ISA Cteep (TRPL4) Increases Dividend 148% in Q4; Studies the effects of extreme weather on transmission

SAO PAULO (Reuters) – Power transmitter ISA Cteep (TRPL4) ended 2023 with a strong increase in net profit and will focus on implementing its investment plan that will allocate 15 billion Brazilian reais in the coming years for new lines and substations, reinforcements and improvements, company executives told Reuters that the networks current.

The electricity company on Tuesday reported a net profit of R$900.6 million for the fourth quarter of 2023, 147.7% higher than recorded a year earlier, while Ebitda (English abbreviation for earnings before interest, taxes, depreciation and amortisation) rose 30.3%. To 826.7 million Brazilian reals.

In 2023, the result on the last line of the balance sheet increased by 107.3%, reaching R$1.94 billion, while EBITDA increased by 26.9%, reaching R$3.13 billion.

According to the company's CFO, Carissa Portela, the 2023 performance was driven by the entry into operation of new transportation projects, in addition to the effects of tariff adjustments and the return of compensation known by the abbreviation “RBSE.”

“We also maximized JCP (interest on shares) payments, which resulted in a significant reduction in corporate income tax, significantly improving net profit… We paid R$1.45 billion in JCP, double the previous year Almost,” the CEO explained. .

For 2024, the transmission company will focus on moving forward with the development of the projects it won in recent energy transmission competitions, with a total investment of about R$10 billion in the coming years, while carrying out reinforcements and improvements to its existing assets, especially in the São Paulo state grid. Which will require additional contributions of R$ 5 billion.

“Ensuring the appropriate progress of our new projects is a priority. At the same time, we will endeavor to work so that the company continues to grow, without losing discipline with leverage and without leaving aside the practice of paying interest.”

Regarding the two transmission auctions scheduled for 2024, he stated that the company will analyze opportunities, but will be responsible for not acquiring projects that could increase its influence to the point of jeopardizing the company's investment grade.

ISA Cteep was one of the major winners of competitions last year, winning three large projects, which are scheduled to be completed from 2026 onwards. The company's leverage, measured by net debt to EBITDA, ended 2023 at 2.39. Once.

“We don't see pressures (on leverage) for 2024… We've started investing aggressively in 2026 and 2027, but even then we expect it to remain at 3.5 times and 4 times, which we don't understand to be the issue,” the CFO said. .

Study on climate change

Shammas commented that ISA Cteep is conducting an analysis with a climate specialist company to verify the potential impacts on its transportation network of climate change and extreme events on the horizon from 2030 to 2050.

“We will now compare that with our network of assets and see if we have, in any case, these extreme events that exceed the design burden of these assets.”

He explained that among the potential problems that transmitters may face in the future are winds with speeds much higher than those supported by transmission towers and flooding of areas where substations are installed.

“Moreover, we will develop possible mitigation plans and discuss this with the regulator. All of this will find fertile ground,” Chammas said, recalling that the Enel agency recently opened a grant to evaluate the need for “regulatory intervention” to ensure the resilience of distribution and transportation networks in the face of extreme weather events.