Comp En De Mn Cemig ADS Q3 2026 Earnings Results & Report

Comp En De Mn Cemig ADS EPS Results

• Actual EPS: $0.07
• Consensus EPS: $0.0533
• Beat/Miss: Beat by +$0.0167
• One Year Ago EPS: N/A

Comp En De Mn Cemig ADS Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $1.75 billion
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Companhia Energética de Minas Gerais S.A. (CEMIG) is a Brazilian electric utility headquartered in Belo Horizonte, in the state of Minas Gerais. Founded in 1952, the company is controlled by the state government of Minas Gerais.

CEMIG generates, transmits and distributes electricity, with a power portfolio that includes hydroelectric and renewable energy facilities. It also participates in electricity trading and provides natural gas distribution services in Minas Gerais through its business interests in Gasmig.

The company’s operations are concentrated in Brazil, particularly Minas Gerais, where it serves residential, commercial and industrial customers. It also has electricity-related activities in other parts of the country.

Comp En De Mn Cemig ADS Q3 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Recurring EBITDA rose 31% year over year to about BRL 2 billion. Reported quarterly EBITDA was BRL 2.7 billion and net income BRL 1.7 billion, with net income benefiting from a BRL 1.1 billion reversal of tax provisions after a favorable court ruling.
• Positive Sentiment: CEMIG reported a triple-A rating, 2.43x leverage and BRL 5.4 billion in cash at quarter-end; management said its debt maturity profile and funding access support its investment plans.
• Positive Sentiment: The company plans close to BRL 7 billion of investment in 2026, with roughly 75% already invested, including BRL 4.1 billion in distribution. Management linked investment and operating improvements to better service metrics, with distribution spending also aimed at the 2028 tariff review.
• Neutral Sentiment: Results across businesses were mixed: trading swung to BRL 18 million positive EBITDA from a BRL 37 million loss, while lower inflation weighed on generation and transmission results and customer migration to the free market pressured Gasmig margins.
• Positive Sentiment: CEMIG renewed the Sá Carvalho concession for another 30 years and said it is optimistic about renewals for Nova Ponte and Emborcação, though those decisions remain pending.

Presentation

[Carolina Senna, Investor Relations Superintendent at Companhia Energética de Minas Gerais]

Good morning, everyone. I am Carolina Senna, CEMIG's Investor Relations Superintendent. Welcome to CEMIG's third quarter 2026 earnings video conference call. Please note that this video conference is being recorded, and it will be available on the company's IR website at ri.cemig.com.br, where you also find the company's presentation. Should you need simultaneous interpretation, the feature is available by clicking on the globe icon located on the bottom of the screen. Upon choosing interpretation, select your language of choice, Portuguese or English. Should you choose to follow the call in English, you may also select mute original audio. During the company's presentation, all participants will have their microphones disabled. After that, we will start a Q&A session.

[Carolina Senna, Investor Relations Superintendent at Companhia Energética de Minas Gerais]

We will now start CEMIG's video conference call with Marco Aurélio Martins da Costa Vasconcelos, CEO, Leonardo George de Magalhães, CFO and IR Officer, Luís Cláudio Corrêa Villani, Chief Information Technology Officer, Hernando Antunes Braga, Chief Distribution Officer, Sergio Lopes Cabral, Chief Trading Officer, Sérgio Pessoa de Paula Castro, Chief Legal Officer, and Iuri Araújo de Mendonça, CEMIG CEO. For the initial remarks, I turn the floor over to our CEO, Marco Aurélio Martins da Costa Vasconcelos, who will start the presentation. Please, the floor is yours.

[Marco Aurélio Martins da Costa Vasconcelos, CEO at Companhia Energética de Minas Gerais]

Good morning, everyone. It is a great pleasure to be able to be here with you in this earnings call for the third quarter of 2026. Thank you, Carolina, for your kind words. To my officers here present, this is a top-tier team. Thank you for the opportunity of working with you.

