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ADR PROGRAMS
|
TABLE 29: NYSE, EBRN AND EBRB | |
|---|---|---|
| Price and Volume | (US$) NYSE EBRN | (US$) NYSE EBRB |
| --- | --- | --- |
| Closing Price on 03/31/2021 | 6.10 | 6.03 |
| Maximum in the quarter | 6.56 | 6.42 |
| Average in the quarter | 5.72 | 5.77 |
| Minimum in the quarter | 4.72 | 5.02 |
| Variation in 1Q21 | -8.5% | -10.4% |
| Change in the last 12 months | 43.9% | 29.1% |
| Average Daily Trading Volume 1Q21 (US$ million) | 8.623 | 387 |
| <br> Evolution of Shares Traded in ADR |
||
| --- |
Source: AE Broadcast
Index number 03/31/2020 = 100 and ex-dividend values.
| MARKETLETTER 1Q2021<br><br>Disclaimer: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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Latibex - MADRID MARKET
|
TABLE 30: LATIBEX, XELTO AND XELTB | |
|---|---|---|
| Price and Volume | (€) LATIBEXXELTO | (€) LATIBEX XELTB |
| --- | --- | --- |
| Closing Price on 03/31/2021 | 5.10 | 5.00 |
| Maximum in the quarter | 5.60 | 5.90 |
| Average in the quarter | 4.84 | 4.86 |
| Minimum in the quarter | 4.20 | 4.30 |
| Variation in 1Q21 | -8.9% | -10.7% |
| Change in the last 12 months | 23.8% | 16.8% |
| Average Daily Traded Volume 1Q20 (thousands of Euros) | 11.8 | 3.1 |
| <br> Evolution of Foreign Currencies |
||
| --- | --- |
Index number 03/31/2020 = 100.
Source: Banco Central
| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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Nº of Employees
PARENT COMPANY
|
TABLE 31: EMPLOYEES FOR WORKING TIME |
|---|---|
| Working time in the company (years) | 1Q21 |
| --- | --- |
| Up until 5 | 21 |
| 6 to 10 | 125 |
| 11 to 15 | 299 |
| 16 to 20 | 151 |
| 21 to 25 | 13 |
| More than 25 | 60 |
| Total | 669 |
|
TABLE 32: EMPLOYEES BY FEDERATION STATE |
| --- | --- |
| Federation State | 1Q21 |
| --- | --- |
| Rio de Janeiro | 655 |
| São Paulo | 0 |
| Brasília | 14 |
| Total | 669 |
CONTRACTED / OUTSOURCED LABOR
|
TABLE 33: CONTRACTED / OUTSOURCED LABOR |
|---|---|
| 1Q21 | |
| --- | |
| 0 |
ROTATION INDEX (HOLDING)
|
TABLE 34: ROTATING INDEX HOLDING WITH PDC |
|---|---|
| 1Q21 | |
| --- | |
| 1.38% |
| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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Balance Sheet
|
(R$ thousand) | |||
|---|---|---|---|---|
| Asset | Parent Company | Consolidated | ||
| --- | --- | --- | --- | --- |
| 03.31.21 | 12.31.20 | 03.31.21 | 12.31.20 | |
| CURRENT | ||||
| Cash and cash equivalents | 2,934 | 21,630 | 291,950 | 286,607 |
| Restricted cash | 3,783,936 | 3,412,292 | 3,783,936 | 3,573,362 |
| Marketable securities | 5,294,403 | 7,740,051 | 14,361,903 | 14,039,358 |
| Customers | 340,686 | 481,109 | 5,780,563 | 5,971,657 |
| Asset contractual transmission | 0 | 0 | 9,431,217 | 10,364,908 |
| Loans and financing | 5,212,163 | 5,937,323 | 4,116,710 | 4,748,661 |
| Remuneration of equity interests | 4,899,769 | 4,720,491 | 706,829 | 675,510 |
| Taxes to recover | 205,534 | 519,200 | 262,873 | 833,960 |
| Income tax and social contribution | 821,158 | 829,569 | 1,235,290 | 1,292,750 |
| Reimbursement rights | 0 | 0 | 3,124 | 4,684 |
| Warehouse | 304 | 305 | 507,309 | 509,991 |
| Nuclear fuel stock | 0 | 0 | 428,340 | 428,340 |
| Derivative financial instruments | 0 | 0 | 445,608 | 317,443 |
| Hydrological risk | 0 | 0 | 3,132 | 3,132 |
| Others | 1,929,597 | 1,683,297 | 2,115,334 | 1,852,043 |
| 22,490,484 | 25,345,267 | 43,474,118 | 44,902,406 | |
