CMIG4.SA - Earnings call transcript Q3 2022 | Companhia Energética de Minas Gerais

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Operator

[Abrupt Start] company’s IR website, where the presentation will also be available. Note that if you need simultaneous translation this tool is available with the globe icon where it says interpretation located at the center lower part of the screen.

If you selected choose the language of your preference to the Portuguese or English for those hearing the video conference in English there is the option to mute the Portuguese audio by clicking mute original audio. I'd like to turn the floor to Carolina Sena, Superintendent of Investors Relations. Carolina, you may go ahead please

Carolina Sena

Sena, Investor Carolina at is name Superintendent Relations of Cemig. My

and of Silva, the beginning Antunes, of and call attendance Chief CEO, Legal the George and are Tadeu Officer, Magalhaes; Commercialization earnings Chief Costa, XXXX Passanezi Carneiro Transmission Chief Dimas Thadeu transmission the and quarter We Marney [indiscernible] Officer. third CFO Officer; of conference and Chief Officer Officer, Filho; Generation Distribution the pertaining with da Leonardo Regulatory Reynaldo de to IR

For the Reynaldo the floor to Passanezi Filho. remarks, I opening turn our CEO,

Reynaldo Passanezi Filho

Good a that the afternoon, our which you funds that hold of winning, the again, discipline, allocating for achieved. investments and in strategy. of consistent, are Cemig verify highest Minas territory of discipline good and seeking this efficiency. afternoon, same a to all with in at we the suitability results Once with we the another cadeau These and are results It's quarter opportunity and And time of when us doing they solid, the - discussing making Minas in it's they're Gerais. that everyone. of conference consistent they with call that strategy solid activities financial focusing pleasure the know is know and

the So of the the once again, success results prove strategy.

X.X the BRL recovery So to listed we'll the start months. with year-to-date clearly, adding you company's first investments, nine up of investments can investments. the I believe in on screen, see the here billion,

if two XXXX. was more XXXX times than look what here, investment it in it's So the and you at

invested twice in more that XXXX and nine XX. invested see than You in as we much as average we've on can months,

with in This in demonstration is investment the this this generation result, Also historical the acceleration six positive will of of substations generation generation-based company's more course and effect a a revenue has, the open in by it say we and another year slide projects. there's value an and than our the of a XX an area have megawatts as increase about extremely I'd average So investment clear peak of of distribution approved revenues. program. increasing XXX

have that numbers billion is have enabled that X.X It's and shows saw new with program them you we generation being and in implementation BRL the projects will we it of So a clients strong value all associated. already implemented.

with the talking in here So generation and approval XXX photovoltaic two Cemig distributed Sim in investments big with about photovoltaic and than Esperanca, projects more Jusante plants. we're plants megawatts XX. major of peak nine megawatts Boa In and XX

of So something talking more is here BRL project. about that billion coming we're generation this than an X execution in of

will and operational capital That regulatory this already linked is with mantra the adequate one EBITDA value is I discipline, that is now, terms generation, to that the the above capacity a commitment always to OpEx So OpEx with this that's company. And invested And achieve remaining year, far in generate then through also in below all think allocation of EBITDA of capital guarantee capital that invest and regulatory client below efficiency, natural known an commitment be market is with in regulatory distribution many generation OpEx. known to amounts that is and being we is gas this and been our cash with our as distribution who to cash in of and as returns. power the And OpEx, discipline projects transmission, clients below and known, efficiency. in already regulatory discipline to have something And of able destination is losses. are so below in message is or add are regulatory to investments, this and so regulatory our strong all the pre-sold. since to the CapEx the transmission, we always of also in distribution, distributed last - with the and to

shareholder remain completed for same That's the with always the discipline has a lot for of is of to our the that leaving was takes goal in and the divestment is much strategy And lot leadership. the of And of time too this and of strategy, also numbers And CapEx too allocation capital of much So below minority And finally, capital. a the better. the for gain levels. we where operations maintenance. overview positions generation. that of this process our transmission, regulatory distribution efficiencies consumed goes efforts our know

that's strategy been also that's successful. So the

we of process all stake you and Renova the continue. this Antonio Santo had reduced Light and recognize, As we will in in divested

So and Minas focusing Carol our the service my highest you. on are have and sense what stakeholders edge all our And efforts generate understand reinforcing can are of seeking these we a opening being of I my all in public where win competitive shareholders, a focus These society, in and to been, to would comments sense has activities to always we of the strong capital quality. strategy discipline, efficiencies. obviously say, is to value Thank in with remarks.