[Marco Aurélio Martins da Costa Vasconcelos, CEO at Companhia Energética de Minas Gerais]

I just have some brief remarks highlighting the main topics of this third quarter. Our EBITDA was sound and very consistent, recurring EBITDA of BRL 2 billion, 31% higher year-on-year, reflecting our operating and financial disciplines. Regarding our concession renewed for Sá Carvalho, we were able to secure another 30 years, and we have great expectation to renew Nova Ponte and Emborcação. We know that the Ministry of Mines and Energy is in charge of the process, and we have positive expectations about the process. Another remark and an important highlight is our AAA rating and the main rating agencies in our country. So we are very happy for having achieved the top rates here regarding our interest on equity. We are in line with our dividend policies with BRL 200 million in a forecast here.

[Marco Aurélio Martins da Costa Vasconcelos, CEO at Companhia Energética de Minas Gerais]

We have also a remark on the reversal of provisions of our profit-sharing program. This was a favorable court ruling in the social security here that caused this reversal of tax provisions with an impact of BRL 1.1 billion in this third quarter. This is stemming from our liability management. I thank our legal officers and also our CFO team, who were able to make that possible. Now I will turn the floor to our CFO, Leonardo, who will move on with the presentation.

[Leonardo George de Magalhães, CFO and Investor Relations Officer at Companhia Energética de Minas Gerais]

Thank you very much for your initial remarks. Good morning, everyone. Thank you for participating in this call. Once again, as our CEO mentioned, these are consistent results in a challenging environment, and we were able to execute our strategy and deliver results. We understand that we are very optimistic with the company's results after these initial remarks.

[Leonardo George de Magalhães, CFO and Investor Relations Officer at Companhia Energética de Minas Gerais]

Let's talk about the investments for CEMIG for this year. These are investments close to BRL 7 billion in 2026, and we are following our strategy with the forecast investments for this year. We have invested approximately 75% of the total amount planned for 2026, and we are optimistic. Our teams are very much engaged so that they can execute this investment program, not only in 2026, but also in 2027, according to the distribution tariff cycle, which is very important to us, aiming the tariff review in 2028. We have invested approximately BRL 4.1 billion in distribution. I draw your attention to also investments in transmission, almost BRL 500 million, and that will bring adequate results to our shareholders. The generation results, and investments also related to maintenance CapEx, and also Gasmig with BRL 132 million, basically the conclusion of the investments in the Centro-Oeste project.

[Leonardo George de Magalhães, CFO and Investor Relations Officer at Companhia Energética de Minas Gerais]

Also, we have investments of BRL 258 million for CEMIG SIM, and we understand that this is a very important investment as well. As our CEO has mentioned, we were able to renew Sá Carvalho, one of the three plants that had the concessions due in 2026 and 2027. We are optimistic about the renewal of all of these concessions of Emborcação and Nova Ponte, which are the next ones for renewal. We have already a positive opinion from ANEEL in terms of the renewal of these concessions. Now, we are talking to the Ministry of Mines and Energy, but we are very optimistic regarding the renewal of these other two as well. Going over the results of this quarter, we have BRL 2.7 billion in EBITDA in this quarter, and almost BRL 2 billion, BRL 1.7 billion in net income in this quarter.

[Leonardo George de Magalhães, CFO and Investor Relations Officer at Companhia Energética de Minas Gerais]

Even if we exclude the non-recurring facts that our CEO mentioned, which has a positive impact in the company's dividends for 2027, this was a result of just considering recurring events at 31% in EBITDA higher than 2025, and a net income almost 20% of 17.9% higher than 2025. That is why we understand it is a reason to celebrate the positive results. Then we are going to go into the details in the next slides, all the contributions for these results. The debt profile for the company, we are AAA rating for the first time in history by the main rating agencies. We have the right debt profile.

[Leonardo George de Magalhães, CFO and Investor Relations Officer at Companhia Energética de Minas Gerais]

The maturity schedule is almost seven years, so we do not have major pressure in terms of maturities for the next few years, and that allows the company to have sustainability to continue executing its strategy and to work on our investment plan. Our leverage is 2.43x our EBITDA generation. It is also adequate to this slow growth and stepped-up growth of leverage that we have planned. It is part of our strategy to finance our investment program. We understand that that is going to bring return to our shareholders. Also, we have a balanced debt with maturities, and the indexers here, part of that related and indexed to the CDI, and another half of that linked to the IPCA.

