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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 6-K

 

Report of Foreign Private Issuer Pursuant to

Rule 13a-16 or 15d-16 Under the Securities

Exchange Act of 1934

 

For the Month of August 2004

 

EDP- Electricidade de Portugal, S.A.

 

Praça Marquês de Pombal, 12

1250-162 Lisbon, Portugal

(Address of principal executive offices)

 

(Indicate by check mark whether the registrant files or will file annual reports under cover of

Form 20-F or Form 40-F.)

 

Form 20-F    X            Form 40-F

 

(Indicate by check mark whether the registrant by

furnishing the information contained in this form

is also thereby furnishing the information to the

Commission pursuant to Rule 12g3-2(b) under the

Securities Exchange Act of 1934.)

 

Yes         No    X  

 

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TABLE OF CONTENTS

 

I.	EDP Release: EDP Increases Stake in Hidrocantábrico to 95.7%

 

II.	EDP’s 2004 First Half Results

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Dated August 2, 2004

 

EDP- Electricidadé de Portugal

 

By:  /s/ João Ramalho Talone        

Name: João Ramalho Talone

Title: Chief Executive Officer

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Lisbon, July 29th 2004

Reuters: EDPP.IN / EDP.N EDP INCREASES STAKE IN TO

Bloomberg: EDP PL / EDP US

95.7% BY ACQUIRING AN ADDITIONAL 56.2% STAKE FROM ENBW, CAJASTUR AND

Under the terms and for the purposes of article 248 of the Securities Code, EDP—Electricidade de Portugal, S.A. (“EDP”), hereby communicates to the market and to the public in general the following:

EDP has today entered into a set of agreements with Energie Baden- AG (“EnBW”), Caja de Ahorros de Asturias (“Cajastur”) and Caja de Seguros Reunidos, de Seguros y Reaseguros, S.A. that will lead to the acquisition of an additional 56.2% stake in del S.A. and permit EDP to increase its current stake from 39.5% to 95.7% of share capital. The total consideration to be paid by EDP within this transaction will be million.

Simultaneously, Cajastur will receive shares equivalent to approximately 5.4%-5.8% of EDP share capital to become one of the largest shareholders of EDP, strengthening the strategic partnership between both companies.

INVESTOR RELATIONS DEPARTMENT

Pedro Pires, Head of IR This transaction will be financed through a share capital

Santos

Elisabete Ferreira increase by means of a rights issue in the amount of

Cristina Requicha

Rui Antunes million, through the issue of new shares to EDP shareholders. EDP has ensured that a group of financial

Tel: +351 21 001 2834

Fax: +351 21 001 2899 institutions undertake to subscribe all the shares that are Email: ir@edp.pt not subscribed for by the shareholders of the company.

Site: www.edp.pt

EDP—Electricidade de Portugal, S.A. Sociedade Aberta Sede: de Pombal, 12 1250-162 Lisboa Portugal Capital Social: 3,000,000,000 1805 da C.R.C. Lisboa Pessoa Colectiva 500 697 256 1

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The execution of the rights issue is subject to the approval by the Portuguese Government of a privatisation Decree-Law of EDP, and the registration of the subscription public offer with the do Mercado de Valores . The launching of the offer is expected to occur in October.

The agreements reached with the remaining shareholders of provide for the acquisition of the entire stake held by EnBW in (34.6%) for a consideration of million to be paid in cash, the acquisition of a 17.5% stake held by Cajastur for a consideration of million to be paid with EDP shares and the acquisition of a 4.1% stake held by for a consideration of million to be paid in cash.

The completion of the transaction will result in the termination of the shareholders agreement of currently in force, allowing for a higher degree of integration of EDP’s and activities.

Within the scope of this new strategic partnership, aimed at the optimisation of the combined operation of EDP and in the Iberian market, Cajastur and will keep a 3.1% stake in as well as certain veto rights, particularly in relation with matters concerning regional interests, which will preserve Hidrocantabrio’s links with the region of Asturias. In addition, Cajastur will have the right, for a long period of time, to sell out of share capital through a put option on EDP. The price of this put option is indexed to the value of EDP shares, ensuring the interests of EDP and Cajastur are unequivocally aligned.

The number of EDP shares to be delivered to Cajastur will be determined based on the volume weighted average price of EDP’s shares during the six months prior to

2

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July 28, 2004 ..29 per share), adjusted for the technical dilution effect of the capital increase.

The Board of Directors of EDP requested the Chairman of the General Shareholders Meeting to call a general shareholders meeting for October 7, 2004, in order to obtain the approval of the amendment to the articles of association of the company to delegate to the Board of Directors the ability to execute the share capital increase once the new phase of the company’s privatisation is approved. The rights issue will ensure certainty of funds to finance the transaction, preserving the balance sheet strength and sustaining profitability per share in the future. EDP has ensured that a group of financial institutions composed by Caixa Geral de Goldman Sachs, Millennium

bcp, Morgan Stanley and UBS undertake to subscribe the shares that are not subscribed for by the shareholders of the company.

Completion of the acquisition by EDP of the shares held by remaining shareholders is subject to certain conditions precedent including the approval of the transaction at the General Shareholders Meeting of EDP, the approval by the EU Commission with respect to the its compliance with EU antitrust rules and the non-opposition by the Spanish authorities.

The strengthening of the partnership through the acquisition of will enable both companies to maximise management flexibility and optimise business integration at the Iberian level. This is a key factor for EDP to successfully implement its business strategy and for the positioning of the Group as a top tier energy player in the Iberian market.

This will be achieved through the optimization of the energy generation assets portfolio, based on dispatch centralization and coordinated expansion of generation capacity, the definition and execution of a joint retail strategy for Portugal and Spain and integrated management of the gas assets portfolio.

3

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EDP believes the completion of this transaction will enable it to implement a series of measures to achieve significant synergies between the companies, including cash savings from implementing coordinated strategies for energy generation and commercialisation, joint management of energy trading in the market, and the coordination of gas and other fossil-fuel sourcing activities. In total, these synergies are expected to amount approximately to million per annum, which will be fully achieved by 2007.

The agreement reached with Cajastur will also allow to focus on its core-business. A divestment of its cable TV assets is expected once the transaction has been executed. Such divestment is expected to generate a substantial capital gain.

Therefore, taking into account the expected synergies and divestments, this transaction is expected to be approximately neutral on EDP’s earnings per share from 2005 onwards, assuming IAS accounting principles.

Morgan Stanley is acting as sole financial advisor to EDP in this transaction.

EDP – ELECTRICIDADE DE PORTUGAL, S.A.

4

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Some of the information contained in this document contains forward-looking statements. Any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and EDP’s actual results may differ materially from those in the forward-looking statements as a result of various factors. EDP undertakes no obligation to publicly update or revise any forward-looking statements.

The information contained herein does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities referred to herein, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any jurisdiction.

A registration statement relating to the securities referred to herein has been filed with the U.S. Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This communication shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any U.S. State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State.

The offering will be made only by means of a prospectus included in the registration statement. A written prospectus, when it becomes available, may be obtained from Mr Pedro Pires Director of Investor Relations at EDP, de de Pombal 12, 1250-162 Lisbon.

This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (the “Order”) (all such persons together being referred to as “relevant persons”). The securities referred to herein are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents. This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons.

Stabilization/FSA

5

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1H2004

Financial Results Portugal

1250-162 Lisboa Headquarters: de Pombal,12

EDPP.IN / EDP.N EDP PL / EDP US

Investor Relations Department Pedro Pires, Head of IR Gon Santos +351 21 001 2834 www.edp.pt Bloomberg: Lisbon, 29 July 2004 Elisabete Ferreira Cristina Requicha Rui Antunes Tel: Fax: +351 21 001 2899 Email: ir@edp.pt Site: Reuters: EDP—Electricidade de Portugal, S.A.

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1 2 3 4 5 9 10 12 15 19 22 24 25 26 27 28 30 32

Table of Contents 1H2004 Financial Results—Summary EBITDA Overview Capex Cash Flow & Financial Debt EDP EDP Energia Enernova & EDP EDP Brazil Telecoms Information Technology Consolidated Financial Results & Consolidated Extrordinary Results Consolidated Income Statement Consolidated Balance Sheet and Cash Flow Statement Income Statement by Business Areas Balance Sheet by Business Areas Cash Flow by Business Areas

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1

1.5% 2.1% 5.5% 2.8% 4.3% -0.9% -8.4% 15.0% -4.0%

%

U personnel financial in while            , 5,688,924 557,686 2,797,941 18,875 5,805 9,950 8,959 1,383 3,889 (2) reduction

1H2003 7.9% down the 19,413 6,052 9,864 8,202 1,590 3,732 1H2004 5,775,815 569,531 2,951,534 were . following services charges and EBIT was up 25.6% interest

(1) (1) (1)

supplies financial in

General Indicators Number of electricity clients Portugal Brazil Electricity sales (GWh) Portugal Brazil No. of employees (core business) Portugal Brazil while EBIT increased 35.6%. Consolidated decrease Adjusting for Oni’s direct costs which are accounted for as S&S at EDP’s consolidated accounts.

Iberia. (2) in 5.6% 3.1% 35.6% 0.6%—51.0% 32.6% (32.8) 51.2 business year-on-year

% 12.4% 51.0% U

U EBITDA was up 12.4% 4.0% electricity the 877.7 406.8 59.4 182.0 0.061 337.0 from 3,345.7 2,468.0 (182.5) 7,492.7 7,205.2 the

1H2003 YE2003 at

0 986.6 551.6 (181.5) (20.1) 274.9 0.092 447.1 7,256.4 benefiting

1H2004 3,532. 2,545.4 1H2004 7,459.9 at the operating level in 1H2004. in the markets where EDP operates: Portugal up 5.2%, Spain and EDP’s concession areas in Brazil up 4.1%; granted by the regulator last year; improvements partly year-on-year. The main contributors were the generation business and Brazil. contributing with an extra 400 MW of installed capacity and 1,155 GWh of electricity emission; for the 1H2004 results, following the acquisition of a 56.8% stake by in July 2003; efficiency improvement, and m) slight was up 51.0% ( strong growth control a cost posted m) on

( healthy growth in electricity consumption tariff revisions in Bandeirante and Enersul contribution of Naturcorp focus results at .9 million is proportionally consolidated in accordance with EDP’s stake in (40%). Figures presented The accounts presented in this document are non-audited.

1H2004 Financial Results—Summary • The EDP Group reported • The good performance at the Consolidated EBITDA is thanks to: TER’s entry into industrial service strong Financial Net profit

Financial Results Summary Operating Revenues Operating Costs EBITDA Operating Results Financial Results Extraordinary Results Net Profit Earnings per share Capex Financial Debt Financial Debt Net Debt (i) the (ii) (iii) (iv) the (v) costs fell 5.9% following the introduction of the HR Restructuring Program. • EBIT was positively influenced by a change in the compensation of subsidised assets’ amortisation. Stripping this out, • debt. • (1) above correspond to 100%. Note:

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2

the the also .7 in UDGr HR in until pool the which at in vis— core main of allowed the of healthy the resulted decrease influenced low The the EDPP increase in concession (+42.26% operation’s (+50% amounting of following transfer in 7.3% and 2003), revisions year-on-year, fall year, were the EDPP. 5.2% a a acquisition EDP’s tariff Enersul level 12.4% result control. 11.3% procurement a Additionally, last to coal Brazilian million up a increase EDP negatively the (middle at Brazil up to and the EBITDA as cost and fuel from despite started at be to year’s .3 was in was million activity. to the tight imported increase at by

activity which contributed thanks last October) behind 1H2004 a .9 which of Naturcorp operations efficient benefited UDGr employees in the and EBITDA a continues up and operations ‘s an in TER’s in the Program, 649 already increase was business engine increased the from of This consumption Brazil (+18.08% the performance of management consumption, from Consolidated EBITDA million demand and price gas EBITDA in resulted EBITDA 4.1% in were all, ‘s EDP EDP reduction 1H2004. the The ONI in .6 All • beginning energy benefited million savings vs. 1H2003). • electricity tariffs, revenues Restructuring a the in personnel costs. • by prices. Basque contributed approximately million to EBITDA. • areas Bandeirante April) remarkable vis 1H2003). • following a 15.6% reduction in operating costs. • to growth business contributors to this improvement.