| Asset held for sale | 289,331 | 289,331 | 289,331 | 289,331 |
| 22,779,815 | 25,634,598 | 43,763,449 | 45,191,737 | |
| NON CURRENT | ||||
| LONG-TERM REALIZABLE | ||||
| Reimbursement rights | 5,658,592 | 5,583,447 | 5,658,592 | 5,583,447 |
| Loans and financing | 10,809,660 | 11,197,073 | 5,968,972 | 6,176,238 |
| Customers | 0 | 0 | 757,481 | 1,061,899 |
| Marketable Securities | 327,406 | 322,884 | 327,763 | 323,236 |
| Nuclear fuel stock | 0 | 0 | 1,228,076 | 1,264,780 |
| Taxes to recover | 2,782 | 2,781 | 438,281 | 430,045 |
| Current Income Tax and Social Contribution | 0 | 0 | 1,790,218 | 2,068,894 |
| Escrow deposits | 4,840,543 | 4,676,895 | 6,782,735 | 6,752,865 |
| Transmission contractual asset | 0 | 0 | 41,507,373 | 41,023,616 |
| Financial assets - Concessions and Itaipu | 1,075,897 | 1,103,034 | 3,183,638 | 3,199,751 |
| Derivative financial instruments | 0 | 0 | 465,013 | 310,100 |
| Advances for future capital increase | 1,982,711 | 1,223,108 | 316 | 1,541 |
| Remuneration of equity interests | 0 | 0 | 17,194 | 0 |
| Hydrological risk | 0 | 0 | 141,876 | 149,094 |
| Decommissioning Fund | 1,872,163 | 1,753,827 | 1,872,163 | 1,753,827 |
| Others | 1,106,513 | 1,153,411 | 1,250,425 | 1,271,995 |
| 27,676,267 | 27,016,460 | 71,390,116 | 71,371,328 | |
| INVESTMENT | 79,793,358 | 77,538,694 | 29,064,846 | 29,089,522 |
| Fixed assets net | 241,632 | 244,673 | 32,489,221 | 32,662,912 |
| INTANGIBLE | 52,110 | 42,974 | 664,241 | 650,950 |
| TOTAL NON-CURRENT ASSETS | 107,763,367 | 104,842,801 | 133,608,424 | 133,774,712 |
| TOTAL ASSETS | 130,543,182 | 130,477,399 | 177,371,873 | 178,966,449 |
| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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| --- |
| | (R$ thousand) |
| --- | --- |
| Liabilities and Equity | Parent Company | | Consolidated | |
| --- | --- | --- | --- | --- |
| | 03.31.21 | 12.31.20 | 03.31.21 | 12.31.20 |
| CURRENT | | | | |
| Loans and financing and Debentures | 8,175,439 | 7,984,194 | 10,629,555 | 11,410,751 |
| Compulsory loan | 58,337 | 57,201 | 58,337 | 57,201 |
| Suppliers | 514,825 | 705,908 | 2,917,065 | 3,904,051 |
| Advances from customers | 1,076,929 | 1,060,770 | 1,151,004 | 1,134,845 |
| Taxes payable | 88,293 | 335,432 | 847,331 | 1,194,042 |
| Income tax and social contribution | 131,049 | 0 | 286,536 | 319,435 |
| Onerous contracts | 0 | 0 | 40,196 | 40,196 |
| Remuneration to shareholders | 1,547,973 | 1,530,718 | 1,564,514 | 1,547,158 |
| Financial liabilities - Concessions and Itaipu | 1,213,879 | 647,214 | 1,213,879 | 647,214 |
| Estimated liabilities | 166,608 | 167,344 | 1,492,268 | 1,454,148 |
| Reimbursement Obligations | 1,375,808 | 1,373,656 | 1,598,401 | 1,618,508 |
| Post-employment benefits | 0 | 0 | 197,347 | 192,209 |
| Provisions for contingencies | 1,332,779 | 1,332,779 | 1,332,779 | 1,722,562 |
| Regulatory charges | 0 | 0 | 613,658 | 586,845 |
| Lease | 7,585 | 7,595 | 209,536 | 217,321 |
| Others | 117,367 | 111,998 | 345,016 | 353,580 |
| | 15,806,871 | 15,314,809 | 24,497,422 | 26,400,066 |
| NON-CURRENT | | | | |
| Loans and financing and Debentures | 19,847,051 | 20,014,081 | 35,978,887 | 35,591,282 |
| Suppliers | 0 | 0 | 16,555 | 16,556 |
| Advances from customers | 0 | 0 | 270,937 | 290,870 |
| Compulsory loan | 991,658 | 989,908 | 991,658 | 989,908 |
| Obligation for asset retirement | 0 | 0 | 3,095,537 | 3,040,011 |
| Provisions for contingencies | 16,827,592 | 16,526,961 | 24,766,182 | 24,108,078 |
