Light cuts Q3 losses

Rio de Janeiro city distributor Light cut third quarter net losses, posting 250mn reais (US$84.7mn) losses in 3Q03, 30.3% less than the 359mn reais loss in 3Q02, the company said in a statement. However, losses increased 34.9% to 547mn reais for the January-September period from 407mn reais in the same period 2002. Net operating revenues increased 9.8% to 857mn reais for the quarter compared to 3Q02. For the first nine months of 2003, the figure climbed 4.6% to 2.8bn reais from 2.78bn. Third quarter EBITDA totaled 87.7mn reais, up 14.6% from 76.5mn reais posted in 3Q02. EBITDA for the nine-month period fell 19.4% to 442mn reais from 548mn reais posted in 2002. Both quarterly and nine-month EBITDA were adjusted by the exclusion of provisions that do not have an immediate effect on cash flow, Light said. Sales volumes fell 6.5% to 13.8GWh in the same nine-month comparison. The decrease is attributed to the exit of large industrial consumers that have invested in self-generation. The company said that the reduction in loss in Q3 was obtained by controlling administrative costs and a fall in financial expenses. However, the results were weaker than what the market expected. Gustavo Gattass, an analyst from UBS Warburg, told BNamericas that he was surprised by the amount Light placed on its balance regarding losses from energy rationing. Losses from operational provisions totaled 194mn reais for Q3. Another concern for Gattass was the drop in sales volumes. "The fall in volumes is greater than what other distributors have reported. We don't know how long this will continue," he said. Light, owned by French energy company EDF, said it invested 65mn reais in the quarter to improve services and combat energy losses.