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Eletrobras Net Quadruples on Dollar Revenue From Itaipu

Centrais Eletricas Brasileiras SA (ELET6), Brazil’s largest utility, said second-quarter profit more than quadrupled as dollar revenue from its power dam venture with Paraguay surged in local-currency terms.

Net income jumped to 1.35 billion reais ($670 million) from 327 billion reais a year earlier, the Rio de Janeiro-based state-run power producer and distributor, known as Eletrobras, said in a regulatory filing late yesterday. The result missed the 1.4 billion-real profit excluding some items expected by analysts, according to the average of three estimates compiled by Bloomberg.

Brazil’s real declined 9.1 percent against the U.S. dollar in the quarter, the worst performance among 16 major currencies tracked by Bloomberg. The weaker real boosted the local-currency value of dollar-denominated revenue from Itaipu, the world’s second-largest hydroelectric dam, which straddles the Brazilian and Paraguayan borders.

“There’s an effect from the dollar’s appreciation, because Eletrobras has dollar revenues from Itaipu,” Filipe Corga Acioli, an analyst at Rio-based Agora CTVM SA, said in an Aug. 10 telephone interview, before the earnings were announced. Corga rates the stock hold.

Eletrobras booked a 701 million-real financial gain stemming from the real’s decline, compared with a 404 million- real loss a year earlier.

Eletrobras rose 0.7 percent to close at 20.62 reais in Sao Paulo trading. It’s down 23 percent this year, compared with a 2.5 percent increase in the benchmark Bovespa index. The earnings report was release after markets closed yesterday.

To contact the reporter on this story: Rodrigo Orihuela in Rio de Janeiro at rorihuela@bloomberg.net

To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net

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