| Post-employment benefits | 1,128,280 | 1,131,997 | 6,971,384 | 6,824,632 |
| Provision for unsecured liabilities | 0 | 0 | 4,081 | 4,191 |
| Onerous contracts | 0 | 0 | 414,704 | 414,705 |
| Reimbursement Obligations | 0 | 0 | 0 | 22,259 |
| Lease | 46,419 | 48,333 | 797,040 | 835,873 |
| Concessions payable - Use of public goods | 0 | 0 | 69,162 | 65,954 |
| Advances for future capital increase | 74,420 | 74,060 | 74,420 | 74,060 |
| Derivative financial instruments | 0 | 0 | 10,014 | 10,014 |
| Sector Charges | 0 | 0 | 698,794 | 744,442 |
| Taxes payable | 0 | 0 | 175,652 | 182,179 |
| Income tax and social contribution | 656,454 | 650,523 | 3,662,876 | 3,705,055 |
| Others | 2,348,764 | 2,248,420 | 1,802,083 | 1,895,020 |
| TOTAL NON-CURRENT LIABILITIES | 41,920,638 | 41,684,283 | 79,799,966 | 78,815,089 |
| EQUITY | | | | |
| Share capital | 39,057,271 | 39,057,271 | 39,057,271 | 39,057,271 |
| Capital reserves | 13,867,170 | 13,867,170 | 13,867,170 | 13,867,170 |
| Profit reserves | 26,616,165 | 28,908,054 | 26,616,165 | 28,908,054 |
| Advances for future capital increase | 0 | 0 | 0 | 0 |
| Other comprehensive income accumulated | -8,333,443 | -8,354,188 | -8,333,443 | -8,354,188 |
| Non controlling shareholdins | 0 | 0 | 258,812 | 272,987 |
| Accumulated profits | 1,608,510 | 0 | 1,608,510 | 0 |
| TOTAL SHAREHOLDERS' EQUITY | 72,815,673 | 73,478,307 | 73,074,485 | 73,751,294 |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 130,543,182 | 130,477,399 | 177,371,873 | 178,966,449 |
| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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Income Statement
|
(R$ thousand) | |||
|---|---|---|---|---|
| Parent Company | Consolidated | |||
| --- | --- | --- | --- | --- |
| 03.31.21 | 03.31.20 | 03.31.21 | 03.31.20 | |
| NET OPERATING REVENUE | 90,281 | -3,568 | 8,208,426 | 7,603,566 |
| Operating costs | ||||
| Personnel, Material and Services | 0 | 0 | -783,534 | -803,044 |
| Energy purchased for resale | -101,222 | -3,659 | -499,316 | -646,220 |
| Charges upon use of electric network | 0 | 0 | -455,668 | -446,459 |
| Fuel for electricity production | 0 | 0 | -537,337 | -467,998 |
| Construction | 0 | 0 | -148,568 | -190,318 |
| Depreciation | 0 | 0 | -403,351 | -400,439 |
| Amortization | 0 | 0 | -14,008 | -16,309 |
| Operating Provisions /Reversals net | 0 | 0 | -6,097 | 0 |
| Others Costs | 0 | 0 | -90,728 | -71,493 |
| GROSS RESULT | -10,941 | -7,227 | 5,269,819 | 4,561,286 |
| Operating expenses | ||||
| Personnel, Supllies and Services | -126,055 | -142,142 | -902,096 | -892,449 |
| Depreciation | -3,041 | -3,273 | -32,466 | -46,568 |
| Amortization | -3 | 0 | -8,275 | -5,948 |
| Donations and contributions | -21,589 | -24,337 | -38,738 | -50,267 |
| Operating Provisions /Reversals net | -471,308 | -75,841 | -1,098,912 | -392,311 |
| Others | -79,655 | -72,666 | -219,131 | -327,118 |
| -701,651 | -318,259 | -2,299,618 | -1,714,661 | |
| OPERATING INCOME BEFORE FINANCIAL RESULT | -712,592 | -325,486 | 2,970,201 | 2,846,625 |
| Financial result | ||||
| Financial income | ||||
| Income from interest, commissions and fees | 256,658 | 410,723 | 138,746 | 226,554 |
| Income from financial investments | 75,029 | 478,215 | 90,845 | 557,821 |
| Moratorium on electricity | 0 | 617 | 127,529 | 54,971 |
| Active monetary updates | 446,326 | 150,028 | 522,951 | 177,909 |
| Exchange rate variations | 889,544 | 3,472,139 | 881,325 | 3,302,788 |
| Fair value adjustment | 0 | 0 | 284,796 | 0 |
