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

Executive summary

• Net profit for 2Q24 rose 35.7% year-over-year to R$1.69 billion, driven by higher revenues, operational improvements, and major non-recurring items such as a R$584 million tax provision reversal.

• Adjusted EBITDA for 2Q24 was R$1.92 billion, up 2.0% year-over-year, while consolidated EBITDA reached R$2.37 billion, up 26.2%.

• Net revenue increased 7.0% year-over-year to R$9.44 billion, supported by growth in energy supply and distribution construction revenues.

• Distribution segment distributed 2.9% more energy, with residential, industrial, and commercial segments all showing growth.

• Dividend payments and extraordinary distributions remained a priority, with R$429.7 million in interest on equity declared in June 2024.

Financial highlights

• Net profit for 2Q24 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, focusing on modernization and reliability.

• 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 credit lines to meet working capital, investments, and debt servicing needs over the next 12 months.

• Some generation investments may be deferred to 2025, but overall targets for transmission, distribution, and gas are expected to be met.