Introduction

About this publication

We present you the hotsite of our Annual Report 2019, an extract of the complete Annual Report 2019 information, written based on the best global practices of management and corporate sustainability reports.

For the 2019 Annual Report, we adopted the materiality developed by Eletrobras, with the participation of all its companies, including Chesf. This matrix was submitted for the approval of our Board of Executive Officers and our Board of Directors to ensure the relevance of all topics to our specific business and the broad coverage of all issues that have a real impact on our activities, or that may influence stakeholders’ decisions. Legal and Regulatory Compliance was added to the original matrix, with two related disclosures.

The table below is the result of the materiality determination process. The limits determine where or in which audiences the impacts occur, and capital is based on the concept proposed by the framework of the IIRC (International Integrated Reporting Council) for the grouping of the different types of input or resources used by Eletrobras companies to generate value.

For more information about this report, please contact:
Planning, Governance, Strategy and Sustainability
Advisory (APP).
Rua Delmiro Gouveia, 333 – San Martin
50761-901 – Recife, PE – Brasil
E-mail: sustentabilidade@chesf.gov.br
Telephone: (81) 3229-2026/3254/3351

Message from the administration

Chesf has been reinventing itself over the last years and 2019 will be registered as a year of positive results in all areas of the Company. Today, the company is more well-developed and undergoing a process of transformation. The implementation of our plan to adapt and modernize the Company has been promoting significant advances, which allow us to reap the fruits of the consolidation of this work, although we still have many challenges and obstacles to overcome.

In an articulated manner, according to Eletrobras’ guidelines and with the full commitment of its staff, Chesf’s governance has established guidelines with the objective of enabling the Company to follow a new path, marked by technological transformation, improvement of the economic-financial situation and modernization of its management systems.

We identified the need to find innovative solutions, with high potential for economic sustainability, respecting regulatory compliance and achieving benefits for society. We direct our efforts to the improvement of the efficiency levels of the various areas of the Company, in an integrated manner, seeking economically consistent results in all segments in which we operate – energy generation, transmission and trading.

In this sense, we have developed projects aimed at the implementation of new methods to generate energy, and one of the milestones is represented by the inauguration of the floating solar power plant of Sobradinho – the first of its kind in Brazil – with a high potential for replicating the methodology to be developed in other lakes.

For another year, we embraced the challenge of repositioning the organizational structure, making quali-quantitative adjustments in the staff, with the conscious adoption of actions aimed at minimizing the impact on our intellectual capital. To this end, new operational requirements were applied in the plants, substations and operation centers, increasing to 70% the number of remotely assisted installations, guaranteeing the reliability of the electrical system. We completed the integration of the Teresina and Fortaleza Operation Centers, with new technological resources that allowed efficiency gains for the development of operational activities.

We have made progress with the implementation of Enterprise Resource Planning – ERP systems, in a single instance in Eletrobras companies, centralizing processes and allowing faster access to reliable information. The commitment and engagement of the teams made it possible to implement, in 2019, the modules of Supply, Finance, People Management and monitoring and control of services provided in Operation and Maintenance (WCM – Work Clearance Management). It is worth mentioning that the use of WCM is considered a pioneer in the country. We employ a computerized solution for communication and collaboration in the cloud, with significant increases in productivity, mobility and business integration.

Implantamos a Unidade Nordeste do Centro de Serviços Compartilhados (CSC), sob coordenação da Eletrobras, para atender as demandas existentes com maior produtividade, adotando práticas mais eficientes e utilizando tecnologias de ponta. Nesse sentido, houve o lançamento do Portal do CSC, um canal direto com o cliente e uso de robotização de atividades. Além disso, foi assinado com a holding o “Contrato de Compartilhamento de Infraestruturas e Recursos Humanos”, viabilizando efetiva cooperação entre as empresas Eletrobras.

Com a entrada em operação comercial da 18ª turbina da Usina de Belo Monte, concluímos mais um empreendimento, com participação em Sociedade de Propósito Específico – SPE. Adicionalmente, adquirimos a participação acionária em duas SPEs (Extremoz Transmissora do Nordeste – ETN e Transmissora Delmiro Gouveia – TDG), aumentando o nosso sistema de transmissão.

We implemented the Northeast Unit of the Shared Services Center (CSC), under the coordination of Eletrobras, to meet the existing demands with greater productivity, while adopting more efficient practices and using state-of-the-art technologies. In this sense, we launched the CSC Portal, a direct channel with the client and the use of activity robotization. In addition, the “Infrastructure and Human Resources Sharing Contract” was signed with the holding company, enabling effective cooperation among Eletrobras companies.

