RIO DE JANEIRO, May 15 (Reuters) - Centrais Eletricas Brasileiras SA, Latin America’s largest utility, on Thursday recorded a 986 million ($444.1 million) first-quarter profit, its biggest in a year and a half, as a drought sent power prices to record highs.
Eletrobras, as the Brazilian state-run company is known, lost 36 million reais in the year-earlier quarter and 5.5 billion reais in the fourth quarter, the company said in a statement.
Full standardized balance sheets and income statements were not immediately available on the Eletrobras website or on the website of Brazil’s securities regulator, the CVM.
The profit, the first in three quarters, comes after a 15-month period during which the company lost more than 17 billion reais, an amount more than the company’s total profits for the previous decade.
The losses were the result of Brazilian president Dilma Rousseff’s decision in late 2012 to force most Brazilian utilities to slash industrial and consumer power rates under long-term contracts by about 20 percent in exchange for early and guaranteed renewal of soon-to-expire contracts to operate hydrodams.
Many of those rate cuts, though, are already being wiped out by drought that has caused water levels in the bulk of Brazil’s hydrodams to fall to their lowest levels in more than a decade.
The resulting spike in spot-market electricity rates allowed Eletronorte, the Eletrobras subsidiary in Brazil’s northern Amazon region, the one area where rains have filled Brazil’s hydrodams, to increase its take from electricity sales on the free market.
Alone, the Eletronorte subsidiary recorded a profit of 1.1 billion reais, the statement said.
Results were also boosted by improved results at the money-losing distribution utility in Brazil’s Maranhao state and the sale of another troubled distribution utility in Mato Grosso state to utility Energisa, the statement said.
Earnings before interest, taxes, depreciation and amortization, or EBITDA, a measure of the company’s ability to generate cash from operations, was 1.69 billion reais in the first quarter, the company said.
That result was 93 times greater than the 18 million EBITDA result a year earlier, according to Thomson Reuters data, and comes after a negative EBITDA of 3.83 billion reais in the fourth quarter.
$1 = 2.22 Brazilian reais Reporting by Jeb Blount; Editing by Ken Wills