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CEMIG Impresses with 2012 Results

Zacks Equity Research

Brazil-based integrated electric utility, Companhia Energetica de Minas Gerais (CIG), also known as CEMIG, reported its financial results for the fourth quarter and full year 2012 on Apr 3, 2013. Net earnings in the quarter were R$2,098 million (US$1,018.4 million), up 195% year over year.

In 2012, net earnings were R$4,272 million (US$2,190.8 million), up 77% year over year. Earnings per share were R$5.37 or US$2.75 per ADR.


CEMIG generated net revenues of R$5,088 million (US$2,469.9 million), up 18% compared with the year-ago revenues.

In 2012, the company’s net revenues came in at R$18,460 million (US$9,466.7 million), showing an increase of 17% year over year. Electricity sold climbed 2.6% to 66,725 GWh in 2012.


Operational costs and expenses, incurred by CEMIG in the fourth quarter, totaled R$4,923 million (US$2,389.8 million), up 49% year over year. The expenses soared because of higher personnel costs, electricity bought for resale, infrastructure construction costs and gas bought for resale, among others.

EBITDA was R$715 million (US$347.1 million) in the quarter, reflecting a year-over-year decline of 44%. EBITDA margin was 14.1% versus 29.3% in the year-ago quarter. Operating margin in the quarter came in at 3.2% compared with 23.4% in the year-ago quarter.

Balance Sheet/Cash Flow

Exiting the fourth quarter 2012, CEMIG had cash and cash equivalents of approximately R$2,485.8 million (US$1,212.6 million), down 2.1% sequentially from R$2,539 million (US$1,269.5 million) in the previous quarter. Talking of long-term debts, a drastic increase of 67% was witnessed in loans, financing and debentures that came in at R$16,170.3 million (US$7,888 million).

Cash generated by operations in 2012 plummeted 20% year over year to R$3,114 million (US$1,596.9 million) while capital spending on addition of fixed and intangible assets declined 18% to R$2,269 million (US$1,163.6 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 #3 (Hold).

Companies, other than CEMIG, that are performing well in the industry are Brookfield Infrastructure Partners L.P. (BIP), Edison International (EIX) and Huaneng Power International, Inc. (HNP), each with a Zacks Rank #1 (Strong Buy).

Read the Full Research Report on EIX

Read the Full Research Report on BIP

Read the Full Research Report on CIG

Read the Full Research Report on HNP

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