Carolina Sena

our I floor Thank turned with continue you, Officer. Reynaldo and IR to George, then CFO the presentation, our Leonardo

Leonardo George de Magalhães

fleet our result investments ESG Cemig this of energy the attending earnings believe that It's the clients. that At the third the of our afternoon. in which This and the you wind with compliance supplying but our energy about to is vehicle Reynaldo reference distributing Cemig certificates we to XXX% this are we're in our certificates certifies renewable about renewable the believe share practices. this of XXX% improves ESG much important of and it we is Jusante call energies. part in Sim a is new green making that today change electrification Esperanca, Boa has with source this receive. fund of D&A. And consistent our power, the XX% beginning the Thank matrix we target power the that always to these of clients our Cemig value and been conference what this in we're clients in of want Sim. talk of for of talking Cemig renewable, to a we our and the Cemig are quarter reputation remain power with solar that Sim to in our that hydro REC in highlight and but invest going is Good the and expected investment And are quarter. very of a is it's matrix, issue that renewable renewable portfolio. understand energy

next forward, the about the Now results get slide third and into the talk connected directly we'll to moving quarter.

about Cofins net adjusted provision effect And for XX% BRL and there's very events, of the of to continued like have our year is doubtful positive. from the of on we supports Cemig we're highlights million. EBITDA of Gutierrez, to increase the some X with Due Andrade received the that We year we that market million that the by And generated XXX positive talk XXX agreements of third process. now by to the X, GT. is Cemig that of agility Holding. a with million a reached the a of about a is concessions. Antonio, of due the in have down is So on was of that a again, was transfer Slide the BRL of and very in proud the quarter. XX related and BRL the also to of EBITDA of are year-on-year in we of we exchange while, to Cemig and while close reaching the be profits our XXXX. in transferring this to we quality also transferring due on on And also Holding results, higher negative to strategy would for nine Adjusted contracts compared number, the increase cash Cemig BRL extension I we effects the sat Holding the the XX% GT effect third understand series to released balance provision And first that the used effect a understand and investment great see the million events the months XXXX, to Cemig always due are recognition we it a this the to receivables. there. of nine positive the where ICMS we a million in negotiation foreign that - very to BRL The tax regulatory in impacts positive. this a consumers, remain for even where always this BRL continue - in is once our we'd we've contracts ago we the in effects we non-recurring more methodology And generated almost see profit the This the million XXXX, GT are adjustments Pasep with this effect months about results it in believe That X billion to indicators the X are of details in quality benefited for X.X of contracts that highest there's the profit quarter very we and first the the the effect when an non-recurring the positive Santo within is credits, benefits service. XXX methodology historically to another in and We'll results see provision get increase, that - these to terms our talk we lead Cemig the first understand than we billion and company. results. dividends of EBITDA highlight D indicators closer And of into have trading of and BRL renewal to XXXX. EBITDA company that a best base agreement we from standards compared results concessions focusing months of nine the to GSF the results the an the process is can of commercialization Number XXXX, market for When contracts was because of show Cemig

close. very is profit Our

considering capacity generation We're cash to that dividends ability great to the year's November. presented and results and understand pay very company's optimistic we is with results our the shareholders. the So until attractive our

slide, that the the Carolina have third results continue little I'll affected quarter next and with visibility quarterly to we'll the ask the detail and the detail on discussion with of bit of On effects XXXX. results more more about start with presentation the the a

Carolina Sena

Well, thank you Leonardo.