With the entry into commercial operation of the 18th turbine of the Belo Monte Power Plant, we concluded yet another venture, with participation in a Special-Purpose Entity – SPE. In addition, we acquired a stake in two SPEs (Extremoz Transmissora do Nordeste – ETN and Transmissora Delmiro Gouveia – TDG), thus increasing our transmission system.

We also concluded the Pindaí Wind Complex, a generation undertaking that required a great effort from the Company to achieve it and added 110MW of clean energy installed capacity to the Brazilian Energy Matrix, coming from wind power generation. In fiscal year 2019, we continued the expansion of our transmission network with the entry into commercial operation of 22 new projects, incorporating 2,644 MVA of installed transformation capacity and 331 km of transmission lines to the Basic Network of the National Electric Sector, adding with the incorporation of these projects R$ 65 million of annual revenues, in addition to significantly reducing our stock of works in arrears in relation to the dates established in the concession contracts.

The modernization of the existing facilities and the strict compliance with the asset maintenance plans made it possible to obtain excellent operating indicators, especially those related to the availability of generation and transmission, reaching all the established goals and obtaining the best results in our history.

We closed the year with one of our lowest debt ratios. We grew 105% in operating cash generation (Ebitda) when compared to 2018. We acquired and merged other companies, which will allow us to increase our annual revenues by R$ 120 million. We completed the renewal of tax benefits with Sudene, which reverts to the region, through the expansion of investment capacity in regional infrastructure. With this, in the last years, Chesf has been providing good remuneration to its shareholders in the form of dividends.

The successive positive results presented in recent years and the trend towards sustainable profits in the coming periods have made it possible to recognize deferred tax assets and liabilities, which contributed significantly to the good financial performance for the year.

We took an important step towards total cost exemption with Nair Alves de Souza Hospital (HNAS), located in the city of Paulo Afonso (BA), which will be progressively and fully transferred to the Government by the fourth quarter of 2020, whose activity does not correspond to the Company’s business scope.

The scenarios and perspectives of the National Electric Sector show us that we must be prepared for the economic and technological change that is underway in the electricity sector. We must be aware of the novelties in energy production, digital transformation and modern management practices in order to acquire the necessary competence to remain in a sector that is proving to be highly competitive.

Consequently, we will continue to seek capital investments with the aim of achieving positive financial results, considering cost reduction and process optimization, without neglecting our commitments related to sustainability, including the Sustainable Development Goals (SDGs) and the Global Compact Principles.

In conclusion, we give special thanks to all the Chesf family. The commitment and dedication of our employees have been crucial to overcoming challenges and achieving better results. Let’s keep fighting and conquering!

Enjoy your reading!
Fábio Lopes Alves | CEO of Chesf
Wilson Ferreira Junior | Chairman of the Board of Directors

Covid-19 Pandemic

Since January 2020, Eletrobras companies have been monitoring the evolution and possible impacts caused by the coronavirus pandemic and following the recommendations of the Ministry of Health and the governments of the states and cities where its operations are located. We prioritize the preservation of employees and collaborators, avoiding the propagation of the disease, and the maintenance of the generation and transmission of electricity in the country. To coordinate and monitor all actions related to the pandemic, on March 17, 2020, the Eletrobras Companies’ Crisis Monitoring and Management Committee was created, formed by the holding company’s Board of Executive Officers, the CEOs of its subsidiaries and the Director-General of Cepel.

Due to the need to preserve its essential activities, the company has taken several steps wherever possible:

  • ANTICIPATED VACATIONS;
  • APPROVED COMPENSATORY TIME OFF;
  • AUTHORIZED REMOTE WORK;
  • RESTRICTED DOMESTIC TRAVEL;
  • PROHIBITED FACE-TO-FACE MEETINGS WITH LARGE NUMBERS OF PEOPLE;
  • SUSPENDED INTERNATIONAL TRAVEL AND QUARANTINED EMPLOYEES WHO SHOWED SYMPTOMS; AND
  • REQUESTED THAT ITS SERVICE PROVIDERS ALSO OBSERVE ALL THE GUIDELINES OF THE MINISTRY OF HEALTH.

With regard to the operation of the electroenergetic system, a contingency action plan was created with the objective of mapping, monitoring and guiding employees on the actions required in generation and transmission operations.

At this unusual time for everyone, Eletrobras companies have demonstrated high resilience, a high degree of commitment and a clear purpose of all managers and employees to generate and transmit the energy that Brazil needs to fight the pandemic, preserve lives and maintain economic activities.