Companhia Energética de Minas Gerais - CEMIG (CMIG4) Q3 2024 earnings summary

Executive summary

• Net profit reached R$3.28 billion in 3Q24, up 165.2% year-over-year, driven by the sale of Aliança Energia and positive effects from the transmission tariff review.

• Adjusted EBITDA for 3Q24 was R$4.96 billion, a 146.52% increase from 3Q23, with recurring EBITDA at R$1.76 billion.

• Achieved highest-ever Fitch AAA credit rating, reflecting strong financial performance and disciplined capital allocation.

• Robust operational cash generation and successful execution of divestment plan, including Aliança Energia sale with R$1.6 billion capital gain.

• Announced significant governance change: controlling shareholder submitted a bill to turn the company into a corporation.

Financial highlights

• Net revenue for 3Q24 was R$10.15 billion, up 7.7% year-over-year.

• Cash and securities increased to R$6.75 billion by 9M24, supported by strong cash from operations and divestments.

• 3Q24 EBITDA reached R$4.96 billion, up 146.5% year-over-year; recurring EBITDA at R$1.76 billion.

• Net profit surged to R$3.28 billion from R$1.24 billion in 3Q23, mainly due to one-off gains from asset sales and tariff review.

• 11th sustainable debenture issuance raised R$2.5 billion, extending average debt maturity by one year.

Outlook and guidance

• Planned investments of R$35.6 billion for 2024-2028, with R$6.2 billion targeted for 2024 and over 65% realized by Q3.

• Management expects current cash balances and operating cash flow to be sufficient for working capital, investments, and debt servicing over the next 12 months.

• Dividend payout policy remains at 50% of IFRS results, with expectations for continued attractive dividends.

• Ongoing focus on reducing energy losses and improving service quality, with DEC outage duration within regulatory limits.

• Expansion of renewable generation with new solar plants expected to add 188 MWp by year-end 2024.