Net income at ENGIE Brasil Energia grows 21.9% in 1Q22

• Net Income was R$ 645 million (R$ 0.7902/share) in 1Q22, 21.9% (R$ 116 million) more than in 1Q21.
• Ebitda registered in 1Q22 was R$ 1.9 billion, an increase of 8.8% (R$ 153 million) compared with 1Q21. The Ebitda margin was 61.8% in 1Q22, growth of 8.3 p.p. in the period.
• Net operational revenue reached R$ 3 billion in 1Q22, 5.8% (R$ 188 million) below the amount reported in 1Q21.
• Quantity of energy sold in 1Q22, excluding trading operations, was 9,169 GWh (4,245 average MW), in volume terms, 1.0% higher than 1Q21.
• The Company's Board of Directors approved, contingent on fulfilling certain conditions precedent, the acquisition of the Serra do Assuruá wind farm, in Bahia, with 882 MW. Including this latest acquisition, the portfolio of projects under development totals 3 GW.
• ENGIE Brasil Energia was appointed by the ENGIE Group as the development and investment vehicle for Green Hydrogen projects in Brazil.
In the first quarter 2022, ENGIE Brasil Energia (EGIE3) reported an Ebitda of R$ 1.9 billion, 8.8% greater than the same period in 2021, while net income was R$ 645 million in 1Q22, an amount 21.9% greater than in the preceding year. Both indicators were positively impacted mainly by the increase of 9.9% in the net average price of energy sales, increased purchase volumes of energy, lower fuel and operational costs due to the sale of the Jorge Lacerda Thermoelectric Plant and greater remuneration of transmission assets under construction and from financial assets of the concessions.
In 1Q22, the plants operated by ENGIE Brasil Energia posted a global internal uptime ratio of 93.5%, being 96.9% at the hydropower plants, 58.2% at the thermoelectric plant (Pampa Sul TPP) and 82.9% at the plants fired from complementary sources - SHPs, biomass, wind and photovoltaic.
The net average selling price of energy reached R$ 225.35/MWh in 1Q22, 9.9% greater than 1Q21, when the price stood at R$ 205,13/MWh, an increase largely driven by monetary restatement of existing agreements.
"Our results show the robustness of our strategy of growth and diversification of businesses. In addition to ensuring the resilience of our portfolio of assets, our operation as an investment platform is relevant in the context of the fair energy transition, incrementing renewable generation capacity and strengthening transmission systems", points out Eduardo Sattamini, ENGIE Brasil Energia's Chief Executive and Investor Relations' Officer
In the first quarter 2022, the Company invested R$ 1 billion and is forecasting further investments of R$ 2.4 billion before the end of the year. The cash position of approximately R$ 4.6 billion with a net debt/Ebitda ratio of 2.2x maintains the Company in a financially comfortable condition in line with the necessary financial discipline for the growth which is projected.
Bolstering the energy transition
With a focus on accelerating the energy transition, the disposal of coal assets continues one of the Company's objectives during 2022, including our expectation of formalizing the sale of the Pampa Sul Thermoelectric Plant by the end of the year.
And to continue gradually replacing coal-fired thermal generation capacity with renewable sources, in February, ENGIE Brasil Energia concluded the acquisition of the Paracatu (MG) and Floresta (RN) photovoltaic complexes, together accounting for 218 MW of capacity, both assets belonging to Solaire Direct. Additionally, the Company's Board of Directors approved, contingent on fulfilling certain conditions precedent, the acquisition of the Serra do Assuruá wind farm, in Bahia, with 882 MW. Once the purchase is confirmed, it will total 3 GW in the portfolio of projects under development.
The Company reached the end of the first quarter with an installed capacity of 8,440.9 MW and operating a generator park of 10,161.6 MW, made up of hydropower and complementary sourced plants - biomass, SHP, wind and solar - together with one thermoelectric plant.
The ENGIE Group has also elected ENGIE Brasil Energia as the vehicle in Brazil for investment in Green Hydrogen. In this way, the Company will be in the global vanguard of the sector with its own internal structure, dedicated to the theme. "Brazil is viewed as having a highly competitive environment for H2, particularly in view of the abundance of natural resources and the major capacity and potential for growth in renewable generation", says Eduardo Sattamini.
Transmission Lines
This first quarter also registered the advance to 99.8% completion of the Gralha Azul Transmission System. Nine transmission lines and three TL sectionings comprising the project are already energized. All that remains is the Irati - Ponta Grossa Transmission Line and two TL sectionings to allow the project to go into full commercial operation. However, due to regulatory restrictions, the conclusion of this final part of the asset is expected only take place in March 2023.
The anticipation of the concession agreement deadline is now a reality with the assets in commercial operations at the end of 1Q22, generating 77% of RAP. As a subsequent event, the TL Guarapuava Oeste - Areia and the Eletrosul TL sectioning in the Guarapuava substation went into operation, further elevating the percentage of the RAP to 87% on April
3, 2022. "The advances in the project's commercial operations will permit a solution to energy supplies from Itaipu to the state of Paraná", Sattamini says. "For the second quarter 2022, there is the outlook for reaching approximately 95% of total expected revenues following the startup of one more substation and a further transmission line sectioning", he adds.
At the end of 1Q22, the general advance in the Novo Estado project was 92.6%. Work on the power line tower foundations reached 93%, 79% of the assembly and 60% of the stringing of transmission line conductor cables. The Xingu - Serra Pelada transmission line is scheduled to go into operation in the fourth quarter of 2022. Work on this stretch has been resumed and will be accelerated in the next quarter with the end of the rainy season in the region, thus concluding the implementation phase of the project and guaranteeing an early startup in relation to the final date for completion enshrined in the concession agreement.
ESG
ENGIE Brasil Energia remains a component of the Corporate Sustainability Index (ISE), of which it has been part for 17 years, and the Carbon Efficient Index (ICO2), both of which are B3 indices. The Company also received ISO 37001 - Anti-bribery Management System certification, reiterating the seriousness with which it views corporate governance and compliance practices.
The Company has published its 16th Sustainability Report, providing information in a transparent manner on the evolution of more than 80 environmental, social and financial indicators and the robustness of its activities.
Verified and assured independently by Bureau Veritas, the publication also looks at the actions adopted for meeting the challenge of climate change and demonstrates the commitment of the operation from the perspective of the stakeholders, this determining the focus and prioritization of the actions in relation to the impacts and opportunities of the business.
"With a focus on the generation of sustainable value for all stakeholders, we have shown in a transparent manner the extent to which we have progressed in ESG aspects, these transversally integrating our corporate policies and practices, aligned to the ENGIE Group's purpose - of accelerating the energy transition to a carbon neutral economy", Eduardo Sattamini comments.

