Companhia Energetica De Minas Gerais Sa · BMFBOVESPA:CMIG3
Companhia Energetica De Minas Gerais Sa — Q2 2021 Earnings Presentation
24 slides from Companhia Energetica De Minas Gerais Sa's earnings presentation, Aug 18, 2021
Slide 1: 2Q21 Results
2Q21 RESULTS OUR ENERGY – YOUR STRENGTH
Slide 2: Disclaimer
2 Disclaimer 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: Cemig highlights
3 Cemig highlights Ebitda and Robust results in 2Q21: Ebitda R$ 2,590 million – up 38.8% YoY Net profit Net profit R$ 1,946 million – up 79.9% YoY Cemig D’s Opex and Ebitda within regulatory limits for the first time: Distribution: Opex and Ebitda Opex at R$ 128 mn – below the regulatory level, Ebit
Slide 4: Cemig highlights
4 Cemig highlights Eurobond US$500 million repurchase of Eurobond completed buyback – in line with Cemig’s published strategy GSF effects: R$ 910 million addition to Intangible assets for recognition rights to extend generating plant concessions. Revaluation: Revaluation with updating of assets usin
Slide 5: Renegotiation of hydrological risk (GSF)
5 Renegotiation of hydrological risk (GSF) GSF (Generation Scaling Factor) agreement created a gain of R$ 910 mn in Intangible assets from rights to extend concessions Intangible assets: Estimated Offtake New date for Right to extend concession extension of concession guarantee Item end of R$ mn Mon
Slide 6: Eurobond buyback
6 Eurobond buyback Cemig GT repurchased U$500mn – Strategy of improving debt profile Cost of the buyback NDF (Non-deliverable forward) % (US$ ’000) (R$ ’000)* Nominal USD: USD Adjustment Adjustment (US$ ’000) Locked-in exchange (unit) R$ ’000 Principal 100.00% –500,000 –2,568,500 exchange rate Premi
Slide 7: Marking to market of Eurobond and its hedge
7 Marking to market of Eurobond – and its hedge FX gain in 2Q on low exchange rate at end of period (US$1=R$ 5.0022) Effect on Financial revenue (expenses) – R$ mn Item Mar. 2021 Jun. 2021 Change, Hedge – Swap (interest) 1,175 419 –756 Hedge – Call spread (principal) 1,586 930 –656 NDF – –59 –59 Bal
Slide 8: Cemig D: Revenue
8 Cemig D: Revenue For the second year running, Cemig D did not increase residential users’ electricity bills May 25: Aneel approved tariff adjustment of Cemig D tariffs (for May 28, 2021 to May 27, 2022). Average increase of 1.28% across all consumer types – well below increases in other Brazilian
Slide 9: Investment program – execution
9 Investment program – execution Investment of R$ 822 mn up to June 2021: Planned for 2021 Generation R$ 47 mn 191 210 Plant expansion and modernization 205 Transmission Total R$ 49 mn Strengthening and upgrading – R$2.9 bn increase in RAP Distribution 2,320 R$ 695 mn Investments in maintenance and
Slide 10: Quality indicators
10 Quality indicators Continuous improvement in indicators: underlines Cemig’s commitment to excellent service quality 11.32 11.03 7.76 7.39 7.30 10.73 6.67 6.56 10.44 10.08 11.18 10.42 10.56 5.44 5.13 4.89 4.86 4.89* 9.57 9.46* 2017 2018 2019 2020 1H21 * 2017 2018 2019 2020 1H21 * Annual limit DECi
Slide 11: Cemig D: Combating default
11 CEMIG D: Combating default Customer default provision improved – factors: Receivables Collection Index more intense collection activity (ARFA2): Collection/Billing, % greater efficiency in combating default 12-month moving average 98.87 96.67 96.78 95.86 Collection index 98.8% in 2Q21 – hig
Slide 12: Results
RESULTS OUR ENERGY – YOUR STRENGTH
Slide 13: Main factors in 2Q21
13 Main factors in 2Q21 Operational efficiency: 2021 Voluntary Retirement Program Cemig H Joined by 324 employees Cost: R$ 35 mn Volume of electricity distributed 12.4% higher YoY: Captive market: 5.3% higher Cemig D Transport for clients: 21.4% higher Default provision – reversal: R$ 8 mn (
