SAO PAULO, Nov 13 (Reuters) - Brazilian power utility Eletrobras made a third-quarter net loss of 1.61 billion reais ($427 million), hit by large provisions and some write-offs to assets that were sold, the company said on Tuesday.
The state-controlled company, formally known as Centrais Elétricas Brasileiras SA, said in a securities filing that its earnings before interest, tax, depreciation and amortization (EBITDA) fell 92 percent compared to the third quarter last year to 189 million reais.
Eletrobras, Brazil’s and Latin America’s largest power company, had earned 550 million reais in the same period a year earlier. Its shares have jumped 51 percent in the last 3 months, boosted by investors’ expectations that president-elect Jair Bolsonaro will go ahead with plans to privatize the company.
The firm has managed to sell several money-losing regional power distribution subsidiaries in the last months, a move seen as positive by investors. It also sold stakes in several ventures raising 1.29 billion reais, an amount, however, not enough to compensate for the heavy provisions and write-offs.
Eletrobras said it made 2.2 billion reais of provisions for contingencies. A large part of that, 1.39 billion reais, related to new calculations of the possible effects of several lawsuits the company is involved with in Brazil.
The company took a write-off of 418 million reais related to the stakes it sold in several power ventures in an auction in September to reflect the cases in which those stakes were sold for the minimum price set in the auction.
It said its power generation business had a profit of 832 million reais in the quarter, but its power distribution unit lost 998 million reais.
$1 = 3.77 reais Reporting by Marcelo Teixeira; Editing by Mark Potter