Centrais Elétricas de Santa Catarina (CLSC4) Q1 2023 earnings summary

Executive summary

• Q1 2023 consolidated net operating income was R$2.607B, down 2.62% YoY; net income was R$218.1M, down 16.08%.

• EBITDA was R$426.1M, down 6.74% YoY; margin was 16.35% versus 17.07%.

• Billed energy rose 2.1% to 7,323 GWh, and investments increased 11.3% to R$306.5M.

Financial highlights

• Gross operating income fell 10.0% to R$4.003B; net operating revenue excluding construction declined 3.7% to R$2.332B.

• Consolidated operating costs and expenses decreased 1.4% to R$2.271B; electricity costs fell 3.8% to R$1.621B.

• Financial result was negative R$52.9M versus negative R$19.5M; higher financing costs contributed to weaker earnings.

• Net margin was 8.4% versus 9.7%; EBIT declined 9.5% to R$352.5M.

Outlook and guidance

• Distributed generation plans provide for up to 14.6 MW of solar projects in 2022–23; 12 MW were under implementation and 2.6 MW remained to be prospected.

• Solar execution is linked to the regulatory window under Law 14,300/22; hydro expansions and reactivations remained subject to regulatory, environmental or construction steps.

• Strategic priorities for 2025–2035 include efficient distribution, selective investments, service quality and meeting regulatory targets.