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MPX Corporate Presentation (September)

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  • 1. September, 2013

2. The material that follows is a presentation of general background information about MPX Energia S.A. and its subsidiaries (collectively, MPX or the Company) as of the date of the presentation. It is information in summary form and does not purport to be complete. No representation or warranty, express or implied, is made concerning, and no reliance should be placed on, the accuracy, fairness, or completeness of this information. This presentation may contain certain forward-looking statements and information relating to MPX that reflect the current views and/or expectations of the Company and its management with respect to its performance, business and future events. Forward looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain words like may, plan, believe, anticipate, expect, envisages, will likely result, or any other words or phrases of similar meaning. Such statements are subject to a number of risks, uncertainties and assumptions. We caution you that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in this presentation. In no event, neither the Company, any of its affiliates, directors, officers, agents or employees nor any of the placement agents shall be liable before any third party (including investors) for any investment or business decision made or action taken in reliance on the information and statements contained in this presentation or for any consequential, special or similar damages. This presentation does not constitute an offer, or invitation, or solicitation of an offer, to subscribe for or purchase any securities. Neither this presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever. Recipients of this presentation are not to construe the contents of this summary as legal, tax or investment advice and recipients should consult their own advisors in this regard. The market and competitive position data, including market forecasts, used throughout this presentation were obtained from internal surveys, market research, publicly available information and industry publications. Although we have no reason to believe that any of this information or these reports are inaccurate in any material respect, we have not independently verified the competitive position, market share, market size, market growth or other data provided by third parties or by industry or other publications. MPX, the placement agents and the underwriters do not make any representation as to the accuracy of such information. This presentation and its contents are proprietary information and may not be reproduced or otherwise disseminated in whole or in part without MPXs prior written consent. Disclaimer 2 3. Exposure to Brazils Growing Energy Demand 1 4. Brazil is highly dependent on hydro generation Newer hydropower predominantly run-of-the-river, leading to faster depletion of reservoirs 4 Dry season Southeast Reservoirs (~70% of total storage capacity) Source: ANEEL Brazils Generation Capacity: 131 GW (Breakdown by source - 2012) 68.7% 9.9% 2.2% 1.6% 1.6% 16.0% Hydro Gas Coal Nuclear Wind Others 67% 56% 76% 29% 38% 46% 54% 62% 0% 25% 50% 75% 100% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Average 2007-2011 2012 2013 5. Water storage capacity has stagnated, leading to decreased system autonomy 5Source: ONS Storage Capacity (Southeast = 70% total capacity) Autonomy = Storage Capacity / (Load Thermal Generation) Storage capacity stagnation Current reservoir autonomy ~ 5 months New thermal plants are necessary to guarantee a reliable power supply GW/month 6. 65.2 86.5 64.7 78.1 60,0 65,0 70,0 75,0 80,0 85,0 90,0 2013 2014 2015 2016 2017 2018 2019 2020 GWavg ENERGY DEMAND PHYSICAL GUARANTEE (with signed PPAs) Sources: ONS, ANEEL 6 2016-on: new generation required ~8 GWavg required until 2020 Economic growth will boost power demand leading to a supply deficit in 2016 Default and delays in greenfield projects might further increase need for new capacity 7. 2 MPX at a Glance 8. Relevant Sector Opportunities Company Operating since 2012 Qualified and committed Management Robust portfolio of projects Demand: significant growth in energy consumption expected in the coming years Supply: risk of delays in start-up of relevant projects Energy Matrix: concentrated in hydropower Team: prepared and aligned with the interests of shareholders Management: highly-qualified and aligned with the companys perpetuation Thermal projects: to meet the needs of Brazil Diversified company: ancillary business in power Generation and natural Gas E&P. Steady revenue stream: Tax-advantaged thermal power plants coming on-line in 2012/13 Onshore gas assets: High operating margins and fast payback on investment 8 Steady cash flows and differentiated competitive positioning A unique investment case in Brazils energy market 9. 