Transmissora Aliança de Energia Elétrica (TAEE11) Q2 2024 earnings summary

Executive summary

• Regulatory net income rose 22.9% year-over-year to R$294 million in 2Q24, driven by improved operational costs, financial results, and tax efficiencies from mergers and JCP distribution.

• IFRS net income surged 81.9% year-over-year to R$403.1 million, reflecting strong cash generation, merger impacts, and monetary restatement revenues.

• Board approved R$223.3 million in earnings distribution (R$0.65/unit), split between interest on equity and interim dividends, payable November 27, 2024; YTD distributions reached R$986 million.

• RAP (Annual Permitted Revenue) stabilized at R$4.1 billion after project completions, with new projects and reinforcements expected to add R$445 million in RAP.

• Operational availability of transmission lines remained high at 99.4%, with a one-off event at Janaúba impacting the Variable Portion.

Financial highlights

• Regulatory net revenues in 2Q24 were R$579.7 million, down 7.2% year-over-year, mainly due to negative IGP-M adjustment and RAP drop at ATE III.

• Regulatory EBITDA reached R$485.2 million, down 7.8% year-over-year, with an EBITDA margin of 83.7%.

• IFRS net revenues in 2Q24 were R$911.1 million, up 33.5% year-over-year, driven by higher investments and monetary restatement revenues.

• IFRS EBITDA was R$520.0 million, up 31.0% year-over-year, with a margin of 57.1%.

• Dividend yield stands at approximately 8.1% based on recent prices.

Outlook and guidance

• Dividend payout policy for 2024 set at a minimum of 75% of regulatory net income, with plans to increase to at least 90% from 2025 onward if conditions remain favorable.

• New projects (Ananaí, Pitiguari, Saíra phase 2, Tangará) and reinforcements are expected to add R$445 million in RAP as they become operational.

• Participation in September's bidding process for new concessions is planned, with a focus on value creation and disciplined financial management.

• ANEEL's Ratifying Resolution 3.348/2024 set RAP adjustments for 2024-2025: -0.34% for IGP-M-indexed and +3.93% for IPCA-indexed concessions, impacting results from 3Q24.

• RAP drop expected after 2030 is being addressed through new investments, operational efficiency, and continued participation in auctions.