4. Highlights
Financial Results
• Net Revenues totaled R$195.1 million in the 1Q07, 13.6% up year-on-year.
• EBITDA totaled R$77.0 million in the 1Q07 (EBITDA Margin of 39,5%), 13.8% up on the
R$67.6 million recorded in the 1Q06.
• Net Income in the 1Q07 was R$30.8 million, 245.2% up year-on-year.
• CEMAR held a non-convertible debenture issue:
• Amounting to R$267.3 million
• Maturing in 2013
• At 105.8% of the CDI
• With a national long-term rating of “A (bra)” assigned by Fitch Ratings
• CEMAR obtained new tax incentive (accelerated depreciation)
Operating Results
• Energy Sales (MWh) growth of 8.3% over the 1Q06.
• In the 1Q07, CEMAR’s DEC and FEC ratios fell by 36.8% and 22.7%,
respectively, compared to the 1Q06.
• The new CEO of CEMAR, Nuno Neves, took up office on March 12, bringing 15 years of
corporate experience to the subsidiary’s management team.
4
6. Customer Base
Customer Base (thousands) Customer Base Breakdown
8.9% 8.9% Industrial
8.7%
0.7%
7.5%
7.2%
Commercial
1,373 7.2%
1,349
1,327
1,307 Others
1,281
5.8%
Residential
86.3%
1Q06 2Q06 3Q06 4Q06 1Q07
Customers %Chg. Y-O-Y
• Growth of 7.2% in the customer base compared to the 1Q06 (91,200 new customers)
6
7. Energy Volume - CEMAR
Energy Volume per Class Billed Energy (% per Class)
CONSUMPTION CLASS (MWh) 1Q06 1Q07 % Chg. Others
Residential 282,450 310,250 9.8% 24.2%
Industrial 85,931 95,104 10.7%
Commercial 137,979 144,146 4.5% Commercial
Others (ex. own consumption) 163,124 175,600 7.6%
19.9%
TOTAL 669,484 725,100 8.3%
Energy Load (% Chg. MWh): Brazil, NE and CEMAR – 1Q07 vs. 1Q06
Industrial
Residential
8.5%
13.1%
42.8%
3.8%
3.7%
• Growth of 8.3% in billed energy
volume over the 1Q06
• Strong growth in the residential
Brazil - SIN Northeast CEMAR and industrial classes: 9.8% and
10.7% respectively
7
8. Energy Balance and Losses
Energy Balance
MWh
Energy Balance (MWh) 1Q06 1Q07 % Chg.
Required Energy * 966,627 1,052,179 8.9%
Sales ** 670,665 726,269 8.3%
Losses 295,962 325,910 10.1%
* Includes own generation
** Includes energy sales to consumer classes, own consumption and supply
to CEPISA
Electricity Losses (LTM)
29.8% 29.6% 29.9% 29.8% 29.9%
1Q06 2Q06 3Q06 4Q06 1Q07
8
9. DEC and FEC
DEC (Avg. Hours per Consumer – LTM) FEC (Avg. Frequency per Consumer – LTM)
15.5
1.1 36.8%
7,8 7.8 24.4%
9.8 0.9 5,9 5.9
2.4 Supplier Supplier
1.6
14.4
6.7
7.4 4.3
CEMAR CEMAR
1Q06 1Q07 1Q06 1Q07
Supplier DEC % Chg.: 118.2% Supplier FEC % Chg.: 77.8%
CEMAR DEC % Chg.: -48.6% CEMAR FEC % Chg.: -35.8%
Consistent improvement trend in service quality
CEMAR DEC and FEC indices have improved 36.8% and 24.4% Y-O-Y in the 1Q07
9
11. Net Revenues
Net Revenues (R$ million)
13.6% 195.1
171.8
1Q06 1Q07
•Net Revenues increased by 13.6% in the 1Q07
•Good performance chiefly due to:
a) 8.3% volume increase in energy sales
b) the August 2006 tariff increase (14.58%)
11
12. Manageable Costs and Expenses
R$ million 1T06 1T07 Var.
Personnel 15.2 12.9 -15.4%
Material 1.4 1.6 15.6%
Services 13.4 16.4 22.3%
Others 2.7 0.1 -95.8%
PMSO 32.7 30.9 -5.3%
PMSO (% of Net Revenues) 19.0% 15.9% -3.1 p.p.
Provisions 1.9 9.9 428.1%
Allowance for Doubtful Accounts and Losses 0.4 7.6 1806.3%
Other Provisions 1.5 2.3 54.6%
MANAGEABLE COSTS AND EXPENSES 34.6 40.9 18.3%
MANAGEABLE COSTS AND EXPENSES (% Net Revenues) 20.1% 21.0% 0.9 p.p.