EDP 27%

HC 27,6

8%

15,3 0,5 -6,3 42.9

13% Brazil IT

EBITDA 1H2004 45.7 -34,0 Oni

46% 15.1

6% -3,0 Adjustments

EDP & Enernova + EDP Other 5.0 by Business Areas Brazil

U

11.3% - -1.2% 24.4% 49.5%—2.2%—12.4%

% 130.8%

U EDP EDP Energia EDP Holding and Other Companies

405.1 32.6 3.9 265.1 61.9 86.8 (2.5) 21.1 3.7 877.7 986.6

1H2003 Enernova & EDP

450.8 (1.3) 8.9 262.1 77.0 129.7 12.8 21.6 25.0 986.6

1H2004 Contributions to the year-on-year EBITDA 877.7 m)

EBITDA Overview EBITDA 1H2003 EBITDA 1H2004 EBITDA ( EDP EDP Energia Enernova & EDP EDP Brazil Oni Information Technology Other & Adjustments Consolidated

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3

14th it MW. to Peixe when 4Q2004. led network the 31.5 on and 2006 of the 1H2004. the

10.3% 1H2004* 1.05 1H2004 in of service until the million capacity operating year-on-year in expansion

7.1% 2003 1.02 2003 industrial million

.0 installed start 21.6% the Capex/Depreciation started total to R$313.3 for

Return on Equity (ROE) extra a to

6.7% 1H2003* 0.83 1H2003 unit an increased required TER with for forecasted grid first TER is amounted The in Padrela) which investments unit and distribution which million). MW MW), major

6.5% 1H2004* 4.3% 1H2004* the MW),

400 Quelha (124 in the

.6 (450 third da farm as TER a plant 5.5% 2003 3.6% 2003 of build Fonte wind Investments needs

Return on Assets (ROA) group will Talefe, power MW EDP do Albacete service. hydro

3.3% investment

Return on Invested Capital (ROIC) 4.7% 1H2003* 1H2003* 400 2004. (Alto the of * Annualised for the 1H2003 and 1H2004.

at quality Angical ONI’s second October farms made in the Peixe - wind 79.3 7.0 141.2 28.5 112.7 29.4 66.8 18.3 18.1 5.4 337.0 in in million, of which million were already invested. The expected IRR for this project is 10.6%. improve the decrease new to in a 1H2003 3 investments in investment operations was of network

236.1 39.7 343.6 12.0 59.7 271.9 71.0 125.8 46.2 55.5 14.1 860.4 the start million investment following

2003 to the

- 13.5 7.3 7.3 following investment .6 distribution with

99.9 31.4 157.4 34.6 122.8 50.8 114.0 447.1 to the year-on-year,

1H2004 forecasted due in is Enernova’s was associated 26.0% unit 72.8% year-on-year, of EDPD 71% fell 26% second bulk at rose the the increased increased investment and HC

1H2004, at investment Brazil 2004 of m) investment the in operating Investment bulk

Capex (-) Edinfor asset transfer (-) Subsidies in cash (=) EDPD cash investments EDPP’s During The Capex ONI’s

CAPEX ( EDP Enernova & EDP EDP (40%) Brazil Telecoms Information Technology Other Total • The EDP Group’s capital expenditure totalled .1 million in the 1H2004, up 33% year-on-year. Note that the figures presented correspond to the EDP Group’s cash out flow on operating investments, considering the consolidation method of each subsidiary. • February should start operations. The investment in this third unit should start in the 2H2004. • The wind farms under contruction are expected to provide a 12% IRR. Enernova plans to invest .0 million in an extra 262 MW by 2006. • Total investment by in the project is estimated at • a drop in the equivalent interruption time, from 161 min in 1H2003 to 100 min in the 1H2004. The regulator remunerates these investments at a 9% pre-tax nominal rate. • Angical should start operating during 2006. • have been completed.

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4

.9 net of Brazilian Angical

57.1% 1H2004 3.8 1H2004* improved million the Peixe EDP through in .1 the 57.5% 2003 4.1 2003 and the payment of from increase of and flow achieved

Financial Debt / Total Capital Financial Debt / EBITDA generated cash The

59.4% 1H2003 4.6 1H2003* was debt. construction debt the

.4 million) operating of * Annualised for the 1H2003 and 1H2004.

EDP million financial consolidated re-start A A3 expenditures of .1 million

Stable the

6.5 business. .2

Negative 1H2004* Group’s to core the at the EDP S.A. level Group’s capital EDP relating

S&P 5.6 2003 the

Moody’s CCGT-TER; in

Debt Ratings domestic of BNDES a reduction following our of in group reduction million from

EBITDA financial interest coverage 5.6 1H2003*

Rating Outlook Rating Outlook following slightly first The ..0 operations the 32). obtained of or from page 18%

32.8 67.6—- 16.5 22.6 funding 274.9 881.3 (476.4) 404.9 (372.1) 5,825.3 805.8 631.4 675.0 (41.2) 8,003.1 142.8 7,860.3 flow (see for

1H2004 1H2003 production the to .9 million cash into to 38.8 18.7—- 23.6 36.5 from Portugal accounted due

5,356.2 786.1 547.3 685.5 7,492.7 287.5 7,205.2 entry in

YE2003 Net debt, however, increased the Oni, partially of - by .8 million principally and is

5,319.8 36.3 17.6 0.1 728.2 618.8 688.2 22.6 28.4 7,459.9 203.5 7,256.4 effect consumption

1H2004 debt fell .5 million). achieved the subsidiaries YE2003 was includes electricity vis—vis financial in Brazil S.A. in EDP which Brazilian debt at flow, increase the m)

( 5.2% financial m) cash 1H2004, ( and an increase reduction the

(1) the

Cash Flow and Financial Debt Cash Flow Net Income Operating Cash Flow Before Working Capital and Capex Change in Working Capital and Capex Net Operating Cash Flow Non-Operating Cash Flow Decrease / (Increase) in Financial Debt See page 27 for a detailed cash flow statement Financial Debt Holding and EDP Finance BV EDP Enernova & EDP EDP EDP Energia (40%) Brazil Telecoms Information Technology Other Total Financial Debt Cash and cash equivalents Net Debt Debt In subsidiaries’ hydropower plant (R$174.1 million). • Overall, as a result of a good operating performance, credit ratios improved at all levels. Netted against million of Escelsa’s Senior Notes in 1H2004

• The EDP Group’s total million), .0 million in dividends. • operating reflects working capital management as well as cash flow from operations. • (1)

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5

(1)

MW 46.9 710.2 56.0 946.4 1,192.0 197.0 3,148.5 J-04

M-04 test PPA A-04 were the

Fuel Coal 0.81 on

Coal/Fuel oil Fuel oil/Nat Gas Fuel oil Fuel oil Gas oil M-04 GWh programmed

F-04

- 367 were influence

-43.0% -5.9% -55.2% 11.3% -6.3% -0.3% J-04

% there no U which

D-03 of 2003 had

- N-03

75 6

290 699 4,390 5,459 of

1H2003 O-03 network, therefore S-03 the semester

- 165 70 313 5 A-03 to and

4,887 5,440 first REN

1H2004 1.33 J-03 the

J-03 emissions with M-03 total during (GWh) A-03 to contract M-03 GWh because PPA

Hydrolicity Coefficient F-03 1,155 the 1H2004 in

J-03 in

Thermal emission Tapada do Outeiro Carregado Barreiro Sines Alto de Mira + Tunes EDP thermal emiss. (PES) 2.0 1.5 1.0 0.5 0.0 contributed GWh foreseen 497 are

-0.3% - 23.1% 66.3% 3.4% 1.8% 8.9% 44.3%—15.3% -2.9% 16.2% 6.6% 1.5% 14.5% 7.0% - 2004, by works

% -38.7% -23.9% -46.4% 222.8% -35.0% -16.0% 256.4% -12.4% -256.8%

U February generation These

8,709 5,459 14,168 429—429 19 58 346 128 551 15,148 1,812 2,112—1,633 940 (261) (211) 21,174 (20) (2) (5) (398) 20,749 1.30 14th energy.

1H2003 the on increased

5,335 5,440 10,775 230 1,155 1,385 24 96 358 83 561 12,721 1,974 3,049 34 1,882 3,351 (268) (176) 22,567 (22) (6) (5) (340) 22,193 0.81 service produce

1H2004 station, to industrial power availability fired started its coal lowered which load, unit, base that

(GWh) a CCGT is works TER which

Hydroelectric (PES) Thermoelectric (PES) Hydroelectric (NBES) TER CCGT (NBES) Biomass Wind Farms Cogeneration Small Hydro first

Electricity Emission in Portugal Energy emission Binding Generation Non-Binding Generation Special Regime Producers Total EDP emission Pego thermal power station (PES) Tapada thermal power station (PES) Alqueva hidroelectric power station (PES) Auto-producers (IES) Import / (Export) net Direct sales to Ind. Clients (incl. in Cogen.) Pumping Gross demand Synchronous compensation Own consumption—generation Own consumption—transmission grid Losses Energy delivered to distribution Hydrolicity Coeficient The Sines, The Alto de Mira (132 MW) power plant was shut down on June 30, 2003

• EDP’s total emission, amounting to 12,721 GWh, was down 16% in the period due to lower rainfall, and thus a lower utilization of our hydroelectric power plants (44% vs 61% in 1H2003). The hydro coefficient was 0.81 vs. 1.30 in the 1H2003. Given that EDP owns nearly all the hydroelectric generation capacity in Portugal, its contribution to the total energy delivered to the system fell from 73% to 57% year-on-year. • emissions. During the 2Q2004 the second TER CCGT unit initiated test emissions (17GWh) and is expected to start industrial service in October 2004. • maintenance capacity charge. (1)

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6

costs lower the the is for in long-term in 1H2004. affect both EDPP, plants emission in to mentioned to consumption under resulted not procurement item power lower consumption did related the Energia 35% 54% it fuel fuel coal Sines recorded is and EDP (NBES)” hydro the 1% of for hence and of 5% and one 1H2003 from EDPP’s REN 1H2003) sales 40% coal the REN, in Trading purchase with with vis—vis / and because 1H2003 the than transferred energy “TER - Natural Gas—Diesel CPPE’s agreed PPAs from station 1H2004 maintenance was of the emissions) decreased the in from in which test CPPE—Fuel Mix - Coal—Fuel-oil escalated. for profit benefited maintenance power foreseen activity, management sales (including gross prices fired EDPP is accounted (programmed 73% coal coal Electricity TER 1% costs Sines dispatch, to 7% million). programmed of generation’s 19% which that maintenace coal management the station. mostly in .1 the of for power regime 1H2004 period vs. 1H2003, higher availability energy relate a In The The Special • The PPA energy charge rose 7.6% due to a higher utilisation of the Sines power station in were lower than the index reference it receives through the PPA energy charge .1 million contracts that were negotiated before the rise in coal prices, as well as from the use of coal stocks in the 1Q2004 at lower prices. • availabilty Programmed PPA Capacity charge. • higher of more expensive coal stocks (namely in 2Q2004). • responsible EDPP’s above the NBES (HDN and Hidrocenel). • at our small hydro power stations.

0.6% 7.6% 2.0% -1.0% 7.7% 35.3% 27.6% -0.9% 24.7%

% 111.3% -34.0% % -52.4% -15.3% 174.9% % -40.8%

U U U 111.1 9.0 5.8 0.7 114.4 440.5 114.4 554.9 35.8 20.5 620.2 59.7 45.0 111.1 18.9 130.0 30.4

1H2003 1H2003 1H2003 Gross Profit 443.8 440.5

443.1 123.1 566.2 75.6 20.3 5.9 668.0 80.7 21.4 7.4 0.6 110.1 52.0 162.0 18.0 1H2003 - PPA Energy Charge

1H2004 1H2004 1H2004

(1) - CPPE Fuel Costs

CPPE—PPA Gross Profit

110.1

123.1 m) m) (

( 456.1 443.1—PPA Capacity Charge

Gross Profit

(2) m)

( 1H2004

PPA Capacity Charge PPA Energy Charge Coal Fuel-oil Natural Gas Diesel m) The Special Regime Producers (SRP) Enernova and EDP (Renewable Energy) were excluded from EDPP consolidation perimeter from July 2003. For analysis purposes these two companies were excluded from EDPP in both periods. Only includes sales from the hydroelectric power plants with installed capacity <10 MW (>10 MW are dispatch by the energy management department).

EDP

Electricity revenues CPPE (PES) TER / Trading (NBES) Cogeneration (Soporgen & Energin) Small Hydro Total EDP Fuel Costs CPPE (PES) Natural Gas (TER, Soporgen & Energin) Total EDP Electricity purchases Trading, Autoconsumption & Cogeneration ( (1) (2)

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7

gross pre- pre- is a in the the the to of r in by In use Sines’s highe higher 104 18 and employees, program, program retirement period that the of charges and and amounted YoY restructuring this liabilities. this greater of 1,944 “early a fact higher 143 HR EDPP to because in 2003 continued to lay-offs lay-offs to as by a 2.8% average salary retirement Under remunerated During at the to

5 3 This for pension 56. due because and due down amounts flexible plan. now to 6.8% and activity. are EDP’s dismissals services) mainly was retirements, retirements, now the accounted increased of and amounted and restructuring are reducing decreased companies 34% flexible flexible result Services Headcount headcount Personnel costs despite a thus works” 100 56 management as salaries retirement (maintenance in Resources retirements early-retiree engineering and increased 1H2004. includes and Total energy (whose flexible system per the decreased flexible cost specialised and Supplies Services 2H2003 1H2004. the Human Security of & in and O&M the the from the personnel accepted at in in the 0.2% decrease of Social number in 29 premiums early-retirees restructuring Non-Group level Supplies implemented 100 the maintenance Pension “Maintenance Other Group • The Human Resources restructuring plan that EDP initiated be reduction retirements retirements including reflected in increase for 2004. • component 2003, correction”) Portuguese 1H2004 average thousand. • Group maintenance stoppages in 1H2003 inflated last year’s figures. • activity telecommunications costs associated with the power plants’ remote control. • 1H2004 from EDP Valor, EDP’s shared services company.

-0.2% -3.2% 1.2% 1.2% 0.2% 0.0% -6.9% 2.4% - 11.1% -6.8% 3.6% -1.6% 7.5% 51.3% 9.5% 54.5% -6.7% 14.2% 41.2% -0.9% 34.3%

% -21.3% -20.4% % %

U U U

60.1 5.9 6.6 0.7 1.5 45.4 2,087 1,139 634—314 3.60 8.8 4.3 1.1 1.3 4.4 19.9 4.4 1.5 0.7 0.1 0.4 7.1

1H2003 1H2003 1H2003

60.0 5.7 6.7 0.7 1.5 45.4 1,944 1,166 499 29 250 4.00 8.2 4.5 1.1 1.4 6.6 21.8 6.8 1.4 0.8 0.2 0.4 9.6

1H2004 1H2004 1H2004

(1)

m)

m) m)

EDP ( The Special Regime Producers (SRP) Enernova and EDP (Renewable Energy) were excluded from EDPP consolidation perimeter from July 2003. For analysis purposes these two companies were excluded from EDPP in both periods.

