Profits of major utility company Eletrobras down in 2022

Eletrobras, Latin America’s largest electric utilities company, ended 2022 — the year of its privatization via major share offerings — with a net profit of BRL 3.6 billion (USD 685 million), down from BRL 5.2 billion in 2021, according to securities filings.

Last June, Eletrobras staged Brazil’s most extensive share offering in 12 years, diluting the federal government’s stake to around 40 percent and attracting investors who expect private management to bring more efficiency and better governance to the formerly state-controlled energy giant. 

In Q4 2022 alone, the company posted a net loss of BRL 479 million, reversing its net profit of BRL 610 million for the same period of 2021.

Net revenue totaled BRL 9 billion from October to December last year, down 14 percent compared to a year ago.

In a statement to the market, the company reported that its results were negatively affected in the last quarter, mainly due to the expense of a BRL 1.2 billion voluntary redundancy plan launched in December, as well as the constitution of billion-real provisions to protect against the potential default of its former concessionaire Amazonas Energia, which now pays the company for services, including energy supply.

Eletrobras also claims to have been affected by requirements of the Energy Development Account (CDE), which subsidizes programs to supply free energy to low-income families and projects to revitalize watersheds in the Legal Amazon region.

Utilities companies are known for being favorable dividend payers and having predictable revenue. But they are experiencing moments of volatility on the Brazilian stock exchange due to, among other factors, President Lula’s questioning of Eletrobras’s privatization model. 

At around 3 pm, the company’s ordinary shares were up just 0.3 percent, trading at BRL 31.93. Most analysts still recommend the company as a “buy” despite lower-than-expected results.

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