AXIA Energia (AXIA6) Q1 2025 earnings summary

Executive summary

• Achieved conciliation with the federal government and signed a new collective bargaining agreement, supporting cost and process improvements and governance enhancements.

• Sale of Amazonas thermal power plants and other thermoelectric assets accelerated the shift to nearly 100% renewable generation and advanced ESG initiatives.

• High operational availability in generation and transmission, with key projects like Coxilha Negra wind farm completed and strong equipment availability.

• Consolidated net loss reported for the quarter, mainly due to regulatory remeasurement at Chesf and higher financial expenses.

• Key events included settlement of USD 500 million bonds, new financing by Eletronorte, approval of additional dividends, and the Furnas merger.

Financial highlights

• Net revenue reached R$10.41 billion, up 19.5% year-over-year, with gross revenue at R$12.2 billion.

• Adjusted net loss of R$81 million (IFRS), with a consolidated net loss of R$353.6 million, mainly due to a R$952 million regulatory reversal at Chesf.

• Adjusted regulatory EBITDA was R$5.4 billion, down 4.1% year-over-year, reflecting lower transmission revenue and higher energy purchase costs.

• Operational costs and PMSO expenses fell 28% sequentially and 8% year-over-year, with personnel costs down 15.1% year-over-year.

• Free cash flow reached R$4.2 billion, with operating cash flow up to R$6.0 billion.

Outlook and guidance

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

• Trading strategy leaves significant uncontracted volume for 2H25, aiming to capture price upsides, with scenarios based on wet season outcomes.

• 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.

• Capacity auction expected in 2025, with readiness to add more production and further progress on divestments, especially in nuclear assets.