CIG-C — Companhia Energética de Minas Gerais

Summary of Cemig's Q3 2025 Earnings Call

1. Key Financial Results and Metrics

• Recurring EBITDA: BRL 1.5 billion, a decline of 16.3% year-over-year.
• Net Profit: Recurring net profit fell by 30.2%, impacted by increased depreciation and higher interest rates.
• Investments: Total investments for the first nine months reached BRL 4.7 billion, with BRL 3.6 billion allocated to distribution.
• Leverage: Net debt to recurring EBITDA ratio stands at 1.76, maintaining a strong credit rating of AAA from two agencies.
• Cash Flow: Starting cash of BRL 2.3 billion, with cash from operations at BRL 3.4 billion.

2. Strategic Updates and Business Highlights

• Investment Program: Cemig is executing its largest investment program, focusing on substations and network improvements, which is expected to enhance future tariff reviews.
• Recognition: Awarded as the best energy company in Brazil by Veja Negócios and recognized for excellence in financial management and sustainability.
• Healthcare Plan: Finalized a collective agreement for a healthcare plan for retired employees, ensuring sustainability and positive transitions.

3. Forward Guidance and Outlook

• The company remains optimistic about future results due to ongoing investments and a favorable position in the trading business.
• Anticipates positive outcomes from the tariff review process as investments mature and regulatory approvals are granted.

4. Bad News, Challenges, or Points of Concern

• Client Migration: Notable loss of large clients migrating to the basic network, adversely affecting distribution results.
• Market Conditions: Declining margins in the trading business and increased energy purchase costs due to lower GSF (Generation Scaling Factor).
• Regulatory Changes: New Technical Note 53 may impact how losses are calculated, though management believes they remain within regulatory limits.
• Operating Costs: Rising operational expenses, particularly in outsourced services and personnel, are a concern as they grow above inflation rates.

5. Notable Q&A Insights

• Technical Note 53: Management clarified that the new method for calculating losses will not retroactively affect past financials, and they remain compliant with regulatory standards.
• Trading Strategy: The company is focused on closing positions rather than expanding exposure, reflecting a cautious approach in response to market volatility.

Overall, while Cemig faces challenges from client migration and market conditions, its robust investment strategy and strong financial position provide a foundation for future growth.