1Q16 Handout 00_Master.xlsx

1Q16

Content

Main Highlights ……………………………………………………….…………………………………………… - 2 -

Consolidated Financial Performance

EBITDA ………………………………………………………………………………………………………………………………

- 3 -

Profit & Loss below EBITDA ………………………………………………………………………………………………

- 4 -

Capex & Net Investments …………………………………………………………………………………………………

- 5 -

Cash Flow …………………………………………………………………………………………………………………………

- 6 -

Statement of Consolidated Financial Position ……………………………………………………………………

- 7 -

Net Debt ……………………………………………………………………………………………………………………………

- 8 -

Business Areas

Overview: Iberian Electricity and Gas Markets ………………………………………………………………… - 10 -

  1. LT Contracted Generation in the Iberian Market …………………………………………………………… - 11 -

  2. Liberalised Activities in the Iberian Market …………………………………………………………………… - 12 -

Financial Results

Conference call and webcast

Date: Thursday, 5th May, 2016, 08:30 am (UK/Portuguese time)

Webcast: www.edp.pt

Lisbon, May 4th 2016

3. EDP Renováveis …………………………………………………………………………………………………………… 4. Regulated Networks in Iberia ………………………………………………………………….…………………… 5. Brazil - EDP Brasil ……………………………………………………………………………………………….…………

Income Statements & Annex

Income Statements by Business Area ………………………………………………………………………………… Quarterly Income Statement …………………………………………………………………………………………… Generation Assets: Installed Capacity and Generation ………………………………………………………

Regulated Networks: Volumes Distributed, Clients and Networks …………………………………… Sustainability Performance ……………………………………………………………………………….……………… EDP Share Performance ………………………………………………………………………………………………..……

- 15 -

- 19 -

- 22 -

- 26 -

- 27 -

- 28 -

- 29 -

- 30 -

- 31 -

The financial statements presented in this document are non-audited. Pursuant to the adoption of IFRIC21, 1Q15 financial statements here presented were restated for comparison purposes.

EDP - Energias de Portugal, S.A. Headquarters: Av. 24 de Julho, 121249 - 300 Lisboa, Portugal The source from all operational data is EDP.

Income Statement (€ m)

1Q16

1Q15

∆ %

∆ Abs.

Main Highlights

Gross Profit

Supplies and services

Personnel costs, employees benefits Other operating costs (net)

Net Operating costs (1)

EBITDA

Provisions

Amortisation and impairment (2)

EBIT

Financial Results

Share of net profit joint ventures/associates

Pre-tax profit

Income taxes

Extraord. contribution energy sector

Net profit for the period

Net Profit

Non-controlling Interest

1,547

205

161

51

417

1,130

3

366

760

(180)

(8)

573

152

59

362

263

100

1,423

207

161

67

435

988

1

337

651

(208)

(2)

441

82

61

298

237

62

9%

-1%

0%

-25%

-4%

14%

526%

9%

17%

13%

-362%

30%

84%

-3%

22%

11%

62%

+124

-2

+1

-17

-18

+141

+3

+29

+109

+28

-6

+131

+69

-2

+64

+26

+38

Note: Pursuant to the adoption of IFRIC21, 1Q15 financial statements here presented were restated for comparison purposes.

Consolidated EBITDA rose by 14% YoY, to €1,130m in 1Q16, reflecting portfolio expansion (+9%) and improving weather conditions in Iberia and Brazil. Note that 1Q EBITDA includes: (i) In 2015, +€78m derived from the sale of gas assets in Spain and (ii) in 2016, €61m gain booked in the sale of Pantanal mini-hydro plant, in Brazil. Excluding these impacts, adjusted EBITDA rose by 17% YoY, to €1,069m in 1Q16, capped by an unfavourable ForEx impact (-€61m or -5% of EBITDA, mainly due to BRL 25% depreciation vs. Euro).

Installed capacity at EDP group rose 9% YoY, to 24.5GW, on back of: (i) +428MW of hydro capacity in Portugal, following the start up of operations at Ribeiradio/Ermida (82MW in 2Q15), Salamonde 2 (207MW in 1Q16) and Baixo Sabor (172MW, mostly in 1Q16); (ii) +589MW of wind capacity (mostly in US and Brazil); (iii) change in consolidation perimeter (+1,333MW, following full acquisition of Pecém I and full consolidation of assets derived from ENEOP, in Portugal) ; (iv) shutdown Soto 2 coal plant, in Spain (239MW).

Key Operational Data

1Q16

1Q15

∆ %

∆ Abs.