| Regulatory asset update | 74,204 | 95,043 | 127,746 | 118,603 |
| Gains on derivatives | ||||
| Other financial income | -280,011 | -729,417 | -492,628 | -1,039,250 |
| Financial expenses | -1,281 | -1,456 | -114,352 | -93,382 |
| Debt charges | -360 | -22,556 | -143,106 | -46,152 |
| Leasing charges | -135,459 | -103,737 | -196,661 | -128,154 |
| Charges on shareholders' funds | -1,335,607 | -3,637,147 | -1,482,257 | -3,904,835 |
| Passive monetary updates | 0 | 0 | 0 | -118,528 |
| Passive exchange variations | -269,673 | -489,246 | -328,705 | -280,423 |
| -280,630 | -376,794 | -583,771 | -1,172,078 | |
| INCOME BEFORE EQUITY | -993,222 | -702,280 | 2,386,430 | 1,674,547 |
| RESULTS OF EQUITY | 2,725,339 | 1,903,940 | 430,075 | 122,032 |
| OUTRAS RECEITAS E DESPESAS | 0 | 0 | 0 | 25,042 |
| OTHER REVENUE AND EXPENDITURE | 1,732,117 | 1,201,660 | 2,816,505 | 1,821,621 |
| Current Income Tax and Social Contribution | -131,049 | 0 | -972,207 | -735,783 |
| Deferred Income Tax and Social Contribution | 0 | 0 | -235,159 | 141,842 |
| NET INCOME FOR THE PERIOD | 1,601,068 | 1,201,660 | 1,609,139 | 1,227,680 |
| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
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|  |
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Cash Flow Statement
|
(R$ thousand) | ||||
|---|---|---|---|---|---|
| Parent Company | Consolidated | ||||
| --- | --- | --- | --- | --- | --- |
| 31.03.21 | 31.03.20 | 31.03.21 | 31.03.20 | ||
| Operating Activities | |||||
| Income before income tax and social contribution | 1,732,117 | 1,201,660 | 2,816,505 | 1,821,621 | |
| Adjustments to reconcile income to cash provided by operations:: | 0 | 0 | 0 | 0 | |
| Depreciation and amortization | 3,043 | 3,273 | 458,100 | 469,265 | |
| Net foreign exchange rate variations | 135,196 | 118,717 | 274,642 | 552,292 | |
| Financial charges | 24,994 | 342,706 | 611,340 | 952,230 | |
| Contractual revenue - Transmission | 0 | 0 | -2,339,732 | -1,801,301 | |
| Construction Revenue | 0 | 0 | -128,445 | -161,677 | |
| Equivalence equity results | -2,725,339 | -1,903,940 | -430,075 | -122,032 | |
| Result on disposal of equity interests | 0 | 0 | 0 | -25,042 | |
| RBSE / periodic tariff revenue | 0 | 0 | 0 | 0 | |
| Operating provisions (reversals) | 471,308 | 75,841 | 1,105,009 | 392,311 | |
| Participation of non-controlling shareholders | 0 | 0 | -12,220 | -10,136 | |
| Financial instruments - derivatives | 0 | 0 | -284,796 | 118,528 | |
| Others | -83,640 | -89,445 | -9,211 | -313,769 | |
| -2,174,437 | -1,452,848 | -755,387 | 50,669 | ||
| (Increases) / decreases in operating assets | |||||
| Customers | 1 | 0 | 355,090 | -10,741 | |
| Marketable securities | 2,445,649 | -338,539 | -322,549 | -1,283,995 | |
| Reimbursement rights | -1 | -40,322 | 1,559 | -52,789 | |
| Warehouse | 1 | -57 | 2,682 | 31,384 | |
| Nuclear fuel stock | 0 | 0 | 36,704 | -168,267 | |
| Financial assets - Itaipu | 593,802 | -433,145 | 593,802 | -433,145 | |
| Assets held for sale | 0 | 94,459 | 0 | 128,250 | |
| Hydrological risk | 0 | 0 | 7,218 | 13,223 | |
| Credits with subsidiaries - CCD | 0 | 0 | 0 | 0 | |
| Others | 185,197 | -284,977 | 328,041 | 827,360 | |
| 3,224,649 | -1,002,580 | 1,002,546 | -948,719 | ||
| Increase / (decrease) in operating liabilities | |||||
| Suppliers | -247,769 | 188,143 | -1,043,673 | -129,947 | |
| Advances | 0 | 0 | -19,933 | -30,134 | |
| Lease | -1,924 | 1,456 | 114,529 | 93,801 | |
| Estimated liabilities | -736 | 9,046 | -68,747 | 57,252 | |
