EBITDA: BRL11.3 billion, a 32% increase from the previous year. Net Profit: Almost BRL1 billion for the year. Investments: BRL5.7 billion, marking a 34.8% annual average growth. Dividends: Proposed BRL5 billion distribution, pending shareholder approval. Debt: BRL9.9 billion, with a focus on sustainability-linked debentures. Cash Flow: Ended 2023 with BRL2.4 billion in cash. Rating: Achieved AAA rating. Transmission Tariff Review: Positive impact of BRL1.5 billion. DEC Indicator: Reduction of 2.5 hours, improving service quality. Trading Company Margin: BRL600 million drop in EBITDA due to expected margin decline. Non-Recurring Effects: BRL3.6 billion, including tariff review and asset sales. Cash from Operations: BRL5.9 billion. Alianca Divestment: BRL2.7 billion received. Renewable Energy Certificates: Issued with own generation and contracts. Customer Inspections: 384,000 conducted to combat delinquency. OpEx: BRL156 million below regulatory limits.

Warning! GuruFocus has detected 4 Warning Signs with BSP:ZAMP3.

Release Date: March 21, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Cia Energetica DE Minas Gerais - Cemig (NYSE:CIG) achieved the highest EBITDA and net profit in its history for 2024, marking a significant financial milestone. The company received a AAA rating, the best in its history, reflecting strong financial health and investor confidence. Cemig's investment in infrastructure and regulated sectors reached BRL5.7 billion, contributing to increased profitability and sustainability. The company successfully completed a divestment program, including the sale of Alianca Energia, positively impacting financial results. Cemig's commitment to sustainability is evident with its inclusion in the DJSI for the 25th consecutive time and achieving top scores in transparency criteria.

Negative Points

Cemig experienced a drop in trading company margins, resulting in a BRL600 million decrease in EBITDA compared to the previous year. The company faced higher tax payments due to increased net profits, impacting overall financial results. There was a reduction in the cubic meter volume for industrial clients, negatively affecting the gas segment's performance. Cemig's debt profile showed a slight increase in leverage, which is expected to rise further with ongoing investment programs. The company is still working on divestments and strategic planning, indicating ongoing restructuring efforts that may pose challenges.

Q & A Highlights

Q: Can you comment on the negotiations regarding the migration of healthcare plans and provide an update on potential asset divestments? A: Cristiana Maria Fortini Pinto E Silva, Vice President - Legal Affairs: We had a favorable ruling in the labor court regarding the healthcare plan, allowing for indefinite post-employment benefits. We are open to negotiations with the union to ensure financial sustainability while protecting employees. Marco Da Camino Lopez Soligo, Vice President of Equity Holdings: We are working on divestments, including [Taiza Belamonchi] and consolidating minor holdings, with updates to be provided in due time.

Story Continues

Q: Has CEMIG received any notice regarding potential privatization, similar to other companies under administration control? A: Leonardo Magalhaes, Chief Financial Officer: Yes, we have received notices and are in discussions with the controlling shareholder, the Economic Development Secretariat, regarding the rules for a potential control transfer. We are supporting their inquiries.

Q: Are you already negotiating with the union regarding post-employment benefits, or are you waiting for a court ruling? A: Marco Da Camino Lopez Soligo, Vice President of Equity Holdings: We are not waiting for the court ruling to negotiate. We are actively contacting the union and are open to receiving proposals for negotiation.

Q: Can you explain the volume of exposure in terms of market differences and its impact on prices? A: Marcus Vinicius, Superintendent of Planning: We have an annual exposure of around 800 megawatts, primarily in the northeast, with about 700 megawatts exposed in the first quarter. This exposure affects price differences.

Q: What are the key achievements and future commitments of CEMIG? A: Andrea Marques de Almeida, Vice President of Finance and Investor Relations: We have made significant progress in distribution, innovation, and sustainability, including planting 1 million trees and launching an environmental awareness program. Future commitments include further divestments, digital transformation, and exploring new technologies for electric transition.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

View Comments