In Iberia, adjusted EBITDA advanced 17% YoY, propelled by new capacity on stream, strong hydro resources and price volatility, particularly when compared to 2015's poor hydro and price context. EDPR's 29% rise in EBITDA, to €379m, was prompted by higher average capacity on stream (+15% YoY) and stronger wind resources (avg. load factor was 7% higher than the avg. scenario, versus -3% in the 1Q15). EDP Brasil's ('EDPB') contribution to recurrent EBITDA was 7% lower YoY entirely due to adverse ForEx impact (-€63m). Excluding ForEx impact, EBITDA rose by 44%, propelled by the full consolidation (as of May-15) of the good-performer Pecém I plant (+€62m ex-Forex). The impact of the hydro deficit in 1Q16 was negligible reflecting improving reservoir levels and lower demand.

Key Financial Data (€ m)

1Q16

1Q15

∆ %

∆ Abs.

Employees

11,939

11,632

2.6%

+308

Installed capacity (MW)

24,493

22,430

9.2%

+2,062

FFO (Funds from operations)

741

621

19%

+120

Capex

233

362

-36%

-129

Maintenance

106

102

4%

+4

Expansion

127

260

-51%

-133

Net investments

(11)

377

-

-388

Equity book value

8,950

8,670

3%

+280

Net debt

17,002

17,380

-2%

-378

Regulatory receivables

2,568

2,477

4%

+91

Net debt/EBITDA (x)(4)

4.2x

4.4x

-6%

-0.2x

Adjusted net debt (3)/EBITDA (x)

3.6x

3.8x

-7%

-0.2x

EDP Group operating costs were stable at €367m in 1Q16 driven by: (i) 2% YoY fall in Iberia, mainly impacted by headcount reduction (-1%); (ii) 12% YoY increase at EDPR level, mainly reflecting portfolio expansion (+15%); (iii) 11% YoY fall in Brazil, reflecting BRL depreciation vs. Euro and tight cost control on one hand; and the full consolidation of Pecém I, on the other hand. Other net operating costs/(revenues) fell from €67m in 1Q15 to €51m in 1Q16, mostly supported by lower one-off gains YoY (in 2015, on the sale of gas assets in Spain; in 2016, on the sale of Pantanal in Brazil). EDP group's costs with clawback, social tariff and extraordinary energy tax in Portugal, and with generation taxes and other levies in Spain amounted to €124m in 1Q16.

Key Balance Sheet Data (€ m)

Mar-16

Dec-15

∆ %

∆ Abs.

EBIT rose 17%, to €760m in 1Q16, reflecting EBITDA growth and higher depreciation, mainly backed by portfolio expansion. Net financial costs worth €180m in 1Q16, down from €208m in 1Q15, reflecting a decline in the avg. cost of debt from 4.7% in 1Q15 to 4.5% in 1Q16 and €11m gain booked on the sale of our equity stake in Tejo Energia. Non-controlling interests reached €100m in the 1Q16 (+€38m YoY), reflecting the share of minorities in the gain booked on the sale of Pantanal at EDP Brasil's level (€23m) and higher net profit at the level of EDPR. Overall, net profit attributable to EDP shareholders amounted to €263m in 1Q16 (+11% YoY). Excluding one-off gains booked in 1Q15 (+€13m; details on page 4) and 1Q16 (-

€24m, details on page 4), adjusted net profit rose 28% YoY, to €287m in 1Q16.

Net debt fell from €17.4bn in Dec-15 to €17bn in Mar-16, mainly supported by proceeds from asset rotation deals signed with Axium in Oct-15 and from institutional partnership structure signed in Nov-15. Total cash and available liquidity facilities amounted to €5.4bn by Mar-16. This liquidity position allows EDP to cover its refinancing needs beyond 2017.

On April 19th, EDP shareholders approved the 2015 dividend payment amounting to €676m (€0.185/share), to be paid on

(1) Net Operating Costs = Operating Costs (Supplies and services + Personnel costs + Costs with social benefits) + Other operating costs (net); (2) Depreciation and amortisation expense net of compensation for depreciation

and amortisation of subsidised assets; (3) Net of regulatory receivables. - 2 -

EBITDA Breakdown

EBITDA (€ m)

1Q16

1Q15

∆ %

∆ Abs.

1Q15

2Q15

3Q15

4Q15

1Q16

2Q16

3Q16

4Q16

1Q16 YoY

∆ %

∆ Abs.

1Q16 QoQ

∆ %

∆ Abs.

