Neoenergia (NEOE3) Q2 2025 earnings summary

Executive summary

• Net operating revenue rose 11% year-over-year in 2Q25 and 7% in 6M25, driven by customer base expansion and tariff adjustments.

• Net income doubled in 2Q25 to R$1.63 billion, aided by a R$869 million one-off tax credit and operational improvements.

• EBITDA increased 8% in 2Q25 and 7% in 6M25; adjusted cash EBITDA up 7% in 2Q25, with networks segment EBITDA up 13%.

• CAPEX reached R$2.8 billion in 2Q25 and R$5.0 billion in 6M25, mainly for distribution and transmission expansion.

• Asset rotation advanced with the sale of Baixo Iguaçu HPP and 50% of Itabapoana transmission line, generating over R$1.0 billion in cash.

Financial highlights

• Gross margin increased 7% year-over-year to R$4.42 billion in 2Q25, mainly from tariff reviews and new transmission assets.

• Operating expenses rose 4% year-over-year, below inflation, reflecting cost discipline.

• Net debt/EBITDA ratio was 3.46x at June 2025, stable versus December 2024.

• Financial result was negative R$1.38 billion in 2Q25, mainly due to higher debt and CDI rates.

• Collection rates remained high, above 97% for all distributors.

Outlook and guidance

• Management expects continued growth in customer base and energy volume, with ongoing investments in network expansion and transmission projects.

• Deleveraging process underway, with net debt/EBITDA expected to approach 3x by 2026.

• Focus on organic growth in distribution, with annual investments of R$7 billion planned post-2025.

• No participation in upcoming transmission auctions unless return thresholds are met.

• ESG targets for 2025 and 2030 remain on track, with strong progress in emissions, digitalization, and diversity.