Corporate presentation
Transcript of Corporate presentation
1October 2008
081003
2
Disclaimer
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 MPX’s prior written consent.
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MPX Overview
AmapariEnergia
MPX Sul Porto do Açu
Pecém IEnergy
Trading Co
Castilla
Seival MineItaqui
51% MPX / 49% Eletronorte
100% 100%
50% MPX / 50% EdB
100%
100%
Power GenerationPower Generation Coal SupplyCoal SupplyPower TradingPower Trading
Eike Batista &Management
Free Float
75.9% 24.1%
Pecém II MPX Colombia
100%
70% MPX / 30% Copelmi
100%
Drilling campaign underway
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Investment Case
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Why MPX?
� Brazil and Chile need to increase installed capacity for electric energy generation
� Commodity risk in Brazilian free market can be eliminated through verticalization
of supply
� Thermal plants are needed to increase capacity and also reliability of Brazilian
energy matrix
� Delays in environmental licensing and lack of feasibility studies for new hydro projects
� Matrix is 85% Hydro: highly dependable on rainfall
� PPAs for thermal capacity in Brazilian regulated market and Chilean free market
allow full pass-trough of fuel costs, eliminating commodity risk
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MPX Today
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2011 2012
MPX Generation Ramp-Up (installed capacity MW)
Itaqui
Pecém I
Pecém II
Pecém I
Itaqui
360 MW*
360 MW
360 MW
720 MW
1,080 MW
* Considering the 50/50 partnership with Energias do Brasil in Pecém I
+ 50%
MPX has secured contracts for 1,080 MW of capacity
360 MW*
360 MW
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2012 2013
Total energy contracted amounts to 899 average MW
MPX Energy Contracted (average MW)
Itaqui
Pecém I
Pecém II
Pecém I
Pecém I
Itaqui
308 MW*
315 MW
276 MW
623 avg MW
899 avg MW
* Considering the 50/50 partnership with Energias do Brasil in Pecém I
+ 44%
308 MW*
315 MW
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MPX is the private listed company with the highest generation growth
Growth in Total Assured Energy from 2008 to 2013 (average MW)
Source: ANEEL, CCEE and company website
872
324
218
147
52
220
MPX
ENERGIAS DO BRASIL
CPFL
TRACTEBEL
LIGHT
AES TIETÊ
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2012 2013
Total guaranteed fixed revenues amount to R$ 662 million
MPX Guaranteed Fixed Revenue (R$ million) *
Itaqui
Pecém I
Pecém II
Pecém I
Pecém I
Itaqui
R$ 221.27 MM
R$ 233.95 MM
R$ 206.98 MMR$ 455.2 MM
R$ 662.20 MM
* As of September 2008, escalated by IPCA
+ 45%
R$ 221.27 MM
R$ 233.95 MM
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MPX has been able to keep a comfortable cash position since its IPO
MPX Total Cash and Cash Equivalents (R$ million)
* As released
Dec/07 Mar/08 Jun/08
1,832 1,815 1,710
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Construction in Pecém I started in late June 2008
1,832 1,710Site Preparation
Coal Storage AreaTemporary Facilities
Site Preparation
13
2008 A-5 New Energy Auction
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2008 A-5 Auction at a glance
Sugar Cane
Biomass
1%
Hydro
4%
Fuel Oil
64%
LNG Open
Cycle
22%Imported Coal
9%
Energy contracted / type of fuel
Energy contracted / submarket
64%
4%
32%
Northeast
Southeast
South
Total energy contracted: 3,125 average MW
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A-5 Auction Highlights
� An auction for Long Term contracts dominated by typically peak plants (oil
plants and open cycle LNG plants)
� MPX was the only typical “base plant” to win the auction
� Limited participation of large energy players in the auction
� Power system operation in bad hydrological periods will have much higher costs
for the system:
� A-5 auction (2008) = 1,990 Avg MW of oil
� A-3 auction (2008) = 811 Avg MW of oil
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Porto do Pecém II TPP
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Pecém II Thermal Power Plant
UTE Porto do Pecém II
Location:
Shareholders:
Fuel:
Pecém Port, State of Ceará
100%
Coal (imported)
Environmental Process: Installation License issued
Guaranteed Completion Schedule: April 2012
Pecém II TPP project is similar to Pecém I
and Itaqui TPPs projects, resulting in
significant capex and opex synergies
Energy sold in the auction: Jan 2013 – 2027 (15 years)
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Revenues, Costs & Capex
Auction Price (ICB): 140 R$/MWh
COP/CEC: 54.39 R$/MWh Fixed Revenue: R$ 206.98 MM/year1
(85.61 R$/MWh x 276 avg MW x 365 x 24)1Escalated yearly by IPCA
Gross output = 360 MW
Average Capex = US$ 1,600 /kW
38%42%
18%
2%
2009 2010 2011 2012
Average MWs sold = 276 avg. MW
(100% sold to Regulated Market with full pass-through of fuel costs)
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Financing & Taxes
Financing Structure: 29% Equity, 71% Debt
- Bridge Loan: R$ 305MM (Citi, for 15 months)
- Long Term Financing
- BNDES direct: 67%, indexed by TJLP
- BNDES indirect: 33%, indexed by IPCA
Tax Advantages:
- Project is part of PAC (Brazilian Infrastructure growth plan)
- PIS/Cofins tax exemption (9.25%) of EPC costs
- 15% income tax (ADENE region/NE for 10 years)
- 59% ICMS deferral on coal imports
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Porto do Açu TPP
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Why did MPX decide not to bid the Açu project ?
� USD appreciation ~15% (from 1.70 to 1.96 R$/US$): ~ 65% of capex is USD
denominated -- > Project cost in R$ increased ~10%
� Equipment prices and schedules at a peak
� Higher hedging costs
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MPX Portfolio
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MPX Portfolio
Size (MW) MPX (MW)
Coal 5,900 5,540
Natural Gas 3,300 3,300
Hydro 30 15
Diesel 23 12
9,253 8,867¹
UTE Porto de Itaqui (Maranhão)Phase I: 360 MWPhase II: 360 MW
UTE Porto do Pecém (Ceará)Phase I: 720 MWPhase II: 360 MW
UTE Porto do Açu (Rio de Janeiro)Phase I: 2,100 MWPhase II: 3,300 MWUTE Castilla (Chile)
Phase I: 700 MW Phase II: 700 MW
UTE MPX Sul(Rio Grande do Sul)
600 MW
UTE Serra do Navio (Amapá)23 MWPCH Capivara (Amapá)
30 MW
¹ Already considering 100% of UTE Açu and UTE Castilla, according to the relevant fact released on February 20, 2008
Coal mining rights in
Colombia
Seival Coal Mine(Rio Grande do Sul)
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Uses and Sources
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Uses and Sources up to 2013
Note:
Figures assume sale of 50% of Itaqui, Açu and Castilla (under analysis)
TBD – to be defined
Total US$ M
Sources of Capital (US$ million)Use of Proceeds (US$ million)
~9,356
IPO Proceeds~244
~364
~8,749
~6,562
~1,100
~645
TBD
Debt
Cash Flow
Equity Partnerships &
Customer Advances
Pre-op Capex and Working Capital
Financial Expenses
Capex
TBD
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Next Steps
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Next steps 2008/2009
� Continue implementation of Porto de Açu I Thermal Power Plant
� Environmental licensing for MPX Sul Thermal Power Plant (supplied by MPX’s
Seival coal mine)
� Environmental licensing and PPAs for Castilla Thermal Power Plant
� Reassessment of timing for placement of Açu’s natural gas phase
� Updated Business Plan to be released before year end
28October 2008