Companhia de Saneamento de Minas Gerais (CSMG3) investor relations material

Executive summary

• Net revenue for 1Q26 ranged from BRL 1.91 billion to R$2.13 billion, up 2.5–3.2% year-over-year, driven by tariff adjustments and stable water/sewage volumes despite adverse weather and a shorter consumption period.

• EBITDA was BRL 787–787.4 million, with a margin of 40.9%, down from 43.3% in 1Q25; net income fell 14.1% to BRL 368–368.1 million, impacted by higher costs, depreciation, and financial expenses.

• Capex reached BRL 695 million, up 28–30% year-over-year, supporting expansion and modernization of water and sewage systems.

• The Belo Horizonte concession was renewed until 2073, with a BRL 1.3 billion grant and BRL 300 million settlement obligation.

• The privatization/destatization process advanced, with legal, regulatory, and technical milestones achieved.

Financial highlights

• Net revenue: BRL 1.91–2.13 billion (+2.5–3.2% YoY); EBITDA: BRL 787–787.4 million (-3.2% YoY); EBITDA margin: 40.9% (-240 bps); Net income: BRL 368–368.1 million (-14.1% YoY).

• Capex: BRL 695 million (+28–30% YoY); net debt: BRL 7.1 billion (+32% YoY); leverage: 2.4x EBITDA (vs. 1.8x YoY).

• Dividend and IoE payout for 1Q26: BRL 177.6 million.

• Cash from operations: BRL 675.1 million, slightly down year-over-year.

• Operating costs and expenses rose due to higher depreciation, third-party services, and energy.

Outlook and guidance

• Regulatory improvements with the 3rd Tariff Review set a 6.56% tariff increase and a pre-tax WACC of 13.7% for 2026–2029.

• High Capex and asset conversion expected to impact tariffs from January 2027.

• Investment plan focuses on water security, sewage universalization, and loss reduction; no municipalities under water rationing as of May 2026.

• The company discontinued its investment program guidance for 2026–2030 due to the ongoing privatization process.

• Operational efficiency and cost discipline remain strategic priorities.