CEMIG(CIG) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Recurring EBITDA for 2025 was BRL 7.3 billion, while total EBITDA including non-recurring items reached BRL 8.3 billion, indicating a strong cash generation to support a record investment program [4][14] - The company reported a recurring net profit of BRL 4.2 billion and a non-recurring net profit of BRL 4.9 billion, with a notable impact from adjustments related to post-employment liabilities [15][24] - The company achieved a dividend payment of BRL 3.5 billion, reflecting a dividend yield of 14.9% [8][23] Business Line Data and Key Metrics Changes - In 2025, the company invested BRL 6.6 billion, with significant contributions in distribution, generation, and transmission sectors [4][12] - Distribution investments included 23 new substations and over 12,000 km of low and medium voltage networks, enhancing service capacity [12] - Generation investments involved BRL 199 million in the GSF auction and BRL 411 million for expansion and maintenance [12] Market Data and Key Metrics Changes - The company faced a 1.4% reduction in market share due to some clients migrating to the basic network [25][30] - The hydrological risk management led to increased energy purchases at higher prices, impacting financial results [24][26] Company Strategy and Development Direction - The company is focused on a significant investment program aimed at enhancing regulated sectors, with a clear objective to extend concessions [5][9] - The strategy includes a commitment to sustainable practices, as evidenced by multiple awards for sustainability and a focus on renewable energy [32][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience and ability to generate stable cash flows, supported by a strong credit rating upgrade to triple A by Moody's [6][9] - The company anticipates no actuarial risk from post-employment liabilities moving forward, transitioning to a financial debt model [7][17] Other Important Information - The company has a robust operational efficiency, with total losses at 0.63% of energy supply revenue, and a high receivables collection index of 99.51% [20] - The average tenure of the company's debt is 6.9 years, with a nominal cost of 13%, which is favorable for a utilities company [22][41] Q&A Session Summary Question: About the trading result in the fourth quarter - The trading result was positive at BRL 97 million, with plans to close positions for 2026 and 2027, aiming for future price increases starting in 2029 [36][37] Question: What is the ideal level of leverage for the company? - The current leverage is at 2.3, expected to increase during the investment cycle, with a target to remain within a range that supports a triple A rating [38][39][40] Question: Any plans to pay bonuses to shareholders in 2026? - Bonuses will be considered if profit reserves exceed capital stock, with evaluations ongoing throughout the year [42][43]