Copel’s CEO Projects High Leverage and Priority in Seeking Investment Opportunities

Daniel Slaviero, interviewed on the program “Entre Reis e CEOs”, presented by Tiago Reis, from Suno, highlighted the company’s growth opportunity

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In adjusted terms, the Brazilian company had a profit of R$ 132.2 million in the period, a decrease of 29.4% in the annual comparison, but above the projected.

The factors behind the good results recorded in recent years by Copel  were one of the subjects addressed by Daniel Slaviero, the company’s CEO, in the first interview of the new InfoMoney program, “Between Reis and CEOs”, presented by Tiago Reis, founder and CEO of Suno Research.

The company’s migration to level 2 of B3, in December last year, is considered by Slaviero as one of the growth drivers of the state-owned energy company from Paraná. The numbers are reflected in the company’s good performance on the Stock Exchange, whose CPLE6 share is up around 23% year-to-date. In the first quarter of 2022, even with a drop in profit, analysts highlighted that both the distribution and generation and transmission (GT) segments presented good numbers for the period.

“It’s an even greater guarantee of governance,” he says, pushing away “populist actions” in energy prices. “This is outside the risk map of any Copel investor”.

The executive commented that the company also had a strong cost reduction in the period. In personnel alone, there was a decrease of more than 2 thousand employees. The company had the highest earnings before interest, taxes, depreciation and amortization (EBITDA) in history last year: R$ 8.4 billion.

dividend policy
Regarding the dividend policy, established in the management of Daniel Slaviero, the proposal is that “the investor can have a perspective” of earnings.

The executive explained that if leverage is below 1.5 times, the payout is 65%, or the proportion of dividend payments in relation to net income; if you have between 1.5 times and 2.7 times, 50% payout applies; and above 2.7 times, 25% payout is made. In recent years, Copel has made a payout of 65%.

“But our goal is not to continue with such low leverage. Results will continue to grow, but we need to improve our capital structure”, explains Slaviero.

“Our leverage is at 1.1x and it’s not an adequate capital structure. It is in our closest mid- and long-term target of 2.5x and paying 50% dividends,” he highlights.

Participation in the next broadcast auction
According to Daniel Slaviero, the “priority is to look for investment opportunities, whether in M&A [mergers and acquisitions] or in auctions”.

By the way, regarding the auction, the company participates in the transmission event, scheduled by Aneel for the end of the month. Copel partnered with Engie to compete for available lots. “We intend to be competitive”, he highlighted.

The company’s CEO also said that Copel Distribuiçao’s (regulated) wire market grew by 5.8% in the first quarter, above the national average.

“This facilitates large investments in technology. Our asset base has significant growth,” he commented. “In a distributor, the key word is to have cost and investment control to accompany growth”.

The company will focus in the coming years on wind and solar energy, which currently occupies 13% of the company’s generation portfolio. But Slaviero says that the company intends to soon reach the 25% index in these energy matrices.

electrobras
Daniel Slaviero commented on the privatization of Eletrobras (ELET3;ELET6) and stated that it will have a “very large impact” on the sector. The company will not participate in the state-owned company’s share offering: “It doesn’t make sense. Our investments are not financial, but in business”.

Copel is an asset partner of Furnas and Eletrosul, two subsidiaries of Eletrobras. The executive praised Eletrobras’ privatization model.

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“When the State releases the company to follow the path of competing in the market and maintains a stake, it will capture all its appreciation, it will participate in the dividends and it will have a seat on the board”, he said.