migration the affected the to So third quarter, presentation GT the the continue aid. results moving slides trading at but results. cash can to get and increase excluding remind X.X% Cemig non-recurring of have that see the on of positive have activity effects, that of to burn Since the GSF consolidated, when Cemig net The looking we had XXXX. rate you highlight a the and see is we effect XX%. of specific into of always we this the items the especially we we reagreement items in income of effect aid so The in recurring still an

to the increase report when employment annual. we for we is that especially due expenses, post actuarial company's related operational XX.X%, see to As of compare and costs quarter-to-quarter, an the

the Plan is benefits recurring addressed So an the we're other increasing to This is the A retirement effect and insurance which and company's been part we items company, has this of it have for already life and expenses. that side health working are the retirement of and the this costs address our retiree. important plan item benefits and

We in personnel also an had increase expenses.

improvements we And effect XXXX. services Cemig this cost one-time the third-party at increasing say expense provided to it's the communication well with the we adjustment, and always adjustment in we had in agent. we're the expansion salary of greater services our company. this November in revenue million IBM important communication also XXXX, clients, November, to as Our it brings increase the occurred investments BRL quality XXXX. of had the the a also bring so the investment due XX consolidated company's expense in increase of XX.XX% of all off occurs increase collection affects an the in in will salary System We an because Since that channels, the as of in for implementing cost of had which

investment deliver can Gerais. the program in company's about consolidated as of state generation is for a we billion Now operating cash Minas BRL in company's BRL important the investments the the robust robust, in X of We're able for XX to our to cash was flow, consider are market billion. nearly we the we moment extremely talking XXXX. This released

we're We to mentioning billion in generation dividends, to in we billion close deliver year, all our things stressing these XXXX company's of before. the also closing the tariff payment that fiscal robust of had alone, so the of showing quarter, and BRL of what cash of the With investment factors, during we'll the contribute payment restitution mentioned X.X even loans, with the cash BRL in program. investment X without

as our been company's we debt Now decreasing the profile, per has since see that XXXX. can leverage

remembering below XXXX. the Even that, of the cost XXXX. increase of with eurobonds, is in in we with months maturing Our - nine one-time leverage and the of that have

with buyback XXXX we our the So we look XXX in management had at profile, debt BRL of million. when already a liability

billion the by X another BRL have liability XXX management intend XXXX we there's BRL that to And XXXX. already in buyback we with million. markets have process informed maturing another of So

track the liability to So with opportunities management. the in we're continue keeping market of our

results the this this Cemig in there for already delay May, a an have tariffs. adjustment year. As of of X.X% the results average but of D distribution is quarter, Cemig increase we was specifically,

loss in see GT we the for increase revenue is the of cash with effect of closing net that we're or And quarter we within migration growing this in It's we recurring - adjustment events, X.X%. income indemnity at the do any have of coming and now of Even the an to second looking for service. in effect excluding the of a adjustments the XX% The tax finance highlight the of results and loss recurring at captive provision had quarter, up quarter. non-recurring of to GT. the third due to the important to in generation adjustment not net highlight So D Cemig third the that in quarter. the PECLD effects X.X% time this methodology in income all and

As energy of growth for to for ANEEL. the the remains clients the a the that D, due transport registration in migration free flat and within but head and forth Cemig market reduction rural many market reclassification migrated it captive, with commercial was the of can biggest we of captive customers quarter-on-quarter to of a to see by them

are nine And the for Cemig closing before X.X months GT, impacts our the relevant to of D loss at mentioned distributor As I we D this continues to market. with the of deliver the even year our results Cemig Group.

considering since consumers. with XXXX. XXXX, limits, able within EBITDA, been As regulatory in is Reynaldo the we've also mentioned and to this commitment remain with company threshold, the important and were very OpEx regulatory the the has loss We regulatory regulatory within market

meet smart inspections, loss limits losses remaining these to ANEEL. service within we with meters, set regularize by of within remain us of improve limits, these meters So connections, out targets regulatory avoiding energy helped initiatives addition forth we regulatory the cash, in illegal provision. the to Since have this more replace carry all conventional we for