Slide 14: Cemig's net profit in 1H21
14 Cemig’s net profit in 1H21 Recovery of economy in Cemig’s concession area boosts results Ebitda Net profit +66.9% +29.5% +133.5% +45.8% 4,435 2,973 2,296 2,368 2,657 1,543 1,014 1,058 1H20 1H21 1H20 1H21 1H20 1H21 1H20 1H21 IFRS IFRS recurring recurring IFRS IFRS recurring recurring Ebitda Profit
Slide 15: Cemig: 2Q21 Net profit
15 Cemig: 2Q21 Net profit Result boosted by recovery of economy in concession area Higher electricity consumption, especially by Free Clients. Gas volume sold by Gasmig up 85.7% YoY, contributing to Ebitda R$ 94 million higher. Ebitda Net profit +38.8% +39.4% +79.9% +58.7% 2,590 1,866 1,946 948
Slide 16: Cemig GT – 2Q21 results
16 Cemig GT – 2Q21 results Average selling price 13.1% higher YoY: R$ 248.34 in 2Q21 vs. R$ 219.53 in 2Q20 Ebitda Net profit +112.6% +254.8% +34.8% +360.5% 1,699 1,444 799 430 319 198 407 43 2Q20 2Q21 2Q20 2Q21 2Q20 2Q21 2Q20 2Q21 IFRS IFRS recurring recurring IFRS IFRS recurring recurring Ebitda Pr
Slide 17: Market of Cemig D, 2Q21 – GWh
17 Market of Cemig D, 2Q21 – GWh Higher consumption by industrial users in Minas Gerais in 2021 Energy injected by Distributed Generation grew 90.5% which Cemig D: billed market + Transport corresponds to 210 GWh compared to 2Q20. Distributors +12.4% 51 –30,1% • Considering injected energy 11,636 84
Slide 18: Cemig D – Results
18 Cemig D – Results Continued earnings growth – on: Increase in total energy distributed Reduction of default provision Sales volume increase led by: volume sold to industrial sector up 19.6% ( = expansion of 907 GWh ) Default provision in 2Q21: reversal of R$ 8 mn, vs. provision of R$ 103 mill
Slide 19: 2Q21: Consolidated operational costs and expenses
19 2Q21: Consolidated operational costs and expenses Operational expenses below regulatory benchmark +25.3% 6,159 4,917 PMSO costs: 2Q21 vs. 2Q20 919 42 9 5 PMSO 856 +7.0% 9 12 Purchase 919 of energy 5,240 856 4 and other 4,061 costs 2Q20 Personnel Profit Materials Outsourced Post- Others 2Q21 Share
Slide 20: Cemig D: Regulatory opex and Ebitda – 1H21
20 Cemig D: Regulatory opex and Ebitda – 1H21 Ebitda and Opex within regulatory target 1,571 385 1,443 31 55 2 11 146 34 Opex within regulatory target Opex R$ 128 mn 2018 2019 2020 1H21 105.4% 128.3% 99.5% 91.9% Regulatory opex PMSO Profit shares Post-retirement Voluntary Fines, offsetting Provision
Slide 21: Debt profile – consolidated
21 Debt profile – consolidated Effective strategy has reduced costs and leverage Maturities timetable – Average tenor 3.4 years Main indexors Net debt (= Debt – {Cash + securities}): R$ 6.3 bn US$500 mn Total net debt = {Net debt – Hedge} : R$ 5.0 bn buyback 13% 8,090 (Aug. 2021) US dollar * 6,998 2
Slide 22: Consolidated cash flow
22 Consolidated cash flow Cash robust at end of quarter – enables compliance with targets of investment plan, plus management of debt 12000 889 910 10000 1,533 2,944 1,366 829 8000 734 6000 4000 6,998 5,805 2000 0 Caixa + TVM CX gerado Liquidação Restituição Pagamentos de Emp. Atividades Alienação d
Slide 23: Management's priorities
23 Management’s priorities Opex within regulatory limit Achieved Strengthen Cemig D’s investment program Achieved DEC within regulatory limit Achieved Bonds – liability management Achieved Optimize capital allocation Partially achieved Definitive solution for Renova Partially achieved Renew
Slide 24: Investor Relations
24 Investor Relations Tel: +55 31 3506-5024 ri@cemig.com.br http:/ri.cemig.com.br OUR ENERGY – YOUR OUR ENERGY – YOURSTRENGTH STRENGTH
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