Energy Co Of Minas Gerais 6-K, filed May 30, 2023
Energy Co Of Minas Gerais (CIG-C)
About this 6-K
Energy Co Of Minas Gerais filed this 6-K on May 30, 2023.
United States
Securities and
exchange commission
washington, d.c. 20549
FORM 6-K
report of foreign
private issuer
pursuant to rule 13a-16 or 15d-16 of
the securities exchange act of 1934
For the month of May 2023
Commission File Number 1-15224
Energy Company of Minas Gerais
(Translation of Registrant’s Name into English)
Avenida Barbacena, 1200
30190-131 Belo Horizonte, Minas Gerais, Brazil
(Address of Principal Executive Offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F a Form 40-F ___
Item Description of Items
| 1. | Notice to the Market dated March 29, 2023 – Clarifications regarding CVM Questioning |
| 2. | Notice to the Market dated April 10, 2023 – Blackrock Significant Shareholding |
| 3. | Notice to the Market dated April 17, 2023 – Conclusion of the sale of the equity interest held in Axxiom |
| 4. | Material Fact dated April 14, 2023 – Cemig GT executed Stock Purchase Agreements that regulate the sale of all equity interests it held in Retiro Baixo and Baguari |
| 5. | Earnings Release for quarter ended on March 31, 2023 |
| 6. | Material Fact dated May 8, 2023 – Award in an Arbitration PUT SAAG to be paid by May 12, 2023 |
| 7. | Notice to the Market dated May 16, 2023 – Cemig has filed 2022 Form 20-F |
| 8. | Notice to the Market dated May 23, 2023 - Periodic Tariff Revision (RTP) of Cemig Distribuição |
| 9. | Notice To The Market dated April 27, 2023 - Cemig requested a postponement on the deadline to file the 20-F Form |
| 10. | Notice To Shareholders dated April 27, 2023 - Dividends/Interest on Equity |
Forward-Looking Statements
This report contains statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. Actual results could differ materially from those predicted in such forward-looking statements. Factors which may cause actual results to differ materially from those discussed herein include those risk factors set forth in our most recent Annual Report on Form 20-F filed with the Securities and Exchange Commission. CEMIG undertakes no obligation to revise these forward-looking statements to reflect events or circumstances after the date hereof, and claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG
By: /s/ Leonardo George de Magalhães . Name: Leonardo George de Magalhães
Title: Chief Finance and Investor Relations Officer
Date: May 30, 2023
| 1. | Notice to the Market dated March 29, 2023 – Clarifications regarding CVM Questioning |
COMPANHIA ENERGÉTICA DE MINAS GERAIS - CEMIG
PUBLICLY-HELD COMPANY
Corporate Taxpayer’s ID (CNPJ): 17.155.730/0001-64
Company Registry (NIRE): 31.300.040.127
NOTICE TO THE MARKET
Clarifications about Official Letter 93/2023/CVM/SEP/GEA-1 of March 28, 2023
CVM Questioning
Cia. Energética de Minas Gerais - CEMIG
FAO Mr. Leonardo George de Magalhães
Investor Relations Officer.
Re: Request for clarification on a news article
Dear Officer,
| 1. | In response to the news article published electronically by “Isto É Online”, in its business section on March 27, 2023, under the headline: “Cemig is getting ready to be privatized and seeks to advance this agenda before the Government,” containing the following statements made by company executives: “CEMIG, a company based in the state of Minas Gerais, is getting ready for its potential privatization, with initiatives to make it more efficient and profitable, as it works to convince the Minas Gerais State Government to urgently move forward with this agenda at the Minas Gerais State Legislative Assembly.” At a public meeting with investors and analysts this Monday, Reynaldo Passanezi, the CEO of CEMIG, and Márcio Utsch, chair of the board of directors, defended that the Minas Gerais State Government be immediately mobilized to work on the company’s privatization agenda, which still needs to be approved at the State Legislative Assembly. According to Mr. Utsch, strategic changes made in recent years, such as divestments of minority stakes in companies like Light and Renova, allowed them to ‘clear up’ CEMIG management’s agenda, opening up the way so they could dedicate more time to the privatization. “We gradually cleared up items on the agenda so that we could increasingly focus on the state of Minas Gerais, selling assets with low or even negative profitability, allowing us to focus on privatizing the company,” he added. The chair of the board of directors of CEMIG sees a more favorable scenario for the legislative approval of the privatization, being said approval likely to be granted ‘on this mandate.’ He also stated that CEMIG’s management defends that the Minas Gerais State Government immediately mobilizes the State Legislative Assembly to approve the privatization. |
| 2. | In view of the above, we request that you clarify whether the news article is true and, if so, explain the reasons why you believe that it is not a material fact, and comment on other information deemed as important on the matter. |
| 3. | It is worth noting that according to article 3 of CVM Resolution 44/21, the Investor Relations Officer is responsible for disclosing and informing the CVM and, if applicable, the stock exchange and the organized over-the-counter market entity where the Company’s securities are traded, of any material act or fact occurred or related to its business, as well as for ensuring its wide and immediate communication, simultaneously in all the markets in which such securities are traded. |
CEMIG’s Response
Dear Nilza Maria Silva de Oliveira,
In response to Official Letter 93/2023/CVM/SEP/GEA-1 of March 28, 2023, Companhia Energética de Minas Gerais - CEMIG (“Cemig” or “Company”) clarifies that:
The news article published in the business section of the Isto É Online website, under the headline: “Cemig is getting ready to be privatized and seeks to advance this agenda before the Government” alludes to the 28th edition of Meeting with Investors, organized by the Company on March 27, 2023. The comments involved public explanations, in response to the market, on the Company’s major strategic direction.