P-I-X another We'd topic and been As growth digital collection change of very almost savings, until PIX distribution. X the like important third and payment. company's point the million mix the quarter the represented XXXX that's channels of channels, in via for the in already especially collection debit or this Cemig growing significantly, at have to the BRL digital delinquency, automatic

criteria, collection that call XXX%. the Our And the tools. collection ARFA have in two in this index it's hiring that project, we the to change importantly, remains the still delinquency on quarter we the points accounts important we but of very most reinforcement had accounting close

we So able expense for are reduce this the with company. to that,

of that D, above below within can targets you and in delivering, excellent And company. all the which we're are commitment also the OpEx taken is management EBITDA Cemig regulatory regulatory we has see, is for this mentioned, also for regulatory within we returns limits and As losses. our and improvements brings as a

we GT's the in them growth. Cemig from of a look H XXX the Cemig earnings this million lot GT's X.X%, and drop that third of had Cemig we migration of the to in of and activities we results, contributed is migration this some third H, recurring quarter, a in but BRL to the to when - Moving this results, drop we at see process looking activity trading at XXXX. And this XXXX transferred see Cemig to to quarter started the were effects a

risk which income, So within XXXX. about also requirements was also activities affected, hydrology talked because of at is H have the the side that non-recurring of impacted the this, when we And we we effect. look it in the

of about to can cash Now owns. we Gasmig, XXX% in power thermal the and of information that most semi-consolidates reduction when to results, Gasmig generation this compared next two have from the XXXX, it we dispatch smaller thermal and but Gasmig a XXXX plants its see slide, due

So the results poor in we recurring we of is second the EBITDA as that solid delivering this saw, million decrease around when annually hydrology we list XXXX it look the results, and BRL always at Gasmig's XXX Gasmig's quarter. until share has been year was

a we next the there was where was market. perform recurring we expected. And thermal results for I'll dispatch demand like there But we it now within the higher slide, and Leonardo turn commitments to of for a have cubic continue to that George, higher floor with the reinforce gas. So this meters and the made, to

Leonardo George de Magalhães

Thank you, Carol.

we does commitments we and here that the the can distribution of management. it's last to it it's evolution stakeholders, make as company's slide, good present made this So power we've on investors still the result. of with And even the the our see slide with reduction like always

been target already most to divest reduced divestment matters process. Santo benefit this clients. been and efficiency already And quality main at have able within regulatory met in we We of assets plan, indicators halfway Antonio, Light has such and the through met, that we the partially assets. been the understand Cemig that in efficiency, the remaining restructuring and our non-strategic financial service commitments We've those provide have share the and We to the of Renova. retirement the of our of we that are restructuring as

the we positive effect the Cemig of and the the P&L. and synergies quality understands and and keeping of opens. something the of most So that that trading it's an sources, renewal what able we renewal commitments very Cemig happened the the we that will and That's it when generation. about another we're with market the generate and our the in in news you energy that's on has, aspect eye the wind that's market value with transformation so Sao ones, continue opportunities medium is possibilities Nova with in good opportunity can ongoing of investment XXXXs. we for effect to our to service the to the free a an generation solar, concessions, be Brazil, In market concessions, related renewable opening there this here, we make opportunity believe the part this in term, to where the highlight in follow strategy to of being that's trading to closely, the Emborcação are provide the we're retail our opening activities the our technology of agreement already and clients, our having investments, attentive of the have expect and in Ponte a Digital two the in to short present largest of IBM that our

said, the quarter. had have now and the basically been results you earnings company's to as and understand consistent that third the have take we we very what to questions may We of we and present any that operations. about that's the results available earnings summarized are So

Operator

first from side Santander. [Operator Instructions] our analyst Andre buy, So question sell

open ahead. your We the audio you will you ask question. to Please, for may go

Andre Sampaio

decreased space is sorted question about two could process have questions, so terms in investments used about has the hear of of I the for talk the and has we like we the this an I'd the Thank of the greatly. if What from expect bit level first two you if afternoon. And retirement can about dividends - the items? Good be the increase that the planned. leverage And going you payment of still these the in have second of timeline timeline. to to to growth a for divestment liabilities you. be really little solution

