Equatorial Energia (EQTL3) Q2 2024 earnings summary

Executive summary

• Became reference investor in SABESP privatization, acquiring a 15% stake for R$5.6–6.8 billion, leading governance changes and expanding into sanitation.

• Launched new solar projects, including Barreiras and Ribeiro Gonçalves, raising renewables capacity to 1.8 GW.

• Led institutional investor rankings in all categories and recognized as the most honored utility company in Latin America.

• Net income for H1 2024 reached R$1,274.5 million, up from R$958.5 million year-over-year, with consolidated net operating revenue of R$20,385.3 million, a 5.2% increase.

• Disposal of INTESA and SPE 7 subsidiaries, resulting in deconsolidation of R$413 million in debt.

Financial highlights

• Adjusted EBITDA reached R$2.4 billion, up 11% year-over-year, mainly driven by distribution segment growth and cost discipline.

• Gross consolidated margin increased 11.5% year-over-year to R$3.8 billion.

• Investments totaled R$2.1 billion, a 20–24% decrease from Q2 2023 due to completion of solar projects.

• Distribution segment saw 8% volume growth year-over-year, with losses below regulatory limits for the third consecutive quarter.

• Net operating revenues for 2Q24 were R$10.5 billion, up 14% year-over-year.

Outlook and guidance

• Focus on operational cost discipline, recovery in Rio Grande do Sul, and turnaround in Goiás.

• Plans to implement Sabesp governance model and pursue universalization goals in sanitation.

• Ongoing capital increases and new debenture issues to support liquidity and future investments.

• Positive prospects for wind generation as weather conditions improve and ONS reduces restrictions.