It is worth noting that the topic of the news article involves an interest that has been publicly expressed on multiple occasions by the Governor of Minas Gerais State, representing the Company’s controller, i.e. the Minas Gerais State, in privatizing CEMIG.
In this sense, please check out news published during the Minas Gerais State Elections in 2018 (https://epbr.com.br/privatizacao-da-cemig-na-pauta-de-zema/) and 2022 (https://economia.uol.com.br/noticias/reuters/2022/12/28/governo-de-mg-considera-privatizar-cemig-em-modelo-de-corporation-diz-valor.htm), and (https://www.suno.com.br/noticias/cemig-cmig4-zema-privatizacao/). For this reason, there is no new act or fact leading the Company to formally disclose a material fact in this regard, even because the Company’s shareholders did not resolve on the Company’s potential privatization.
It is also worth noting that the measures required to change CEMIG’s controlling interest depend on the approval from the controlling shareholder and other agents, as per the Minas Gerais State Law.
The Company states that there is no new information to date, according to CVM Resolution 44/21, to justify the disclosure of a Material Act or Fact about the matter.
The Company reiterates its commitment to transparency and the best market disclosure practices.
Belo Horizonte/MG - March 29, 2023.
Leonardo George de Magalhães
Chief Financial and Investor Relations Officer
| 2. | Notice to the Market dated April 10, 2023 – Blackrock Significant Shareholding |
COMPANHIA ENERGÉTICA DE MINAS GERAIS - CEMIG
PUBLICLY HELD COMPANY
Corporate Taxpayer’s ID (CNPJ): 17.155.730/0001-64
Company Registry (NIRE): 31.300.040.127
NOTICE TO THE MARKET
COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG (“Cemig or Company”), according to article 12 of CVM Resolution 44/2021, of August 23, 2021, hereby announces that it received a mail from BlackRock, Inc. (“BlackRock”), headquartered at 55 East 52nd Street, in the city and state of New York, 10022-0002, United States, informing that on April 04, 2023, its shares, in the aggregate, now retain 10.015% of the Company's total capital, of which 198,316,005 preferred shares and 22,149,447 American Depositary Receipts ("ADRs”), representing 22,149,447 preferred shares, totaling 220,465,452 (15.043%) preferred shares and 16,836,657 derivative financial instruments referenced to preferred shares with a financial settlement, accounting for approximately 1.148% of the total preferred shares issued by Cemig.
As a reference, according to the notice dated September 05, 2022, the date of the last mail received by the Company, BlackRock informed that it held 9.913% of Cemig's total capital, of which 14.89% preferred shares.
In the same mail, BlackRock, Inc. also states that:
“... the aforementioned equity interest is strictly for investment purposes, not for a change in the Company’s shareholding control or administrative structure. BlackRock did not enter into any agreements or contracts that regulate voting rights or the purchase and acquisition of securities issued by the Company”.
Belo Horizonte, April 10, 2023.
Leonardo George de Magalhães
Chief Financial and Investor Relations Officer
| 3. | Notice to the Market dated April 17, 2023 – Conclusion of the sale of the equity interest held in Axxiom |
COMPANHIA ENERGÉTICA DE MINAS GERAIS - CEMIG
PUBLICLY HELD COMPANY
Corporate Taxpayer’s ID (CNPJ): 17.155.730/0001-64
Company Registry (NIRE): 31.300.040.127
NOTICE TO THE MARKET
Conclusion of the sale of the equity interest held in Axxiom Soluções Tecnológicas S.A.
COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG (“Cemig or Company”), a publicly held company with shares traded on the stock exchanges of São Paulo, New York, and Madrid, hereby informs the Brazilian Securities and Exchange Commission (CVM), B3 S.A. – Brasil, Bolsa, Balcão (“B3”), and the market in general, further to the disclosure made through the Notice to the Market dated December 22, 2022, that it concluded, on April 14, 2023, the sale to Light S.A. (“Light”) of all equity interest (49%) it held in the capital stock of Axxiom Soluções Tecnológicas S.A. (“Axxiom”).
The value of the transaction is symbolic, R$1.00 (one real), with the settlement of Axxiom’s assets and liabilities.
The transaction is in line with the Company’s Strategic Planning, which provides for the divestment of assets that do not comply with the electricity activities of Grupo Cemig.
The Company reaffirms its commitment to keeping shareholders, the market in general, and other stakeholders duly and timely informed about the developments of the transaction, according to the applicable regulation, and in compliance with the restrictions outlined in CVM rules and other applicable laws.
Belo Horizonte, April 17, 2023.
Leonardo George de Magalhães
Chief Financial and Investor Relations Officer
| 4. | Material Fact dated April 14, 2023 – Cemig GT executed Stock Purchase Agreements that regulate the sale of all equity interests it held in Retiro Baixo and Baguari |
COMPANHIA ENERGÉTICA DE MINAS GERAIS - CEMIG
PUBLICLY HELD COMPANY
Corporate Taxpayer’s ID (CNPJ): 17.155.730/0001-64
Company Registry (NIRE): 31300040127
CEMIG GERAÇÃO E TRANSMISSÃO S.A.