Personnel costs Total Personnel Costs Pension Premiums Early Retirement Correction Social benefits with early retirees Medical care with inactives Adjusted Personnel Costs Number of employees Generation activity Maintenance and Engineering activity Energy Management activity Sub-Holding MW/Employee Non-Group Supplies & Services Maintenance and specialised works Insurance costs Surveilance and security Building rentals Other Total Non-Group S&S Group Supplies & Services Specialised works Building rentals Electricity Maintenance Other Total Group S&S (1)

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8

fuel our and books the and

450.8 1H2004 EBITDA of benefits 2003 HDN management efficient management service between in

0.0 rentals centre by Energia’s

Generation to medical than the energy energy EDP to rate thanks at 1H2003 in difference 0.1 in the Spanish electricity

CostsPersonnel the for the pool in the related of also discount 1.9 Group and 1H2004 made records lower S&S—Non- transfer Spanish accounted in only provisioning a the the are used

2.4 S&S—Group in operations because purchases higher to which 0.6 resale following purchases department goods for began due the study, Materials and 11.3% intermediary replacing TER decrease of Revennues up as mostly

8.8 Operating thus most once actuarial Other was purchases acting 2004 management is 2004 58.2 EDPP, supplier, In increased

Gross Profit EBITDA the to energy EDPP’s Electricity the Provisions 405.1 1H2003 EBITDA • The “services provided” line, includes mostly intra-group transactions between EDPP and “EDP Energia” related with the purchase of electricity following an updated mortality table. pool for the supply of electricity to non-binding customers. • activity procurement. • department electricity Hidrocenel. and pool price and the price agreed with EDP Energia (see page 9 for more detail). •

m

7.7%—8.3% 12.2% 24.7% 12.3% 12.2% 34.3% 9.5% -0.2% 1.4% 59.3% 17.7% 11.3% 0.0%—16.2% 15.8% 26.0% 35.8%

% -40.8% 0.0 p.p. -27.8% -100.7% -0.5 p.p. 1.4 p.p. % -55.4% 105.5% -52.8% -45.0% -41.7%

U U

620.2 6.5 9.6 636.2 30.4 130.0 160.4 475.9 74.8% 2.0 7.1 19.9 60.1 1.8 (2.0) (18.2) 70.7 405.1 63.7% 116.2—4.9 284.0 44.6% 24.0 39.3 4.1 11.9 79.3 10.0 69.2

1H2003 1H2003

668.0 35.7 10.4 714.1 18.0 162.0 180.0 534.1 74.8% 1.4 9.6 21.8 60.0 1.8 (3.9) (7.4) 83.2 450.8 63.1% 116.2 (0.0) 5.7 329.0 46.1% 10.7 80.7 1.9 6.6 99.9 5.9 94.0

1H2004 1H2004

(1)

m) (

m)

Gross Profit/Revenues Sundry materials and goods for resale (

EDP Operating Income Statement Electricity Sales Services Provided Other Sales Operating Revenues Electricity Fuel for electricity generation Direct Activity Costs Gross Profit Supplies and services—Group Supplies and services—Non-Group Personnel costs Generation centre rentals Other operating costs (or revenues) Own work capitalised Operating Costs EBITDA EBITDA / Revenues Depreciation and amortisation Compensation of subsidised assets’ depre Provisions EBIT EBIT / Revenues Operating investment Binding Generation Non-Binding Generation Other investments Financial costs (capitalised) Total operating investment Recurring investment Non-recurring investment The Special Regime Producers (SRP) Enernova and EDP (Renewable Energy) were excluded from EDPP consolidation perimeter from July 2003. For analysis purposes these two companies were excluded from EDPP in both periods.

(1)

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9

the this at sales the EDP below liberalised energy activity to because EDPP’s Through Electricity due between present 20.8% 8.2% 20.6% 24.7% 69.3% 4.9% 13.9% -0.4%—63.7% 2.7% we % 232.1% -14.9%

Portuguese year with namely U last received. Energia, the or being supplied in the non- EDP 9.1%, transactions activity, 667.9 9.6 677.5 35.7 130.0 165.7 511.8 29.2 61.8 1.8 (18.7) 437.8 64.6% to period periodically) to EDP Energia’s books and the charged by 1H2003 same decreased intra-group electricity the is supplied management 806.9 10.4 817.3 118.5 162.0 280.5 536.8 33.2 61.6 (0.7) (6.8) 449.5 55.0%

(reviewed the supplies with contract personnel of the energy management being together of energy 1H2004 that contract the and maintained its market share vs. June 2003 (when costs the in facilities elimination of comparable price of price the transfer company not fixed number Personnnel of is the a transfer by the specialised and effect Group’s Profit has the the increased following the Gross Services is Energia the illustrate EDPP, vis—vis of and EBITDA—EDPP & EDP Energia Electricity Sales & Services Provided Other Sales Operating Revenues Electricity Fuel for electricity generation Direct Activity Costs Gross Profit Supplies and services Personnel costs Other operating costs (or revenues) Own work capitalised EBITDA EBITDA / Revenues

Energia Energia’s EDP result to and EDP EDP a Supplies order As In • market. • energy management department, previously in EDP Energia, was meanwile transfered to EDPP. Currently management department which procures electricity (namely in the Spanish pool) on behalf of EDP Energia. Purchases at the Pool price are charged directly difference mechanism, EDP Energia is isolated from short-term pool price volatility and the associated risks can be better managed EDPP. • In the 1H2004 EDP Energia had contracts with 73% of the facilities

binding system (a total of 2,602 facilities) 1,244 facilities were being supplied in the non-binding system). • in GWh more than doubled from 1H2003 levels. • delay in the roll-out of the information systems. • Energia the consolidated EBITDA of the two companies.

-9.4% -8.5% -4.5% -0.2% 71.2% -1.1% - 0.9% - - 0.0% 2.1% 28.3% -6.8%

% 160.5% 638.8% -86.0% 126.1% % 108.8% 112.2% % %

U -62.4 p.p. -55.3 p.p. -53.5 p.p. U U U

60.0 20.4 39.6 66.0% 3.2 1.8 0.0 2.5 (0.5) 6.9 32.6 54.4% 1.7—0.0 30.9 51.5% 913 73% 67% 1,026 53 1.7

1H2003 1H2003 1H2003 1H2003

156.3 150.7 5.5 3.5% 2.9 1.6 0.0 2.5 (0.2) 6.9 (1.3) -0.8% 1.7—0.1 (3.1) -2.0% 1,906 73% 69% 2,177 68 1.6

1H2004 1H2004 1H2004 1H2004

m) (

m)

Supplies and services ( EDP Energia Operating Income Statement Operating Revenues Direct Activity Costs Gross Profit Gross Profit/Revenues Personnel costs Generation centre rentals Other operating costs (or revenues) Own work capitalised Operating Costs EBITDA EBITDA / Revenues Depreciation and amortisation Compensation subsidised assets’ deprec. Provisions EBIT EBIT / Revenues Supply—Clients and Sales Number of Clients Market Share (# of Clients) Market Share (Consumption) Sales (GWh) Number of Employees Number of Employees Operating Investment Operating Investment

---

 

10

a of IRR. 262 as farms 8.9 1H2004 Group’s 12%

EBITDA and

EDP wind capacity a additional

0.8 Revennues EDP the new

Operating 3 provide an Other to in installed in year-on-year to million was total

0.1 rentals centre MW a million

Generation Enernova and 50 .9 with expected by investment are

0.1 Costs

Personnel Producers increased contributed Padrela) Enernova’s and contruction approximately

0.4 of

S&S Regime

Enernova bulk Quelha under invest at the da to 3.8 farms

Gross Profit EDP

2003, Special 1H2004, Fonte wind plans July capacity and 1H2003 the Talefe, The Group

3.9

EBITDA do MW. EDP m As from Installed Enernova During (Alto • were excluded from EDP consolidation perimeter. • result emissions rose 66.3% year-on-year to 96 GWh in the 1H2004. • EBITDA, up from .9 million in the 1H2003. • 31.5 The MW of wind capacity which will start operating by 2006.

50 0 50 66.3% 23.1% 55.5% 27.6% 70.0% 61.1% 4.9% 71.9% 58.8% - 19.7%—62.1% 16.7%

MW % % 5.6 p.p. -32.2% -16.9% -136.4% -83.4% 130.8% 241.7% % % 347.0% U U 26.3 p.p. 34.1 p.p. U U U

47 9 56 58 19 77 1.3 5.0 6.3 1.0 5.3 83.9% 1.1 0.6 0.1 0.1 (0.5) 1.5 3.9 60.8% 1.9—0.0 1.9 30.4% 12 7.0

1H2003 1H2003 1H2003 1H2003 1H2003

96 9 105 96 24 120 1.7 8.5 10.2 1.1 9.2 89.5% 0.8 0.5 0.2 (0.1) (1.1) 0.2 8.9 87.1% 2.3 (0.1) 0.0 6.6 64.5% 14 31.4

1H2004 1H2004 1H2004 1H2004 1H2004

m) (

m)—MW ( GWh Supplies and services Personnel costs Other operating costs (or revenues) Own work capitalised EBIT / Revenues Enernova & EDP Installed Capacity Wind Biomass Total Generation—Enernova EDP Total Operating Income Statement EDP Enernova Electricity Sales Direct Activity Costs Gross Profit Gross Profit/Revenues Generation centre rentals Operating Costs EBITDA EBITDA / Revenues Depreciation and amortisation Compensation subsidised assets’ deprec. Provisions EBIT Number of Employees Number of Employees Operating Investment Operating Investment

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11

a r EDP fo energy some clients sales, 69.1% of NBES distributed of actually a threshold threshold 43.1% Consumption total energy year-on-year. were 1H2004, because The of transfer industrial HV the

8% 5 1.5% 2,602 achieved ones. electricity 85% place eligibility gain and up and for which take the for NBES total continued did VHV voltage 92% of segment, Clients Eligible BES with the EDPD in 5,776,511, out 1H2003 not 2003, low BES & NBES Consumption—1H2003 Consumption accounted to growth 3,485, the did the EDP Energia Market Share in NBES: 67.0% due However, totalled non-binding 2004 December which 18.6% Between June except year-on-year totalled the Until (BES), year-on-year (NBES). and customers status in in NBES 5.2% 9.3% market. occur consumers up system 3.4% system operating to all 52.6% Consumption the electricity decree-law.

15% was binding non-binding liberalised the for NBES decreased explain company expected of included Clients Eligible the non-binding 1H2004, with the in that in 85% electricity the the clients system BES for sales Portugal, to of Group’s publication clients of Consumption in end energy the liberalisation

BES & NBES Consumption—1H2004 HV the the full in EDP Energia Market Share in NBES: 69.1% Demand Electricity customers 19 number non-binding By The • amounting to 20,385 GWh. • distributed MV and respectively. • The acquiring Energia, market share in the liberalised market with 2,177 GWh of energy sold to its 1,906 clients. • delay the was extended to SLV clients in April 2004.

7.0% 5.2% -3.4% 9.3% 18.6% 4.4% 0.7% 10.7% 92.6% 5 19 (799) 1,015 84,274 1,384 1,358 993 (1) 994 365 (1) 366 1.5%

% -35.4% -32.0% -25.9% 105.7% 112.2% -43.9% 116.8% -70.7% 104.7% U 85,898 87,256

U

20,749 (12) (1,357) 19,380 17,849 554 1,718 4,558 1,490 8,929 600 1,531 1,026 30 996 505 35 470 5,688,011 13 123 19,315 27,676 5,599,139 41,745 1,244 913 2 911 331 2 329 5,689,255

1H2003 1H2003

22,193 (16) (1,791) 20,385 17,236 606 2,037 3,378 1,555 8,995 664 3,149 2,177 17 2,161 972 10 962 5,773,909 18 142 18,516 28,691 5,683,413 43,129 2,602 1,906 1 1,905 696 1 695 5,776,511

1H2004 1H2004 NBES—Non-Binding Electricity System.

(3)

(3) (1) (2)

(GWh) VHV (Very high voltage) HV (High voltage) SLV (Special low voltage) HV (High voltage) MV (Medium voltage) HV (High voltage) MV (Medium voltage) VHV (Very high voltage) SLV (Special low voltage) PL (Public lighting) HV (High voltage) MV (Medium voltage) HV (High voltage) MV (Medium voltage)

Energy Consumption Electricity Sales Energy delivered to Distribution Own consumption—distribution Distribution losses Total electricity sales Electricity sales—BES MV (Medium voltage) LV (Low voltage) PL (Public lighting) Electricity sales—NBES EDP Non-EDP Electricity Clients Binding consumers HV (High voltage) MV (Medium voltage) LV (Low voltage) Non-binding consumers EDP Non-EDP Total electricity consumers        % Growth Figures presented include Sales to the EDP Group. BES—Binding Electricity System.

