Companhia Energetica De Minas Gerais Sa · BMFBOVESPA:CMIG3
Companhia Energetica De Minas Gerais Sa — Q2 2020 Earnings Presentation
34 slides from Companhia Energetica De Minas Gerais Sa's earnings presentation, Aug 18, 2020
Slide 1: 2Q20 results reflect greater operational efficiency
2Q20 results reflect greater operational efficiency
Slide 2: Disclaimer
Disclaimer 2 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 the events or results will take place as referred to in these expectations.
Slide 3: Highlights
Highlights 3 Recurring Ebitda R$ 2.3 billion in 1H20 (up 12% year-on-year). Distribution: Total load down 4% YoY in 1H 20 – down 6% YoY in 2Q20. Periodic Review of Transmission Revenue: R$ 430 mn gain in bottom line. Covid Account: Receiving R$ 1.4 billion up to January 2021. Strong cash position, a
Slide 4: Cemig in the fight against Covid-19
Cemig in the fight against Covid-19 4 Crisis Management Committee – Strategic aims: Ensure service Energy is essential for the population. continuity. Carrying out action plans to maintain adequate supply. Employees’ health Some of our employees are on the front line, others can work remotely. and s
Slide 5: Execution of investment program
Execution of investment program 5 2020 Executed % Market segment Planned Revised* Up to June 2020 Executed Distribution 1,667 1,473 571 38.76% Generation 95 77 19 24.68% Transmission 250 160 76 47.50% Total of investments 2,012 1,710 666 38.95% * Revised after start of quarantine. Cemig has reviewed
Slide 6: Programmed Voluntary Severance Program
Programmed Voluntary Severance Program 6 396 employees (approximately 7% of Cemig group’s total) accepted the Voluntary Severance Program implemented in 2Q. Payment of the standard legal severance payments. Total cost: R$ 59 million Cemig GT: 61 employees; cost R$ 11 million Cemig D: 329 employees;
Slide 7: Cemig D – Acceptance of the 'Covid Account'
Cemig D – Acceptance of the ‘Covid Account’ 7 Total: R$ 1.40 billion First tranche, R$ 1.18 billion, received July 31, 2020. Remainder, R$ 220 million, in six installments, August 2020–January 2021 The amounts received are not added to the debt nor the net profit of Cemig D: – they will be taken int
Slide 8: Cemig D proposal to reduce tariff adjustment
Cemig D proposal to reduce tariff adjustment 8 On June 25 the Council of Aneel approved Cemig D’s tariff adjustment – an average of 4.27%, backdated to May 28. After an administrative appeal contesting the adjustment, Cemig submitted a new proposal to Aneel, based on the concept of totally exception
Slide 9: Cemig D – Default and losses
Cemig D – Default and losses 9 18.00% 17.80% 17.60% 17.40% 17.20% 17.00% 16.80% 16.60% 9,000 16.40% 16.20% 13.66% 16.00% 15.80% Structural measures for losses and metering 15.60% 15.40% 15.20% 15.00% 14.80% 14.60% Total Losses - LTM 14.40% 14.20% 14.00% 13.80% 13.60% 13.40% 13.20% 13.00% 12.80% 12.6
Slide 10: Cemig D – quality indicators
Cemig D – quality indicators 10 11.62 11.32 11.03 10.73 8.12 7.76 10.44 7.39 7.30 11.57 11.18 10.42 10.56 9.58 3.24 5.37 5.44 5.13 4.89 2016 20147 2018 2019 Until 2.28 Jul/20 LTM 2016 2017 2018 2019 1H20 Service quality Limit DECi FECi Upper Limitlimit++ xxx Robust investment program in 2020–22 unde
Slide 11: Cemig D – Distribution Load
Cemig D – Distribution Load 11 6,300 6,100 5,939 5,900 5,804 MW average 5,693 5,700 620 MW average 5,780 10.44% 112 MW average 1.97% 5,500 5,581 5,300 2019 5,319 5,100 2020 Preliminary 4,900 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 4,000 Own load 2,400 Free Clients 3,694 2,354 3,800 2,300 2,2
