CEMIG Earnings above Est. in 1Q13

Zacks

Brazil-based integrated electric utility, Companhia Energetica de Minas Gerais (CIG), also known as CEMIG reported its financial results for the first quarter 2013 on May 17, 2013. Net earnings in the quarter were R$865 million (US$432.5 million), up 37% year over year.

Earnings per share were R$1.01 or US$0.51 per ADR. This was way above the Zacks Consensus Estimate of US$0.24 per ADR.

Revenue

CEMIG in the first quarter 2013 generated net revenue of R$3,677.6 million (US$1,838.8 million), up 15.2% compared with the year-ago revenues. Despite a fall in a few categories, including a 9.4% decline in revenues from sales to end customers, more than a double increase in revenue from Supply +Transactions in the CCEE category drove the results. 

Electricity sold in the quarter was down 1.8% year over year to 10,796 GWh.

Expenses/Income

Operational costs and expenses in the quarter totaled R$2,456 million (US$1,228 million), up 7% year over year. The expenses soared because of higher personnel costs, post-retirement benefits, cost of materials and purchased energy costs among others, although there was fall in a few other expenses, including contracted services, royalties, operating provisions among others on a year-over-year basis.

EBITDA was R$1,590 million (US$795 million) in the quarter, reflecting a year-over-year growth of 28%. EBITDA margin was 43.2% versus 38.9% in the year-ago quarter. Operating margin in the quarter came in at 33.2% compared with 28.0% in the year-ago quarter.

Balance Sheet/Cash Flow

Exiting the first quarter 2013, CEMIG had cash and cash equivalents of approximately R$2,041 million (US$1,020.5 million) versus R$2,485.8 million (US$1,212.6 million) in the previous quarter. Talking of long-term debts, a drastic decline was witnessed in loans, financing and debentures that came in at R$2,644 million (US$1,322 million).

CEMIG generated approximately R$374 million (US$187 million) in cash from operating activities, registering a year-over-year decline of 11%. Capital spending on addition of fixed and intangible assets plummeted 70% to R$219 million (US$109.5 million).

CEMIG is one of the largest integrated electric utilities in Brazil with approximately 97% of the company’s installed generation capacity being hydroelectric power. The stock currently has a Zacks Rank #4 (Sell).

Other stocks to watch out for in the industry are CPFL Energia S.A. (CPL) and Empresa Nacional de Electricidad S.A. (EOC) with a Zacks Rank #1 (Strong Buy) while ALLETE, Inc. (ALE) with a Zacks Rank #2 (Buy).

Read the Full Research Report on CIG

Read the Full Research Report on CPL

Read the Full Research Report on ALE

Read the Full Research Report on EOC

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