Strategy and Competitive Advantages
Strategy
Our objective is to seize growth opportunities within the Brazilian energy industry and consolidate our position as the largest and most profitable integrated electricity company in Brazil. The key elements of our strategy are described below:
We enjoy a unique opportunity for organic growth in our distribution concessions, given our competitive standing.
We have three Discos in the Northeast region (Neoenergia Coelba, Neoenergia Pernambuco and Neoenergia Cosern) which historically have grown above the Brazilian average. These concessions require a large volume of investments, especially in new connections, expanding our regulated asset base and, consequently, our remuneration base. On the other hand, we have two other Discos (Neoenergia Elektro and Neoenergia Brasília) that take advantage of being exposed to more mature markets.
Thus, we will continue to carry out our investment plan, expanding the access to electric energy (universalization) and increasing the quality of the service we provide, as well as the automation of networks and systems aiming the evolution to smart energy networks.
We will continue to seek operational excellence, staying at the forefront of efficiency and quality in the industry. We expect that widespread automation, smart metering, and mobile workforce management, will lead us to better utilization of resources and use of networks, reducing marginal costs.
Due to our experience and proven ability of execution in the Transmission business, with Capex savings and anticipations compared to Aneel`s schedule, we also see opportunities for growth in this way, obviously in a selective manner and respecting the returns pursued.
As Brazil’s electricity consumption grows over the next decade, we will continue to explore investment opportunities in new generation projects, in particular, wind and solar photovoltaic energy generation through our pipeline, observing a strict return on investment rules, in order to ensure that energy demand is met as well as creating value for its shareholders.
The commitment to cost control is a non-negotiable value for Neoenergia. Since 2017, the group has maintained the Opex at almost constant levels, thus absorbing the period’s inflation, the increase in the Discos’ customer base, which has grown at an average pace of around 300 thousand new consumer units per year, and the new business.
The review of operational and corporate processes, the use of technologies and the constant search for efficiencies and synergies have allowed us to obtain significant cost savings.
Our strengths:
- We are one of the largest energy distributors in Latin America, being the largest national distribution player in terms of clients and with assets in attractive markets, a diversified customer profile and services recognized for their excellence.
- We expect a favorable tariff review for our distribution concessions, relying on a robust and well-developed regulatory framework.
- We operate in the energy distribution sector, with high quality and efficiency.
- We have one of the major integrated energy platforms in Brazil, with a large share of regulated business (distribution and transmission), long-term PPAs and concessions, hydrological risk insurance and generation assets with diversified matrixes.
- Our solid experience in developing projects in all segments of the electricity sector, when combined with competitive financing lines, represent a differential in seizing and developing new opportunities for growth.
- High Standards of Governance combined with a management team with solids experiences in the sector and an Controlling Shareholder reference in the sector in best practices in the world.
- Proved ability to achieve growth with financial discipline and profitability.
- Sustainable agenda, alongside UN’s standards, focusing on renewables growth, diversity, inclusion and high governance standards.