© Reuters.
By Leticia Fucuchima
SÃO PAULO (Reuters) – Renewable energy generator Auren closed 2022 with a historic achievement by resolving the legal imbroglio over the Três Irmãos hydroelectric plant, unlocking the receipt of an important figure so that the company can pursue more opportunities for organic growth , acquisitions and generate more returns for shareholders, executives told Reuters.
The company controlled by the Votorantim group and CPP Investments disclosed on Thursday a net profit of 2.45 billion reais in the fourth quarter, against 42.0 million reais registered a year earlier. In the consolidated 2022, profit totaled 2.67 billion, compared to 420.3 million in 2021.
Quarterly and annual profits were boosted by accounting for the indemnity referring to Três Irmãos, after the company closed, in December last year, an agreement with the Union to end a dispute that had been going on for 10 years. In corrected values, the compensation amounts to 4.2 billion reais and will be paid in seven years, with the first installment scheduled for October.
With the closure of this case, the company’s board of directors approved this Thursday the payment of 1.5 billion reais in extraordinary dividends to shareholders.
The resolution of the Três Irmãos pending issue adds to the positive operating performance of the company, which recorded increases in hydroelectric and wind generation in the last quarter of 2022, leading to a 51.3% increase in earnings before interest, taxes, depreciation and amortization (Ebitda), to 520.8 million reais in the quarter.
With low leverage, 1.4 times net debt over Ebitda, the company continues to seek growth through acquisitions and the development of new projects from scratch, Auren CEO Fabio Zanfelice told Reuters.
Zanfelice did not comment on specific acquisition opportunities, but stated that the company is not interested in small assets, such as wind projects below 150 megawatts (MW) of power.
“Scale, asset synergy, is important for growth”, adding that the company also has no interest in buying minority shares.
In the case of new own generation projects, he recalled that the company is in the process of structuring large-scale solar plants, Sol do Piauí and Sol de Jaíba. In his evaluation, the current scenario presents more risks for those who want to launch projects from scratch, given the horizon of low long-term energy prices and rising costs associated with the construction and development of projects.
ENTRY IN TRANSMISSION
Currently focused on the renewable generation segment, Auren has been studying a possible entry into the energy transmission segment for years, and believes that the scenario for this year presents favorable conditions for such a movement this year.
According to Zanfelice, this year’s competitions will offer large transmission projects, which provide scale to operators. And, as these are projects with significant investments, the expectation is that fewer agents will have the strength to compete in them, potentially reducing competition and the discounts offered.
“In fact, this is an interesting moment for anyone thinking of going into transmission… We didn’t close any strategy (to participate in the auction), but I can say that the conditions of this auction are in line with what we imagined going into transmission, the themes of (rates of) returns and scale.”
Scheduled for June 30, the first energy transmission auction of 2023 will offer the market nine lots, totaling 6.1 thousand kilometers of new transmission lines and estimated investments of 15.8 billion reais.