(1) (2)

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12

- -—-—- - - 2003 a the as tariff of LV

2.7% 15.1% 6.5% 9.7% 12.4% 68.4% 2.8% -2.9% -0.2% -4.1% 7.8% up partly ERSE’s

% -25.5% -10.9% 123.0% half the

U differences the non- the of between segments; for in made between positive LV period, above

24.4 83.7 49.2 17.8 5.5—- 9.4 2002 is costs 337.8 142.9 1,113.5 (12.9) (0.8) 1,737.8 26.1 (3.4) (5.1) 15.0 1,778.8 1,769.4 1,182.2 587.2 reflects the reposition variations the the 1.5% the for fuel 1H2003 that 1H2004 of for of differences the of came real

- - - for the LV segments; (iii) the half from

25.0 96.4 55.2 (0.2) 58.3 in BES and 251.6 152.1 1,221.0 (14.3) 1,786.9 (28.8) (10.6) (78.9) (118.3) 1,726.8 (39.5) 1,766.3 1,133.4 632.9 energy acquisition costs 2002 of recovery acquisition

1H2004 recovery with adjustment to million adjustment the the tariff fuel the energy tariff for costs real relates recognised reposition -.6 to estimated t-1 reflects and that the (ii) related regarding 1H2004 m) that and real million 2002; the consumption between from ( adjustment costs real .6 estimated adjustment tariff year from estimated a million to adjustment fuel that differences adjustment (ii) tariff real million fact million -.8 to tariff between t-2 relative positive and the system; (i) -.9 and t-2 -.3 to million 2003 (iii)

VHV ( Very High Voltage) HV (High Voltage) MV (Medium Voltage) SLV (Special Low Voltage) LV (Low Voltage) Public lighting Interruptibility discounts Tariff correction discounts Distribution 1H01 Reposition Distribution 1H02 Reposition Distribution 2002 Distribution 1H03 Distribution 1H03 Reposition Distribution 1H04 • Allowed Revenues for the Energy Acquisition Activity are related to: (i) a .0 million binding .9 really paid to REN for energy acquisition and (iv) a .1 million tariff adjustment The follows: and

Electricity Sales & Gross Profit Invoiced Sales—BES Invoiced Sales—NBES Tariff Adjustments Electricity Revenues (-) Tariff adjustments’ reposition Sales to customers before reposition Electricity purchases Electricity Gross Profit between EDPD’s differences tariff invoiced to final clients (estimated and settled by ERSE) and the amounts related to costs with the tariff convergence mechanism. • adjustment the estimated related estimate segments.

; a to with 9.84 24.55 453.4 11.7 4.6 63.2 79.5 4.2 1.2 39.4 44.8 (7.0)—11.4 4.4—5.1 5.1 year-on- result Activity 1H2004; (iii) (SPS) 2003 when 19,136 10,796 587.2 the (NS); activities; decrease 1H2003* 7.8% is Grid the Activity SPS from the ERSE

This for Activity accordance by 9.48 23.87 462.4 10.8 5.0 64.8 80.6 7.9 2.3 39.1 49.3 (3.6) 0.3 0.2 (3.1) 33.0 10.6 43.7 632.9 and reflect 20,547 11,215 increased 1H2004. Distribution revenues System NS decrease, (in used 1H2004 the the Services’ Public UDGr, 2.8% tariffs, costs in of allowed the for and respectively final fuel (GWh) Revenues) million Use Network in to the total 3.7% for the Supply a .9 for adjustments (i) segments, estimated to EDPD’s the LV pass-through (Regulated for of tariff reflect: lower revenues and a 1H2003 73% revenues t-2 are and Profit” the for revenues in UDGr HV/MV in allowed the which BES

Gross in allowed for for the m) million in allowed decrease to increase accounted in revenues Purchases, “Electricity .2 which increase million Revenues sales 2.0% increase .5 unit from a 1.4% in (i) a

EDP EDPD’s a Allowed Electricity energy Regulated Revenues ( Unit revenue for the UDGr: HV and MV / MWh) Electricity delivered to BES/NBES consumers: HV and MV Unit revenue for the UDGr: LV / MWh) Electricity delivered to BES/NBES consumers: LV (GWh) URD total allowed revenues Allowed revenues for the NS activity: VHV; HV and MV Allowed revenues for the NS activity: SLV Allowed revenues for the NS activity: LV CRedes total

allowed revenues Allowed revenues for the SPS activity: VHV; HV and MV Allowed revenues for the SPS activity: SLV Allowed revenues for the SPS activity: LV CSEP total allowed revenues t-2 tariff adjustment for UDGr activity t-2 tariff adjustment for CSEP activity t-2 tariff adjustment for CRedes activity t-2 tariff adjustments for UDGr, CSEP and CREDES t-2 tariff adjustment for Energy Acquisition activity t-1 tariff adjustment for Energy Acquisition activity Allowed Revenues for Energy Aquisition Activity Total allowed revenues after tariff adjustment * Allowed Revenues for the 1H2003 were calculated on the basis of an estimated Energy Balance.

• year, of: (UDGr), (ii) 10.2% (iv) and (v) a .6 million increase in tariff adjustments for Energy Acquisition Activity. • 2004, the ‘CPI – X’ formula) and (ii) a 5.2% increase in consumption. • in establishing 2004 tariffs.

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13

(i) of a the 149 will * early in 2003 total 935 of end million 6.6 retirees measure 128 that currently in 1H2004 the scope created for reflects: early whom the .4 500 enable 548 Restructuring responsibilities This of and anticipations resulted HR study 264 out 2 until and which 910 anticipation retirements should 6.1 2003 the 2004, million). other occur Program Asset 549 the 1H2004. Nevertheless, the dismissals for early employees: actuarial retirement (ii) July .5 will dismissals 1H2004 812 in 718 5.3 of employees, 188 2002 reflecting to early retirees within 2004 early and to that Regulatory total the 493 (NPV 158 and for of the Deferred Income the EDPD negotiated Restructuring the a January age by negotiated of 771 period, covers at 21 EDPD HR negotiated to 5.0 2001 – retirements dismissals Program 454 the following From the with that workforce early 28 added decrease Program retirement 2004, 658 during its age, a 4.2 2000 retirees. Program 60 million were the amortisation Premiums Asset their employees, June to 366 7.3% early 149 and .6 costs Restructuring reduced to 586 Pension Restructuring forward retirement (relative HR Customers/Employee & Sales/Employee 3.6 1999 Program amounted to .9 million some these million These 326 to in Regulatory HR of EDPD Restructuring ) dismissals January EDPD’s decreased a the age bring HR from 7 .0 million 533 to 3.1 1998 costs compensated with decrease of in 1H2004, the Apart age, from some .3 306 of anticipations retirements). 1H2004). opted the such, to in 17.8% retirement part As 2 Sales/Employee ( Clients/Employee Sales/Employee (GWh) 457 cost was creation EDPD retirement of EDPD early 218 2.6 1997

Personnel The During 255 * 1H2004 annualised.

• Program implemented last year. Remunerations paid of the HR Restructuring this this purpose. • the contemplated legal at also has a positive impact on early retirement’s correction. • were retirements. to 2004. total cost with amounts and savings of approximately million (or .7 million on average for the next 26 years).

5.3% -3.0% 4.0% 14.3% 7.5% 17.5% 0.2% -4.0% 17.5% 12.1% 10.5% -7.3% 1.6% 2.4% -2.5% -9.3% to and EDP, r lower

% % % -17.8% -18.1% million Edinfo

U U U mostly from year-on- are .9 the to fees 7.5%

43.7 7.7 51.3 42.8 52.7 14.0 17.0 8.2 2.7 10.8 95.5 28.0 38.2 5.6 6.7 capitalised from figures

202.5 123.9 6,807 relates up

1H2003 1H2003 1H2003 materials was services million, 1H2003

46.0 7.4 53.4 48.9 56.6 16.5 17.0 7.9 3.2 12.1 105.5 187.7 23.1 31.3 5.7 6.9 120.8 6,176 which year-on-year management .6 that grid, in IT-Log

1H2004 1H2004 1H2004 sundry 14.3% in fact in increase totalled the distribution increased an increase by increase (i) an services to: (ii) EDPD’s services due and and explained m) at is m) ( m) and

( year-on-year made mostly Valor; supplies increase 4.0% supplies 1H2004 EDP and This

EDP Sundry Materials Own Work Capitalised Maintenance Works Sundry Materials Supplies & Services Supplies&Services—Group Supplies&Services—Non-Group Maintenance costs Specialised works Communications Insurance costs Others Total Supplies&Services Personnel costs ( Total Personnel Costs Pension premiums Early retirement correction Social benefits with early retirees Medical care with inactives Adjusted Personnel Costs Number of employees The investment accounted for as “own work capitalised”. Group the Non-group

• • in S.A. Group. • year. than normal due to late invoicing.

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14

p.p. .3 off an the the the a in service. of in 0.25 improved (i) min

262.1 1H2004 EBITDA slowdown. netted of a an of: municipalities .2 million). considered million 161 in was quality 7.2 Fees reflect from been .5 improvement from Concession creation economic clients the 7.4%) the bills had to an down 14.8 Costs up year-on-year to for Personnel due doubtful which improve sales, electricity Portuguese to 1H2004, 3.9 44.7% for allowed Group LV high the assets, year-on-year grid the

S&S—Non- in down overdue to 12.4% and min 6.1 year’s on due provisions

S&S—Group 21.6% (100 million, abnormally of subsidised distribution debts of the up grid 2.1 resale previous were increased .2 charged in goods for bad was MV Materials and the 2003 for constitution grid the on in 2.1 Revennues totalled interests amortisation invested at Operating the investment Other provision the were time (based period Provisions of distribution 0.6 1H2004 86% Gross Profit fees, the regarding million operating the the for in interruption climate. .2 in total which 265.1 1H2003 EBITDA provision a that compensation of Concession Provisions (ii) EDPD’s m economic million The extraordinary gain, was accounted for as an operating item. 1H2004, 1H2003).

• increase in the average rate paid to municipalities, to 7.5%. • and Note against extraordinary gains resulting from the reversal of this kind of provisions ( • • Investment equivalent

- -4.0% 24.0% 59.3% -2.8% -4.1% -0.1% 4.0% 14.3% 7.5% -7.3% 8.4% 2.3% -2.6% 0.7% -1.2% 0.7% - 21.6% 21.1% 12.4% 21.5% 17.3% 19.5% 8.9%

% 0.9p.p. 0.2p.p. -44.7% 102.6% 3.0p.p.        % -77.8% -17.5%

U U

15.8 1,763.1 8.6 0.8 1,788.3 1,182.2 606.1 33.9% 51.3 42.8 52.7 202.5 85.5 (5.8) (88.1) 340.9 265.1 14.8% 173.1—42.0 50.1 2.8% 132.6 8.3 8.1 18.8 167.7 28.5 26.5 55.0 112.7

1H2003 1H2003

33.7 1,693.1 10.7 1.3 1,738.8 1,133.4 605.5 34.8% 53.4 48.9 56.6 187.7 92.7 (5.7) (90.4) 343.4 262.1 15.1% 174.2 (36.9) 23.2 101.6 5.8% 161.2 10.0 1.8 15.5 188.5 34.6 31.1 65.7 122.8

1H2004 1H2004

m) (

m)

EDP Operating Income Statement Electricity sales—Group Electricity sales—Non-Group Services provided Other sales Gross Profit/Revenues Sundry materials and goods for resale Supplies and services—Group Supplies and services—Non-group Personnel costs Concession fees Other operating costs (or revenues) Own work capitalised EBITDA / Revenues EBIT/ Revenues (

Operating Revenues Direct Activity Costs Gross Profit Operating Costs EBITDA Depreciation and amortisation Comp. of subsidised assets’ depreciation Provisions EBIT Investment Distribution Grid Public Lighting Information Systems Other Investments Operating investment Investment Subsidies—Cash Investment Subsidies—Kinds Investment Subsidies Operating investment excl. subsidies

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15

cost price; net

1.4% -1.8% 11.9% -8.5% 4.4% 83.5% 9.7% 10.2% power revenues selling in

% -49.4% 7.1 p.p.

U 32/MWh 34/MWh variable selling increase the average

536 578 493 (63) 7.1% J lower system’s the 3,068 1,770 4,839 6,446 6,383 at a average lower

1H2004 1H2003 by of

1H2003 its the / MWh) emission result between of offset M and

544 568 3,432 1,620 5,052 905 7,068 (32) 7,036 7.4% net a

1H2004 as (balance increase costs partly higher 3.3% fuel was

A a a ii)

CCGT differences i) average impact (GWh) at for through: the M coefficient CTCs of negative emission of 1H2004 this

Weighted Average Pool Price ( net in increase

F hydrological higher million the .6 margin by Nonetheless, lower a a iii) gross

Soto de Ribera J i) and its

HC’s Net Electricity Generation Hydroelectric Nuclear Coal CCGT Total Generation Pumping Energy delivered to the Pool HC’s market share in wholesale market 60 50 40 30 20 10 0 for working days and temperature effects. Due to a dry first half the hydrological of: receivable explained works); a improve respectively. because as mostly million,

6.6% 14.0% 7.2% -0.2% 19.0% 68.5% -5.4% 28.5% 2.4% 5.3% 51.9% -9.0% -7.4% able 11.9%

% -13.2% % % % -11.9%

U U U U 1H2004 account was .3 the maintenance to in for able and

89,495 20,184 4,261 113,940 79,082 31,342 3,515 32.3 15.3 2,168 120.3 2,614 414.5 263.1 151.3 activity decreased

1H2003 1H2003 1H2003 1H2003 9.7% was this million by stopped

1 clients, activities .8 Excluding hydroelectric emission.

95,404 23,016 3,698 122,118 78,903 37,291 5,924 30.6 19.7 2,220 126.7 3,970 377.1 243.7 133.4 emission Supply of (2)

1H2004 1H2004 1H2004 1H2004 net impact its 1Q2003 liberalised and market grew 4.1% versus 1H2003, or 3.3% adjusted prices to increase the negative (in (1) to pool electricity Generation a (2) low the had able of (GWh) availability the of was for supply Profit which higher the pool, to Gross the due compensate Regarding Overall, to

(100%)—Generation & Supply Spain Energy Balance Generation Special Regime Imports Market Sales & Purchases Regulated Distribution Supply Exports Source: OMEL Generation—Selling Price & Fuel Costs Avg. HC Selling Price to the Pool Avg. HC Fuel Cost Supply—Electricity Sales to Clients Electricity Supplied (GWh) Sales of the Electricity Supplied m) Number of Clients Gross Profit (Generation + Supply) Revenues Direct Activity Costs Gross Profit plant To • The increase in the average fuel costs due to a hike in imported coal prices continues to put pressure on generation margins. price Includes wholesale market, ancillary services and capacity payment.

