SAO PAULO--Tractebel Energia (TBLE3.BR), the Brazilian
subsidiary of GDF Suez (GSZ.FR), reported Thursday a drop in
fourth-quarter net profit due in part to higher electricity prices
as more thermoelectric plants were needed in Brazil to make up for
falling hydroelectic generation.
Net revenue climbed 16% to 1.27 billion Brazilian reais ($644
million), but profit dropped 3.6% to BRL433 million, Tractebel said
in a regulatory filing.
Brazil's rainy season, which usually starts in the fourth
quarter, started out drier than usual, leading to a drop in
reservoir levels at hydroelectric dams. Because the country relies
overwhelmingly on hydropower--about 85% of electricity is generated
via dams--the lower reservoir levels required the firing of
thermoelectric plants, which produce energy at much higher
costs.
Tractebel is not much different, with about 85% of its installed
capacity coming from hydoelectric sources. In order to supply all
its customers with power, Tractebel had to buy more expensive
energy from other generators on the open market, where prices were
rising due to the abnormally dry weather.
Tractebel ended up paying a net BRL11.1 million for the energy,
whereas in the year-earlier quarter it gained a net BRL47.4 million
from selling energy, according to the filing.
For the year, however, Tractebel profited from buying and
selling energy on the market, with a net gain of BRL244.8 million,
the company said.
In the fourth quarter, earnings before interest, taxes,
depreciation and amortization, or Ebitda, slipped 0.6% to BRL762.1
million, representing a 9.8 percentage point drop in Ebitda
margins.
Write to Paulo Winterstein at paulo.winterstein@dowjones.com
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