Copel posts 2004 earnings of US$137mn

Brazilian power company Copel posted net profits of 374mn reais (US$137mn) in 2004, up from 171mn reais the previous year, Copel said in a statement. Gross operational revenue rose to 4.61bn reais last year from 3.74bn reais in 2003, operating profits were 600mn reais, up from 301mn reais a year earlier and Ebitda was 910mn reais compared to 437mn reais the previous year. The company's revenues were spurred by a 1.4% increase in the amount of power sold to 17,669GWh and an average 14% rise in power rates from June 2004 as well as a reduction in discounts given to clients who paid their bill on time. The Paraná state-owned company's commercial and rural sales both rose 5.6% last year, while residential sales increased 1.4%. Industrial sales, which account for 37% of the total, fell 1.9% in 2004 as some large customers migrated to non-regulated contracts, Copel said. "The company's strategy to continue offering special services should reduce the number of clients leaving the company," a Copel spokesperson told BNamericas. Power sales are expected to rise 3% in 2005 and 3-5% annually in the following th3-4 years, the spokesperson said. In 2005, the company also hopes to increase revenue through its plan to keep reducing discounts for clients who pay on time, the official said. As part of this policy to reduce default, Copel has not passed on to customers the full impact of annual rate adjustments authorized by power regulator Aneel in the last two years. Default fell to 2.3% of sales revenue at the end of 2004 from 5.4% in June 2003, the company said. Copel CEO Rubens Ghilardi expects Aneel to authorize a 7-8% power rate increase in June this year, the spokesperson said. INVESTMENTS The company plans to invest 491mn reais in 2005, up from 442mn reais in 2004. "Copel will continue to invest heavily on its transmission and distribution network," the spokesperson said. In 2004, Copel invested 234mn reais in distribution, 88.6mn reais in transmission and 18.3mn reais in power generation. The company also invested 43.3mn reais in its telecommunications operations Copel Telecomunicações, while another 18mn reais were pumped into natural gas distributor Compagas, in which Copel has a 51% stake. In 2005, Copel plans to invest in the continued construction of three transmission lines and expansion and construction of 12 substations. In generation, the company plans to continue expanding its 4,550MW generation park of 18 power plants, all in the southern state of Paraná, where it produces and sells power. Among the plans are the continued development of the 240MW Santa Clara-Fundão hydroelectric complex and the conclusion of the automation and modernization of the Chaminé hydroelectric plant. Feasibility studies for four hydroelectric power plants with combined installed capacity of 893MW and feasibility and environmental impact studies for 152MW of small-scale hydroelectric projects are also on the cards. The four larger projects are short-listed to be included in the federal government's tender for future generation capacity to be held by the end of June. Copel plans to bid for these projects, the spokesperson said. To make the investment feasible, the company intends to sell by the end of April 400mn reais in local debt securities to pay down some US$150mn in eurobonds coming due at the beginning of May. "The reduction in financial expenses will give the company the stamina to carry out these investments," he said. Additionally, Copel continues to participate in a special commission set up to discuss a solution for the 480MW Araucária thermoelectric power plant controlled by US energy company El Paso that could result in Copel increasing its 20% stake in the project and El Paso relinquishing control. Copel has a transmission line network of 6,996km and distribution network of 165,576km serving 392 towns and some 3.18 million people in Paraná.