Companhia Energetica De Minas Gerais Sa · BMFBOVESPA:CMIG3
Companhia Energetica De Minas Gerais Sa — Energy Co of Minas Gerais — Q3 2013 Earnings Presentation
35 slides from Companhia Energetica De Minas Gerais Sa's earnings presentation, Dec 10, 2013
Slide 1: Cemig: Third Quarter 2013 Results
Cemig: Third Quarter 2013 Results
Slide 2: Disclaimer
Certain statements and estimates in this material may represent expectations about future events or results that 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. These expectati
Slide 3: Cemig maintains its growth path
Cemig maintains its growth path . Strategy of expansion in renewable sources . Enters controlling block of Renova • 51% interest in Brasil PCH . In 3Q13 equity holdings contribute 44% to 3Q13 net income . Selected for leading sustainability indices . Pays 2nd tranche of Interest on Equity: R$ 850mn,
Slide 4: Our 3Q results
937 766 789 171 1,527 1,268 1,289 259 3,673 3,546 -3.6% +1.7% +3.0% Gain on dilution of equity holding in jointly held subsidiary . Results show robustness of the business portfolio .Adjusted Ebitda shows the growth path .Cemig maintains short term trading and sales strategy .Net revenue 3.6% lower
Slide 5: Sustainability: Our commitment
Sustainability: Our commitment . DJSI – included for 14th year running (every year since DJSI created) . Dow Jones Emerging Markets Index – included for 2nd year running . ISE Corporate Sustainability Index (BM&FBovespa) – 8th year running . ET Carbon Ranking Leader Award – 1st placed in Brics 300 .
Slide 6: Generation - Cemig plants
Jaguara hydro power plant . Cemig GT wins injunction in renewed mandamus from Higher Appeal Court (STJ) against decision of Mining and Energy Ministry . Injunction gives Cemig GT control of Jaguara concession until final judgment . Cemig to own revenues from end of 1st concession (Aug 28, 2013) . Sa
Slide 7: Renova: Focus on renewables
Renova: Focus on renewables Cemig GT enters at controlling stockholding block of Renova* .Acquisition of 51% of Brasil PCH (subject to approvals) •Investment of R$ 676mn .Brasil PCH has 13 Small Hydro Plants (PCHs), with total installed capacity of 291 MW – firm energy of 194 MW. .All PCH’s have lon
Slide 8: Gasmig: Growing business volume of natural gas sold
551 962 1,065 1,323 2009 2010 2011 2012 . 3Q13 gross revenue of R$376 mn, up 8% from 3Q12 .Natural gas volume up 8% from 3Q12 .Natural gas now serving Belo Horizonte hospital network .Mater Dei Hospital has signed 2,700 m³/month natural gas contract .Expansion of natural gas distribution network in
Slide 9: 3Q13 Results
3Q13 RESULTS
Slide 10: Consolidated net revenue
3,192 3,678 3,463 3,439 3,673 3,546 10,328 10,662 - 0.7% +15.3% +3.2% -3.6% . Commercial strategy yields record net revenue in 9M13 .Higher volume of sales to traders and generators .Gain from high spot market price .Growth in number of Cemig’s clients: .Cemig GT: growth 19% .Cemig D: growth 3% 1Q12
Slide 11: Consolidated expenses – changes in 3Q13
2,795 2,793 21 -20 8 -7 -5 285 -2 -13 18 -87 -234 34 -0.1% 11 .Cost reduction program shows results in the quarter .PMSO 2% down in real terms (IPCA) .Increase in electricity prices in Brazilian market .Significant impact on cost of energy bought by distributors .Volume of electricity brought in Fre
Slide 12: Ebitda: Guidance vs. Achieved
