ELPL4 - Eletropaulo

Market is indeed very crazy! It was so in love by dividends and energy companies that just now they realized that the price revision would have a great impact on earnings! If revenue drops 10%, earnings will fall a lot more!

That's my best prediction of what would be a recorrent net income for ELPL. And dont't forget the huge demand of Eletrobras, about 1 billion.

What Parisotto would say?

Comgas Cash Flow

Here, I think, it's the cash flow of Comgas either by prior accountancy and by IFRS.

In either one, dividends paid exceed free cash flow generated. That can explain why net debt grew 35% over 2010.

Coelce - My estimate

I'm posting my estimate because I got different numbers from yours (click to enlarge):

I considered just cost of goods sold and taxes variables. Other expenses fixed. I got a net income reduction of just 12,7%.

This is because the ratio fixed expenses to revenue is very low. Also, company will have to pay less taxes.

Am I right?

Coelce

Infomoney: Aneel reajusta tarifa de energia na PB e aprova revisão para o CE

Finally we have some numbers to work on: "A proposta prevê redução de 10,16%, em média, na conta de luz."

I cutted 10% from the last 4 quarters revenues and the net profit fell to 215.290 from 458.306. That's a reduction of 53%. The ROE would nove dive to 14,8% from 31,6%. Just as we expected!

What will be the impact on the payout? That's the most important issue now.

I hope the market drops COCE so I have an oportunity to buy for a fair price in this new environment.

Copel Free Cash Flow

Year............................2007.....2008.....2009.....2010....2011(est)

Cash earnings...............1.636...1.587.....1.503....1.390....2.018
Changes in working K....-40.....-40.......-40......-40......-40
CFO.............................1.596...1.547...1.463.....1.350.....1.978
CFI.............................-465....-565.....-866.....-947.....-2.060
FCF..............................1131.... 982.....597......403.......-82

Electric Power Companies x Inflation

Are electric power companies earnings automatically adjusted by inflation?
As I told you yesterday, I now suspect that it isn't.

We can visually verify this looking at the historical earnings/dividends graphs, available at Fundamentus.
Now it's easy to see that, except for ELPL, that has several nonrecurring items, earnings and/or dividends are rather steady since about 2007.

OHLB3 - My View

In the first half of 2011, when all concessions were yielding money, OHLB generated BRL 290 mi in cash (earnings + depreciation + others adjustments). I don't know if there is some seasonality, but let's consider a cash generation of BRL 600 mi in cash per year (15% mkt value).
Now we have to discount normal investments. On page 12 of 2Q11 report they say that they spent BRL 90 mi in maintenance. For the sake of prudence, let's say that they will spend BRL 200 mi in investments regularly. So FCF would be BRL 400 mi (10% of mkt value).
That's too good to be true. And it is. I see at least 2 problems:

OBRASCON HUARTE LAIN BRASIL S.A. - OHLB3

I took a look on this road concessions company and found that it may be worth to dig in for more information.

Are power distribution companies the great bargains in the market?

After reading the recent COELCE analysis in Ação e Reação, I have a feeling that in the coming months we'll see the kinds of comments on the media we saw about Cielo and Redecard: "Market overreacted", "Analysts now optimistic", "Great discount caused by excessive pessimism", "Buy" Buy" Buy!".

The price metrics of Eletropaulo and Coelce are so cheap...
It means that Mr.Market is seriously afraid about the regulatory issues.
As he usually overreacts, and the metrics are so cheap, I think it's very reasonable to think that Coelce and Eletropaulo are bargains.

GEPA3 - Geração Paranapanema

Although with a high P/E, depreciation is very huge and investments low, wich gives a FCF yield of 11%.
All the concessions are due after 2029.
May be a good option, but more study is necessary.

COMGAS

The change in accounting standards made the comparison with past periods more difficult. The reason is the end of the regulatory asset/liabity account. The earnings presentation, fortunately (on page 12) shows the evolution of this account since december 2008.

Natural Gas / CGAS / PETR

Petrobras anuncia desconto nos contratos de gás natural brasileiro a partir de maio

Good news for Comgas. Petrobras changed its price policy to avoid destroy the competitiveness of natural gas.

ELPL4 - Eletropaulo

Eletropaulo announced today its results of 2010. Net income, without extraordinary effects, reached almost BRL 1 billion. I'm considering in my valuation just BRL 800 millions of recurring earnings (the equivalent amount of 2009), wich gives a P/E = 7,0 and a yield bigger than 10%.
Nice figures.

CSMG3 - Copasa

Copasa has released 2010 results. A shame.
For the net earnings of 677 mi, 313 was due to the reversion of net actuarial liabilities, leaving a normal earnings of just BRL 364 millions.

Besides that, it altered the payout from 50% to 35%. I sold the remaining shares I had Tuesday, when I saw that release. With this figures, this piece of shit is not worthing more then 20,00.

P/E: 7.5
ROE: 10%
Yield: 5-6%

COMGAS - CGAS5

BB Investimentos revisa preço-alvo e recomenda compra para Comgás

Today the brazilian investing news website Infomoney stated that BB Investimentos revised the target price for COMGAS to R$ 60,00 and upgraded it to BUY. They listed a bunch of reasons to be optimistic about COMGAS and iadaiadaiada.
Well, I bought COMGAS at R$ 30,00 - 35,00 more than a year ago. Didn't the analysts see that COMGAS was a good investiment then, when it was selling for 30% less?
I definetly LOVE the analysts!