CEMIG(US:CIG)2023-05-15 16:00Financial Performance - Total energy sales to final customers in 2022 reached 26,365 million Reais, slightly down from 26,665 million Reais in 2021[133] - Net revenue increased by 2.42% from R$33,646 million in 2021 to R$34,463 million in 2022[162] - Total revenue from energy sold to final customers in 2022 was R$30,158 million, a 1.82% increase from R$29,619 million in 2021[164] - Revenue from construction distribution increased by 75.27% to R$3,246 million in 2022, driven by a higher execution of CEMIG D's investment plan[170] - Revenue from supply of gas rose by 30.52% to R$4,529 million in 2022, attributed to a 16% readjustment in the natural gas margin[170] - The company reported a net cash increase of R$1,939 million in net income, adjusted for the reconciliation of net cash[151] - In 2022, the company's net revenue was R$20,919 million, a decrease of 6.38% compared to R$22,345 million in 2021[201] - Gross electricity supply revenue fell to R$20,209 million in 2022, down 6.93% from R$21,713 million in 2021, primarily due to a 2.45% decrease in the volume of energy sold[201] Energy Sales and Rates - The average rate for residential customers in 2022 was R$ 903.10 per MWh, a decrease from R$ 994.43 in 2021[133] - The average rate for industrial customers in 2022 was R$ 329.10 per MWh, showing a slight increase from R$ 322.41 in 2021[133] - The average rate for commercial customers in 2022 was R$ 687.17 per MWh, an increase from R$ 662.38 in 2021[133] - The average tariff on free customers increased by 22.82% in 2022 compared to 2021, reflecting higher consumption by industrial and commercial customers[168] Debt and Financing - The company repurchased US$ 244 million of its Eurobonds in December 2022, reducing the outstanding debt principal to US$ 756 million, maturing in 2024[136] - CEMIG provided total financing guarantees amounting to R$ 10,579 million as of December 31, 2022, down from R$ 11,364 million in 2021[137] - CEMIG's net debt to adjusted EBITDA ratio is required to be 2.5 or less, and the company is compliant with all covenants as of December 31, 2022[138] - The company's total indebtedness from loans and debentures as of December 31, 2022, was R$10,580 million, down from R$11,364 million in 2021[155] - The company aims to maintain a consolidated net indebtedness at or below 2.5 times Adjusted EBITDA[154] Investments and Capital Expenditures - The company plans to allocate R$5,726 million for capital investments in 2023, primarily for the expansion of its distribution system[141] - CEMIG invested R$24 million in 37 research and development projects in 2022, focusing on energy systems and environmental control technologies[140] - Infrastructure construction costs totaled R$3,536 million in 2022, a 73.67% increase from R$2,036 million in 2021, reflecting higher investment volumes[182] Operating Costs and Expenses - Total operating costs and expenses were R$29,679 million in 2022, reflecting a 5.10% increase from R$28,237 million in 2021[196] - Expenses due to energy purchased for resale decreased by 9.24% to R$14,614 million in 2022, compared to R$16,101 million in 2021[173] - The cost of energy decreased by 19.63% to R$11,938 million in 2022, primarily due to lower electricity purchase costs and reduced electric system usage charges[186] - Personnel expenses in 2022 were R$1,352 million, an increase of 8.94% from R$1,240 million in 2021, driven by an 11.08% salary adjustment[175] Market and Economic Conditions - CEMIG's foreign currency-denominated debt may adversely affect its financial position during periods of Real depreciation against the U.S. dollar[144] - The company faces risks from political and economic conditions in Brazil, which can directly impact its business and financial condition[301] - CEMIG's operations may be adversely affected by climate change, health epidemics, and labor unrest[300] Employee and Management Information - CEMIG's total employee count decreased from 5,254 in 2020 to 4,969 in 2022, with management level employees remaining relatively stable at around 190[263] - The total compensation for CEMIG employees in 2022 was R$37 million, consistent with 2020 but slightly increased from R$34 million in 2021[255] - The company has a Careers and Remuneration Plan established in June 2022 to maintain a competitive compensation structure and promote employee development[265] - The Executive Board of CEMIG consists of seven members, with terms expiring at the Annual General Meeting in April 2024[273] Legal and Regulatory Issues - The company faced multiple criminal actions related to tax evasion involving its Board member, Mr. José João Abdalla Filho, with ongoing legal proceedings[251][252] - The company cannot guarantee the renewal of existing concessions or the acquisition of new ones, which could materially affect its operations[311] Miscellaneous - CEMIG is a state-controlled mixed capital company organized under Brazilian laws, with financial statements prepared in accordance with IFRS[291] - The exchange rate used for translating Reais to U.S. dollars is R$5.2860 to US$1.00 as of December 30, 2022[291] - CEMIG's actual results may differ substantially from forward-looking statements due to various risks and uncertainties[294]