Energisa (ENGI3) Q2 2024 earnings summary

Executive summary

• Adjusted recurrent EBITDA rose 13.2% to R$1,658.3 million in 2Q24, with net income up 16.6% to R$377.6 million year-over-year, driven by strong energy sales and rate reviews in distribution and transmission.

• Electricity sales grew 11.2% year-over-year, the highest Q2 rate in 23 years, with all concessions and customer segments showing double-digit growth.

• Strategic expansion included the acquisition of Infra Gás (pending closing), new PV plants, and early completion of transmission projects.

• Gas distribution saw a 53.8% increase in investments and a 7.2% rise in customers, but net income dropped 52.3% year-over-year due to lower thermoelectric demand.

• Recognized for innovation and employee empowerment, ranking among Brazil's most innovative companies for 10 consecutive years.

Financial highlights

• Net operating revenue (ex-construction) reached R$6,038.2 million (+14.3% YoY); adjusted recurrent EBITDA was R$1,658.3 million (+13.2% YoY); adjusted net income was R$377.6 million (+16.6% YoY); consolidated net income was R$655 million.

• Dividend payout for 2Q24 was R$457.1 million (32.5% payout ratio); interest and dividends of R$157 million announced for the semester (34.2% payout ratio).

• Net debt/EBITDA stood at 2.7x, with net debt at R$23,447.8 million as of June 2024.

• Investments in 2Q24 totaled R$1,591.7 million (-8.1% YoY), with distribution accounting for the majority; cash and equivalents were R$11,214.8 million.

• PMSO costs rose 24.2% year-over-year, mainly due to PLR provision.

Outlook and guidance

• Targeting BRL 6 billion in investments for 2024, focusing on distribution, transmission, and distributed generation, with ongoing expansion in PV plants.

• Expecting organic and selective inorganic growth, especially in natural gas and distributed generation.

• All electricity distributors exceeded 2024 DEC and FEC regulatory targets, indicating strong operational performance.

• RAP for transmission concessions adjusted by 3.92% for July 2024–June 2025; new projects in Maranhão and Amazonas to support future revenue growth.

• Anticipates maintaining PMSO growth below inflation and expects delinquency (PDD) to remain stable or improve with economic conditions.