Slide 12: Cemig GT – Periodic Review of Transmission Revenue
Cemig GT – Periodic Review of Transmission Revenue 12 Periodic Review of RAP for assets of: the transmission concession contracts renewed under Law 12783/2013 Cemig GT was classified as a “benchmark” for the sector, together with CTEEP. Increase of 9.13% in RAP includes the start of payment not prev
Slide 13: Cemig GT – Load
Cemig GT – Load Cemig GT Total 1,917 1,921 1,954 1,687 1,717 303 MWaverage 1,651 MWaverage +18.40% mar abr mai jun jul ago Cemig GT – Incentive-bearing supply Cemig GT – Conventional supply 727 1,272 1,226 695 1,190 682 661 227 MWaverage MWaverage 1,045 1,071 1,056 +21.72% MWaverage 606 616 76 MWave
Slide 14: Covid-19: plan for Free Clients
Covid-19: plan for Free Clients 14 Cemig D: Invoices payable in up to 12 monthly installments, from July, at 1% per month interest. If total is settled in 2020, interest waived. Cemig GT: Difference between agreed offtake and metered consumption can be paid in up to 36 monthly installments, from Jul
Slide 15: Analysis of Results
ANALYSIS OF RESULTS
Slide 16: Main factors in the 2Q20 results
Main factors in the 2Q20 results 16 Cemig H Cemig GT Light: re-valuation at market: Profit affected by sale of energy at the lower limit of Gain of R$ 475 million flexibility contract range. Tariff review – adjustment of Permitted Revenue (RAP) Cemig D Positive effect on Ebitda of: R$ 430 mn Volunta
Slide 17: Marking to market of Eurobond and hedge instruments
Marking to market of Eurobond and hedge instruments 17 Hedges contracted for protection of dollar-denominated debt Full swap for interest: set at 142% of CDI rate (average for main issue and retap). Call spread for principal: protection for range US$ = R$ 3.45 to R$ 5.00 Effect on financial result I
Slide 18: Energy market in 2Q20 – GWh
Energy market in 2Q20 – GWh 18 Cemig D: billed market + transmission – 6.0% 84 68 913 Distributors –19.0% 11,198 918 841 10,526 901 Other –7.9% 1,623 1,276 4,910 Rural –1.8% –3.5% 4,739 5,112 4,782 Commercial –21.4% Industrial –6.5% 6,288 5,787 –8.0% 2,658 Residential +4.3% 2,548 2Q19 2Q20 2Q19 2Q20
Slide 19: 2Q20 consolidated Ebitda and net profit
2Q20 consolidated Ebitda and net profit 19 Ebitda Net profit 2Q19–2Q20 –0.2% 2Q19–2Q20 –50.6% 2Q19aj–2Q20aj –6.8% 2Q19aj–2Q20aj + 4.8% -805 -870 -1,700 1,812 1,809 2,115 -609 1,007 939 1,044 415 435 2Q19 Adjustments 2Q19 adj. 2Q20 Adjustments 2Q20Aj 2Q19 Adjustments 2Q19 adj. 2Q20 Adjustments 2Q20 a
Slide 20: Cemig GT: 2Q20 Ebitda and net profit
Cemig GT: 2Q20 Ebitda and net profit 20 Ebitda Net profit 2Q19–2Q20 +148.2% 2Q19–2Q20 +7.6% 2Q19aj–2Q20aj –33.0% 2Q19aj–2Q20aj –62.8% -401 +210 742 -155 509 -299 341 343 369 299 188 2Q19 Adjustments 2Q19 adj. 2Q20 Adjustments 2Q20 adj 70 2Q19 Adjustments 2Q19 adj. 2Q20 Adjustments 2Q20 adj. Ebitda P
Slide 21: Cemig D: 2Q20 Ebitda and net profit
Cemig D: 2Q20 Ebitda and net profit 21 Ebitda Ebitda Net profit 2Q19–2Q20 –57.1% 1Q19–1Q20 + –79.5% 2Q19aj–2Q20aj +31.4% 2Q19aj–2Q20aj +87.5% -830 1,237 4 1,379 -1,227 531 535 2 407 152 283 285 2Q19 Adjustments 2Q19 adj. 2Q20 Adjustments 2Q20 adj. 2Q19 Adjustments 2Q19 adj. 2Q20 Adjustments 2Q20 adj
Slide 22: Consolidated operational costs and expenses 2Q20
Consolidated operational costs and expenses 2Q20 22 –10.2% PMSO costs – Comparing 2Q19 and 2Q20 5,490 4,929 PMSO 882 –8.3% 868 32 Provisions 869 59 198 101 43 4 21 882 868 Non- 809 manageable 3,738 3,863 2Q19 2T19 Personnel Pessoal Profit PLR Materials Post- Material Pós Other Outras 2Q20 2T20 aj PD
Slide 23: 1H20 results: main factors
