Companhia Energética de Minas Gerais - CEMIG (CMIG4) Q2 2024 earnings summary

Executive summary

• Net profit reached R$1.69 billion in Q2 2024, up 35.7% year-over-year, driven by higher energy sales, operational efficiency, and non-recurring gains such as a R$584 million tax provision reversal.

• Adjusted EBITDA was R$1.92 billion, up 2.0% year-over-year, with consolidated EBITDA at R$2.37 billion (+26.2%).

• Revenue grew 7.0% to R$9.44 billion, supported by increased residential consumption and tariff adjustments.

• Major non-recurring items included a R$584 million reversal of tax provisions and a R$410 million reversal of amounts repayable to consumers.

• Strategic divestments included the sale of a 45% stake in Aliança Geração for R$2.74 billion.

Financial highlights

• Net profit for Q2 2024 was R$1.69 billion, up 35.7% year-over-year; adjusted net profit was R$1.13 billion, down 6.6%.

• EBITDA reached R$2.37 billion (+26.2% YoY); adjusted EBITDA was R$1.92 billion (+2.0% YoY).

• Net revenue grew 7.0% to R$9.44 billion; operational expenses rose 1.8% to R$7.44 billion.

• Gross debt increased 18.4% to R$11.64 billion; net debt rose 15.0% to R$8.65 billion.

• Leverage (net debt/adjusted EBITDA) remained low at 1.02x; average real cost of debt was 7.2%.

Outlook and guidance

• Planned investments of R$35.6 billion for 2024-2028, with R$6.2 billion targeted for 2024.

• Execution of the largest investment program in company history, focusing on modernization, reliability, and expansion across all segments.

• Tariff adjustment effective May 2024 increased average tariffs by 7.32% for consumers.

• Transmission RAP for 2024-2025 cycle increased by 18.8% to R$1.36 billion.

• Management expects sufficient cash flow and liquidity to meet obligations and investments over the next 12 months.