Feb. 8 (Bloomberg) -- Light SA, the power distributor serving Rio de Janeiro, expects electricity sales to rise more than 3 percent this year as the company benefits from a growing middle class and investments ahead of the 2016 Olympic Games.
Rising demand for electricity means Light’s 2013 sales growth will match a similar increase last year, Chief Financial Officer Joao Zolini, said in an interview at Light’s headquarters in downtown Rio yesterday.
Preparations for the Olympics and the 2014 soccer World Cup are driving an expansion in Rio’s hotel capacity and improvements in infrastructure that include extending the subway network and renovating the city’s downtown port area. A drive to quell the city’s crime led police to occupy the city’s slums, known as favelas, making room for more installation of basic services including water and energy.
“It’s a magic time for Rio,” Zolini said. “There was 40 percent of the market we used to not even consider and are now potential clients.”
Light, based in Rio de Janeiro, fell 0.7 percent to 19.68 reais at the close in Sao Paulo, the lowest since October 2008.
The government’s decision to lower power rates that generators sell to distributors like Light will reduce the company’s spending, he said. Rates have been by slashed as much as 32 percent since Jan. 24.
“About 15 percent of the power we buy to distribute to clients is lost through robberies and technical problems, so its money we lose,” Zolini said. “With lower power rates, we will be paying less for that electricity we lose,” he said.
Light’s revenue grew 5.5 percent to 1.7 billion reais ($860 million) in the third quarter, the third consecutive year-on-year increase for the period. Fourth quarter results will be announced March 8.