PUBLICLY HELD COMPANY
Corporate Taxpayer’s ID (CNPJ): 06.981.176/0001-58
Company Registry (NIRE): 31300020550
MATERIAL FACT
COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG (“CEMIG” or “Company”), a publicly held company with shares traded on the stock exchanges of São Paulo, New York, and Madrid, hereby informs, under CVM Resolution 44/2021, of August 23, 2021, the Brazilian Securities and Exchange Commission (CVM), B3 S.A. – Brasil, Bolsa, Balcão (“B3”), and the market in general that its subsidiary CEMIG GERAÇÃO E TRANSMISSÃO S.A. (“CEMIG GT”) executed, on this date, Stock Purchase Agreements that regulate the sale of all equity interests it held in Retiro Baixo Energética S.A. (“Retiro Baixo”) and Baguari Energia S.A. (Baguari Energia”) to FURNAS Centrais Elétricas, as follows:
| (i) | For R$200.4 million, the interest of 49.9% held by CEMIG GT in the total Capital Stock of Retiro Baixo, which operates the Retiro Baixo Hydroelectric Power Plant, located in the State of Minas Gerais, which has an installed capacity of 81.1 MW and 34.8 MW of physical guarantee. |
| (ii) | For R$393.0 million, the indirect interest of 34% held by CEMIG GT in the Baguari Consortium, which operates the Baguari Hydroelectric Power Plant, located in the State of Minas Gerais, which has an installed capacity of 140.0 MW and 81.9 MW of physical guarantee, accounting for 69.38% of Baguari Energia’s total Capital Stock. |
The amounts will be adjusted by 100% of the CDI rate, from the reference date of December 31, 2022, to the actual payment in the closing of transactions.
The shares transfers are subjected to certain conditions precedent that are common for transactions of this nature, among which the authorization by the Brazilian Antitrust Authority (“CADE”) and the Brazilian Electricity Regulatory Agency (“ANEEL”).
These transactions are in line with the Company’s Strategic Planning, which provides for seizing opportunities in divesting minority stakes of Grupo Cemig.
CEMIG and CEMIG GT reaffirm their commitment to keeping shareholders, the market in general, and other stakeholders duly and timely informed about the developments of the transactions, according to the applicable regulation and in compliance with the restrictions set out in CVM rules and other applicable laws.
Belo Horizonte/MG - April 14, 2023.
Leonardo George de Magalhães
Chief Financial and Investor Relations Officer
| 5. | Earnings Release for quarter ended on March 31, 2023 |
CONTENTS
| 2 | |
| 1Q23 CONSOLIDATED RESULTS | 5 |
| Income statement | 6 |
| Results by business segment | 7 |
| CEMIG’s electricity market | 8 |
| Number of clients, and breakdown by segment | 8 |
| PERFORMANCE BY COMPANY | 8 |
| Cemig D | 9 |
| Billed electricity market | 9 |
| Sources and uses of electricity – MWh | 10 |
| Client base | 10 |
| Distribution and consumption, by sector | 10 |
| The annual tariff adjustment | 11 |
| Quality indicators – DEC and FEC | 11 |
| Combating default | 12 |
| Energy losses | 13 |
| Cemig GT / Holding Company | 14 |
| Electricity market | 14 |
| Gasmig | 15 |
| Financial results | 16 |
| Consolidated operational revenue | 16 |
| Operational costs and expenses | 19 |
| CONSOLIDATED EBITDA (IFRS and Adjusted) | 22 |
| Cemig D - EBITDA | 23 |
| Cemig GT – Ebitda | 23 |
| Finance income and expenses | 24 |
| Net profit | 24 |
| Investments | 26 |
| Debt | 27 |
| Covenants – Eurobonds | 28 |
| Cemig’s long-term ratings | 29 |
| ESG – Performance | 30 |
| Share performance | 32 |
| Cemig generation plants | 33 |
| RAP – July 2022–June 2023 cycle | 34 |
| Regulatory transmission revenues – 1Q23 | 34 |
| Complementary information | 35 |
| Cemig D | 35 |
| Cemig GT | 37 |
| Cemig, Consolidated | 38 |
| Disclaimer | 43 |
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 4 |
|
1Q23 CONSOLIDATED RESULTS
Consolidated results – 1Q23
| 1Q23 | 1Q22 | Change, % | |
| Ebitda by company, IFRS | |||
| (R$ million) | |||
| Cemig D (IFRS) | 775,088 | 654,529 | 18.4% |
| Cemig GT (IFRS) | 818,897 | 944,545 | -13.3% |
| Gasmig (IFRS) | 257,995 | 181,910 | 41.8% |
| Consolidated (IFRS) | 2,161,971 | 1,916,813 | 12.8% |
| 1Q23 | 1Q22 | Change, % | |
| Adjusted Ebitda by company | |||
| (R$ million) | |||
| Cemig D | 741,098 | 654,529 | 13.2% |
| Cemig GT | 788,809 | 944,545 | -16.5% |
| Consolidated | 2,072,566 | 1,916,431 | 8.1% |
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 5 |
|
Income statement
| 1Q23 | 1Q22 | Change, % | |
| Profit and loss accounts | |||
| Net Revenues | 8,647 | 7,847 | 10.2% |
| Operating Expenses - consolidated | 6,941 | 6,399 | 8.5% |
| Personnel | 335 | 304 | 10.2% |
| Employees’ and managers’ profit sharing | 38 | 37 | 2.7% |
| Forluz – Post-Retirement Employee Benefits | 103 | 153 | -32.7% |
| Materials | 29 | 20 | 45.0% |
| Outsourced services | 467 | 380 | 22.9% |
| Energy purchased for resale | 3,445 | 3,103 | 11.0% |
| Depreciation and Amortization | 303 | 284 | 6.7% |
| Operating Provisions | 121 | 163 | -25.8% |
| Charges for use of the national grid | 700 | 869 | -19.4% |
| Gas bought for resale | 614 | 564 | 8.9% |
| Construction costs | 703 | 491 | 43.2% |
| Loss due to reduction to recoverable value | 46 | - | - |
| Net gain on disposal of asset held for sale | -30 | - | - |
| Other Expenses | 67 | 31 | 116.1% |
| Equity gain (loss) in subsidiaries | 153 | 184 | -16.8% |
| OPERATIONAL PRE-TAX PROFIT | 1,859 | 1,632 | 13.9% |
| Net Finance Income (Expenses) | -106 | 314 | -133.8% |
| Corporate income tax | -355 | -491 | -27.7% |
| Net profit for the period | 1,398 | 1,455 | -3.9% |
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 6 |
|
Results by business segment
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 7 |
|
CEMIG’s electricity market
Number of clients, and breakdown by segment
In March 2023 the Cemig Group invoiced approximately 9.1 million clients – an addition of approximately 164,000 clients, or a 1.8% increase in its consumer base, in relation to March 2022.
