Companhia Energética de Minas Gerais (NYSE:CIG) Q2 2023 Earnings Call Transcript

The works are ongoing. All the suppliers are contracted. And as Dr. Reynaldo mentioned, we have already requested the renewal concessions for Sá Carvalho, Emborcação, Nova Ponte. [indiscernible] also consolidated these results, Cemig is important for our consolidated results. So every quarter, we bring this results. We can see that we had an EBITDA growth of 55.4% affected by the repositioning of the tariff review and higher consumption, especially — the consumption from industrial and thermal clients increasing 36.5%. GASMIG has showing growth opportunities. And because of that, it launched a centralized project that will bring the gas pipeline up to Divinopolis, CapEx of BRL780 million. Up to June, we have already invested BRL73 million.

And by the end of the year, we will have invested BRL367 million. We are concluding the bidding process and environmental licensing. And in the second half of the year, we will be accelerating the works. We are also investing in distributed generation part of that by Cemig’s [indiscernible]. And another part by the floating ones, which will be in Cemig’s GT. So now we have an operation 19 plants, in construction 51 plants and being developed the three floating plants, the solar plants. Installed capacity is growing. So we have 52 megawatts in operation; in construction, 168; and being developed 174. A significant growth in distributed generation. And that is going to be going into our EBITDA in the next few years. And recently, we have concluded the bidding process to build 23 solar plants that will gradually be in operation by 2024.

Now to conclude, I will turn the floor to Leonardo, who is going to discuss and talk about our commitments and challenges and opportunities.

Leonardo George de Magalhaes: Thank you, Carol. We like to finish with this slide because this is our commitment with the investors. And these commitments come from our strategic planning. And most of these commitments are being mapped by the company. Some of them have already achieved such as the OpEx below regulatory limits. Our EBITDA is over the regulatory limit. The losses also are within the regulatory limits. And also the strengthening of Cemig’s D investments program, and that’s a great advancement from what we had in the past. So you used to invest BRL800 million — BRL900 million in the past. And now we have a broad investment program for this year, 3.2 and we understand that and we feel confident and the company has — the company has already contracted these materials, these services, and we are ready to invest.

Now what is in progress, the divestment of non-strategic methods. We understand that a large part of these assets have already been sold, such as Light, Renova, Axxiom (ph) and other assets in Santo Antônio also was divested, and we continue with the divestment process. Digital transformation, we invest — we intend to invest BRL1 billion up to 2027. Renewables investments that are going on at full power, as Carol mentioned. Also growth in retail electricity sales and the bonds, liability management because little by little, we are reducing our FX exposure. For the future, we will continue investing in renewable holding generation sources and renewals of concessions and the company is already preparing itself. But to be ready to renew the important concessions in our portfolio for energy generation.

That’s it. Thank you very much. I’ll turn the floor back to Carol. And now we can start our Q&A session.

A – Carolina : Thank you all very much. We’ll now start the Q&A session, please. [Operator Instructions] The first question is from Andre Sampaio, sell-side analyst from Santander. Please Andre, you may open your microphone.

Andre Sampaio: Good afternoon, everyone. I have a question about GASMIG. Can you comment on the results? Why was the results so much higher than the regulatory limit. Is there anything there that this is non-cash or is that non-recurring effect, and it makes sense to imagine that huge gap, vis-a-vis the regulatory limit?

Carolina Senna: I will turn the floor to Leonardo.