•Manageable costs and expenses (PMSO - excluding provisions) totaled 15.9% of Net Revenues in the
1Q07, 3.1 p.p. down year-on-year
•Personnel: year-on-year decline of 15.4% in the 1Q07 due to the 7.5% reduction in the number of
employees and non-recurring restructuring expenses registered in the 1Q06 (R$3.9 million)
•Allowance for Doubtful Accounts and Losses reached 2.7% of Gross Operating Revenues (GOR) in
the 1Q07 – growth attributable to non recurring positive performance in the 1Q06 due to:
•collections from public sector customers
•CEMAR’s debt installment repayment campaigns
12
13. EBITDA and EBITDA Margin
EBITDA (R$ million) and EBITDA Margin (% of Net Revenues)
39.4% 39.5%
13.9%
77.0
67.6
1Q06 1Q07
EBITDA EBITDA Margin
•EBITDA reached R$77.0 million in the 1Q07, 13.9% higher than the R$67.6 million recorded in the 1Q06
•EBITDA margin of 39.5%, stable year-on-year
13
14. Income Tax and Social Contribution
Income Tax / Social Contribution (R$ million) 2006 1Q07
Expense Income Tax/ Social Contribution (42.6) (18.4)
(+) Reversal in Tax Provision 2005 (6.1) -
( - ) Deferred Tax Asset 19.1 9.1
( - ) ADENE Incentive 10.8 2.7
= Tax / Cash Basis (18.7) (6.7)
Earnings Before Tax 157.4 62.8
Effective Tax Rate (%) - Cash Basis 11.9% 10.6%
•Deferred tax assets and the tax benefits obtained from ADENE (Northeast Development Agency)
lowered the income tax and social contribution disbursements to 10.6% of EBT in the 1Q07
14
15. Net Income
Net Income (R$ million) 1Q06 – 1Q07
43.9%
30.8
245.2%
21.4
8.9
1Q06 Pro-Forma 1Q06 1Q07
1Q07 Net Income totaled R$30.8 million, 245.2% higher than the R$8.9 million recorded in
the 1Q06
If we exclude non-recurring expenses related to the IPO, 1Q07 Net Income would have
been 43.9% higher than in the 1Q06
* 1Q06 Pro Forma Net Income excludes the non recurring IPO related expenses of R$12.5 million
15
16. Indebtedness
Gross Debt – 1Q07
Avg. Spread Avg. Due Date Avg. Maturity Part.
Maturity R$ million Total % Reference
(per year) (month-year) (in years) (%)
6-month LIBOR 0.8% pa Apr-18 11.0 0.7%
Short Term 51.0 5.7%
IGP-M (2 years) 12.0% pa Jun-09 2.2 8.1%
Long Term 846.6 94.3% IGP-M (9 years) 12.7% pa Jan-16 8.8 19.8%
2008 46.9 5.2% IGP-M (17 years) 4.4% pa Jan-24 16.8 14.5%
TJLP 4.2% pa Jul-13 6.2 0.2%
2009 64.6 7.2%
Fixed Rate (R$) 11.9% pa Mar-17 9.9 10.4%
2010 53.3 5.9% RGR 6.2% pa Feb-17 9.8 5.5%
2011 123.6 13.8% Fixed Rate (US$ 6.8% pa Jun-20 13.1 0.9%
After 2011 558.3 62.2% FINEL* 9.8% pa Jan-16 8.8 6.5%
CDI 105.4% of CDI May-13 6.1 33.4%
Total 897.6 100.0%
*FINEL is a sectorial index representing 20.0% of IGP-M
•Gross debt reached R$897.6 million on Mar-31-07
•R$267.3 million from the Non Convertible Debentures Issue
•Release of a R$5.8 million tranche from the RGR financing line to fund sub-
transmission investments
•Release of R$28.0 million tranche from the BNB financing line
•Debt Profile: low average cost maintained, 13.2% p.a. in the last twelve months, or 95.3% of
CDI, with average maturity of 8.7 years
16
17. CEMAR’s New Debentures
•On March 28, CEMAR sucessfully placed its 3rd public issuance of non convertible
debentures
Key Terms Description
Offering Type Non Convetible Debentures
Offering Size R$267.3 million
Offering
Best Efforts
Placement
Term 6 years
Cost 105.8% of CDI
Primarily for the prepayment of CEMAR’s
Use of Funds
costlier debt
Bookrunners UBS Pactual and Itaú BBA
17
18. 18
Gross Gross
897.6
897.6
Debt Debt
Net Net
Regulatory Regulatory
96.5
96.5
Assets Assets
Cash and Cash and
Cash Eq. Cash Eq.
434.8
270.5
CEMAR CEMAR
Cash and Cash and
Cash Eq. Cash Eq.
190.3
190.3
EQTL EQTL
Net Debt
Consolidated Net Debt (R$ million)
Net Debt
1Q07
176.0
1Q07
340.3
Consolidated Net Debt Pro Forma* - (R$ million)
Net Debt
Gross Gross
587.0
587.0
Debt Debt
Net Net
Regulatory Regulatory
63.1
63.1
Assets Assets
Cash and Cash and
Cash Eq. Cash Eq.