• Demand in the Spanish electricity coefficient dropped from 1.11 in the 1H2003 to 0.83. • in the 1H2004 vis—vis 1H2003. Emission at the Soto de Ribera power plant decreased 8.5% as a result of the triennial maintenance works last April at Soto de Ribera III. • and costs). • and ii) lower pool prices. • emission .9 million) and a better performance of the supply activity due to a higher selling price to customers and lower electricity acquisition costs .5 million). (1)

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16

of were a also to 1H2004 1H2004 2004, million CCGT regulated on the the for .6 million achieved allocated in in .9 both based segment,

555,072 565,561 552,720 Spain activities (note:

were

Clients in Gas Supply distributed in gas transport, market, liberalised 3.2% Direct Clients in Gas Distribution 1,364 gas gas Direct Clients in Elect. Distribution or 161,961 108 subsidiaries gas generation the in in 1H2003 1H2004 distributed its for 1H2003 1H2004

2003) 1H2003 1H2004 regulated 1H2004 Spanish gas and to -—- - -—- increase the total electricity

% 3.5% 4.0% % % of

U 24.1% -6.0% U U GWh Spanish revenues In the in particularly

3.1 45.3 3.8 52.2 1.3 15.8 1.7 18.8 - 23.0 23.0 share the Naturcorp for compared for clients. As clients, 11,501 to increase

1H2003 1H2003 1H2003 market regulated of (+2.5% the of 1H2003. the 3.8 46.9 3.6 54.3 5.4 48.1 7.1 60.6 53.9 14.1 68.0 to 7.9% revenues allocated terms liberalised by number a the the In to 1H2004 million 1H2004 1H2004 were in mostly the .1 contributed reach sets 1.9% of to that 10% supplied or (1) 2003 able gas against increase m) m) explained activity, 1st

(

( was .8 . the the m) 17%, in on distribution ( August Eco/31/2004) sector) and

Elect. Distribution Transmission Distribution Commercialisation Elect. Regulated Revenues Gas Distribution Transmission Distribution Commercialisation Gas Regulated Revenues Gas Supply Basque Country Rest of Spain Gas Sales since (Orden companies, subsidiaries impact electricity increased winter Law last its the

- - - -—- sector the

% 8.4% 18.0% 6.3% 8.0% 25.8% electricity % % the and important to

U U U to distribution an gas 1,077 434 2,677 4,188 551 Spanish 822 258 1,080 - 1,493 1,493 Naturcorp, gas supply during had in 1H2003 the 1H2003 1H2003 of According Naturcorp also Spanish to Spanish of (excluding the

512 693

1,167 2,846 4,525 5,034 7,547 12,581 4,118 1,031 5,149 Naturcorp acquisition 1H2003. the in temperatures 1H2004 1H2004 1H2004 of to method Naturcorp low attributed the in market According to the Decree Law (Real Decreto 1802/2003) that sets the revenues for the Spanish regulated electricity activities for 2004, inclusion share of the million After attributed consumption (1) The consolidation inclusion liberalised (GWh) (GWh) market the addition, the

.4 1H2003. million the The In (GWh) 0.8% of the the a .6 share 1H2004

(100%)—Electricity Distribution & Gas Activity Elect. Distribution Low Voltage Medium Voltage High Voltage Electricity Distributed of which: access clients of Gas Distribution Gas

Distributed to direct clients Gas Distributed to access clients Total Gas Distributed Gas Supply Basque Country Rest of Spain Gas Supplied the Operating data considers 100% of Naturcorp’s gas distribution subsidiaries’ figures, while all financial data considers the consolidation method.

Electricity Distribution: out . While the distribution revenues reflect the allowed revenue agreed for 2004, the rise in the transmission revenue is related with the new transmission grid that was put into service, whose remuneration is based in the return on the invested capital (10-year Spanish Treasury Bond plus 150 bps). Gas Distribution: against against the considering allocated to Naturcorp and its subsidiaries. Gas Supply: 5.2% and non-regulated, sold 10,183 GWh of gas, corresponding to a 7.7% market share (excluding supply to the electricity sector). In technology. contributed to this growth. (1)

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17

0.6

45.2 6.8 in a

-19.1 192.5 hike by farms; partly .6 which 4.2 the wind increase is of 154.7 the customer costs Gas Special Regime Holding & Other of explained in million of invested million, result profit, .2 farms a provided million the wind operating at associated with gross works to

YoY EBITDA 1H2003 Generation & Supply Electricity Distribution EBITDA 1H2004 costs as the new other

U in estimated fuel at The is

- - capex,

% 33.5% -8.0% 79.0% contributing GWh.

U -36.3% 141.7% 32 p.p. 175.2% 25.2 p.p. -52.6% 717.1% 21.2 p.p. 149.9% -20.8% higher increase maintenance increase project

16.4 9.9 6.4 2.3 0.2 3.9 2.8—0.4 0.7 32.6 130 to ‘other revenues’ results, 227 The

39.2% 23.7% 4.1% 7.5% and to this

1H2003 in Regarding in a

Special Regime 21.8 6.3 15.5 2.1 2.7 10.7 5.1 (0.1) 0.2 5.5 81.4 103 primarily i) 142% profit.

1H2004 71.0% 48.9% 25.4% increase of: activity’s gross million).

-—-—-—-—-—-—-—- due result infrastructure gas investment        % an the .1 U a the increased 16.0% by to Total as on

32.3 14.1 18.2 56.3% 1.5 2.0 14.7 45.5% 4.9—0.0 9.8 30.3% 8.7 65 fell network

Gas 1H2003 12.9% impact generators million decreased 4Q2004.

327.9 249.9 77.9 7.9 10.1 59.9 14.8 (0.6) 0.1 45.6 24.2 298 activity explained .3 1H2004 23.8% 18.3% 13.9% the and in - supply mainly increased underground important regime

% 4.2% 3.0% 7.5% -7.1% 5.7% 12.9% 6.2% 24.1% of

U 0.8 p.p. 1.4 p.p. -56.2% 1.8 p.p. -21.4% -10.6% and an capitalised

197.5 143.4 54.1 27.4% 11.1 10.2 32.8 16.6% 14.2—0.4 18.2 9.2% 20.2 395 activity rentals had special emission work operational 1H2003 from net be

Electricity Distribution 205.9 147.8 58.1 28.2% 10.3 10.8 37.1 18.0% 15.0 (0.8) 0.2 22.7 11.0% 15.9 353 generation distribution 2003, to (own

1H2004 August GWh interests should

% -9.0% -7.4% 15.4% 1.6% 6.0% revenues 109 U -11.9% -1.1 p.p. -10.2% -16.0% -2.2 p.p. -26.5% -27.3% -3.5 p.p. -12.6% ‘other operating costs’ is from which electricity in of 17.2 15.3 46.4—0.7 71.7 12.8 581 electricity higher as MW),

414.5 263.1 151.3 36.5% 118.8 28.7% 17.3% the fall the financial

1H2003 of by

The of emission contributed of (124

Generation & Supply 377.1 243.7 133.4 35.4% 19.8 13.7 99.8 26.5% 47.2 (0.1) 0.5 52.2 13.8% 11.2 616 and Naturcorp,

1H2004 EBITDA EBITDA net MW) farm of The companies. The revenues 1H2004 (34 capitalisation wind Supply: consolidation The lower Albacete & between regulated and by in full the

(100%) Business Areas Breakdown Revenues Gross Profit Gross Profit/Revenues Personnel Costs Other Operating Costs (net) EBITDA/Revenues Depreciation EBIT/Revenues rise The MW) in

Direct Costs EBITDA Comp. of subsidised assets’ dep. Provision EBIT Capex # of employees Generation imported coal prices. The increase in personnel expenses is mainly related to the transfer of employees to the supply activity following the reorganisation of personnel relationship management provided by the supply activity to the electricity and gas distribution activities. This impact is eliminated on consolidation. Electricity Distribution: 4.0% and ii) a reduction in personnel costs. Gas: on this activity’s EBITDA. Special Regime: (65 explained million million were already invested. The expected IRR for this project is 10.6%.

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18

items, since the the by the last in increase on on offset in of investment prices 192.5 1H2004 million prices of partly million the accounted EBITDA Statement coal beginning .2 pool farms amortisation was .1 the on benefit the Income low at 7.0 imported wind benefit tax

Costs of all increase against since Personnel the new goodwill the this tax explains of effect two 1H2004 1H2003 the rules, affected rise The higher to a the IAS

7.1 services which a the the to of to

andSupplies from

2003, Naturcorp due 1H2004. Nevertheless, in with related result of the a 2003. million pursuant 10.0 Costs August margin benefiting as million

Operating July

Other since inclusion gross during 7.7% in .8 comparable 4Q2003, The prices directly the 61.9 activity’s renewables, charges In Gross Profit Naturcorp pool in increased acquisition not accounted EBITDA. is of low interest CCGT. increase Profit activity’s generation and expenses Naturcorp Net

154.7 1H2003 EBITDA in the consolidation gas fall 4Q2003 output of financial in m Consolidated EBITDA in 1H2004 was affected by: the the namely operating costs; the the Financial 1H2004’s i) at ii) the generation activity was offset by a better gross margin on the supply activity; iii) the 4.0% increase in the electricity distribution’s regulated revenues; iv) (65 MW) and (34 MW). • back lower 1H2003). • year made the 1Q2003 was reverted and will be accounted during the CCGT plant’s useful life. If we exclude the million tax benefit, net profit would have gone up by million.

25.6% 24.9% 26.9% 19.5% 16.6%—23.9% 31.8% 24.4% 21.0% - 30.6% -7.7% 93.9%—- 32.7% 87.9% 72.8% 15.0%

% 0.3p.p. -0.2p.p. -51.4% 0.5p.p. -69.7% -64.2% % -22.0% %

U U U

700.3 469.8 230.5 32.9% 36.4 42.0 2.8 (5.3) 75.8 154.7 22.1% 69.7—1.5 83.6 11.9% (72.5) 5.8 16.9 (15.4) 1.9 30.4 39.3 43.8 9.6 73.5 1,383

1H2003 1H2003 1H2003

879.5 587.0 292.5 33.3% 43.5 49.0 11.5 (4.1) 99.9 192.5 21.9% 84.3 (1.6) 0.7 109.1 12.4% (78.1) 1.8 32.8 13.1 8.8 10.9 52.1 82.3 7.5 126.9 1,590

1H2004 1H2004 1H2004

m)

( was proportionally consolidated in accordance with EDP’s stake in (40%).

m)

(100%) Income Statement Gross Profit/Revenues Supplies and services Personnel costs Other operating costs (or revenues) Own work capitalised EBITDA/Revenues EBIT/Revenues

Revenues Direct Costs Gross Profit Operating Costs EBITDA Depreciation Compensation of subsidised assets’ depr. Provision EBIT Financial Results Extraordinary Results Income Before Taxes Income taxes Minority interests Net Profit Capex ( Recurring investment Non-recurring investment (-) Subsidies Capex Number of employees Number of employees Note:

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19

these more the the b.p.

ANEEL in for which 133

10,877 2,071 1,454 1,322 3,740 2,291 1H2004 was (note: 2006 of benefited out further also

Industrial Other profit and

+4.1% Enersul, the strong Nevertheless, 2003. 2004 compensated 2003, a profit gross April was in gross and 6% in Enersul’s regions, Regarding market. October which in There

Brazilian Subsidiaries (GWh) 10,447 1,265 1,465 1,277 4,277 2,163 1H2003 in between

Total Electricity Distributed by free increase 2003, revision Enersul’s

Residential Commercial Liberalised Consumers systems. the The revision tariff to recognised August adjustments.

- tariff in last

% 3.9% 7.7%20.9% 3.1% -9.1% 4.8% 5.7% 1.4% 5.6% 23.5% 14.1% 28.3% 11.3% 20.3% 71.7% 31.9%29.8% 34.1% 18.6% last be the tariff accounts.

U 262.7% irrigation of consumers adjustments. the in

1,691 1,666(230) 447 319 278 372 1,417 20 1,437 107.4 46.8 63.5 64.0 281.6 0.9 (29.4) 253.1132.3 120.9 198.7 in would increase annual Enersul use tariff the Enersul 1H2003 tariff agreed the the in in 1,757 1,795(277) 461 290 291 393 1,437 81 1,518 132.6 53.4 81.5 71.2 338.7 3.4 (8.3) 333.8171.7 162.1 235.8 temperatures during the 1H2004 that affected the residential industrial and granted accrued, 1H2004 17.30% increase 2007 reducing some revisions increase being the until revenues’ of to tariff

% -5.4% -0.8%2.8% -2.8% -8.5% 0.8% -5.1% -5.3% 17.0% -1.3% 5.9% 10.0% 14.9% 11.0% 9.7% 12.8%14.9% 9.7% 15.8% tariff tariff ‘other

U 136.2% -18.6% due to the mild switch already

‘other’) by 2003’s is thanks average recovered as

636 394 592 646 85.6 77.4 13.9 the be 3,624 4,084(481) 1,335 2,957 3,603 161.9 144.3 469.2 (40.2) 442.9265.9 176.9 158.7 in

Escelsa 1H2003 mainly of average which level, reflects 42.26% will booked

3,428 4,049(494) 619 1,222 397 561 2,800 755 3,555 171.5 158.8 98.4 85.9 514.5 32.8 (47.7) 499.6305.5 194.1 183.8 back 18.08% gap, profit

1H2004 (included the million the the 3.40% gross accrued on and the reflects R$7 companies the being to segment at

% -6.5% 7.1%4.7% 12.3% 4.6% -0.5% -4.9% 7.3% 19.7% -2.4% 15.7% 14.3% 9.5% 6.4% 17.2%1.7% 66.6% 15.1%

U -15.1% 105.7% 2134.3% concession area was rural and profit already 605 501 600 79.5 2.3 tariffs increase gross amounting

5,596 5,906(498) 1,079 2,623 4,807 5,408 298.1 365.9 142.4 886.0 (88.8) 799.4607.9 191.5 184.3 the performances is

1H2003 distribution consumption in Bandeirante good in 2003 9.7% that 2003

5,232 6,326(521) 1,211 2,228 633 499 4,571 1,234 5,805 356.8 357.2 164.9 90.9 969.7 50.5 (83.1) 937.1618.0 319.1 212.2 affected three a increase gap April

1H2004 the had post increase October in at to 9.67% 7.3% to 34.1% ANEEL able the period, which subsidiaries the applied was and by segment of Enersul’s wet three result be tariffs granted a Escelsa the a to industrial as would 2003 tariff due the profit, consumption. to the (1) in 14.68% of also gross adjustments). in applied and Bandeirante that top on

Distribution losses Residential Industrial Commercial Other Electricity sales to customers Electricity distributed to access clients Residential Industrial Commercial Other Electricity sales to customers Electricity distributed to access clients Other Revenues decrease in tariff decrease were

Brazil—Distribution Energy Sales & Gross Profit Electricity Purchases & Self Generation Electricity delivered to distribution Total Electricity Distributed Total Revenues(-) Direct activity costs Gross Profit Average Tariff to customers (R$/MWh) The Regarding Includes the Regulatory Tariff Repositions, Taxes over Revenues, Non-Invoiced Electricity and other revenues.