LT Contracted Generation Liberalised Activities Iberia

133

205

153

102

-13%

101%

-20

+103

153

102

169

81

144

93

117

88

133

205

-13%

101%

-20

103

14%

132%

16

116

Regulated Networks Iberia

234

324 -28%

-90

324

245

242

221

234

-28%

-90 6% 14

Wind & Solar Power Brazil

379

185

295

129

29%

43%

+84

+56

295

129

253

372

235

154

360

202

379

185

29% 84

43% 56

5%

-8%

19

-17

Other

(6)

(15)

58% +8

(15)

24 (7)

(55)

(6)

58% 8

89% 49

Consolidated

1,130

988

14%

+141

988

1,143

860

933

1,130 14%

141

21%

197

Consolidated EBITDA amounted to €1,130m in the 1Q16, 14% higher YoY, including the following one-offs: (i) in the 1Q15, +€78m derived from the sale of gas assets in Spain, and (ii) in the 1Q16,

+€61m in the wake of the sale of the Pantanal mini-hydros in Brazil. Excluding these impacts, adjusted EBITDA totalled €1,068m in the 1Q16 (+19% YoY), impacted by stronger hydro production (hydro resources were 45% above average year in Portugal) and higher results with energy management in the liberalised business in Iberia and by the impact of higher installed capacity and better wind resources YoY at EDPR level (avg. load factor was 7% higher than the P50 scenario in the 1Q16, versus -3% in the 1Q15). ForEx had a 5% negative impact on EBITDA (-€61m), mostly due to the average BRL depreciation (-25%) vs. Euro.

LONG TERM CONTRACTED GENERATION IN IBERIA (12% of EBITDA) - EBITDA fell by 13% (-€20m

YoY), to €133m in 1Q16, reflecting the transfer of 7 hydro plants to our liberalised activities following the termination of respective PPAs (1Q15 gross profit: €19m). These plants have a total installed capacity of 627MW and an annual production 1.7TWh (on an average hydro year).

LIBERALISED ACTIVITIES IN IBERIA (18% of EBITDA) - was €103m higher YoY, at €205m in 1Q16,

backed by a cheaper average generation cost, prompted by a sharp recovery in hydro resources and production (62% weight in generation mix in 1Q16 vs. 40% in 1Q15); and by higher results with energy management in the wake of low-price context and high price volatility during 1Q16. Note that, as a result of the end of PPAs at 7 hydro plants in Dec-15, 627MW of hydro capacity was transferred from the LT Contracted portfolio (0.5TWh in 1Q15) to liberalised generation portfolio, posting a €22m of gross profit in 1Q16.

REGULATED NETWORKS IN IBERIA (21% of EBITDA) - EBITDA fell 28% YoY, to €234m in the 1Q16,

materially impacted by a one-off in the 1Q15, namely the sale of some gas assets in Spain to Redexis (€78m). Adjusted by this effect EBITDA declined by 5% YoY (-€12m), reflecting lower non-regulated revenues in gas distribution in Spain and a €7m recovery of previous years' regulated revenues in electricity distribution in Spain in the 1Q15.

WIND & SOLAR POWER (33% of EBITDA) - EDPR's EBITDA went up by 29% YoY (+€84m) to €379m in the 1Q16, reflecting: i) higher production (+30% YoY) supported by an increase of 15% on the avg. capacity on stream and stronger wind resources (+4pp YoY on load factor, to 38% in 1Q16); and ii) income from new tax equity deals during the period.

BRAZIL (16% of EBITDA) - EDPB's contribution to consolidated EBITDA was 43% higher YoY (+€56m), to

€185m in the 1Q16, including the adverse ForEx impact (-€63m, in the wake 25% depreciation of BRL vs. Euro) and the impact from the disposal of Pantanal mini-hydro plants (+€61m). Adjusted for the Pantanal one-off, local currency EBITDA rose 29% YoY, to R$536m in the 1Q16. Generation and Supply EBITDA went up 99% YoY (+R$210m), reflecting the full consolidation of Pecém since May-15 (+R$201m) and better performance at our hydro plants (+R$43m YoY) due to a negligible impact of the hydro deficit vs. a greater impact in the 1Q15 (GSF at 88% in 1Q16 vs. 79% in 1Q15 and avg. PLD of R$35/MWh in 1Q16 vs. R$388/MWh in 1Q15). EBITDA from distribution fell by R$95m to R$137m in the 1Q16, impacted by lower demand, overcontracted volumes at Bandeirante, and an abnormal positive impact from tariff increases in the 1Q15.

Profit & Loss Items below EBITDA

Profit & Loss Items below EBITDA (€ m)

1Q16

1Q15

∆ %

∆ Abs.

1Q16

2Q16

3Q16

4Q16

1Q16 QoQ

∆ % ∆ Abs.

