AXIA Energia (AXIA6) Q1 2025 earnings summary

Executive summary

• Achieved conciliation with the federal government and governance improvements, including a new collective bargaining agreement and approval by the General Shareholders' Assembly.

• Sale of Amazonas thermal power plants and other thermoelectric assets, accelerating the shift to nearly 100% renewable generation and supporting capital allocation and ESG progress.

• Major events included settlement of USD 500 million in bonds, new financing by Eletronorte, and approval of additional dividends for 2024.

• High operational availability in generation and transmission, with completion of Coxilha Negra wind farm and advances in key projects.

• ESG initiatives advanced, including a new sustainability report, decarbonization partnerships, and investments in biodiversity.

Financial highlights

• Net operating revenue reached R$10.4 billion, up 19.5% year-over-year, with gross revenue at R$12.2 billion, but regulatory changes led to a drop in transmission revenue.

• Adjusted IFRS net income was -R$81 million, mainly due to a R$952 million regulatory remeasurement at Chesf; consolidated net loss was R$353.6 million.

• Adjusted regulatory EBITDA was R$5.4 billion, down 4.1% year-over-year, with an EBITDA margin of 42.4%.

• Operational costs fell 28% sequentially and 8% year-over-year, with personnel cost savings of R$143 million.

• Default at Amazonas Energia dropped to R$56 million from R$432 million year-over-year.

Outlook and guidance

• Expectation to maintain de-seasonalized cost structure throughout 2025, with ongoing focus on cost reduction, efficiency, and portfolio risk mitigation.

• Trading strategy leaves significant uncontracted volume for 2H25, aiming to capture potential price upsides under different hydrological scenarios.

• Effects of recent ANEEL tariff reviews will be fully reflected in the 2025-2026 cycle, with a 5.48% reduction in RAP for renewed contracts.

• Anticipate further progress on divestments, especially in nuclear assets, and readiness for capacity auction in 2025.

• Expansion in wind and telecom infrastructure expected to support future growth.