9Note : Annual Payments are indexed to the IPCA inflation index (Figures as of November, 2012) Capacity (100% of project) 1,756 MW Annual Capacity Payments (adjusted for ownership %) R$ 878.2 million Energy Source Coal Coal Gas OCGT Ownership after transaction MPX 50%/EDP 50% 100% MPX 70%/Petra 30% Total Capacity (MW) 720 360 676 Capacity Payments (R$ MM/year) 567.2 299.8 421.2 Start up May/13 Feb/13 Apr/13 Operating power plants will generate annual revenues of at least R$ 878 million MPX currently operates over 1.7 GW PECM I PARNABA IITAQUI 10. 10 Minimum annual revenues of R$ 620 million will come from assets under construction Additional 1.1 GW will come on stream in 2013 10 PECM II2 PARNABA III Nova Vencia PARNABA II Energy Source Coal Gas CCGT Gas OCGT Gas MPX Stake after transaction 100% 100% MPX 70%/Petra 30% MPX 70%/Petra 30% Total Capacity (MW) 365 517 176 56 Capacity Payments (R$ MM/year) 269.2 353.1 93.5 54.0 Start up 3Q13 4Q13 4Q13 4Q13 PARNABA IV Free Market Note : 1 - Annual Payments are indexed to the IPCA inflation index (Figures as of November, 2012. Parnaba IV as of January, 2013 ). 2 - Pecm II was synchronized to Brazils National Interconnected System on June 2, electrical tests required by ONS were completed on June 29 and on July 2 the unit demonstrated full design capacity. Declaration for commercial operation (DCO) is now conditioned to the availability of the new 500kV substation/transmission line under construction by Chesf/TDG. Capacity (100% of projetct) 1,114 MW Annual Capacity Payments1 (adjusted for ownership %) R$ 619.6 million 11. 11 COAL Au Coal: 2.1 GW Sul + Seival: 1.3 GW - Integrated to the Seival Mine: Operating License granted and 152 MM tons in proven reserves WIND Ventos Wind: up to 1.2 GW - High-quality greenfield assets in one of Brazils best wind resource areas - Capacity: up to 600 MW (321 MW with environmental license) - Estimated Load Factor: 48% (P50) - Grid connection 30 km from project location - All land rights secured - Option to acquire projects expansion (+600 MW) GAS Parnaba Expansion: 2.3 GW - Key competitive advantage through the integration of natural gas production and power generation in a tax-advantaged region Au CCGT: 3.3 GW - Located 150km from natural gas accumulations discovered in the Campos Basin at a port with a license to build a regasification terminal Maranho Rio de Janeiro Rio de Janeiro Rio Grande do Sul Rio Grande do Norte MPX holds a robust portfolio of greenfield assets Over 9 GW in licensed base-load and wind power generation projects 12. Natural Gas E&P 3 13. Integrated onshore gas fields supply MPX power plants in the Parnaba Basin Strong competitive position in gas-fired generation 13 MA OGX Maranho Blocks Total area: 24,500 km FAZENDA CHICOTE GAVIO BRANCO GAVIO REAL Parnaba Power Generation Discovery Fields SANTA ISABEL SO RAIMUNDO MA 33.3% stake in OGX Maranho, owner and operator of 8 onshore gas fields 3 rigs operating simultaneously: 2 focused on exploration and 1 completion rig on the production development GAVIO REAL Beginning of commercial production in Jan/13 Current gas production: 4.1 million m3/day GAVIO BRANCO Declaration of commerciality presented to ANP Total estimated volume in place between 0.2 and 0.5 Tcf 14. With attractive opportunities to monetize new discoveries Unique competitive position in gas-fired generation Gas Field GTU Power Generation 14 EXPLORATION In 2Q13, 5 new wells drilled by OGX, 3 of them are wildcats*: Fazenda Alencar prospect (OGX-112): 22 meters of net pay of gas discovered Fazenda Sossego prospect (OGX-114): 14 meters of net pay of gas discovered Fazenda Havana prospect (OGX-115): In progress Additionally, 2 wildcat adjacent wells commenced to be drilled: SE Bom Jesus (OGX-111), adjacent to Bom Jesus (OGX-88): 20 meters of net pay of gas discovered NW Fazenda Chicote (OGX-113), adjacent to Fazenda Chicote (OGX-107): Gas shows were found *A wildcat well is the first well drilled on a new prospect. 15. Financial Highlights 4 16. 16 Debt Consolidated gross debt profile (R$ million) 2,651 46% 3,082 54% Short Term Long Term 2,651 1,121 1,530 Project Holding Short Term Debt (R$ million) 100 350 Paid-off by capital increase Project debentures 1,080 LT debentures at holding Short Term Debt (2Q13): R$ 1,121.5 million at project level: R$ 845.2 million refer to outstanding bridge-loans to Parnaba I & II power plants to be paid-off with draw down from long-term financing. R$ 276.2 million refer to current portion of the project finance debts of Pecm II, Itaqui and Parnaba I MPX holding plans to eliminate outstanding intercompany loans with its subsidiaries through the issue of LT tax- advantaged infrastructure debentures at project level with subsequent use of funds to pay-off loans The remaining short-term debt balance a

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