AXIA Energia (AXIA6) Q2 2024 earnings summary

Executive summary

• Achieved a 16% year-on-year reduction in PMSO, targeting BRL 6.3 billion in recurring PMSO for 2024, with ongoing efficiency initiatives and a younger workforce; 1,790–2,000 new hires since Jan 2022 reduced average employee age.

• Completed the merger/incorporation of Furnas, streamlining structure, enabling BRL 1.1 billion in deferred tax credits, and consolidating assets and liabilities.

• Major asset sales included thermal power plants (2 GW) for BRL 4.7 billion, minority stakes in wind farms, and CTEEP shares, supporting net zero commitments and portfolio optimization.

• Launched and completed share buyback programs, with up to 10% of outstanding shares targeted over 18 months.

• Significant fundraising of BRL 16.4 billion in Q2 2024 strengthened liquidity and capital structure.

Financial highlights

• Regulatory net operating revenue rose 9% YoY to BRL 9.7 billion; consolidated net operating revenue for H1 2024 was BRL 17.1 billion.

• Recurring regulatory EBITDA increased 10% YoY to BRL 6.0 billion; IFRS profit dropped 31% due to adjustments.

• Net profit for H1 2024 was BRL 2.07 billion, slightly up YoY; net income for 2Q24 was BRL 1.7 billion.

• PMSO dropped 16–17% YoY, with efficiency gains.

• Net debt/EBITDA at 1.9x (regulatory) and 2.7x (adjusted); net debt at BRL 42–45.2 billion; gross debt at BRL 71.9 billion.

Outlook and guidance

• Ongoing focus on efficiency, further PMSO reductions, and capturing operational gains.

• 245 large-scale transmission projects underway, adding BRL 1.2 billion in RAP between 2024–2028.

• Regulatory changes in transmission tariffs (RAP) and ongoing appeals against reductions will impact future revenues.

• Investment program includes BRL 5.6 billion for transmission auctions and modernization, plus new wind projects adding 330 MW by 2024.

• Optimism for continued improvement in profitability and efficiency to match industry peers.