Of this total, 9,072,744 are final consumers (including Cemig’s own consumption), and 572 are other agents in the Brazilian electricity sector.
This chart shows the breakdown of the Cemig Group’s 1Q sales to final consumers:
|
Sales by segment, %
|
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 8 |
|
PERFORMANCE BY COMPANY
Cemig D
Billed electricity market
| 1Q23 | 1Q22 | Change, % | |
|
Captive clients + Distribution for Free Clients (MWh) |
|||
| Residential | 2,984,825 | 2,841,768 | 5.0% |
| Industrial | 5,457,071 | 5,304,265 | 2.9% |
| Captive market | 334,141 | 368,760 | –9.4% |
| Energy transport | 5,122,930 | 4,935,505 | 3.8% |
| Commercial, services and Others | 1,612,350 | 1,581,950 | 1.9% |
| Captive market | 1,113,679 | 1,148,033 | –3.0% |
| Energy transport | 498,671 | 433,917 | 14.9% |
| Rural | 528,060 | 552,822 | –4.5% |
| Captive market | 517,361 | 540,836 | –4.3% |
| Energy transport | 10,699 | 11,986 | –10.7% |
| Public services | 870,898 | 830,032 | 4.9% |
| Captive market | 765,523 | 829,160 | –7.7% |
| Energy transport | 105,375 | 872 | 11,984.3% |
| Concession holders | 64,686 | 63,562 | 1.8% |
| Energy transport | 64,686 | 63,562 | 1.8% |
| Own consumption | 7,545 | 9,854 | –23.4% |
| Total | 11,525,435 | 11,184,253 | 3.1% |
| Total, captive market | 5,723,074 | 5,738,411 | –0.3% |
| Total, energy transported for Free Clients | 5,802,361 | 5,445,842 | 6.5% |
Energy supplied to captive clients plus energy distributed for Free Clients and distributors in 1Q23 totaled 11,520 GWh, or 3.1% more than in 1Q22, mainly on higher consumption by residential consumers (increase of 143.1 GWh or 5.0%), reflecting (i) a 2.8% increase in the number of clients, plus a 2.2% increase in average consumption; with (ii) aggregate consumption by captive and Free industrial clients up 2.9% YoY (152.8 GWh).
The 3.1% growth in total energy distributed comprises: (i) an increase of 6.5% (356.5 GWh) in network service to Free Clients, and (ii) a decrease of 0.6% (15.3 GWh) in consumption by the captive market.
|
Energy distributed, by segment
|
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 9 |
|
Sources and uses of electricity – MWh
| 1Q23 | 1Q22 | Change, % | |
| Metered market – MWh | |||
| Transported for distributors | 64,614 | 65,976 | -2.1% |
| Transported for Free Clients | 5,768,677 | 5,450,841 | 5.8% |
| Own load + Distributed generation (1) | 8,277,750 | 8,027,269 | 3.1% |
| Consumption by captive market | 5,682,138 | 5,820,237 | -2.4% |
| Distributed generation market | 1,020,445 | 668,975 | 52.5% |
| Losses in distribution network | 1,575,168 | 1,538,057 | 2.4% |
| Total volume carried | 14,111,042 | 13,544,086 | 4.2% |
Client base
In March 2023 Cemig billed 9.07 million consumers – 1.8% more than in March 2022.
