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Companhia Energética de Minas Gerais – CEMIG (NYSE:CIG) is one of the 9 Most Profitable Penny Stocks to Buy Right Now. On September 10, Reuters reported that Companhia Energética de Minas Gerais – CEMIG (NYSE:CIG) plans to invest in clean energy projects. Cemig’s CEO, Reynaldo Passanezi Filho, told Reuters that the company plans to use its experience in hydropower to invest in clean energy technologies. Cemig is working on approximately a $7.4 billion (40 billion BRL) investment plan from 2025 through 202 ...

Financial Data and Key Metrics Changes - The company reported an adjusted EBITDA of BRL 2.2 billion for the quarter, reflecting a 15% increase compared to the previous year [14][21] - Total investments for the first half of the year reached BRL 2.7 billion, with a full-year investment plan of BRL 2.8 billion [4][11] - The net debt to adjusted EBITDA ratio improved to 1.59, indicating a strong leverage position [18] Business Line Data and Key Metrics Changes - The distribution segment saw significant investments, with nine substations energized and over 2,600 kilometers of low and medium voltage networks constructed [12] - The energy market for semi-distribution experienced a 3.3% drop, attributed to the migration of industrial clients to the free market [21][22] - The gas segment, GASMIG, reported improved EBITDA and net profit due to efficient cost management [29] Market Data and Key Metrics Changes - The company noted a gross effect of BRL 76 million related to price differences in energy submarkets, which is expected to normalize in the future [6][17] - The distributed generation market showed a significant growth of around 20% compared to the previous year [22] Company Strategy and Development Direction - The company is focused on a BRL 59 billion investment plan from 2019 to 2029, primarily targeting distribution to meet unmet load and support distributed generation [36][42] - Future investments will also aim to enhance resilience and automation in operations, responding to regulatory requests [38] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the second half of the year, anticipating positive scenarios regarding tariff adjustments and energy market conditions [5][7] - The company is closely monitoring regulatory changes and their potential impacts on profitability, especially concerning tariff reviews and pension fund expenses [50][54] Other Important Information - The company successfully participated in the GSF auction, securing extensions for three power plants, which is expected to add value in the long term [8][28] - The Supreme Court's recent ruling on tax deductions is viewed positively, although the final impacts are still being assessed [44][45] Q&A Session Summary Question: Comments on capital allocation and future focus - Management highlighted a strategic focus on distribution investments to address unmet load and support distributed generation, with a strict rule to invest only in Minas Gerais [34][36][42] Question: Impact of recent Supreme Court ruling on taxes - Management acknowledged the positive implications of the ruling but emphasized the need to wait for final details to assess the full impact [44][45] Question: Rationale behind increasing short positions for 2027-2028 - Management clarified that the increase in short positions was a result of market conditions and ongoing efforts to close positions and reduce exposure [47][48] Question: Regulatory environment's effect on profitability and pension fund expenses - Management stated that efficiency improvements are a priority, and discussions on tariff adjustments are ongoing, with a focus on reducing costs in pension plans [50][51][54]

Financial Data and Key Metrics Changes - The company reported an adjusted EBITDA of BRL 2.2 billion for the quarter, reflecting a 15% increase compared to the previous year [14][21] - Total investments for the first half of the year reached BRL 2.7 billion, with a full-year investment plan of BRL 2.8 billion [4][11] - The net debt to adjusted EBITDA ratio improved to 1.59, indicating a strong leverage position [18] Business Line Data and Key Metrics Changes - The distribution segment saw significant investments, with nine substations energized and over 2,600 kilometers of low and medium voltage networks constructed [12] - The energy market for semi-distribution experienced a drop of 3.3% due to the migration of industrial clients to the free market [21] - The company reported a gross effect of BRL 76 million related to price differences in energy submarkets [6][17] Market Data and Key Metrics Changes - The company noted a significant growth of around 20% in distributed generation compared to the previous year [22] - The trading sector faced a negative impact of BRL 76 million due to differences among energy submarkets [6][21] Company Strategy and Development Direction - The company is focused on a BRL 59 billion investment plan from 2019 to 2029, primarily targeting distribution to meet unmet load and support distributed generation [36][42] - Future investments will also aim to enhance resilience and automation in service delivery [38] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the second half of the year, anticipating positive scenarios regarding tariff adjustments and energy trading [6][7] - The company is closely monitoring regulatory changes and their potential impacts on profitability, especially concerning tariff reviews and pension fund expenses [50][55] Other Important Information - The company successfully participated in a GSF auction, securing extensions for three power plants, which is expected to add value [8][28] - The company is actively working on reducing operational expenses while improving service quality through technology and efficiency initiatives [51][54] Q&A Session Questions and Answers Question: Comments on capital allocation and future focus for transmission auctions - Management highlighted that the bulk of investments will be in distribution to address unmet load and support distributed generation, with a focus on regulatory sectors [36][39] Question: Impact of recent Supreme Court ruling on PIS and ICMS - Management noted that the ruling allows for the deduction of taxes and honoraries, which is positive, but the final ruling's impact is still uncertain [44][45] Question: Rationale behind increasing short position for 2027-2028 - Management clarified that the increase in short position was due to market conditions and the need to close existing positions, with a focus on reducing exposure moving forward [47][48] Question: Regulatory changes affecting profitability and pension plan expenses - Management emphasized the importance of efficiency and technology in improving service quality and managing costs, with ongoing negotiations regarding pension funds [50][55]

