Light (LIGT3) Q2 2024 earnings summary

Executive summary

• Judicial Reorganization Plan approved by over 99% of creditors and ratified in June 2024, with effects expected in 3Q24; plan includes capital raise, debt restructuring, and payment options for creditors.

• Distribution business saw strong operational and financial recovery, with Adjusted EBITDA up 135.2% YoY in 2Q24 and 23.9% for 6M24; operational improvements led to higher collections and cash position.

• Company faces high indebtedness, negative net working capital, and insufficient operating cash flow, with future viability dependent on successful plan execution and concession renewals.

• Generation and Trading segments experienced margin pressure and EBITDA decline due to lower prices and expiring high-priced contracts.

• Investment plan to address supply quality issues is on schedule, with major projects underway and additional teams deployed.

Financial highlights

• Consolidated cash position reached R$2.8 billion at June 2024, up R$672 million from December 2023.

• Distribution Adjusted EBITDA was R$754.9 million for 6M24 (+23.9% YoY); 2Q24 EBITDA at R$623.6 million (+135.2% YoY).

• Adjusted billed sales in Distribution grew 8.7% YoY in 2Q24, driven by higher residential and commercial consumption.

• Collection rate improved to 98.6% in June 2024, up 0.8 p.p. YoY, supporting lower provision for doubtful accounts.

• Consolidated net loss for 6M24 was R$408.9 million, compared to net income of R$216.5 million in 6M23.

Outlook and guidance

• Effects of the Judicial Reorganization Plan to be recognized in 3Q24; capital increase and debt conversion expected post-concession renewal.

• Expectation to reach regulatory levels for DEC and FEC by year-end, with reinforced operational teams and ongoing investments in network modernization.

• Company’s future depends on successful execution of the reorganization plan and renewal of key concessions, both subject to regulatory and creditor approvals.