4,764 6,430 6,482 5,865 Guidance 2013 Últimos 12 meses 1,240 1,591 1,214 1,252 1,527 1,289 3,982 4,132 Realized 81% Lower limit of Guidance* *Ebitda: calculated by same criterion used in guidance presented at Cemig/Apimec Investor Meeting of May 2013. +3.2% +28.3% +3.8% 12 -15.6% Ebitda: Guidance vs
Slide 13: Consolidated net income and net debt
46% 43% 5% 4% 2% IPCA CDI IGP-M UFIR/RGR 1,225 1,684 1,169 1.066 935 1,201 509 2,310 2013 2014 2015 2016 2017 2018 2019 2020 6.2 5.53 5.03 5.33 5.04 5.47 jun/12 sep/12 dec/12 mar/13 jun/13 sep/13 52.4 49.6 49.9 46.3 40.1 36.3 28.7 26.9 Total net debt: R$ 5 billion OTHERS After 2019 Net Debt Stockhol
Slide 14: 1,086 1,143 1,245 3T12 3T13 8,839 8,922 - 2.9% -7.3% +1% Gain on issue
741 574 532 167 1,086 833 809 253 1,143 1,245 3T12 3T13 8,839 8,922 - 2.9% -7.3% +1% Gain on issue of shares Gain on issue of shares 3Q12 3Q13 3Q12 Adjustment 3Q12 3Q13 Adjusted 3Q12 Adjustment 3Q12 3Q13 Adjusted 3Q12 3Q13
Slide 15: 48% 48% 1% 3% IPCA CDI IGP-M other 17 838 2013 2014 2015 2016
48% 48% 1% 3% IPCA CDI IGP-M other 845 774 634 157 637 118 117 838 2013 2014 2015 2016 2017 2018 2019 em diante 6.06 5.6 5.14 4.81 5.18 5.64 jun/12 mar/13 jun/13 57.2 53.6 55.2 47.9 40.8 36.3 31.4 27.2 2011 1T12 2T12 3T12 2012 1T13 2T13 3T13 2.4 2.1 2.1 1.7 1.1 1.0 0.8 0.7 Total net debt: R$ 4.1 bil
Slide 16: 2,510 2,255 3Q12 3Q13 3Q12 3Q13 6,185 6,477 3Q12 3Q13 -50.1% 127 63 3Q12
2,510 2,255 3Q12 3Q13 3Q12 3Q13 6,185 6,477 3Q12 3Q13 -50.1% 127 63 3Q12 3Q13 3Q12 3Q13 351 285 3Q12 3Q13 4.7% -10.2% -18.8%
Slide 17: Net Debt and Ebitda
Net Debt St. Eq. + N.debt 45% 39% 8% 7% 1% IPCA CDI IGP-M RGR 18 368 902 529 901 290 447 392 1,472 2013 2014 2015 2016 2017 2018 2019 6.73 5.96 5.41 5.64 4.88 5.26 jun/12 mar/13 jun/13 52.9 51.8 55.3 55.5 66.3 65.5 61.4 61.3 2011 1.9 1.9 2.1 2.3 2.6 3.5 3.7 4.0 OTHERS 2011 1Q12 2Q12 3Q12 2012 1Q13 2
Slide 18: Share performance – 2013 to Nov.
Share performance – 2013 to Nov. 4 Shareholders in more than 40 countries .Average daily trading volume: •Bovespa: R$ 80 mn •NYSE: US$ 28 mn .Over 200 meetings/conferences with investors in various countries .Anefac Professional of The Year Award – Accountant, Leonardo George de Magalhães 4.9% 9.2%
Slide 19: Cemig's Investor Relations Apps
. IR applications made available by Cemig for tablets and smartphones App Store (iOS) https://itunes.apple.com/us/app/cemig-relacoes-com -investidores/id681193412?mt=8&ls=1 Google Play (Android) https://play.google.com/store/search?q=cemig%20rela %C3%A7%C3%B5es%20com%20Investidore&c=apps Smartphones
Slide 20: Cemig's Investor Relations Apps
Cemig’s Investor Relations Apps“ > IR applications made available by Cemig for tablets and smartphones Tablets App Store (iOS) httos:/itunes apple. com/us/app/cemig-relacoes-com cinvestidores/id681193412?mt=88ls=1 Smartphones Google Play (Android) Ge * httos:/play.qooale.com/store/search?7q=cemig%20
Slide 21: Investor Relations
Investor Relations Tel.: +55-31 3506 5024 Fax: +55-31 3506 5025
Slide 22: Investidores
Investidores Telefone: (55-31) 3506-5024 Fax: (55-31) 3506-5025 Email: ri@cemig.com.br Website: http://ri.cemig.com.br Table of Contents 2. Market Announcement — Earnings Release of Third Quarter 2013 Table of Contents
Slide 23: Cemig's long-term ratings
Cemig’s long-term ratings The leading rating agencies maintained their long-term credit rating outlook for Cemig: Cemig Cemig D Cemig GT Agency Rating Outlook Rating Outlook Rating Outlook Fitch AA(bra) Negative AA(bra) Negative AA(bra) Negative S&P — — brAA Stable brAA- Stable Moody’s Ba1 Negative