Results 2Q25 Transf rming lives with our energy Disclaimer Certain statements and estimates in this material may represent expectations about future events or results which are subject to risks and uncertainties that may be known or unknown. There is no guarantee that events or results will occur as referred to in these expectations. These expectations are based on the present assumptions and analyses from the point of view of our management, in accordance with their experience and other factors such as the ...

Group 1 - Cemig (CIG) is part of the Utilities group, which consists of 109 companies and currently ranks 2 within the Zacks Sector Rank [2] - Cemig has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook as the consensus estimate for full-year earnings has increased by 5% over the past 90 days [3] - Year-to-date, Cemig has returned approximately 10.7%, outperforming the average return of 8.6% for Utilities companies [4] Group 2 - Cemig belongs to the Utility - Electric Power industry, which includes 60 stocks and is currently ranked 79 in the Zacks Industry Rank [5] - The Utility - Electric Power industry has gained about 8.6% year-to-date, indicating that Cemig is performing better than its peers in this specific group [5] - Another outperforming stock in the Utilities sector is MYR Group (MYRG), which has returned 22% year-to-date and has a Zacks Rank of 1 (Strong Buy) [4][6]

Group 1 - CEMIG has filed its 2024 Form 20-F with the U.S. Securities and Exchange Commission on April 30, 2025 [1] - The filing is part of the company's compliance with regulatory requirements for publicly held companies [1] - CEMIG's shares are traded on stock exchanges in São Paulo, New York, and Madrid [1] Group 2 - The 2024 Form 20-F is accessible on the SEC's website and CEMIG's Investor Relations website [2]

Financial Exposure and Risk Management - As of December 31, 2024, CEMIG has no outstanding indebtedness denominated in foreign currencies, and its net liabilities exposed to foreign exchange fluctuations amount to R$210 million in a base scenario, with a probable relief of R$16 million and an adverse increase of R$10 million [1054]. - The sensitivity analysis indicates that in a probable scenario, the Selic rate will be 9.15% and the TJLP rate will be 7.94% on December 31, 2025, with net liabilities exposed to interest rate fluctuations estimated at R$1,245 million [1062]. - CEMIG's net exposure to inflation indices as of December 31, 2024, shows net liabilities of R$2,565 million, with assets indexed to inflation totaling R$5,905 million and liabilities amounting to R$8,470 million [1065]. - The company reported a positive result of R$521 million from hedging transactions related to US$381.1 million, resulting in a net cash inflow of R$443 million as of December 5, 2024 [1059]. - The company has implemented derivative financial instruments to protect against foreign exchange risks, ensuring that these instruments are not used for speculative purposes [1056]. - The company estimates that in an adverse scenario, the net effect of fluctuations in interest rates could lead to a loss of R$188 million [1064]. Liquidity Management - CEMIG's liquidity management includes monthly cash flow projections over 12 months and daily liquidity projections over 180 days, ensuring sufficient cash flow for operational needs [1070]. - CEMIG's cash equivalents and marketable securities amount to R$4,524 million, while total liabilities are R$4,898 million, resulting in net liabilities exposed of R$374 million [1061]. - The company has 2,462 million reais in principal payments due within 3 months to 1 year [1074]. Financial Obligations - Total financial obligations amount to 22,300 million reais, with principal payments of 19,374 million reais and interest payments of 1,528 million reais [1074]. - Loans and debentures account for 18,646 million reais, with principal payments of 16,000 million reais due over 1 to 5 years [1074]. - Supplier obligations total 2,926 million reais, primarily due within 1 month at 2,761 million reais [1074]. - Fixed rate obligations include 5,672 million reais due over 1 to 5 years, with 5,354 million reais in principal payments [1074]. - Interest payments on loans and debentures amount to 2,217 million reais over 1 to 5 years [1074]. - Total interest payments across all obligations amount to 2,298 million reais over 1 to 5 years [1074]. - The pension plan deficit (FORLUZ) totals 695 million reais, with 304 million reais due over 1 to 5 years [1074]. - The company has 5 million reais in obligations due within 1 month related to the pension plan [1074]. - Total obligations over 5 years amount to 6,124 million reais, with 5,902 million reais in principal payments [1074]. Credit Risk - Any reduction in CEMIG's credit ratings could increase financing costs and complicate debt refinancing, potentially impacting operational capabilities [1073]. Investment Strategy - CEMIG's financial strategy includes investing in private credit investment funds and bank CDs to optimize returns while managing liquidity risk [1071].