• Total electricity distributed by EDP’s subsidiaries in the Brazilian market increased 4.1%, reflecting the increase in demand of 7% in Bandeirante and the drop in consumption in Escelsa’s concession area. The rise in consumption in Bandeirante’s region increased 7.3% vis—vis 1H2003 reflecting an improvement of the economic environment. The drop in consumption in Escelsa’s segment consumption increase is explained by: i) the unusual high temperatures and dry weather during the 1H2004, which resulted in a higher use of the air conditioning and of the irrigation systems; and ii) economic growth in the region (commercial). • consumers continue to pay for the use of the distribution grid. • evident established annual slight 32.59% increase from April 2004’s 17.02% average tariff increase. (1)

Sales (GWh)Energy Gross Profit (R$            m)

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20

34.3 11.7 -0.1 471.6 lower a of and to of hydro the

108.2 13.0 and sold of by 27.37% is owner Other 2004 trading – start 304.6 the Angical the April and The to Escelsa Enersul explained in remainder Investco Peixe Fafen million. to the related million partly The

Bandeirante Generation & Trading of paid of is

YoY is adjustment R$50.2

EBITDA 1H2003 EBITDA 1H2004 in consumption, led to a strong 100% fee debt services tariff to 1H2003). rental - construction

(1)        % 42.2% 75.5% 8.7% 10.6% 58.3% 38.4% 19.8% 43.9% 41.4% and million the financial U -14.8% -85.3% -18.1% 166.7% 102.6% 17.02% vis—vis the -12 p.p. -0.6 p.p. (considering of in 128.6 64.5 64.2 49.9% 0.2 28.4 1.7 3.4 33.8 30.4 23.6% 6.9—23.5 121.9 226.7 174 supplies the R$47.0 (+37.9% with GWh 1H2003 and a 7.3% increase in 2003, from increase 69.7 0.2 24.2 2.8 0.5 27.7 42.1 8.3—33.8 246 April 898 clients (decrease The

Generation & Trading 182.9 113.2 38.1% 23.0% 325.2 459.3 to 6.9% associated

1H2004 in decrease is

- GWh direct services 2H2004.

% 31.9% 29.8% 34.1% 57.3% 15.9% 14.1% 48.1% -0.5% 96.3% 77.2% -1.0% -1.5% the

U 0.8 p.p. -11.5% 3.5 p.p. -12.4% occurred 851 increased to and activity the costs, sold in

Enersul 1H2003 253.1 132.3 120.9 47.8% 3.9 19.4 25.2 1.1 49.6 71.3 28.2% 27.6 7.0 36.6 16.8 588.2 939 9.67%) from activity supplies 5.5% were generation

333.8 171.7 162.1 48.6% 6.2 17.2 29.2 4.0 56.6 105.6 31.6% 27.5 6.2 71.9 29.7 582.4 925 operating (plus this lower concluded

1H2004 GWh the be emission from and in

- 32.59%

% 12.8% 14.9% 9.7% 33.4% 9.4% 6.1% 3.2% 18.4% 5.8% -4.1% net sales 1,059

U -17.5% 11.9% -55.8% 41.7% of should

-1.1 p.p. -0.2 p.p. Regarding its which MW

442.9 265.9 176.9 40.0% 3.6 27.3 33.2 2.7 66.9 110.1 24.9% 29.3 22.1 58.6 23.3 1,349 revision performance expenditures

Escelsa 1H2003 1,644.8 profit. increase electricity of 133 tariff to

499.6 305.5 194.1 38.8% 4.8 22.5 36.4 7.2 70.9 123.1 24.6% 30.3 9.8 83.1 27.6 1,294 gross to 1H2003) top-line capital MW

1,739.5 in the

1H2004 able the 54 - by gross profit level, on the back of the October’s tariff revision good of

% 17.2% 1.7% 66.6% 3.6% 17.7% 8.6% 24.1% 97.6% 9.0% 76.8% 0.6% was Accordingly, from U 10.1 p.p. 9.5 p.p. 148.9% -17.6% -11.0% increase vis—vis the bulk plan Brazil of the 3.6 7.9 explained

1H2003 799.4 607.9 191.5 24.0% 39.1 41.9 (3.8) 80.8 110.8 13.9% 36.5 66.3 57.2 807.8 1,360 strong in emission). (+106% result a The increase in personnel costs is mostly related to annual salary adjustment of August 2003. Bandeirante largely net a 1H2004,

3.7 46.1 45.5 4.9 39.8 14.0 47.2 activity GWh As

1H2004 937.1 618.0 319.1 34.1% 100.2 218.9 23.4% 165.1 813.0 1,211 is the re-powering following EBITDA Lajeado’s 2,336 Cerj. in Fafen’s 11.9% in generation sell and made UHE to increased increase The at able Enersul million).

The good performance at Bandeirante’s strong energy was Escelsa, investments (R$313.3 EBITDA of the

Brazil Gross Profit/Revenues Sundry mat. & goods for resale Supplies and services Personnel costs Other operating costs (revenues) EBITDA/Revenues The right activity plant This section includes the power stations Lajeado and Fafen, and the trading/supply company Enertrade.

P&L R$            million Revenues Direct Activity Costs Gross Profit Operating Costs EBITDA Depreciation Provision EBIT Capex Financial Debt (Non-Group + Group) # employees Bandeirante: increase in Bandeirante’s EBITDA and was the main driver for the sound EBITDA growth of the operations in Brazil. Operating costs increased 24.1% in comparison with the 1H2003. The 17.7% increase in supplies and services is partly related to the implementation of the Customer Care & Service system in the 2Q2004 and higher advertising to increase awareness of Bandeirante as a modern electricity distribution company. Bandeirante has been investing in the modernisation of its distribution network since 2002. The increase in personnel costs, besides reflecting the annual salary adjustment, includes an increase in bonuses paid in 2004. Escelsa: costs with energy efficiency programmes. Enersul: 5.6% increase in consumption. Regarding operating costs, the 14.1% increase vs. the 1H2003 is mostly explained by the annual salary adjustment in August 2003. Generation & Trading: EDP’s supply Bandeirante, Lajeado’s power plant – and the decision to bring O&M at Fafen inhouse) EBITDA increased 38.4% vis—vis 1H2003. Regarding power financing by BNDES on the investment in the Peixe Angical hydro power plant (R$174.1 million). (1)

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21

of in

471.6 1H2004 the the since Brazil

EBITDA in fall results, in 20% the 12.0 Costs 107.1 between Personnel 157 above financial from 1H2004 consolidation the

Adj. Net Profit 1H2004 by from the in

1.3 services

andSupplies down gone in Group’s benefited profit 3.6 for resale was has million EDP debt net and goods

49.7 in

Materials R$115.2

Costs Forex hedge at EDP inflation offset

11.6 of

Operating headcount are

Other Adjusted Net Profit 1H2004 (R$            m) Forex gain corresponding to 54.76% of Escelsa’s Senior Notes (EDP holds 83% of this debt issue in US Dollars) that debt denominated consolidation, Total note Notes Group

195.5 Gross Profit

57.3 please Senior currency in 1H2003 Net Profit 1H2004 employees. but denominated local Notes

304.6 EBITDA of toll Escelsa m dollar in Senior

- - - - their charges, number the

% 5.6% -2.8% 7.6% 7.0% 1.8%

U 14.3% 30.4% 4.9p.p. 25.1% 49.5% 5.9p.p. -19.0% 93.7% 7.3p.p. -68.6% -56.6% -46.5% the took in Escelsa differences in

449.2 292.1 157.1 3.3 34.0 31.3 1.8 70.3 86.8 28.7 10.7 47.4 29.2 12.0 88.6 36.5 22.6 29.5 in 2003 impact financial gain 1H2003 35.0% 19.3% 10.6% of forex million the forex reduction middle negative that

4.1 33.0 33.6 4.5 75.2 29.2 8.6 91.8 27.9 15.8 15.8 the Regarding the 513.5 308.6 204.9 39.9% 129.7 25.3% 17.9% (59.4) (4.6) (3.7) the a

1H2004 in had note through 10% to million). account

- - - - into

% 17.8% 8.3% 35.6% 31.9% 1.1% 10.9% 11.6% 54.8% 4.7% than 1H2004) U 5.2p.p. 6.0p.p. -15.3% 101.2% 7.4p.p. -65.6% -53.9% -39.2% (US$431 namely in important more is taking

1,585.5 1,035.9 549.6 34.7% 11.3 118.8 110.3 4.7 245.1 304.6 19.2% 101.5 37.1 166.0 10.5% 85.1 43.1 294.1 124.6 75.2 94.3 costs, of (-7.0% It issue

R$            million 1H2003 increases Dollar Notes. debt However,

745.1 39.9% 14.9 120.1 122.3 16.3 273.6 471.6 25.3% 106.2 31.5 333.9 17.9% (216.0) (16.6) 101.3 57.5 (13.5) 57.3 US Senior Dollar

1H2004 1,867.3 1,122.1 controllable salary the US 1H2003. against Escelsa’s this annual of reducing to vis—vis on Real 83% 39.2% However the related focused of is is 1H2004. million approximately decreased Brazil and in depreciation R$95.1 holds profit

Brazil Income Statement Revenues Direct Activity Costs Gross Profit Gross Profit/Revenues Sundry materials & goods for resale Supplies and services Personnel costs Other operating costs (or revenues Operating Costs EBITDA EBITDA/Revenues Depreciation EBIT/Revenues Financial Results Extraordinary Results Income Before Taxes Income taxes Minority Interests EDP The Net

Provision EBIT Net Profit • The tariff revisions and the increase in electricity demand in Bandeirante and Enersul’s regions were the engine behind the Brazilian operations’ remarkable performance at the EBITDA level. • 1H2003 middle of 2003 to 9.6% in June 2004. • which EDP benchmark interest rates. • would have been R$107.1 million.

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22

to drop million data of is in year-sales from (Offer Spain services, 24.1% .3 in termination increase 2.4% a OLL

271.2 209.9 61.3 a voice 1H2004 in the to revenues network modest from Comunitel’s through and decreased Internet -24.1% resulted thanks in very (million minutes) and access Portugal a access increase distribution in Revenues

357.2 314.6 42.6 1H2003 direct in revenues, xDSL year-on-year 23.7% the to of of market resulted year-on-year) a operating dial-up 21.8% and offer phase year-on-year).

Corporate Residential Carriers 46.3% up segment from cards improved first 1.6% Telecom’s (up were the (up clients pre-paid an of ONI carriers of Telecommunications’ Operators’ of

1,548.1 520 128.0 900 1H2004 ONI’s from Telecom to Comunitel basis the half of at the conclusion ONI

Voice +14.1% sales transfer revenues on The competitive within at almost

(million minutes) revenues for

1,356.3 475.6 124.8 756 voice services Loop). contracts revenues 1H2003 Telecom’s continued in increasingly account ONI Operating internet Local some The The • corporates (up 27% year-on-year) were the main drivers of voice traffic which was up 14.1%. • in ISP traffic. • increase & the allowing the company to increase its voice and internet clients. • of operating which on-year while revenues from data & internet fell 10.8%.

