Is a 70% drop in profit worrying? – Money Times

Results from Transmissão Paulista are in line with estimates from Genial, XP and Eleven (Image: REUTERS/Shelby Tauber)

The results for the second quarter of 2022 presented by Transmission from São Paulo (TRPL4) are as expected, say the Eleven, great and XP Investimentos.

THE great highlights that the result was in line with the broker’s expectations and continues with the recommendation to keep the stock.

“Once again, the company entered pressured results, with pressure on margins due to the evolution of operating costs, higher financial expenses due to greater indebtedness and evolution of the debt cost indexes and the reprofiling of flows from the Basic Network Existing System (RBSE)” , says Genius.

In the same line, the XP stated that the results are in line with the estimates and maintains the neutral recommendation, with a target price of BRL 25.

“The results were in line with our estimates, mainly reflecting the negative impact of the RBSE reprofiling (-R$156 million) and higher financial expenses (+117% YoY). On the other hand, we see the impacts of the operational start-up of the new Retrofitting Projects (+R$ 19.2 min) and Greenfield (+R$ 32.9 mn) as positive”, says XP.

despite the Eleven highlighting that the results are also in line with the expectations of the broker, the recommendation for Transmissão Paulista is to buy, with a target price of R$ 31.

“The operating result of ISA CTEEP came in line with our estimates, with the financial result weighing more than expected due to investment in new projects and the deteriorating macroeconomic scenario. The updated RAP for the next cycle shows a growth of 26%”, he says.

Positive and negative highlights

To the greatdespite the results of São Paulo broadcast having pointed to a not very inspiring quarter from a strictly operational point of view, the brokerage was very satisfied with what it saw in terms of investments and the company’s projects.

From a positive point of view, the XP highlights that the results were partially offset by the positive impact of the RAP cycle (Permitted Annual Revenue) 2021/2022 due to the positive variation in the IPCAthe start-up of new Retrofitting Projects and Greenfield projects, and the RAP of contract 012/2016, referring to the acquisition of Piratininga – Bandeirantes Transmissora de Energia at the end of the first quarter of 2021.

On the other hand, on the negative side, they highlight the impact of -R$ 156 million from the reduction in RBSE revenue during the 21/22 and 22/23 tariff cycles, due to the reprofiling of the financial component and the increase of +117% per year in financial expenses, due to new funding and increase in the IPCA and CDIresponsible for indexing, respectively, 55% and 36% of the company’s debt.

already the Eleven says that as a positive point of the result, the growth of expenses with personnel, material, outsourced services and others (PMSO) in 7.1%, below the inflation in the period.

“On the other hand, the company’s leverage measured by the net debt/Ebitda ratio closed the quarter at 3.25x, just below the more restrictive covenant of the 5th issuance of debentures of 3.5x”, says the broker.

2Q22 Results

The net profit of São Paulo broadcast fell 70% in the second quarter of 2022 compared to the same period last year, reaching R$ 74 million, according to a document sent to the market this Thursday (28).

Revenue fell by 7.5%, totaling R$ 732 million.

Ebitda, which measures the operating result, was R$ 555 million, down 12%.

The deterioration is mainly explained by the 7.5% reduction in net revenue, to 732.9 million reais, due to the rescheduling of payments from the Rede Básica Existing System (RBSE).

The performance, according to the company, was mainly affected by a worsening of the financial result, which was negative by R$ 301.0 million in the period, an increase of 117.5% compared to the financial expense of the second quarter of 2021.

The postponement of RBSE compensation to transmitters was determined by the regulatory agency Aneel last year, in order to mitigate tariff readjustments to consumers, and with an effect on the results of the transmitters in the short term.

According to the financial director of São Paulo broadcastCarisa Cristal, the impact of this RBSE reprogramming tends to be lower in the third quarter.

*With Renan Dantas


O Money Times publishes informative articles of a journalistic nature. This publication does not constitute an investment recommendation.

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About Yadunandan Singh

Born in 1992, Yadunandan approaches the world of video games thanks to two sacred monsters like Diablo and above all Sonic, strictly in the Sega Saturn version. Ranging between consoles and PCs, he is particularly fond of platform titles and RPGs, not disdaining all other genres and moving in the constant search for the perfect balance between narration and interactivity.

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