| Indemnification obligations | 0 | 0 | -44,518 | 0 | |
| Sectorial charges | 0 | 0 | -18,835 | 79,300 | |
| Liabilities associated with assets held for sale | 0 | 0 | 0 | -26,536 | |
| Accounts payable with subsidiaries | 0 | 0 | 0 | 0 | |
| Others | -127,798 | 316,776 | -334,395 | -1,112,335 | |
| -378,227 | 515,421 | -1,415,573 | -1,068,599 | ||
| Payment of financial charges | -256,634 | -187,983 | -493,055 | -566,344 | |
| Revenue of RAP and indemnities | 0 | 0 | 2,909,321 | 1,926,701 |
| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
| --- |
|  |
| --- | | Revenue of financial charges | 292,335 | 412,218 | 202,696 | 240,004 | | --- | --- | --- | --- | --- | | Payment of income tax and social contribution | -52,352 | -71,152 | -741,543 | -1,150,712 | | Revenue of remuneration for investments in equity interests | 413,675 | 156,847 | 426,826 | 158,371 | | Supplementary pension payment | -3,717 | -2,870 | -75,506 | -56,688 | | Payment of legal contingencies | -213,681 | -463,992 | -675,483 | -471,265 | | Bonds and related deposits | -48,670 | -54,066 | -69,830 | -52,570 | | Net cash provided by (used in) operating activities | 2,535,058 | -949,345 | 3,131,518 | -117,531 | | Financing activities | | | | | | Loans and financing obtained and debentures obtained | 0 | 5,193,319 | 0 | 6,119,567 | | Payment of loans and financing and debentures - principal | -1,059,032 | -5,863,325 | -1,530,616 | -6,321,568 | | Payment of remuneration to shareholders | -2,281,924 | 0 | -2,312,224 | 0 | | Advanced receivalbe for future capital increase | 0 | 0 | 0 | 0 | | Payment of finance leases | 0 | -3,301 | -161,148 | -139,451 | | Others | 0 | 0 | -3,907 | 5,393 | | Net cash provided by (used in) financing activities | -3,340,955 | -673,308 | -4,007,895 | -336,060 | | Investing activities | | | | | | Lending and financing | 0 | 0 | 0 | 0 | | Loans and financing receivables | 1,555,558 | 1,819,051 | 1,213,310 | 855,972 | | Acquisition of fixed assets | 0 | 0 | -279,298 | -178,009 | | Acquisition of intangible assets | -9,139 | 0 | -27,664 | -15,611 | | Acquisition / capital investment in equity | 0 | 0 | -2,244 | -25,250 | | Advance concession for future capital increase | -759,218 | -230,055 | 0 | -6,000 | | Investment sale in shareholdings | 0 | 17,512 | 1,687 | 17,512 | | Net cash flow in the acquisition of investees | 0 | 0 | 0 | 0 | | Others | 0 | 0 | -24,073 | -18,807 | | Net cash provided by (used in) investing activities from continuing operations | 787,202 | 1,606,508 | 881,719 | 629,807 | | Increase (decrease) in cash and cash equivalents | -18,696 | -16,145 | 5,343 | 176,216 | | Cash and cash equivalents at the beginning of the year for continued operations | 21,630 | 18,202 | 286,607 | 335,307 | | Cash and cash equivalents at year-end of continuing operations | 2,934 | 2,057 | 291,950 | 511,523 | | | -18,696 | -16,145 | 5,343 | 176,216 |
| MARKETLETTER **1Q2021**<br><br>*Disclaimer*: This material contains calculations that may not produce an accurate sum or result due to rounding performed. |
| --- |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: May 18, 2021
| CENTRAIS ELÉTRICAS BRASILEIRAS S.A. - ELETROBRÁS | |
|---|---|
| By: | /S/ Elvira<br> Baracuhy Cavalcanti Presta<br><br><br>* * * |
| Elvira Baracuhy Cavalcanti Presta<br><br> <br>CFO and Investor Relations Officer |
FORWARD-LOOKING STATEMENTS
This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates offuture economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.