Cemig (CMIG4) reported a net profit of R$ 1.04 billion in the first quarter of 2025, marking a 9.9% decrease compared to the R$ 1.15 billion achieved in the same period of 2024. Despite this decline in profit, the company saw its net revenue increase by 9.7% year-on-year, reaching R$ 9.84 billion. The financial performance was notably pressured by a 12.2% rise in operating expenses and costs, which totaled R$ 8.42 billion during the quarter.
One of the key factors contributing to this increase in costs was the significant rise in the price of electricity purchased for resale, which surged by 21.5% compared to the previous year, amounting to R$ 4.26 billion for the quarter. This increase in electricity costs has been attributed to regional price disparities, with energy prices in the Southeast/Midwest and South regions being nearly R$ 400 higher than those in the Northeast and North.
In terms of financial obligations, Cemig ended the first quarter with a financial expense of R$ 249.6 million, reflecting a 37.9% increase from the R$ 181 million reported in the same quarter of the previous year. This rise was largely driven by monetary fluctuations and charges related to debentures. The total debt of the company reached R$ 15.242 billion in March 2025, an increase of 24.1% compared to the end of 2024, with an average maturity term of 5.5 years.
The court recently annulled the sale of 12 Small Hydroelectric Plants (PCHs) and three Hydroelectric Generating Plants (CGHs) belonging to Cemig. The decision, issued by the 2nd Court of Public Finance and Autarchies of Belo Horizonte, affects an auction that took place on August 10, 2023, for the divestment of small assets that were not included in the company’s Strategic Planning. Cemig has announced its intention to appeal this decision through various judicial channels.
In a detailed report, Cemig attributed its reduced profit to the exposure to price differences between various energy submarkets, which adversely affected its energy trading activities. The company reported that energy prices were significantly higher in the Southeast and South regions compared to the Northeast and North, exacerbating the challenges faced in the competitive energy market.
During the first quarter, the adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) also reflected a downturn, decreasing by 9.6% year-on-year to R$ 1.799 billion. Despite these challenges, Cemig managed to bill 9.45 million consumers in March 2025, a 2.2% increase from March 2024. Among these consumers, 5,058 are classified as free customers utilizing Cemig’s distribution network.
Operational costs and expenses surged to R$ 8.42 billion in the first quarter, which is an increase of R$ 957.3 million compared to the same quarter the previous year. This rise is primarily attributed to the higher costs associated with electricity purchased for resale, construction costs, and depreciation and amortization expenses.
Investment activities for Cemig during the first quarter totaled R$ 1.21 billion, representing an 18.6% increase compared to the same period in 2024. This investment reflects the company’s ongoing commitment to infrastructure and operational improvements, despite the financial challenges faced in its core business operations.
The results of Cemig’s operations for the first quarter of 2025 were officially disclosed on May 8, 2025. The company continues to navigate a complex energy market characterized by fluctuating prices and regulatory challenges, while also focusing on strategic investments to bolster its operational capabilities.
As Cemig moves forward, the focus will be on addressing the financial pressures stemming from increased costs and navigating the implications of the recent court decision regarding its asset sales. The company remains committed to enhancing its service delivery and maintaining its competitive edge in the energy sector.