Financial Data and Key Metrics Changes - The company achieved a record EBITDA of BRL 11.3 billion, marking a significant increase compared to the previous year [7][24] - Net profit reached nearly BRL 1 billion, influenced by higher investments and increased tax payments due to higher profits [32] - The company reported a total debt of BRL 9.9 billion, with a stable debt cost around 12% [33][35] Business Line Data and Key Metrics Changes - The distribution segment showed an improvement in EBITDA, while the trading segment experienced a decline due to lower margins [50] - The company reported a reduction of 2.5 hours in the DEC indicator, reflecting improved service delivery [27] - The generation segment also saw adjustments, with trading margins down compared to the previous year [50] Market Data and Key Metrics Changes - The company noted a favorable hydrology in November and December, which positively impacted energy demand [39] - The captive market experienced a slight reduction of 0.6%, while the free market continued to grow [40] - The company is a leader in Brazil's retail trading market, both in terms of transaction volume and energy transacted [41] Company Strategy and Development Direction - The company is focused on a bold investment program, planning to invest BRL 59.1 billion from 2019 to 2028, significantly above regulatory depreciation [14] - There is a strong emphasis on sustainability, with the company being recognized for its clean energy matrix and various sustainability achievements [21][22] - The company is also working on digital transformation and regionalization to improve service quality and operational efficiency [54][56] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's transformation and sustainability, highlighting the importance of infrastructure investment for regional development [9][18] - The company is open to negotiations regarding health care plans and is actively engaging with unions [68] - There are ongoing discussions regarding potential privatization, with management cooperating with the Economic Development Secretariat [73] Other Important Information - The company plans to distribute BRL 5 billion in dividends, reflecting strong financial performance [20] - The company has made significant progress in reducing operational expenses, ending the year with BRL 156 million lower than regulatory limits [46] - The company is committed to maintaining compliance with regulatory standards and improving operational efficiency [43] Q&A Session Summary Question: Can you comment on the negotiations regarding health care plans and updates on divestments? - Management confirmed ongoing negotiations with unions regarding health care plans and mentioned divestments related to Taesa and Belo Monte [62][71] Question: How is the union behaving in negotiations, and what about exposure in sub-markets? - Management stated they are open to negotiations and have been in contact with the union, while also addressing exposure to price differences in energy trading [77][79]

Financial Data and Key Metrics Changes - The company achieved its highest EBITDA in history at BRL 5 billion for Q3 2024, reflecting a significant turnaround and financial strength [8][19] - The company received a AAA rating, the best in its history, with over six notches of growth in a five-year period [6][20] - Cash generation remained robust, with BRL 1.8 billion in EBITDA for the quarter [31] Business Line Data and Key Metrics Changes - The sale of Alianca Energia resulted in a capital gain of BRL 1.6 billion [7][34] - The transmission tariff revision contributed an additional BRL 1.5 billion in IFRS adjustments [8][34] - Investments in distribution increased significantly, with BRL 4.4 billion realized investments, nearly four times the previous levels [28][29] Market Data and Key Metrics Changes - The average tariff adjustment for the quarter was 7.32%, with market growth of 4.5% in Minas Gerais [33][52] - The captive market showed a slight decline, while residential clients improved due to high temperatures [53] Company Strategy and Development Direction - The company is focused on a bold investment plan of BRL 6.2 billion for the year, with expectations to invest over 90% of the forecasted amount [28][29] - The controlling shareholder has submitted a bill to turn Cemig into a corporation, indicating a strategic shift [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future cash generation and the impact of upcoming tariff reviews in 2028 [79] - The company is committed to maintaining low leverage while executing a significant investment program [79] Other Important Information - The company was recognized as one of the most transparent companies in Brazil due to the quality of its financial statements [30] - The company is investing in technology and digital transformation to prepare for future challenges [67] Q&A Session Summary Question: Understanding the bill of law for Cemig to become a corporation - Management indicated that the best entity to answer this would be the Minas Gerais administration, and a referendum may be required if the bill is approved [71][73] Question: Insights on energy purchase and sale in the quarter - The company did not need to purchase energy due to not being in an open position, but faced price differences due to market dynamics [75][77] Question: Projections on leverage and dividends - The company expects leverage to increase due to dividends and investments, projecting a leverage ratio between 2 and 2.5 by 2027 [79]