Companhia de Saneamento de Minas Gerais (CSMG3) Q2 2024 earnings summary

Executive summary

• Net revenue for Q2 2024 rose 10.7% year-over-year to R$1.74 billion, driven by tariff adjustments and increased water and sewage volumes.

• Adjusted EBITDA increased 12.1% to R$726 million, with margin improving to 41.4%, and net income surged 30.4% to R$325.2 million.

• Costs and expenses fell 3.6% year-over-year, reflecting efficiency initiatives and headcount reduction.

• Regular and extraordinary dividends declared in H1 2024 totaled R$618.3 million.

• Operational efficiency and lower extraordinary expenses contributed to improved profitability.

Financial highlights

• Net revenue increased 10.7% year-over-year, mainly due to a 4.21% tariff adjustment and 7.2% growth in measured water and sewage volumes.

• Adjusted EBITDA reached R$726 million, up from R$648 million in Q2 2023; margin improved to 41.4%.

• Net income was R$325.2 million, a 30.4% increase year-over-year.

• Investment in H1 2024 totaled R$901.3 million, up 33.2% from H1 2023.

• Net financial result was negative R$118.7 million, mainly due to higher FX expenses from increased euro-denominated debt.

Outlook and guidance

• 2024 investment program set at R$1.67 billion for the parent company, with multi-year plan (2025–2028) targeting R$1.97 billion annually.

• Dividend payout set at 50% of adjusted net income for 2024, with extraordinary dividends as approved.

• Positive outlook for H2 2024, expecting higher volumes due to weather and ongoing commercial improvements.