Of this total, 2,663 were Free Clients using the distribution network of Cemig D.
| 1Q23 | 1Q22 | Change, % | |
| NUMBER OF CAPTIVE CLIENTS | |||
| Residential | 7,543,247 | 7,338,285 | 2.8% |
| Industrial | 28,908 | 29,810 | –3.0% |
| Commercial, services and Others | 946,504 | 944,926 | 0.2% |
| Rural | 458,641 | 502,694 | –8.8% |
| Public authorities | 69,453 | 67,561 | 2.8% |
| Public lighting | 7,249 | 6,879 | 5.4% |
| Public services | 13,605 | 13,543 | 0.5% |
| Own consumption | 764 | 761 | 0.4% |
| 9,068,371 | 8,904,459 | 1.8% | |
| NUMBER OF FREE CLIENTS | |||
| Industrial | 1,097 | 988 | 11.0% |
| Commercial | 1,524 | 1,296 | 17.6% |
| Rural | 14 | 20 | –30.0% |
| Concession holders | 8 | 8 | 0.0% |
| Others | 20 | 7 | 185.7% |
| 2,663 | 2,319 | 14.8% | |
| Total, Captive market + Free Clients | 9,071,034 | 8,906,778 | 1.8% |
Distribution and consumption, by sector
Industrial clients accounted for 47.3% of Cemig D’s total distribution. The greater part was energy transported for industrial Free Clients (44.4%), which was 3.8% higher in volume than in 1Q22. Volume of energy billed to captive clients was 2.9% of the total distributed, and 9.4% less than in 1Q22 – mainly due to migration of clients to the Free Market.
Residential consumption was 25.9% of total energy distributed by Cemig D, and 5.0% higher than in 1Q22. Average monthly consumption per consumer in the quarter was 2.2% higher than in 1Q22, with the number of clients 2.8% higher (an increase of 204,900 clients in 12 months), partly due to migration of 23,200 consumers from the Rural category in compliance with Aneel Resolution 1000/2020.
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 10 |
|
Commercial and services: Volume distributed to these consumers was 14.0% of the total distributed by Cemig D in 1Q23, and by volume 1.9% more than in 1Q22. This increase comprises a reduction of 3.0% in the volume of energy billed to captive clients, and an increase of 14.9% in the volume transported for Free Clients.
The number of Cemig consumers in the Free Market increase by 17.6% YoY – the effect of migration of captive clients. As well as this migration, the migration of consumers to the Micro- and Mini- Distributed Generation market contributed to the reduction of the captive market.
Rural clients consumed 4.6% of the total energy distributed in 1Q23: by volume, 4.5% less than in 1Q22, as a result of the number of consumers in the category being 8.8% lower (reduction of 44,000 clients) - due to reclassification to other categories as required by Aneel Normative Resolutions 901/2020 and 1000/2020.
Public services: The volume distributed to this category was 7.6% of the total energy distributed, with consumption 4.9% higher than in 1Q22, mainly reflecting an increase of 2.6% in the number of consumer units.
The annual tariff adjustment
Cemig D’s tariffs are adjusted in May of each year. Every five years there is the Periodic Tariff Review, also in May. The aim of the Tariff Adjustment is to pass on changes in non-manageable costs in full to the client, and to provide inflation adjustment for the manageable costs that are established in the Tariff Review. Manageable costs are adjusted by the IPCA inflation index, less a deduction factor known as the ‘X Factor’, under a system using a price-cap regulatory model.
On June 22, 2022, after an extension of the previous tariffs by 25 days, Aneel ratified the result of Cemig D’s annual tariff adjustment, in effect until May 27, 2023, in which the average effect perceived by consumers was an increase of 8.80%. For residential consumers served at low voltage, the average increase was 5.22%. The difference in revenues arising from the postponement of the increase will be adjusted by the Selic basic interest rate, and compensated for in the tariff adjustment event of 2023. An amount of R$ 2.81 billion was included in the 2022 tariff adjustment process referring to the reimbursement of PIS, Pasep and Cofins taxes, representing a negative variation in the tariff of 15.20%.
| Average effects of the Tariff Adjustment | |
| High Voltage | 14.31% |
| Low voltage | 6.23% |
| Average effect | 8.80% |
See more details at this link:
https://www2.aneel.gov.br/aplicacoes/tarifa/arquivo/Nota%20t%C3%A9cnica_Cemig_2022.pdf
The result of the Periodic Tariff Review of Cemig D (which takes place every 5 years) will come into effect on May 28, 2023 – this process is currently under assessment by Aneel.
Quality indicators – DEC and FEC
The DEC indicator of average outage time per consumer (Duração Equivalente de Interrupções por Consumidor) was 9.74 hours in the moving window up to March 2023. Despite the more challenging target for the year 2023 (9.58 hours), the Company is working and investing heavily in the distribution business to provide quality service to our customers and meet the regulatory parameter.
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 11 |
|
Combating default
Cemig has maintained its high level of collection actions, achieving greater efficiency in combating default.
A good indication of this is the Billing Collection Index (‘ARFA’) posting 99.75% at the end of 1Q23 – boosted in part by growing migration of receipt of payments to digital media.
In combating default, we highlight the following activities:
| § | New payment channels, and online negotiation, made available in recent quarters, have contributed to increase in the volume of collection via digital channels (PIX instant payments, automatic debits, payments by card and app, etc.) to approximately 59.64% of the total collected – compared to 53.97% in 1Q22. Payments by PIX, for example, were 12.4% of the total collected in 1Q23. This change in the collection mix reduced costs by 10.0% – a saving of R$ 2 million. |
| § | Cemig now accepts payment of overdue electricity bills by credit card – transferring the risk of receipt to the card operator. |
|
Receivables Collection Index (‘ARFA’) – % (Collection / Billing) – 12 month moving average |
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 12 |
|
Energy losses
Energy losses were compliant with the regulatory level in the 12 months, at 11.06% (the regulatory level is 11.22%).
Among actions to combat losses, in 1Q23: (i) We made 119,000 client inspections; (ii) 97,000 obsolete meters were replaced; (iii) 6,000 conventional meters were replaced by smart meters; and (iv) 1,900 clandestine connections were regularized. In another highlight, inspections with positive results were approximately 50% of the total.