160.6 5.2 165.8 84.3 4.5 88.8 77.0 46.5% 38.1 27.6 (1.5) (0.0) 64.2 12.8 7.7% 265.9 222.0 312.5 800.4 688.2 32.0 267.5 987.7 0.1 800.4 -2.6% -1.7%

(187.4) % -74.3% -15.7% -23.2% -13.9%

ONI Group ONI Group U

96.3 0.4 96.7 60.7 0.3 61.0 35.7 36.9% 19.7 11.8 0.1—31.5 4.2 4.3% 85.3 54.8 80.5 220.6 72.1 5.6 126.3 203.9—16.7 220.6 616 351 179 216 746 1,362

Comunitel Comunitel 1H2003

78.2 2.9 81.1 35.5 2.4 37.9 43.1 53.2% 21.1 14.3 (0.9) (0.0) 34.5 8.6 10.7% 128.0 162.4 151.4 441.8 217.5 3.4 172.7 393.7 0.1 48.0 441.8 600 345 46 182 573 1,173

ONI Telecom ONI Telecom 1H2004

Telecoms—ONI Group Operating Income Statement m) Telecommunication services Equipment sales Operating revenues Telecommunication services Equipment sales Direct activity costs Gross Profit Gross Profit/Revenues Supplies and services Personnel costs Other operating costs (or revenues) Own work capitalised Operating costs EBITDA EBITDA/Revenues Balance Sheet ( m) Intangible Assets Fixed Assets Other Assets Total Assets Financial debt Provisions Other Liabilities Total Liabilities Minority interests Shareholders’ equity Total liab. & shareholders’ equity Number of Employees Fixed Line Portugal Comunitel Germinus OLA Internet Fixed Line Spain Total

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23

the for has fixed 13.9% lower of has in margin million

1H2004 in

12.8 which a ONI

EBITDA million contract gross ONI’s acquisition .6 reflect since telecommunication major achieved and

3.3 .8

Costs a 1H2004, Comunitel, costs reflecting improved Personnel to of were voice the network EBIT in from year-on-year from the all, 8.3 savings Group million Personnel of in 26.0% S&S—Non- year-on-year completion All .0 contribution main works. year-on-year, proceeds the 11.6% to The 5.4% expansion done). down 1.8 in with Group higher the

S&S -been million, increased growth sales an EBITDA. specialised for

year-on-year in deceased .5 .2 million in operating revenues; (ii)—.7 million in direct costs and (iii)—.5

2.0 Revennues 13.9% and already Operating 4.7% following swing required Other a equipment has revenues (i) up 46.5% million totalled of: from was amortisation 3.4 to advertising Profit (investment Gross operating back profit .3 and p.p. the revenues a infrastructures investment gross 3.1 to needs on in expenses,

1H2003 (2.5) led access

EBITDA Consolidated Although Depreciation Operating m • 1H2004, services which benefited from growth in Comunitel (explained above); and (ii) a .9 million increase equipment supply. Revenues from data & internet services decreased 8.2% year on year to .9 million due to a 29% decrease in revenues from rented capacity (termination of some contracts within the Operators’ segment). • decreased lower margins than ONI Telecom. • ONI’s continued focus on efficiency enabled the company to cut operating costs by 15.6% which network reduction in headcount. • investment direct year-on-year. • completed the bulk of its investments in the infrastructure.

13.9% -8.2% 34.0% 9.1%—11.6% 14.2%—18.4% 3.9%—4.7% - - - - -5.4% 45.9%

% -3.1p.p. -18.8% -10.6% -15.6% 9.4p.p. -22.7% 13.3p.p.        % -28.6% 127.9% -38.9% -24.3% -28.9% -21.0% -26.0%

U U

-

(1) 95.9 41.3 10.0 147.2 1.3 148.6 73.8 1.2 75.0 73.4 0.2 73.6 49.5% 0.3 44.3 30.9 0.5 76.1 (2.5) (1.7%) 33.6 2.2 (38.4) (25.8%) 7.1 0.4 6.7 11.2 4.7 6.5 18.3

1H2003 PF 1H2003

109.3 37.9 13.4 160.6 5.2 165.8 84.3 4.5 88.8 76.3 0.7 77.0 46.5% 2.1 36.0 27.6 (1.5) (0.0) 64.2 12.8 7.7% 31.8 1.7 (20.8) (12.5%) 5.1 1.0 4.1 8.4 3.3 5.1 13.5

1H2004 1H2004

m) (

m)

Voice services Data & Internet services Other services Telecommunications services Equipment sales Telecommunication services Equipment sales Telecommunication services Equipment sales Gross Profit/Revenues Supplies and services—Group Supplies and services—Non-Group Personnel Costs Other operating costs (or revenues) Own work capitalised EBITDA/Revenues EBIT/Revenues ( Non-recurring Non-recurring

Telecoms—ONI Group Operating Income Statement Operating revenues Direct activity costs Gross Profit Operating costs EBITDA Depreciation and amortisation Provisions EBIT Investment Fixed line Portugal Recurring Fixed line Spain Recurring Total operating investment Note: In order to provide for like for like analysis, 1H2003 accounts here presented reflect for consolidation adjustments between Comunitel and OLA Internet: (i)—million in operating costs.

(1)

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24

.8 the a to a EBITDA

21.6 1H2004 EBITDA services led (ii) the and services and and year-on-year, following which 3.7 while

CostsPersonnel 11.1%

Supplies IT-Log million 2.2%, at fell sales. .2 up

2.6 and amortisation,

S&S—Non-Group costs by was the 1H2004, sales

In fell EBITDA and 2.6 equipment S&S—Group processing Personnel and capitalised data centre. revenues. depreciation

0.7 goods for resale in work in andMaterials sector in Portugal. graphics savings Own operating increase

3.6 Revennues processing in the IT finishing, in

Other Operating major to data 31.5% with a 4.2 new negotiations. decrease in

Revenues related costs, a in wage 4.4% resulted activities control the 21.1 1H2003 EBITDA due to a slowdown for to invested up centre m Edinfor’s efforts Edinfor successful made of and as processing

0.1% -5.1% -4.4% 6.3% -8.9% 32.5% 87.4% -6.3% 2.2% 31.5% on-going IBM,

% -47.9% -11.1% 1.5p.p. -37.2% -30.9% -2.8p.p.        % -14.6%        % -59.5% recovery process) data

U U U slight with year-on-year) a for 13.1 82.2 95.2 10.9 5.5 29.2 33.4 (1.3) (3.6) 74.1 21.1 22.2% 11.3 0.4 9.5 10.0% 1,757 18.1 down 4.4% year-on-year, mostly a company’s contract (restructuring 6.3%

1H2003 1H2003 1H2003 the down reflecting (i) equipment

13.1 77.9 91.0 11.5 2.8 26.6 29.7 (0.9) (0.5) 69.4 21.6 23.7% 14.8 0.2 6.6 7.2% 1,501 7.3 to: Edinfor’s costs new

1H2004 1H2004 1H2004 .0 million, due of employees of year-on-year, mostly 256 (operating totalled 6.3% termination of acquisition period efforts m) the the ( the reduction in m) increased a ( during following both cost-cutting Revenues at Edinfor materials 15.0% from investment with decrease year’s company’s

Information Technology—Edinfor Group Sales Services Provided Sundry materials and goods for resale Supplies and services—Group Supplies and services—Non-group Personnel Costs Other operating costs (or revenues) Own work capitalised EBITDA/Operating Revenues EBIT/Operating Revenues Number of employees perating Investment Costs The Last

Operating Income Statement Operating Revenues Operating Costs EBITDA Depreciation and amortisation Provisions EBIT Number of Employees O Operating Investment • Operating provided to non-EDP Group companies accounted for 49.5% of Edinfor’s operating revenues. •

decreased million benefiting completion of an internal IT project (“Edinfor Sys”) at the beginning of 2004. • margin increased 1.5 p.p. to 23.7% in 1H2004. • 30.9% drop in EBIT in 1H2004. • Edinfor’s operating investment decreased sharply to .3 million reflecting the company’s efforts to reduce the levels of investment but this is not sustainable for all of 2004.

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25

This r the are the as its with

1H2004 yea on

-181.5 .6 in Group

Financials this 3Q2003 reduction companies Electra. paid in receivable coupons in against subsidiaries booked loss cost retirement +27.6 Other 2H2003 which be the legal from the to one-off The to market million ‘Parcela A’ Brazilian the Losses & associated in 2003) acquisition the eliminated previously due -4.0 Rationing losses stake) depreciation the of SELIC on stake in for coupon. eventual .9 and and of assets, mainly

Gain/Loss Real a

-20.5 (4.36% million is the Financing Net Forex group Naturcorp adjust 7% debt

(Interests) Iberdrola BCP we anticipation U accumulated .0 the 1H2003 EDP the if semi-annual subsidised include -16.9 Notes @ the from receivable to in mitigate the 13% of Escelsa’s accounting million of Energia due to +3.9 (Derivatives) sale despite Notes’ interest denominated 1H2004 Net Interests .2 Tejo fallen accepted equity the dividends mainly provisions” Escelsa in by Senior an dollar amortisation (Debt) i) in from overall, have and by that +19.4 Net Interests from EDP in YE2003. as higher the the less would Escelsa is explained by: of +1.2 GoodWill depressed following: dividends million created retirees Amort Income million decreased the monthly gains/(losses)” in were iii) charges from .5 affecting depreciation been early Income Income .6 in to -22.5 Investment ii) million; accrued were compensation had were influenced by: increase results interest 2003 1H2004, paid .5 in that +12.9 Method amortisation losses the Extraordinary Results million extraordinary Equity year’s 1H2003); to being “Decrease Financial Investments million Investment in

U last in financial million) forex .2 item

1H2003 .9 Dollar provision “Other -182.5 Financials Lower Goodwill Net Net The a A The m Financial Results • since investment was fully provisioned by • million amounted 2H rather than six-monthly. • because of the revaluation of Escelsa and Enersul’s fixed assets late in 2003. • .9 currently consolidation against the corresponding expense in Escelsa. • US (note:

Escelsa’s Senior Notes forex differences are offset in Group consolidation). The swing in • an extraordinary gain and now accounted for as an operating item; • of dollar denominated assets (NBCE’s). • compensations age.

- 2.5% 4.0%—- 5.5% 0.6% 48.9%—-—- 27.0% 4.8% 22.4% 18.6% 40.8% -2.5% - -—- -

% -71.5% -90.3% -20.4% % -17.5% 179.8%        % -42.4% % -81.3% -105.5% 109.7% 165.9%

U U U U

7.2 31.5 (48.0) (9.3) (158.0) 2.5 19.6 (37.3) (173.2) (182.5) 10.9 2.5 (7.2) 0.5 0.0 0.5 7.2 15.2 4.2 18.8 1.9 5.4 2.5 48.0 6.4 23.3 (2.4)—37.2 (0.3) (0.6) (4.2) 59.4

1H2003 1H2003 1H2003 1H2003

20.1 9.0 (46.8) (17.7) (151.7) (18.0) 15.6 (9.7) (163.8) (181.5) 9.0 3.8—3.5 1.2 2.6 20.1 19.3 4.4 10.8 2.3 6.3 3.6 46.8 (4.6) 4.4 (4.9)—- (2.4) (1.3) (11.2) (20.1)

1H2004 1H2004 1H2004 1H2004

m) ( m) m) ( m) (

( Income from group&associated cos. Investment income Goodwill amortisation Net Financial Interest paid Net foreign exchange differences Selic on rationing losses and ‘Parcela A’

Consolidated Financial Results & Extraordinary Results Financial Results Financial Investments Gains/(Losses) Other Financing Gains/(Losses) Financial results Income from Equity Method REN (30%) CEM (22%) Electra (30.6%) (20%) DECA II (EEGSA (21%)) Other Total Goodwill amortisation Comunitel Other Total Extraordinary Results Fixed assets gains / (losses) (Increase)/decrease in deprec. & provisio Prior year adjustment (net) Hydrological correction Compensation of subsidised assets’ depre Bad debts Inventory gains / (losses) Other gains / (losses) Extraordinary Results EBE IVEN ACE Holding

---

 

26

986.6 1H2004 EBITDA 986.6 1H2004 EBITDA 6.8 fees Concession 32.6 Others 20.5 costsPersonnel m) m) 21.6 Technology Information

8.2 services Supplies and resale 12.8 Telecom

37.0 goods for Materials and

90.7 Fuel costs 129.7 Brasil 23.5 Electricity costs

77.0 Changes in EBITDA 1H2003—1H2004 ( revennues Consolidated EBITDA build-up 1H2004 ( 130.1 operating Other

262.1 EDP 34.1

salesElectricity

450.8 EDP

877.7 1H2003 EBITDA

Note: In the 1H2004, ‘Other Operating Revenues’ identified in the above chart include ‘Services Provided’ and ‘Other Sales’ which were formerly accounted as Eletricity Sales

1.1% 34.1% 5.6% 1.5% 70.1% -2.6% -5.9% 7.7%—10.7% 3.1% 12.4% 4.5% - 35.6% 0.6%—23.4% 22.7% 51.0%

% 272.5% -31.9% 1.7p.p. -26.0% 3.5p.p. -126.4% -213.5%

U

3,115.6 30.9 199.2 3,345.7 1,598.2 129.3 115.7 310.2 345.3 87.9 (2.1) (116.7) 2,468.0 877.7 26.2% 408.3—62.5 406.8 12.2% (182.5) 59.4 283.7 141.8 (31.2) (9.0) 182.0

1H2003

3,149.7 115.1 267.1 3,532.0 1,621.8 220.0 78.7 302.0 324.7 94.7 7.6 (104.2) 2,545.4 986.6 27.9% 426.8 (38.0) 46.2 551.6 15.6% (181.5) (20.1) 350.0 174.0 (70.6) (28.2) 274.9

1H2004 m)

( Other operating costs (or revenues)

Consolidated Income Statement Consolidated Income Statement Electricity Sales Other Sales Services Provided Operating Revenues Electricity Fuel Sundry materials and goods for resale Supplies and services Personnel costs Concession fees Own work capitalised Operating costs EBITDA EBITDA/Revenues Depreciation Compensation of subsidised assets’ depre Provisions EBIT EBIT/Revenues Financial Results Extraordinary Results Pre-tax profit Income Taxes Defered Taxes Minorities Net Profit

---

 

27

274.9 121.3 426.8 (40.0) 46.8 (6.0) 4.8 (93.9) 146.7 881.3 (29.4) 852.0 (447.1) 404.9 10.6 (9.4) (146.7) (268.0) 41.4 32.8 (see Group debt million

1H2004 flow

EDP financial .9 cash the Group Gross to enabled 2003 total 1H2004. in of business the million million core during .7 .3 the share at from for generation per million accounting dividend .8 m) by

.09

( cash-flow a reduce • The core business is still the main contributor with EDP and EDP The pay in the 1H2004.