Slide 24: Electricity sold by consumer category
Table of Contents The volume of electricity sold to final consumers in Cemig’s concession area in 3Q13 was 2.26% lower than in 3Q12. MWh Change Average price in 3Q13 Average price in 3Q12 Consolidated 3Q13 3Q12 % R$ R$ Residential 2,343,749 2,210,313 6.04 467.76 554.89 Industrial 6,002,381 6,594,665
Slide 25: Consolidated operational revenue
The total of Cemig D’s electricity losses in the 12-month period ending September 30, 2012 was 5,840 GWh, or 11.23% of the total of energy carried. In the same 12 months non-technical losses totaled 1,303 GWh — equal to 7.63% of the total electricity billed in the low-voltage market. This was a redu
Slide 26: Main variations in expenses
The following paragraphs outline the main variations in expenses: Electricity bought for resale This expense in 3Q13 was R$ 1.45 billion, 24.37% more than in 3Q12 (R$ 1.168 billion). The main factors in the difference are: Table of Contents · Purchases of electricity for resale R$ 200 million higher
Slide 27: Post-retirement obligations
Post-retirement obligations Post-retirement liabilities in 3Q13 were R$ 42 million, 25.25% higher than in 3Q12 (R$ 33 million). The expense basically reflects monetary updating of the obligation and this variation arises, principally, from reduction of the discount rate on the actuarial obligations
Slide 28: Adjusted Ebitda
1.900 1.700 1.500 1.300 1.100 00 700 500 300 100 -100 Consolidated me ! 3Q12 Adjustment 3Q12 Adjusted Ebitda—RS “000
Slide 29: Adjusted consolidated Ebitda
Adjusted consolidated Ebitda was slightly - 1.57% - higher, in line with profit being 2.9% higher than adjusted profit in 3Q12, this factor being partially offset by lower equity gain on subsidiaries (after disposal of the interest in the TBE Group), and by net revenue 3.46% lower. Cemig D’s Ebitda
Slide 30: Debt
Cemig’s total consolidated debt at September 30, 2013 was R$ 9.538 billion, 8.42% less than on December 31, 2012. The ratio debt/consolidated stockholders’ equity (equity = R$ 13.198 billion) was 72.27%, and book value per share was R$ 13.71.
Slide 31: Debt by maturity
Debt by maturity (R$ mn) 2013 «201420152016 = 2017,-—S 2018 = 2019 —Ster 2019
Slide 32: Net debt with and without IFRS
Net debt with IFRS 10 Net debt without IFRS 10 (RS bn) (R$ bn) 7.740 11.965 9773 18% Z8% 5.003 31/12/2012 30/06/2013 31/12/2012 30/06/2013
Slide 33: Debt with and without IFRS
Debt with IFRS 10 (RS bn) 1041s 9.463 Debt without IFRS (RS bn) 16.170 31/12/2012 30/06/2013 31/12/2012 30/06/2013
Slide 34: Acquisitions: Brasil PCH
Table of Contents ACQUISITIONS BRASIL PCH On June 14, 2013 Cemig GT signed a share purchase agreement with Petrobras for acquisition of 49% of the common shares of Brasil PCH. On August 8, an Investment Agreement was signed between Cemig GT, Renova Energia S.A, RR Participações S.A, Light Energia S.
Slide 35: Light — Highlights of 3Q13
Table of Contents Light — Highlights of 3Q13 · Total energy sold in 3Q13 was 1.7% higher than in 3Q12, at 5,581 GWh, reflecting increased consumption by the Commercial segment — which was up 2.5% YoY — and the group Others , up 3.8% YoY. · Consolidated net revenue in the quarter, excluding construct
Energy Co of Minas Gerais — Q3 2013 Earnings Presentation on 6ix