About ENGIE

Our group is a global reference in low-carbon energy and services. Together with our 170,000 employees, our customers, partners and stakeholders, we are committed to accelerate the transition towards a carbon-neutral world, through reduced energy consumption and more environmentally-friendly solutions. Inspired by our purpose ("raison d'être"), we reconcile economic performance with a positive impact on people and the planet, building on our key businesses (gas, renewable energy, services) to offer competitive solutions to our customers.

ENGIE is the largest private-sector power producer in Brazil, operating in generation, commercialization and transmission of electric power, gas transport and energy solutions. With an installed capacity of 10 GW from 69 power plants, which stands for about 6% of the country's capacity, the Company has nearly 97% of its installed capacity in the country from renewable sources and with low GHG emissions, such as hydro, solar and biomass power plants, and windfarms.

With the acquisition of TAG, ENGIE now also owns the largest natural gas transportation network in the country, at 4,500 km and transecting 10 states and 191 cities.

The Group also has a complete portfolio of integrated solutions focused on reducing costs and emissions and improving the infrastructure for companies, such as compressed air, local solar self-production, biogas and biomass, power management and consulting, HVAC and substations. ENGIE also acts as a partner for cities to make the urban spaces more efficient and sustainable, with public lighting, electric mobility and district cooling solutions. With 3,500 employees, ENGIE's turnover in Brazil in 2021 was R$ 13.5 billion.

The Group´s turnover in 2021 was of 57.9 billion Euros. The Group is listed on the Paris and Brussels stock exchanges (ENGI) and is represented in the main financial indices (CAC 40, Euronext 100, FTSE Eurotop 100, MSCI Europe) and non-financial indices (DJSI World, DJSI Europe, Euronext Vigeo Eiris - Eurozone 120/Europe 120/France 20, MSCI EMU ESG screened, MSCI Europe ESG Universal Select, Stoxx Europe 600 ESG, and Stoxx Global 1800 ESG).