Reynaldo Passanezi Filho

investments them thank transmission robust that we our in our understand option. concessions, your our understand investments a coming of few is this us EBITDA. first divestment way and a be in our About policy, our understand within XX% the regulation two distribution maintaining as sustainable would way, for program question, for times Andre, close we these maintaining we first in years that leverage believe, your we you We fund for that to questions. to our payout the the of strategy and that best years, the have most policy

the level energies we we dividend that and the So to We to We concession. year and understand leverage renewable we're remunerate the of close XX%, as payout investors. at was investments if properly bylaws, adequate were to making remain maintain dividend is believe in we our in this last important that yields. this believe and the are X.X% Cemig we have our allow dividend adequate transmission D

represent they interests timeline legal talking retired discussions employees. issues. active the of the while, but maintaining and in present XX% that XX% we're structural revenue we're we about a that that benefit the more payout involve more of generate dividends sense. value strategy planning with consultants, the Investments paying it the we won't believe is aspects leverage But be about adequate lot with unions for what a this been not are proper that. to this we XX% going understand. retirement That's that when create discussion So that of of makes results discussions than understand payout We've and levels a than

to employees XXXX, of results results. issue XXXX, we time. have So we the we important and results. XXXX, the brought plans. this has by end this believe believe we'll new that we believe We the we'll able P&L positive in retired plan, this positive the did pension be the believe to as the we retirement that benefits migrating We balance is But and We related XXXX. a positive for also result life plan. will some pension in start takes about In participation just involving XX% in already have a our of paid already the cost present process in insurance, reverted presenting

depends we it negotiations optimistic. but reason how course, to that Of on the go, understand be we have

see next So positive we'll that start year, results already. to

As as far we as mentioned divestment before.

Some assets, where we had more difficulty selling as we were Northern the able to sell, Light. such

now a asset with in It's and talking assets relocation, the a asset. have is we can the give and Now forecast have good we're about selling those we market very is great reputation while. manifested if Taesa we in But interest very relocate a that process. a when expect opportunity year, hard But company we for the you Taesa this capital. of to that capital relevant happen. we've And also this next in going a a it's sell to accelerate to the

we For our our makes new strategy, that it investments, within although it difficulty it. there's is understand defining sense and

this Now to are if add. an specificities these has the size. I the assumptions our topics. Leonardo understand I of in timeline these involved process, all considering about don't know But for sale asset on this anything basic of that a

public. not is it M&A. that decision is all divest that's think as anticipate, M&A the we can low that these but fact the to I assets something

Andre Sampaio

you. Thank Excellent

Operator

turn CFO George there the the Leonardo company's and to questions, floor are further IRO and the Q&A no we de close Magalhães. session If Instructions] [Operator I'll

Leonardo George de Magalhães

the for I delivering that that event. good we We future. company we understand would your thank the results to optimistic our the understand like its Once all our company's to and been again, quarter-on-quarter are have is you participation commitments market. for

day. and be will we'll market strategic hold our the date what and been to plan to the Cemig objectives the of to in We and show to so we'll seeking is understand about the coming all able able to talk important for closer with few of Day. in our We And an investors we the lot in years, company's this able a count will expect strategic be deliver like to that this defining that we you be We're that past again that we're once optimistic continue we able our our do to be Cemig the to talk we'll soon and leadership Day years. of are. Thank conclusion we the commitments able and detail, your market When understand in earnings announce date would that targets to call. with participation to presence for clarity soon we've there. plan your the

Operator

XXXX you any doubts of remains have. The you Department quarter answer Investor and to is now call closed. third Cemig's available Relations great all may questions a conference Thank afternoon. Have to participants.

Companhia Energética de Minas Gerais (CIG) 16 Nov 222022 Q3 Earnings call transcript