1H20 results: main factors 23 Cemig H Cemig GT Light: re-valuation at market: Reduction of R$ 134 mn Profit affected by sale of energy at lower limit of flexibility contract range. Centroeste: re-valuation at fair value: Gain of R$ 52 mn Review of Permitted Transmission Revenue. Positive effect of R
Slide 24: Energy market in 1H20 – GWh
Energy market in 1H20 – GWh 24 Cemig D: billed market + transmission – 4.0% 160 142 Distributors –11.3% 22,488 1,838 1,744 21,590 1,782 1,678 Other –5.1% 3,310 2,957 9,670 Rural –5.8% –1.3% 9,548 10,106 Commercial –10.7% 9,626 Industrial –4.7% 12,818 12,042 –6.1% 5,443 Residential +2.8% 5,292 1H19 1
Slide 25: 1H20 consolidated Ebitda and net profit
1H20 consolidated Ebitda and net profit 25 Ebitda Net profit 1H19–1H20 –20.0% 1H19–1H20 –66.1% 1H19adj–1H20adj 12.3% 1H19adj–1H20adj 20.7% -1239 -333 3,273 -2,065 2,617 2,284 2,912 35 2,034 847 987 1,022 1H19 Adjustments 1H19 adj. 1H20 Adjustments 1H20 adj. 1H19 Adjustments 1H19 adj. 1H20 Adjustment
Slide 26: 1H20 Cemig GT Ebitda and net profit
1H20 Cemig GT Ebitda and net profit 26 Ebitda Net profit 1H19–1H20 +17.7% 1H19–1H20 –60.6% 1H20adj/1H19adj +2.1% 1H20aj/1H19aj –15.8% -421 -224 1,447 -520 1,229 -23 1,005 1,026 926 406 365 342 1H19 Adjustments 1H19 adj. 1H20 Adjustments 1H20Aj 1H19 Adjustments 1H19 adj. 1H20 Adjustments 1H20Aj Ebitd
Slide 27: 1H20 Cemig D Ebitda and net profit
1H20 Cemig D Ebitda and net profit 27 Ebitda Net profit 1H19–1H209 –41.2% 1H19–1H20 + –69.4% 1H19adj–1H20adj +12.7% 1H19adj–1H20adj +41.5% -830 4 -1,227 1,743 1,567 2 913 1,025 1,029 340 479 481 1H19 Adjustments 1H19 adj. 1H20 Adjustments 1H20Aj 1H19 Adjustments 1H19 adj. 1H20 Adjustments 1H20Aj Ebi
Slide 28: 1H20: Consolidated operational costs and expenses
1H20: Consolidated operational costs and expenses 28 –2.9% PMSO costs – Comparing 1H19 and 1H20 10,240 9,947 PMSO 1,770 1,683 Provisions 979 357 –8.2% 85 5 25 59 141 60 Non- 1,770 1,683 7,491 7,907 1,624 manageable 1H19 1S19 Personnel Pessoal Profit PLR Materials Post- Material Pós Other Outras 1H20
Slide 29: Cemig D – 1H20 Regulatory Opex and Ebitda
Cemig D – 1H20 Regulatory Opex and Ebitda 29 Opex within regulatory target, after excluding Voluntary severance plan and Default provision 247 44 152 152 45 31 19 R$ 196 million Opex 1,323 1,519 Regulatory PMSO Profit shares Post-retirement Severance Plan Fines, offsetting Provisions Default Real Op
Slide 30: Cash flow
Cash flow 30 Cash in December/19 1,288 Cash generation in the semester 4,206 Financing/Leasing -1,087 Investments -702 Cash in June/20 3,705
Slide 31: Debt profile – consolidated
Debt profile – consolidated 31 In July, S&P reaffirmed the Company’s ratings and upgraded outlook to positive Maturities timetable – Average tenor: 3.8 years Main indexors Net debt (Debt – Cash and securities): R$ 12.2 billion 1% Total net debt (Net debt – Hedge): R$ 8.9 billion 8,688 US dollar 23%
Slide 32: Covenant of the Eurobond
Covenant of the Eurobond 32 2019 1Q20 2Q20 R$ mn GT H GT H GT H Consolidated debt 7,887 14,776 9,419 15,763 9,564 15,862 Debt contracts with Forluz 253 1,117 248 1,097 246 1,089 Liabilities under any put option 483 483 504 504 553 553 Consolidated cash and cash equivalents and – 584 –1,289 –857 –2,4
Slide 33: Save the date: 25th Annual Cemig Meeting with the Capital Markets
33 SAVE THE DATE: September 15, 2020 25th Annual Cemig Meeting with the Capital Markets 100% DIGITAL
Slide 34: Investor Relations
Relações com Investor Investidores Relations Tel: +55 (31) 3506-5024 ri@cemig.com.br http://ri.cemig.com.br
Companhia Energética de Minas Gerais — Q2 2020 Earnings Presentation on 6ix