Velcan climbing more than 5% on Tuesday at 11.85 euros after the good news announced in Brazil. The Rodeio Bonito hydroelectric plant (15 MW) has signed its largest production since the beginning of the concession, thanks to a level of precipitation that is normalized after three years of drought. The load factor exceeds 57%.

In parallel, the company reports that its payments under the Energy Reallocation Mechanism (MRE) were significantly reduced in the second half compared to the first. Several independent producers had challenged the way the regulators had calculated the additional costs of this device. They were heard, including through their legal actions. The MRE should not exceed 0.29 million euros in the second half after the first 0.9 ME.

Moreover, the risk that the plant Rodeio Bonito excluded from MRE due to insufficient production has been reduced: even under very unfavorable hydrological scenario, there will be no exclusion by January 2019. If d`exclusion, a factory must indeed again apply to be readmitted with a slightly lower level ensured POWER ENGINEERING, but keeps the right to sell on the spot market. "Most hydropower plants have suffered from the same water problems, the group believes qu`une properties that such an outcome is unlikely to materialize," says management.

In 2016, Velcan expects that the contribution of its Brazilian operations exceeds 13.6 million reais. For the sake of prudence, the company has modeled a decrease of 5% of the energy security in the context of the amount of pre-sold electricity. However, it does not find such a drop at this point. EBITDA is expected to reach 11.5 MBRL in this scenario.

The decline in real penalizes accounts but better rainfall will limit the impact, according to Portzamparc remaining to purchase for a price of 21.4 euros.
/ NRO