Cash Flow Net Profit Tariff Adjustment Depreciations Compensation of subsidised assets depreciation Goodwill Amortization Net Provisions Interests Hydraulicity Account Other Adjustments (Equity Method, Forex Differences and Other) Add back: Net Financial Interests and other financial costs (or revenue Operating Cash Flow before Working Capital Change in Operating Working Capital Operating Cash Flow Capex Net Operating Cash Flow Divestments of Fixed Assets Net Financial Investments Net Financial Interests and other financial costs (or revenues) Dividends Paid and Results Distributed to Employees Other Canges in Non-Operating Working Capital Decrease/(Increase) in Financial Debt page 32). • to was

15,084.1 1,849.7 11,651.6 1,582.8 2,334.8 159.2 921.5 966.6 287.5 622.4 609.3 18,650.7 3,000.0 (49.0) 1,965.9 381.1 5,298.0 236.5 387.5 819.6 7,492.71,457.5 6,035.3 1,781.9782.6 999.3 2,018.4 616.1 12,728.7 18,650.7

YE2003 YE2003 YE2003

15,214.8 1,807.6 11,706.1 1,701.2 2,364.4 144.0 1,031.8 985.1 203.5 664.1 546.7 18,790.0 3,000.0 (55.6) 2,144.9 274.9 5,364.2 233.8 375.2 804.8 7,459.91,470.4 5,989.6 1,718.4703.3 1,015.0 2,301.4 532.2 12,816.7 18,790.0

1H2004 1H2004 1H2004

m) (

m) m) (

Consolidated Balance Sheet and Cash Flow Statement Intangible assets, net Tangible assets, net Financial Investments, net Inventories Accounts receivable—trade, net Accounts receivable—other, net Cash and cash equivalents Shareholders’ equity Share capital Own shares Retained earnings and other reserves Net profit for the year Short-term debt & current portion of long-term debt Long-term debt Accounts payable—trade, net Accounts payable—other, net

Assets ( Fixed assets Currents assets Accruals and Deferals Deferred Tax Total assets Shareholders’ equity Minority interest Hydrolicity correction account Liabilities Provisions Financial Debt Current liabilities Accruals and Deferals Deferred Tax Total liabilities Total liabilities and shareholders’ equity

---

 

28

3,149.7 115.1 267.1 3,532.0 1,621.8 220.0 78.7 302.0 324.7 94.7 7.6 (104.2) 2,545.4 986.6 27.9% 426.8 (38.0) 46.2 551.6 15.6% (181.5) (20.1) 350.0 103.4 (28.2) 274.9

EDP Consolidated

- 13.1 77.9 91.0—- 11.5 29.5 29.7—(0.9) (0.5) 69.4 21.6 23.7% 14.8—0.2 6.6 7.2% (5.9) (0.8) (0.1) 1.8 (1.2) (0.7)

Information Technology

- 5.2 160.6 165.8—- 4.5 122.3 27.6—(1.5) (0.0) 153.0 12.8 7.7% 31.8—1.7 (20.8) -12.5% (26.2) (0.4) (47.4) 5.9 0.0 (53.3)

ONI

477.8—35.7 513.5 306.2 2.4 4.1 33.0 33.6—4.5—383.8 129.7 25.3% 29.2—8.6 91.8 17.9% (59.4) (4.6) 27.9 15.8 (3.7) 15.8

Brazil

333.5 7.9 10.4 351.8 176.6 54.5 3.7 17.4 19.6—4.6 (1.6) 274.8 77.0 21.9% 33.7 (0.6) 0.3 43.6 12.4% (31.2) 0.7 13.1 5.3 3.5 4.4

(2)

HC

1,726.8 1.3 10.7 1,738.8 1,133.4—53.4 105.5 187.7 92.7 (5.7) (90.4) 1,476.7 262.1 15.1% 174.2 (36.9) 23.2 101.6 5.8% (16.5) 3.0 88.1 61.2—26.9

EDP

10.2—- 10.2—1.1—0.8 0.5 0.2 (0.1) (1.1) 1.3 8.9 87.1% 2.3 (0.1) 0.0 6.7 65.3% (1.1) (0.1) 5.4 1.5—3.9

Enernova & EDP

155.2—1.1 156.3 150.7—- 2.9 1.6 0.0 2.5 (0.2) 157.6 (1.3) -0.8% 1.7—0.1 (3.1) -2.0% (0.3) (0.2) (3.7) (1.5)—(2.1)

EDP Energia

(1) 668.0 10.4 35.7 714.1 18.0 162.0 1.4 31.4 60.0 1.8 (3.9) (7.4) 263.2 450.8 63.1% 116.2 (0.0) 5.7 329.0 46.1% (48.2) (0.7) 280.0 81.3 0.8 197.9

EDP

m) Electricity Sales Other Sales Services Provided Electricity & Gas Sundry materials and goods for resale Own work capitalised EBITDA/Revenues EBIT/Revenues Business segment accounts not audited

Income Statement by Business Areas 1H2004 Fuel Supplies and services Personnel costs Concession fees Other operating costs (or revenues) The Special Regime Producers (SRP) Enernova and EDP (Renewable Energy) were excluded from the EDPP consolidation perimeter 40% Consolidation.

( Operating Revenues Operating costs EBITDA Depreciation Compensation of subsidised assets’ depreciation Provisions EBIT Financial Results Extraordinary Results Pre-tax profit Income taxes Minority interests Net Profit Note: (1) (2)

---

 

29

3,115.6 30.9 199.2 3,345.7 1,598.2 129.3 115.7 310.2 345.3 87.9 (2.1) (116.7) 2,468.0 877.7 26.2% 408.3 62.5 406.8 12.2% (182.5) 59.4 283.7 110.6 (9.0) 182.0

EDP Consolidated

- 13.1 82.2 95.2—- 10.9 34.7 33.4—(1.3) (3.6) 74.1 21.1 22.2% 11.3 0.4 9.5 10.0% (5.3) (0.5) 3.6 2.4 (0.2) 1.5

Information Technology

- 1.3 147.2 148.6—- 1.2 118.4 30.9—0.5—151.1 (2.5) -1.7% 33.6 2.2 (38.4) -25.8% (26.2) (4.9) (69.5) (5.0) 0.1 (64.6)

ONI

449.2—- 449.2 291.4 0.8 3.3 34.0 31.3—1.8—362.5 86.8 19.3% 28.7 10.7 47.4 10.6% 29.2 12.0 88.6 36.5 22.6 29.5

Brazil

280.1—- 280.1 146.0 40.7 1.3 14.6 16.8—1.1 (2.1) 218.2 61.9 22.1% 27.9 0.6 33.4 11.9% (29.0) 2.3 6.8 (6.2) 0.8 12.2

(2)

HC

1,778.8 0.8 8.6 1,788.3 1,182.2—51.3 95.5 202.5 85.5 (5.8) (88.1) 1,523.2 265.1 14.8% 173.1 42.0 50.1 2.8% (17.3) 44.9 77.8 25.7—52.1

EDP

6.3—- 6.3—1.0—1.1 0.6 0.1 0.1 (0.5) 2.5 3.9 60.8% 1.9 0.0 1.9 30.4% (0.7) 0.3 1.4 0.9—0.6

Enernova & EDP

32.9—27.1 60.0 20.4—- 3.2 1.8 0.0 2.5 (0.5) 27.3 32.6 54.4% 1.7 0.0 30.9 51.5% 0.1 (0.2) 30.8 10.2—20.7

EDP Energia

(1) 620.2 9.6 6.5 636.2 30.4 130.0 2.0 27.1 60.1 1.8 (2.0) (18.2) 231.1 405.1 63.7% 116.2 4.9 284.0 44.6% (41.2) 6.7 249.5 86.0 0.3 163.1

EDP

m) Other Sales Services Provided Electricity Sundry materials and goods for resale Own work capitalised EBITDA/Revenues EBIT/Revenues Business segment accounts not audited

Income Statement by Business Areas 1H2003 Electricity Sales Fuel Supplies and services Personnel costs Concession fees Other operating costs (or revenues) The Special Regime Producers (SRP) Enernova and EDP (Renewable Energy) were excluded from the EDPP consolidation perimeter 40% Consolidation.

( Operating Revenues Operating costs EBITDA Depreciation Provisions EBIT Financial Results Extraordinary Results Pre-tax profit Income taxes Minority interests Net Profit Note: (1) (2)

---

 

30

1,807.6 11,706.1 1,701.2 2,160.9 203.5 1,210.8 18,790.0 804.8 7,459.9 1,718.4 2,833.6 12,816.7 375.2 233.8 5,364.2 18,790.0

EDP Consolidated

67.8 90.9 1.5 77.0 4.0 32.0 273.2 2.5 88.5 112.4 15.3 218.7—1.8 52.7 273.2

Information Technology

265.9 222.0 1.5 191.7 1.6 117.7 800.4 32.0 688.2 214.5 53.0 987.7—0.1 (187.4) 800.4

ONI

142.0 973.0 15.2 562.9 89.3 352.1 2,134.6 164.2 912.3 366.3 151.1 1,593.9—78.6 462.0 2,134.6

Brazil

591.8 38.5 103.5 40.3 20.6 37.9 728.2 162.0 110.7 - 181.8 680.5

(2) 1,106.4 1,901.0 1,038.7 1,901.0

HC

0.9 4,403.2 0.2 756.7 25.4 255.0 5,441.5 353.6 778.1 1,118.9 1,721.3 3,971.9—- 1,469.6 5,441.5

EDP

0.0 154.2 0.8 9.1 0.0 5.0 169.0 0.3 51.1 79.8 4.5 135.6—- 33.4 169.0

Enernova & EDP

- 88.7 0.1 48.8 0.0 2.9 140.4 1.2 0.1 60.3 5.2 66.7—- 73.7 140.4

EDP Energia

7.1 4,227.5 31.0 739.9 12.7 34.7 5,052.9 97.5 2,406.6 623.1 106.6 3,233.7—0.4 1,818.8 5,052.9

EDP

m) Business segment accounts not audited Balance Sheet by Business Areas 1H2004 The Special Regime Producers (SRP) Enernova and EDP (Renewable Energy) were excluded from the EDPP consolidation perimeter 40% Consolidation

( Intangible assets Fixed assets Financial Investments Other assets Cash and Equivalents Accruals and deferrals Total assets Provisions Financial debt Other liabilities Accruals and

deferrals Total liabilities Hydrolicity correction account Minority interests Shareholders’ equity Total liabilities + equity Note: (1) (2)

---

 

31

1,849.7 11,651.6 1,582.8 2,047.3 287.5 1,231.8 18,650.7 819.6 7,492.7 1,781.9 2,634.5 12,728.7 387.5 236.5 5,298.0 18,650.7

EDP Consolidated

70.8 95.4 0.5 82.6 2.4 27.1 278.8 2.3 89.2 114.8 15.3 221.6—3.3 53.8 278.8

Information Technology

283.6 230.0 1.4 193.6 6.2 118.7 833.5 37.2 682.9 199.7 46.4 966.2—0.1 (132.8) 833.5

ONI

142.3 924.8 53.5 622.6 83.9 386.3 2,213.2 164.1 829.5 516.0 129.0 1,638.6—80.4 494.2 2,213.2

Brazil

607.7 40.7 108.8 42.3 14.3 39.2 786.1 131.2 94.0 - 175.3 676.2

(2) 1,088.4 1,902.0 1,050.5 1,902.0

HC

0.8 4,389.2 0.2 1,009.5 30.3 12.7 5,442.6 341.1 778.1 1,187.6 1,568.8 3,875.6—- 1,566.9 5,442.6

EDP

0.0 126.1 0.0 10.5 0.1 4.2 140.9 0.2 52.2 51.5 4.4 108.3—- 32.6 140.9

Enernova & EDP

- 88.8 0.1 16.8 0.2 3.5 109.3 1.1—17.6 2.2 20.9—- 88.5 109.3

EDP Energia

6.7 4,241.6 7.7 1,015.8 10.1 68.5 5,350.4 92.8 2,487.7 754.7 138.0 3,473.2—0.2 1,877.1 5,350.4

EDP

m) Business segment accounts not audited Balance Sheet by Business Areas 2003 The Special Regime Producers (SRP) Enernova and EDP (Renewable Energy) were excluded from the EDPP consolidation perimeter 40% Consolidation

( Intangible assets Fixed assets Financial Investments Other assets Cash and Equivalents Accruals and deferrals Total assets Provisions Financial debt Other liabilities Accruals and deferrals Total liabilities Hydrolicity correction account Minority interests Shareholders’ equity Total liabilities + equity Note: (1) (2)

---

 

274.9 121.3 426.8 (40.0) 46.8 (6.0) 4.8 (93.9) 146.7 881.3 (29.4) 852.0 (447.1) 404.9 32

EDP Consolidated

(0.7)—14.8 (0.0) 2.5 0.2—(1.0) 3.3 19.1 2.5 21.6 (7.3) 14.3

Information Technology

(53.3)—31.8—8.1 (0.5)—8.1 17.0 11.2 4.2 15.4 (13.5) 1.8

ONI

15.8 3.0 29.2—2.2 7.7—26.7 33.2 117.8 (11.9) 105.9 (114.0) (8.0)

Brazil

4.4—33.7 (0.6) 16.4 (0.6)—11.4 16.0 80.6 42.0 122.6 (50.8) 71.8

(1)

HC

26.9 118.3 174.2 (36.9)—15.1—1.2 25.7 324.5 (66.5) 257.9 (122.8) 135.2

EDP

3.9—2.3 (0.1)—0.0—- 1.1 7.3 2.1 9.4 (31.4) (22.1)

Enernova & EDP

(2.1)—1.7—- 0.1—- 0.3 0.0 (22.7) (22.7) (1.6) (24.4)

EDP Energia

197.9—116.2 (2.0)—4.0—1.4 47.6 365.2 54.8 420.0 (99.9) 320.1

EDP

m)

Cash Flow by Business Areas 1H2004 40% Consolidation

( Net Profit Tariff Adjustment Depreciation Compensation of subsidised assets depreciation Goodwill Amortisation Net Provisions Interests Hydraulicity Account Other Adjustments (Equity Method, Forex Differences and Other) Add back: Net Financial Interests and other financial costs (or revenue Operating Cash Flow before Working Capital Investment in Operating Working Capital Operating Cash Flow Capex Net Operating Cash Flow (1)