EBITDA

1,130

988

14%

141

1,130

21%

197

Provisions

3

1

526%

3

3

-53%

-4

Amortisation and impairment

366

337

9%

29

366

-10%

-40

EBIT

760

651

17%

109

760

46%

241

Net financial interest

(202)

(238)

15%

37

(202)

-8%

18

Capitalized financial costs

14

32

-57%

-18

14

-24%

-4

Net foreign exchange differences and derivates

6

(40)

-

46

6

-44%

-5

Investment income

0

0

88%

0

0

-

-0

Unwinding w/ pension & medical care responsibilities

(10)

(11)

14%

2

(10)

-7%

1

Capital Gains/(Losses)

13

-

-

13

13

-1161%

15

Other Financials

(2)

50

-

-51

(2)

-64%

3

Financial Results

(180)

(208)

13%

28

(180)

-13%

27

Share of net profit in joint ventures and associates

(8)

(2)

-362%

-6

(8)

-682%

-9

Pre-tax Profit

573

441

30%

131

573

82%

258

Income Taxes

152

82

84%

69

152

262%

110

Effective Tax rate (%)

26%

19%

-

7.8 pp

26%

0.1 pp

Extraordinary Contribution for the Energy Sector

59

61

-3%

-2

59

4840%

58

EDP Renováveis

60

39

55%

21

60

140%

35

Energias do Brasil

40

18

121%

22

40

-27%

-15

Other

(0)

5

-

-5

(0)

100%

-0

Non-controlling Interests

100

62

62%

38

100

25%

20

Net Profit Attributable to Shareholders of EDP

263

237

11%

26

263

49%

86

Amortisation and impairment (net of compensation from depreciation and amortisation of Income taxes amounted to €152m in the 1Q16, representing an effective tax rate of 26% (vs. 19% in the subsidised assets) rose 9% YoY to €366m in the 1Q16, reflecting: (i) higher depreciation charges at 1Q15). The gain booked in the 1Q15 on the sale of gas assets in Spain had no impact on the taxable income EDPR (+€23m YoY), derived from the new capacity installed over the last 12 months; (ii) perimeter, thus impacting negatively the YoY comparison. Additionally, the 1Q16 results reflects the full-year

depreciation charges of Pecém following consolidation (+€9m).

Net financial costs decreased 13% YoY to €180m in the 1Q16. Net interest expenses decreased

impact from EDP's share on the extraordinary contribution (0.85% on net assets) applied to the energy sector in Portugal (€59m in the 1Q16).

15% YoY due to lower avg. cost of debt of 4.5% (vs. 4.7% in the 1Q15). Net ForEx differences and Non-controlling interests reached €100m in the 1Q16 (+€38m YoY), reflecting the capital gain booked on the derivatives totalled €6m in 2015 (+€46m YoY in the 1Q16, since there was a negative impact sale of Pantanal at EDP Brasil's level (€23m impact at non-controlling interests' level), as well as the share of related to mark-to-market on the appreciation of the USD against the EUR in the 1Q15). Capitalised minorities on higher net profit for the share capital not held by EDP at EDP Brasil's and EDPR.

financial costs fell €18m YoY, to €14m in the 1Q16, due to the commissioning of new plants in

Portugal. Capital gains reached €13m, mostly related with the sale of our equity stake in Tejo Overall, net profit attributable to EDP shareholders was 11% higher YoY, at €263m in the 1Q16, impacted by Energia (+€11m). Other financials (-€2m in the 1Q16, -€51m YoY) considers lower gains with the higher operational performance. Excluding non-recurrent events(1), adjusted net profit in the 1Q16 amounted

tariff securitisation (-€26m YoY).

to €287m (+28% YoY vs. €224m in the 1Q15).

Share of net profit in joint ventures and associates amounted to -€8m in the 1Q16 (-€6m YoY), (1) Non-recurrent events: (i) in the 1Q15 (+€13m), gains with the sale of assets in Murcia (+€74m) and on the mostly impacted by lower results from EDPR's equity stake in some wind parks in the US. The asset extraordinary energy tax (-€61m); (ii) in 1Q16 (-€24m), gains arising from on the sale of Pantanal in Brazil split of ENEOP since Sep-15 (+€7M in the 1Q15) and the consolidation of Pecém I since May-15 (- (+€24m), on the capital gain from of the sale of Tejo Energia stake (+€11m) and the extraordinary energy tax

€8m in the 1Q15) produce a neutral effect.

(-€59m).

EDP - Energias de Portugal SA published this content on 04 May 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 04 May 2016 16:53:01 UTC.

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