[Leonardo George de Magalhães, CFO and Investor Relations Officer at Companhia Energética de Minas Gerais]

Here, we have consolidated costs and expenses, which have grown 10.3% compared to 2025, but you see that third-party services had an increase of BRL 54 million, but that has to do with investments that we are making in quality improvement, but also it impacts our OpEx. We know that we are having now extreme climatic events this year because of the super El Niño, and that has an impact in our OpEx. The company, in a very disciplined way, is able to allocate costs to the operation of the system, reducing costs in other areas of the company. Also, we draw your attention to the fact that the costs in 2025 are slightly lower because of non-recurring effects that happened in 2025 due to the sale of assets, or real estate assets then.

[Leonardo George de Magalhães, CFO and Investor Relations Officer at Companhia Energética de Minas Gerais]

If we consider that, we will see that the variation in expenses of 2026 compared to 2025 is very close to inflation. Regarding total expenses of the company, we have great news also in other areas. Financial compensation, for instance, when clients do not meet some quality indicators, they are reduced. We are able to provide services to our clients with greater quality, also reducing expenses. Therefore, in total expenses, they have increased 4.7% vis-a-vis last year, when we did not consider the non-recurring events because of the legal contingency regarding the tax effects on the profit-sharing program. Thanks to a successful job done by the legal team, we were able to deduct this provision. Therefore, we will not need to have the provision for that lawsuit. Moving on, the cash generation for the company is very robust.

[Leonardo George de Magalhães, CFO and Investor Relations Officer at Companhia Energética de Minas Gerais]

We generated around BRL 6 billion in cash in these nine months of 2026, representing BRL 8 billion if we annualize that result. That cash generation is also supported by the financial market funding, and we have the attractiveness of the company because this is a AAA company, a sound company with the right capital allocation, and we also can have a successful access to the capital market in the second quarter. Therefore, the company can execute its strategy to grow. Therefore, we end the quarter with around BRL 5.4 billion in cash, which will guarantee the execution of investments for the next months. Moving on, CEMIG D's results, 54% in the comparison to the second quarter of 2025 and 2026, with the cash generation measured by EBITDA cash generation that is very robust.

[Leonardo George de Magalhães, CFO and Investor Relations Officer at Companhia Energética de Minas Gerais]

The third quarter of 2025 was more difficult to the company, and in this quarter, we see the recovery of the market for CEMIG D. We will be showing you in the next slides that has also contributed to the greater cash generation. Also, the tariff adjustment that happened on May 28th that contributed to a greater cash generation to the company, and about net income, even with the effects because of the debt and the interest rates on the debt, we almost doubled the net income from one year to another. BRL 269 million in 2025 to BRL 500 million in net income in this third quarter of 2026.

[Leonardo George de Magalhães, CFO and Investor Relations Officer at Companhia Energética de Minas Gerais]

Other favorable effects include reducing expenses with post-employment, especially with healthcare plan, thanks to the agreement that we had with the union, where we see a positive impact starting this year, and also provision for expected credit losses that is controlled by the company. The billed market growth is 1% comparing 2025 to 2026 in third quarters. Also, you see the difference in the classes which are important for revenue generation for the company. Residential growing 6.9%, and you see rural with a reduction of 4.5%, which is natural because there is a more favorable rainfall time, which reduces irrigation, and that is natural. Industrial going down 2.5%, but that is basically migration of clients to the free market. Even with this migration, they are still paying the total power carriage for the company. DG is growing. It already represents almost 25% to our market.

