Engie Brasil Energia (EGIE3) Q3 2024 earnings summary

Executive summary

• Net operating revenue in 3Q24 was R$2,537 million, up 0.9% year-over-year, driven by higher sales volume and transmission revenues, partially offset by lower prices and trading revenue.

• Adjusted EBITDA decreased 5.8% to R$1,665 million, with margin dropping to 65.6%, reflecting lower equity income from TAG and higher costs.

• Adjusted net income fell 28.2% to R$666 million, mainly due to the partial sale of TAG, higher financial expenses, and increased depreciation/amortization.

• Major investments in the quarter totaled R$1.9 billion, focused on new wind, solar, and transmission projects.

• Secured Block 1 in Aneel Transmission Auction, adding 780 km of new lines across five states, and began commercial operation of 50 wind turbines at Serra do Assuruá Wind Complex.

Financial highlights

• Net income for 3Q24 was R$658 million, down 24.1% year-over-year; adjusted net income was R$666 million, down 28.2%.

• Net operating revenue reached R$2,537 million (+0.9%); energy sales volume (excluding trading) rose 4.3% to 8,942 GWh.

• Adjusted EBITDA was R$1,665 million (-5.8%), with adjusted EBITDA margin at 65.6%.

• Net debt increased 24.5% year-over-year to R$19,095 million; net debt/EBITDA at 2.7x.

• Return on equity (ROE) was 26.5%; return on invested capital (ROIC) was 16.7%.

Outlook and guidance

• Ongoing construction of major wind and solar projects, with Serra do Assuruá Wind Complex expected to be completed in 1H25 and Assú Sol Photovoltaic Complex targeting full operations by 4Q25.

• Company remains focused on expanding renewable capacity, participating in regulatory modernization, and maintaining organic growth.

• Management reiterates commitment to sustainable development, ESG leadership, and dividend policy of at least 55% of distributable net income.

• Curtailment levels for wind and solar expected to remain high in 2025, despite new transmission lines.

• Gradual energy sales strategy continues, focusing on stable average prices and long-term contracts.