Coelce profit hit by Brazil's energy crunch

Friday, July 25, 2014

Brazilian power distributor Coelce has posted a 64% year-on-year decline in second-quarter profit amid soaring wholesale energy prices.

Net income for the period fell to 27mn reais (US$12mn), reflecting a net margin of just 3%, Coelce said in a statement.

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Despite the dip, the Fortaleza-based firm ended Q2 with 3.56mn consumers, up 4% on the year-ago figure.

The volume of energy sold and transported by the utility climbed 2% to 2.66TWh.

Coelce's Q2 profit slide comes as Brazil's distributors rely on spot market thermopower purchases to make up for dwindling hydroelectric output.

According to Coelce director Erildo Pontes, the scenario has forced the utility to pay eight times more for wholesale energy.

Controlled by Spain's Endesa, Coelce serves 2.7mn consumers in Brazil's Ceará state.

BNamericas will host its fourth LatAm Power Generation Summit in Santiago, Chile, on August 13-14. Click here to download the agenda.