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 13 |
|
Cemig GT / Holding Company
Electricity market
The total volume of electricity sold by Cemig GT and by the Cemig holding company (‘Cemig H’), excluding sales on the wholesale power exchange (CCEE) was 7.2% higher than in 1Q22. Cemig GT sold 6,332 GWh (including quota sales) in 1Q23, 15.5% less than in 1Q22. This reduction reflects transfer of sales contracts totaling 2,998 GWh (excluding CCEE transactions) to Cemig H. These especially include contracts for sales to traders, accounting for the reduction of 26.2% in that category.
Cemig Holding posted sales of 2,998 GWh in 1Q23. Migration of contracts from Cemig GT to Cemig Holding began in 3Q21 (in that quarter the only revenue posted was from settlements in the CCEE), and has been growing gradually since then.
| 1Q23 | 1Q22 | Change, % | |
| Cemig GT – MWh | |||
| Free Clients | 3.843.590 | 4.622.307 | -16,8% |
| Industrial | 2.883.714 | 3.561.728 | -19,0% |
| Commercial | 956.466 | 1.055.478 | -9,4% |
| Rural | 3.410 | 5.101 | -33,2% |
| Free Market – Free contracts | 1.205.196 | 1.632.408 | -26,2% |
| Wholesale – Quotas and cooperatives | 684.682 | 590.797 | 15,9% |
| Regulated Market | 565.779 | 613.431 | -7,8% |
| Regulated Market – Cemig D | 32.607 | 31.307 | 4,2% |
| Total, Cemig GT | 6.331.854 | 7.490.250 | -15,5% |
| Cemig H – MWh | |||
| Free Clients | 1.368.672 | 300.840 | 355,0% |
| Industrial | 1.089.819 | 227.931 | 378,1% |
| Commercial | 273.315 | 69.565 | 292,9% |
| Rural | 5.538 | 3.344 | 65,6% |
| Free Market – Free contracts | 1.629.701 | 909.809 | 79,1% |
| Total Cemig H | 2.998.373 | 1.210.649 | 147,7% |
| Cemig GT + H | 9.330.227 | 8.700.899 | 7,2% |
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 14 |
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Gasmig
Gasmig is the exclusive distributor of piped natural gas for the whole of the state of Minas Gerais. It serves industrial, commercial and residential users, and users of compressed natural gas and vehicle natural gas; and supplies gas as fuel for thermoelectric generation plants. Its concession expires in January 2053. Cemig owns 99.57% of Gasmig.
Gasmig’s tariff review process was completed in April 2022. The result of the review was an average reduction of 10.05% in the tariffs. Important aspects include the following:
| § | The WACC used (real, after taxes) was reduced from 10.02% p.a. to 8.71% p.a. |
| § | Regulatory Ebitda for 2022 was approximately R$ 620 million. |
| § | The Net Remuneration Base was increased significantly, to R$ 3.48 billion. |
| § | The regulator recognized the cost of PMSO in full. |
| Market ( ’000 m³/day ) | 2019 | 2020 | 2021 | 2022 | 1Q22 | 1Q23 | 1Q23 vs. 1Q22 |
| Residential | 21.28 | 25.52 | 29.69 | 31.21 | 26.81 | 30.31 | 13.1% |
| Commercial | 47.70 | 49.14 | 56.24 | 63.34 | 57.39 | 53.67 | –6.5% |
| Industrial | 2,085.32 | 2,007.45 | 2,398.47 | 2,422.69 | 2,245.31 | 2,635.22 | 17.4% |
| Other | 148.44 | 116.32 | 129.55 | 149.17 | 155.91 | 114.42 | –26.6% |
| Total excluding thermal generation | 2,302.74 | 2,198.43 | 2,613.95 | 2,666.41 | 2,485.42 | 2,833.62 | 14.0% |
| Thermal generation | 793.94 | 385.52 | 1,177.06 | 104.08 | 422.05 | – | – |
| Total | 3,096.69 | 2,583.95 | 3,791.01 | 2,770.50 | 2,907.47 | 2,833.62 | –2.5% |
In 1Q23 the volume of gas sold by Gasmig was 2.5% lower than in 1Q22 (10.0% lower, including Free Market volume), due to zero dispatching of the thermal generation plants in 1Q23. Meanwhile, year-on-year, consumption by commercial users was down 6.5%, and industrial consumption was up 17.4% (up approximately 5.8%, if Free Market volume is included). Excluding the thermoelectric generation market, total sales volume was 14.0% higher (and approximately 4% higher including the Free Market).
The number of Gasmig’s clients increased by 14.6% from 1Q22, to a total of 84,720 in 1Q23. This growth reflects expansion of the residential client base (addition of 10,700 clients).
