EDB H1 bottom line down 45% to US$57mn

Brazilian power group ( EDB) posted net profits of 125mn reais (US$57mn) in the first half of the year, down 45% from the same period of 2005, the company said in a statement. Gross operational revenue rose 2.4% to 2.99bn reais in 1H06, while Ebitda fell 14% to 445mn reais, the company said. The group's net revenue fell to 1.179mn reais from 1.181mn reais in the year-ago period. About 85% of the group's net revenue came from power distribution operations. The higher revenue came from a 3.9% increase in total power distributed by EDB's three power distribution units: Escelsa, Bandeirante and Enersul. The three companies together distributed 11.9GWh 1H06. Excluding the non-regulated market power that flowed through the companies' networks, EDB's power sales to end-users fell 7% to 7.5GWh as a result of industrial clients that opted to buy power on the non-regulated market. Power sold to industrial clients fell 31% to 2.2GWh, EDB said. A 51mn-real, one-time expense on voluntary retirement plans also reduced company net profits. Despite the increase in costs in the first half, the company aims to start saving on salaries from the second half of 2006 on after laying off 615 people. Power generation operations accounted for 5% of total revenues. Power produced, however, fell 6.5% in the first half of 2006 due to a drought which reduced the water and power generation capacity of the 902MW Lajeado hydro plant. The company's power generation subsidiary CESA sold power from the 29MW Santa Fé hydro project in Espírito Santo state at the government's power auction this year. CESA will now invest 105mn reais to build the project by end-2008. Power trading on the non-regulated market accounted for 10% of total net revenue. Enertrade, the power trading unit, sold 3.5GWh in the first half of 2006, up 10% from 3.2GWh in the same period of 2005. Enertrade sold more power because it increased its client base, the company said. EDB is the holding company for the Brazilian assets of Portugal's state power company EDP.