Financial Performance - Net operating revenue for 2020 was R$29,080,513, a slight increase from R$29,042,129 in 2019[48] - Operating expenses for 2020 were R$26,371,596, compared to R$20,441,343 in 2019, indicating a significant rise in costs[48] - Profit before income tax and social contribution for 2020 was R$6,952,646, down from R$7,217,786 in 2019[48] - Net income from continued operations for 2020 was R$6,387,313, a decrease from R$7,848,445 in 2019[48] - Financial results showed a loss of R$1,671,646 in 2020, an improvement from a loss of R$2,448,786 in 2019[48] - The company declared a mandatory dividend of R$1.5 billion, representing 23.78% of its adjusted net income for the year ended December 31, 2020[58] - The earnings per share (EPS) for 2020 was R$4.06 for common shares and R$4.47 for preferred shares, showing a decline from R$8.12 and R$8.93 in 2019 respectively[54] Assets and Equity - The total assets as of December 31, 2020, were R$178,966,449, compared to R$178,622,483 in 2019[47] - Shareholders' equity increased to R$26,400,066 in 2020 from R$26,341,171 in 2019[47] Sales and Investments - The company generated sales proceeds of R$896.9 million from the sale of 24 SPEs in 2020[42] - For the year ended December 31, 2020, the company invested R$3,122 million in capital expenditures, with a planned budget of R$8.245 billion for 2021[166] Debt and Financial Obligations - The company incurred a total debt of R$19.7 billion related to the sale of its distribution companies, which includes R$8.5 billion in receivables from the CCC Account[104] - The company has already paid R$6.7 billion in principal and interest of the R$19.7 billion total debt, leaving an outstanding balance of approximately R$8.0 billion[106] - The company expects to receive R$1.9 billion in reimbursements from the CCC Account as of December 31, 2020, after accounting for obligations to return R$472 million[111] - The company is subject to financial covenants, including a net debt to EBITDA ratio generally fewer than four and a debt service coverage ratio higher than 1.2[176] Regulatory and Operational Risks - The company is subject to various risks, including financial liabilities and potential impacts from the privatization bill proposed by the Brazilian Government[64] - The company is subject to regulatory changes by ANEEL, which could adversely affect its operations and financial results[70] - The company is exposed to potential claims regarding mismanagement of sectoral funds and governmental programs, which it managed until April 30, 2017[116] - The Brazilian electricity sector may continue to face negative impacts from the COVID-19 pandemic, with uncertainties regarding future government actions[83] COVID-19 Impact - Brazil's GDP decreased by 4.1% in 2020 due to the COVID-19 pandemic, with initial forecasts predicting a 9% contraction[75] - Average energy consumption dropped by 15.7% from February to May 2020, but increased by 3.8% starting June 2020, ending the year with a 1.3% rise compared to January 2020[76] - The company reported no material impacts on its electric energy trading business during the pandemic, as results aligned with projections[77] - The COVID-19 pandemic has increased risks related to employee health and safety, prompting the company to implement various workplace modifications[82] Legal and Compliance Matters - The company may incur losses and spend resources defending against pending litigation and administrative proceedings[68] - The company has filed claims with ANEEL for renewed transmission concessions, with indemnification for RBNI assets paid in installments totaling approximately R$8.1 billion as of December 31, 2012[125] - The company maintains its current provision estimates for litigation concerning compulsory loan book-entry credits, primarily based on repetitive appeals, despite the unfavorable June 2019 STJ Decision[220] Future Outlook and Strategic Plans - The company aims to reduce the number of SPEs from 94 to 49 by the end of 2021 to enhance efficiency in generation and transmission assets[97] - The company plans to remedy material weaknesses in internal controls identified during the 2020 certification process by implementing a new methodology in 2021[89] - The company may experience difficulties in maintaining its market share unless changes to its capital structure are made[166] Eletronuclear Specifics - Eletronuclear invests R$100 million annually in modernization and safety requirements for its nuclear plants[191] - As of December 31, 2020, Eletronuclear's impairments totaled R$4.5 billion, with potential for additional provisions if construction on Angra III does not resume in 2021[199] - The budget for Angra III has been revised to R$27.1 billion, with R$18.5 billion pending implementation, and the expected operational date remains November 2026[203]
Eletrobras(EBR_B) - 2020 Q4 - Annual Report