Auren Energia (AURE3) Q1 2026 earnings summary

Executive summary

• Adjusted EBITDA reached R$ 925.9 million in 1Q26, down 23% year-over-year, mainly due to lower trading results, reduced wind and solar resources, and lower hydro generation, but record modulation gains of R$ 97.2 million fully offset curtailment impacts.

• Net profit was a loss of R$ 601.6 million versus a profit of R$ 54.0 million in 1Q25, mainly due to mark-to-market effects on energy contracts and lower EBITDA.

• Net debt decreased by R$ 135.4 million during the quarter, with leverage at 5.2x Net Debt/Adjusted EBITDA, and deleveraging expected to accelerate from 2027.

• Corporate restructuring advanced with Phase 1 approved, consolidating hydro assets and simplifying structure for improved cash and debt management.

• Construction of Cajuína 3 wind project (112.1 MW) reached 72% completion, on schedule and budget, with commissioning expected in December 2026.

Financial highlights

• Net revenue rose 4.1% year-over-year to R$ 3,074.5 million; adjusted EBITDA margin fell to 30.1% from 40.8% in 1Q25.

• Generation segment revenue grew 7.0%, but trading margins declined sharply due to unfavorable market conditions.

• Net financial result improved to -R$ 589.8 million from -R$ 732.1 million, driven by lower interest expenses and reduced gross debt.

• Dividends from noncontrolling hydro interests increased to R$ 89.3 million, up 53% year-over-year.

• Cash and cash equivalents decreased to R$ 2,959.4 million from R$ 3,826.1 million at year-end 2025.

Outlook and guidance

• 2026 expected to be a plateau year for leverage, with accelerated deleveraging projected from 2027 and a target Net Debt/EBITDA of 3.0–3.5x.

• Focus on operational efficiency, zero-based budgeting, AI implementation, and completing corporate restructuring.

• Regulatory discussions on curtailment and compensation mechanisms expected to conclude in 2026, improving predictability for long-term investments.

• Well-contracted energy balance of 130% until 2030, with potential for price increases beyond 2027 and over 30% of the portfolio uncontracted from 2029 onward.

• Forecasts consistent EBITDA growth, cash generation, and deleveraging from 2027 onward.