[Leonardo George de Magalhães, CFO and Investor Relations Officer at Companhia Energética de Minas Gerais]

In the 2028 tariff review, this market is going to be adjusted, but we understand that this growth in DG, which was 24.8% when compared 2025 to 2026, is going to be reduced considering that as projects come in and start operating, we see that DG2 and DG3 are less attractive, and this impact in our market is reduced, but it is significant up to the third quarter of 2026 of almost one-fourth of our total market today is the DG market. Moving on, our OpEx, we are at 16.5% below the regulatory limit. This is the commitment of the company with operating efficiency. Once again, BRL 622 million, and the company is aiming to have its costs controlled and a discipline in capital allocation in its investment program in line with our strategy.

[Leonardo George de Magalhães, CFO and Investor Relations Officer at Companhia Energética de Minas Gerais]

On the next slide, it is also important to make it clear, and it is always important to have positive financial results, but we also need to be careful about the quality of our services to clients. Our DEC is still lower than the prior year, 8.61 in September of 2026, a very significant number to the company, lower than the total DEC of 9.26 by an hour. We have an important goal for DEC for this year, and all of the investments that the company is doing also has this impact in our service reflecting on DEC and FEC. FEC is at 4.8, lower than 5.37, which is the maximum allowed by the regulation to be executed by the company. Also, losses. Our delinquency is controlled. Provisioned losses in 2026 regarding 2025, it had a reduction of 53.3%.

[Leonardo George de Magalhães, CFO and Investor Relations Officer at Companhia Energética de Minas Gerais]

That is, we are posting consistent results and quality results that are converging with the company's investments. Results on CEMIG GT, 12% higher in the EBITDA, considering 3Q 2025, net income is slightly lower, 6.5%. In the next slide, we will go over that. You will be able to have an understanding the impact of each one of the businesses in CEMIG GT results. Also important for the company was the generation here, 6.9% lower of EBITDA compared to 3Q 2025, but this is not a reduction of operating efficiency. This reduction is very much explained by lower inflation in this third quarter of 2026 compared to 2025. We have important assets, regulatory ones for CEMIG GT that are posted and that are updated by the inflation and that generate revenue for CEMIG GT.

[Leonardo George de Magalhães, CFO and Investor Relations Officer at Companhia Energética de Minas Gerais]

With lower inflation during this period of time, there was also a drop of these impacts compared to the prior year. The same thing happened in transmission. Important regulatory assets, over BRL 5 billion in transmission assets also updated by inflation, and that has affected the total revenue of our transmission company, but we are still investing in reinforcements, and our transmission company is still generating positive impacts and generating value to shareholders thanks to the execution of its strategies. We are very disciplined, and we can understand that this is a benchmark in the transmission sector when compared to the other Brazilian electric sector companies. About our trading company, CEMIG SIM and others, we have a positive impact here in 2025.

[Leonardo George de Magalhães, CFO and Investor Relations Officer at Companhia Energética de Minas Gerais]

The last call for the second quarter, we mentioned that the first half of 2026 was the most difficult period for our trading company because we were closing positions for the year, and we expected positive results for the second half of 2026. This is actually happening. Turning to the consolidated results for our trading company that has operations from CEMIG GT and also for CEMIG Holding, we realized a significant improvement. We went from negative EBITDA of BRL 37 million to BRL 18 million positive EBITDA in the 3Q 2026. A number of factors helped us here. Of course, the new strategy to tackle this challenging scenario for energy trading and also the submarket effect, basically null in 2026 against minus BRL 19 million in 2025. Also, spot prices helped company closing positions at favorable positions.

[Leonardo George de Magalhães, CFO and Investor Relations Officer at Companhia Energética de Minas Gerais]

We have a great more rainfall, therefore, there was a reduction in energy prices and more positions more favorable to the company. We now understand that the trading company is at a favorable position for the next year, considering the closing of price curves and the future weather for 2027 or the upcoming years. Moving on. Now we are getting close to the end of our presentation for the earnings call of this quarter. Gasmig recurring EBITDA with a slight drop, but that's very important. This is a company that generates BRL 800 million of EBITDA in a year, very important result in the portfolio of results of the company.

