Centrais Elétricas de Santa Catarina (CLSC4) Q4 2023 earnings summary

Executive summary

• FY23 net operating revenue was R$10,402.6M, up 5.1% YoY; reported EBITDA rose 5.6% to R$1,139.7M and net profit rose 3.0% to R$557.0M.

• Excluding construction revenue, FY23 net operating revenue was R$9,405.3M, up 5.9%; adjusted EBITDA reached R$1,359.5M and adjusted net income R$702.1M.

• Q4 reported EBITDA fell 46.7% YoY to R$119.3M and net profit declined 13.9% to R$89.0M, pressured by higher provisions.

Financial highlights

• FY23 gross profit was R$1.658bn and EBIT R$825.1M; net financial expense widened to R$141.8M from R$82.7M, reflecting higher interest and monetary updates, lower investment income and taxes on financial income.

• Consolidated EBITDA margin was 10.8% reported and 12.1% excluding construction revenue; net margin was 5.3% and 5.9%, respectively.

• Operating cash flow was R$450.3M versus R$867.9M; investing outflow was R$1.010bn, financing inflow R$524.9M and year-end cash R$906.2M.

• Consolidated investment totaled R$1,317.1M in FY23, down 0.6% YoY; Q4 investment was R$395.1M, up 10.4%.

Outlook and guidance

• A R$4.5bn investment plan runs through 2026, including R$3.5bn for network capacity and expansion and R$1bn for strategic projects; R$3.5bn of projects were already underway.

• The 2024 consolidated investment budget is R$1.177bn, funded by R$1.021bn of own resources and R$156.2M of third-party resources.

• Strategic priorities for 2025–2035 include efficient distribution, selective investment, regulatory target performance, concession continuity and sustainable investment execution.

• 2024 plans include 9.5 MW of distributed solar projects at various stages; 10 MW of solar projects were under construction, with expected start-ups from Nov 2023 to Mar 2024.

• The 2024 plan includes targets to reduce water use, printing, disposable cups and administrative waste.