176.9
284.4
CEMAR CEMAR
Cash and Cash and
Cash Eq. Cash Eq.
190.3
190.3
EQTL EQTL
Net Debt Net Debt
1Q07 1Q07
156.7
49.2
Ownership Adjusted Net Debt (R$ million)
Consolidated Net Debt Pro Forma* - (R$ million)
19. Consolidated Net Debt
Consolidated Net Debt (R$ million) and Net Debt / EBITDA (LTM)
1.6 1.5
0.7
331.9 0.5
305.0 0.3 0.3
179.8
176.0
105.1 105.0
4Q05 1Q06 2Q06 3Q06 4Q06 1Q07
Net Debt Net Debt / EBITDA (LTM)
19
20. CAPEX
CEMAR’s CAPEX* (R$ Million)
16.7% 31.5
27.0 2.9
1.9 Others
2.2
3.8
Equipaments and Systems
18.1
8.3
Network Expansion
Network Maintenance
12.8
8.7
1Q06 1Q07
•CEMAR* Direct Capex totaled R$31.5 million in the 1Q07
•For 2007 we expect CEMAR’s CAPEX to reach approximately R$180.0 million
* excluding Direct Investments in the Light for All Program
20
21. PLPT (Luz Para Todos – “Light for All” Program)
PLPT Direct Investments (R$ million)
14.6% 35.4
30.9
1Q06 1Q07
Connected Customers
103,067 111,826
• By the end of March
80,577
2007, CEMAR had
62,443 connected 111,800
50,824 additional customers
through the PLPT
1Q06 2Q06 3Q06 4Q06 1Q07
21
22. Efficiency Indices
Clients per Employee: 1Q06 – 1Q07 PMSO* per Clients: 1Q06 – 1Q07
17.8% 1,176 25.7
-11.7%
22.7
998
1Q06 1Q07 1Q06 1Q07
EBITDA (R$) per Consumer : 1Q06 – 1Q07 EBITDA (R$) per MWh: 1Q06 – 1Q07
6,1% 107.2
7.1% 57.1
101.0
53.4
1Q06 1Q07 1Q06 1Q07
* Excluding provisions and restructuring expenses
22
23. Dividends
The OSM of April 5, 2007, approved dividend payments of R$107.8 million
(R$1.64/UNIT).
This was 98.2% more than the 2006 dividend pay-out of R$54.4 million
($ 1.03/UNIT).
Dividend payments began on May 7, 2007.
Dividends (R$MM e R$/UNIT) Paid - 2006 and 2007
1.64
107.8
1.03
54.4
05/06 06/07
Dividends (R$ Million) R$/UNIT
23
24. Equatorial’s Share Performance – EQTL11
Equatorial’s UNIT’s total return outperformed the overall market and electricity sector index
Price Movement: EQTL11, Ibovespa and IEE (31/03/06 = 100)
150
Price Evolution
140 (3/31/06 = 100 to 2/5/07):
Price Evolution
130 EQTL11: 37.9%,
120 EQTL11 Total Return
(Div. R$1.64/UNIT): 49.2%
110 IBOV: 30.3%,
100 IEE: 27.9%
Avg. Traded Volume:
90
2006 - R$3.1 million,
80 Last 60 days - R$4.5 million;
02/02/07
07/21/06
08/18/06
09/15/06
10/13/06
11/10/06
12/08/06
01/05/07
03/02/07
03/30/07
04/27/07
06/23/06
03/31/06
04/28/06
05/26/06
Last 30 days - R$5.1 million
EQTL11 IBOV IEE
Average Daily Traded Volume – Monthly Basis (R$ Million)
8.1
7.3
4.6 4.9
4.1
3.0 3.1
1.6 1.9 2.0 1.4 2.1
0.8
Oct-06
Nov-06
Aug-06
Apr-06
Apr-07
Jun-06
Jul-06
Dec-06
May-06
Jan-07
Feb-07
Mar-07
Sep-06
24
26. DISCLAIMER
This document may contain prospective statements, which are subject to risks and uncertainties, as they were
based on the expectations of Company’s management and on available information. These prospects include
statements concerning the Company’s current intensions or expectations for our clients; this presentation will also
be available on our website www.equatorialenergia.com.br/ri and also in the IPE system at the Brazilian Security
Exchange Commission – CVM.
Forward-looking statements refer to future events which may or may not occur. Our future financial
situation, operating results, market share and competitive positioning may differ substantially from those
expressed or suggested by said forward-looking statements. Many factors and values that can establish these
results are outside Company’s control or expectation. The reader/investor is prevented not to completely rely on
the information above .
The words “believe", “can", “predict", “estimate", “continue", “anticipate", “intend", “forecast" and similar words, are
intended to identify affirmations. Such estimates refer only to the date in which they were expressed, therefore
Company has no obligation to update said statements.
This presentation does not consist of offering, invitation or request of subscription offer or purchase of any
marketable securities. And, this statement or any other information herein, does not consist of a contract base or
commitment of any kind.
26