[Leonardo George de Magalhães, CFO and Investor Relations Officer at Companhia Energética de Minas Gerais]

That's because of client migration to the free market, generating lower margin to the company with an impact in the net income, but still generates sound, consistent, and important results for the CEMIG Group. The good news is that the tariff review for Gasmig has not been concluded yet, but the WACC has already been posted. It's going to be of 8.24%, and that has been published by ARSAE. We understand that this is a fair and adequate WACC that remunerates investments of Gasmig. Basically, this is our earnings presentations for the third quarter. Once again, sound and consistent results in a very challenging environment, and we're still executing our strategy in a way that we are very much focused in our investment plan. Thank you all very much, and we now will be available for the Q&A.

[Carolina Senna, Investor Relations Superintendent at Companhia Energética de Minas Gerais]

Right now, we are going to start our Q&A session. Click on the Q&A icon on the bottom of the screen and send your question by writing. We would like you to send all your questions in a single file and wait for the company's reply during the session, where we announce the name of the participants, and we will be reading the questions so that the company can answer them.

[Carolina Senna, Investor Relations Superintendent at Companhia Energética de Minas Gerais]

Our first question is from Ricardo Bello from Safra. "Can you talk about your expectation regarding the battery auction and how you see the discussion on the charges definition? What is your appetite for acquisitions now in a tighter interest rate scenario? Finally, what is the visibility of the regulatory agency, and what do you expect to address still this year, such as losses?" I will talk about Fredstwon so that he can start talking about the battery auctions. Thank you.

[Fredstwon Pereira, Transmission Asset Management Superintendent at Companhia Energética de Minas Gerais]

Good morning, everyone. It's a pleasure to be here with you. For the battery auctions, we expect it to be a very aggressive auction. We have a lot of projects already registered, and the demand is not known yet. We understand that this is going to be a tight competition, especially when we bring into the context the bonus and margins and the distributions of projects all over Brazil. So, we expect it to be an auction that is going to be successful, but at very aggressive and competitive prices.

[Carolina Senna, Investor Relations Superintendent at Companhia Energética de Minas Gerais]

Thank you, Fredstwon. The other questions, I turn to our CFO, Leonardo.

[Leonardo George de Magalhães, CFO and Investor Relations Officer at Companhia Energética de Minas Gerais]

About the appetite for acquisitions, we understand that it's a scenario that is more challenging, higher interest rates, to close M&A operations. But once again, we have an investments program that is well-structured, where we prioritize investments in Minas Gerais, especially in our distributing company, and also transmission reinforcements, and we intend to execute those for the next years up to the tariff review. These are investments that are very important. We are doing them in-house, and we believe that they are going to bring return to shareholders. If there is an opportunity for an M&A that will bring value to shareholders, we'll consider those. But this is a more challenging scenario to execute a growth strategy via brownfield. About the regulatory agenda, as we have already mentioned, and this has to do with the losses today. The company's losses are under control.

[Leonardo George de Magalhães, CFO and Investor Relations Officer at Companhia Energética de Minas Gerais]

We are within a regulatory goal. We are very proud of that. This is one of the companies in the industry that can keep its losses within the limit established by the regulating agency. Also factor X productivity. We understand that this will be addressed up to the tariff review, and we believe it's going to have positive reflections for the company. Considering our investments today, we are very optimistic. We expect those to be concluded up to the tariff review.

[Carolina Senna, Investor Relations Superintendent at Companhia Energética de Minas Gerais]

Well, thank you all for your participation, and we stress that the investor relations superintendents are available for additional questions by our email. So now, we end our third quarter of 2026 earnings call for CEMIG. Have a great weekend, and thank you very much for being with us in this call.

Participants

Analysts

• Carolina Senna, Investor Relations Superintendent at Companhia Energética de Minas Gerais
• Marco Aurélio Martins da Costa Vasconcelos, CEO at Companhia Energética de Minas Gerais
• Leonardo George de Magalhães, CFO and Investor Relations Officer at Companhia Energética de Minas Gerais
• Fredstwon Pereira, Transmission Asset Management Superintendent at Companhia Energética de Minas Gerais