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 15 |
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Financial results
Consolidated operational revenue
| 1Q23 | 1Q22 | Change, % | |
| R$ ’000 | |||
| Revenue from supply of electricity | 7,095,344 | 8,304,056 | –14.6% |
| Revenue from use of distribution systems (TUSD charge) | 980,398 | 859,444 | 14.1% |
| CVA and Other financial components in tariff adjustments | 20,840 | –700,107 | –103.0% |
| Reimbursement, to consumers, of PIS, Pasep and Cofins tax credits – Realized | 695,989 | 436,718 | 59.4% |
| Transmission Operation and Maintenance Revenue | 87,740 | 83,787 | 4.7% |
| Transmission Construction Revenue | 39,403 | 68,395 | –42.4% |
| Financial remuneration of transmission contractual assets | 177,254 | 191,945 | –7.7% |
| Generation Indemnity Revenue | 22,476 | – | – |
| Distribution Construction Revenue | 676,448 | 440,565 | 53.5% |
| Adjustment to expected cash flow from indemnifiable financial assets of the distribution concession | 30,844 | 19,732 | 56.3% |
| Gain on financial updating of Concession Grant Fee | 134,766 | 131,595 | 2.4% |
| Settlement on CCEE | 29,363 | –18,670 | –257.3% |
| Transactions in the Surpluses Sales Mechanism (MVE) | –3,766 | 138,994 | –102.7% |
| Revenue from sales of gas | 1,123,570 | 956,008 | 17.5% |
| Fine for continuity indicator shortfall | –38,469 | –31,894 | 20.6% |
| Other operational revenues | 492,015 | 501,358 | –2.2% |
| Taxes and charges reported as deductions from revenue | –2,917,278 | –3,534,478 | –17.5% |
| Net operational revenue | 8,646,937 | 7,847,448 | 10.2% |
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 16 |
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Revenue from supply of electricity
| 1Q23 | 1Q22 | Change, % | |||||||
| MWh (2) | R$ ’000 | Average price billed – R$/MWh (1) | MWh (2) | R$ ’000 | Average price billed – R$/MWh | MWh | R$ ’000 | ||
| Residential | 2,984,825 | 2,394,792 | 802.32 | 2,841,768 | 3,115,806 | 1,096.43 | 5.0% | –23.1% | |
| Industrial | 4,307,674 | 1,439,741 | 334.23 | 4,158,420 | 1,393,200 | 335.03 | 3.6% | 3.3% | |
| Commercial, services and others | 2,343,460 | 1,503,080 | 641.39 | 2,276,420 | 1,743,177 | 765.75 | 2.9% | –13.8% | |
| Rural | 526,308 | 392,758 | 746.25 | 545,936 | 489,779 | 897.14 | –3.6% | –19.8% | |
| Public authorities | 223,654 | 164,544 | 735.71 | 204,191 | 179,314 | 878.17 | 9.5% | –8.2% | |
| Public lighting | 269,516 | 116,991 | 434.08 | 285,011 | 167,372 | 587.25 | –5.4% | –30.1% | |
| Public services | 272,353 | 164,251 | 603.08 | 339,958 | 246,977 | 726.49 | –19.9% | –33.5% | |
| Subtotal | 10,927,790 | 6,176,157 | 565.18 | 10,651,704 | 7,335,625 | 688.68 | 2.6% | –15.8% | |
| Own consumption | 7,545 | – | – | 9,854 | – | – | –23.4% | – | |
| Retail supply not yet invoiced, net | – | 13,439 | – | – | 77,884 | – | – | –82.7% | |
| 10,935,335 | 6,189,596 | – | 10,661,558 | 7,413,509 | – | 2.6% | –16.5% | ||
|
Wholesale supply to other concession holders (3) |
4,038,776 | 964,188 | 238.73 | 3,700,905 | 866,323 | 234.08 | 9.1% | 11.3% | |
|
Wholesale supply not yet invoiced, net |
– | –58,440 | – | – | 24,224 | – | – | –341.2% | |
| Total | 14,974,111 | 7,095,344 | 477.09 | 14,362,463 | 8,304,056 | 571.46 | 4.3% | –14.6% | |
| (1) | The calculation of average price does not include revenue from supply not yet billed. |
| (2) | Information in MWh has not been reviewed by external auditors. |
| (3) | Includes Regulated Market Electricity Sale Contracts (CCEARs) and ‘bilateral contracts’ with other agents. |
|
Consolidated volume of energy sold: up 4.3% YoY
GWh |
Energy sold to final consumers
Gross revenue from sales to final consumers in 1Q23 was R$ 6,189.6 million, compared to R$ 7,413.5 million in 1Q22, a reduction of 16.5% YoY, in spite of volume being 2.6% higher. The lower figure is mainly explained by the lower rate of ICMS tax, which was limited to 18% as from the second half of 2022, by Law 194 of 2022.
Wholesale
Revenue from wholesale supply in 1Q23 was R$ 905.7 million, compared to R$ 890.5 million In 1Q22 – and increase in volume of 9.1 – due to higher spot sales to traders in 1Q23, and new sales contracts with supply start dates as from January 2023.
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 17 |
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Transmission
| 1Q23 | 1Q22 | Change, % | |
| TRANSMISSION REVENUE (R$ ’000) | |||
| Operation and maintenance | 87,740 | 83,787 | 4.7% |
| Construction, upgrades and improvement of infrastructure | 39,403 | 68,395 | –42.4% |
| Financial remuneration of transmission contractual assets | 177,254 | 191,945 | –7.7% |
| Total | 304,397 | 344,127 | –11.5% |
Transmission revenue was 11.5% lower, due to the financial remuneration of the transmission contractual assets being 7.7% lower, due to the different IPCA inflation rate – the basis for the remuneration of the contract – which was 2.09% in 1Q23, compared to 3.20% in 1Q23 and lower construction revenue due to lower investments in reinforcements and improvements in the period
Gas
| 1Q23 | 1Q22 | Change, % | |
| REVENUE FROM SUPPLY OF GAS (R$ ’000) | |||
| Industrial* | 993,687 | 813,489 | 22.2% |
| Automotive | 29,369 | 44,458 | –33.9% |
| Commercial | 25,716 | 22,309 | 15.3% |
| Residential | 20,180 | 17,485 | 15.4% |
| Thermal generation* | 19,908 | 42,435 | –53.1% |
| Other | 34,710 | 15,832 | 119.2% |
| Total | 1,123,570 | 956,008 | 17.5% |
* Includes revenue from the Free Market.
