Energisa (ENGI3) Q3 2024 earnings summary

Executive summary

• Achieved the highest electricity market growth in 11 years, with Q3 2024 up 5.9% year-over-year, and completed major acquisitions in the natural gas segment, including Infragás and Norgás.

• Net operating revenue excluding construction revenue grew 10.6% year-over-year to R$6,919.3 million, with consolidated net income up 5.6% to R$727.1 million and adjusted recurrent net income up 2.3% to R$542.5 million.

• Recognized as a top employer, with multiple subsidiaries ranking highly in workplace awards.

• Maintained disciplined capital allocation and operational efficiency, with a focus on sustainability and decarbonization.

• Expanded biosolutions business line, focusing on biomethane and biofertilizers.

Financial highlights

• Adjusted recurrent EBITDA fell 13.5% year-over-year to R$1,830.9 million, mainly due to negative tariff adjustments and non-recurring effects.

• Net profit reached R$442 million, up 2.3% year-over-year, while consolidated net income rose 5.6% to R$727.1 million.

• Investments in the quarter increased 18.2% to R$1,827.3 million, with electricity distribution up 44% and natural gas distribution up 108.7%.

• PMSO expenses grew 4.2% year-over-year, below inflation.

• Finance income improved, with a 23.4% reduction in net financial expenses compared to 3Q23.

Outlook and guidance

• Targeting R$24 billion in investments by 2026, with R$17.3 billion already invested by September 2024.

• Aims to reach 530 MWp in distributed generation capacity and 25% of consolidated EBITDA from non-distribution businesses by 2026.

• Expects to conclude concession renewals in the first half of 2024 and maintain all distributors within regulatory quality limits.

• Focus on new transmission auctions, market opening in 2025, and ongoing investments in quality, resilience, and regulatory compliance.

• ANEEL set Red Flag Level 2 for October and Yellow Flag for November 2024 due to hydrological conditions.