Gross revenue from supply of gas in 1Q23 totaled R$ 1,123 million in 1Q23, versus R$ 956 million in 1Q22. The increase results from passthroughs of the adjustments made in the last 12 months to the cost of gas acquired, and to the adjustment of the margin by the IGPM inflation index in 2022, while the total volume of gas sold was 10.0% lower, as a result of the near-zero dispatching of the thermal electricity generation plants in the quarter.
Revenue from Use of Distribution Systems – The TUSD charge
| 1Q23 | 1Q22 | Change, % | |
| TUSD (R$ ’000) | |||
| Use of the Electricity Distribution Systems | 980,398 | 859,444 | 14.1% |
Revenue from the TUSD in 1Q23 – charged to Free Consumers on their distribution of energy – was 14.1% higher year-on-year. This reflects volume of energy transported for Free Clients 6.5% higher, and an increase of 22.8% in the average tariff for Free Clients – partially offset by the lower ICMS tax rate.
| 1Q23 | 1Q22 | Change, % | |
| POWER TRANSPORTED – MWh | |||
| Industrial | 5,122,930 | 4,935,505 | 3.8% |
| Commercial | 498,671 | 433,917 | 14.9% |
| Rural | 10,699 | 11,986 | –10.7% |
| Public services | 105,375 | 872 | 11,984.3% |
| Concession holders | 64,686 | 63,562 | 1.8% |
| Total energy transported | 5,802,361 | 5,445,842 | 6.5% |
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 18 |
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Operational costs and expenses
Operational costs and expenses were R$ 6.94 billion in 1Q23, compared to R$ 6.40 billion in 1Q22, mainly due to: (i) the cost of energy purchased being R$ 341 million higher YoY; (ii) the expense on gas purchased for resale being 9.0% (R$ 51 million) higher; (iii) construction cost being R$ 212 million higher; and (iv) an impairment of R$ 46.1 million on valuation of the small generation plants that have been separated for sale. See more details on costs and expenses in the pages below.
| 1Q23 | 1Q22 | Change, % | |
|
Operational costs and expenses R$ ’000 |
|||
| Electricity bought for resale | 3,444,067 | 3,103,382 | 11.0% |
| Charges for use of national grid | 700,181 | 868,532 | –19.4% |
| Gas purchased for resale | 614,803 | 563,781 | 9.0% |
| Construction cost | 703,281 | 491,262 | 43.2% |
| People | 335,197 | 303,567 | 10.4% |
| Employees’ and managers’ profit shares | 38,127 | 37,150 | 2.6% |
| Post-retirement obligations | 103,038 | 153,480 | –32.9% |
| Materials | 29,233 | 20,252 | 44.3% |
| Outsourced services | 467,446 | 379,749 | 23.1% |
| Depreciation and amortization | 302,666 | 283,909 | 6.6% |
| Provisions / adjustments for operational losses | 113,536 | 120,265 | –5.6% |
| Impairment | 46,126 | – | – |
| Estimated loss on client default | 7,926 | 43,092 | –81.6% |
| Net gain on disposal of asset held for sale | -30,487 | - | - |
| Other operational costs and expenses | 65.533 | 30,551 | 114.5% |
| Total | 6,940,673 | 6,398,972 | 8.5% |
Electricity bought for resale
| 1Q23 | 1Q22 | Change, % | |
|
Electricity bought for resale – Consolidated R$ ’000 | |||
| Acquired in Free Market | 1,225,659 | 1,230,940 | –0.4% |
| Electricity acquired in Regulated Market auctions | 937,269 | 625,633 | 49.8% |
| Distributed generation | 618,732 | 453,589 | 36.4% |
| Supply from Itaipu | 262,175 | 394,055 | –33.5% |
| Physical guarantee quota contracts | 226,248 | 214,718 | 5.4% |
| Proinfa | 127,894 | 151,414 | –15.5% |
| Individual (‘bilateral’) contracts | 125,429 | 110,083 | 13.9% |
| Spot market | 110,319 | 93,764 | 17.7% |
| Quotas for Angra I and II nuclear plants | 89,917 | 89,298 | 0.7% |
| Credits of PIS, Pasep and Cofins taxes | –279,575 | –260,112 | 7.5% |
| 3,444,067 | 3,103,382 | 11.0% | |
The expense on electricity bought for resale in 1Q23 was R$ 3.44 billion, which was R$ 340.7 million, or 11.0%, higher than in 1Q22. This arises mainly from the following items:
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 19 |
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| § | Expenses on energy acquired in the Regulated Market were 49.8% higher than in 1Q23. This increase is due to lower energy costs in 2022. |
| § | Expenses on supply from Distributed Generation were 36.4% higher than in 1Q22, arising from the increase in the number of distributed generation plants installed, and the higher quantity of energy injected into the grid (1,020 GWh in 1Q23, vs. 669 GWh in 1Q22). |
| § | The expense on energy bought from Itaipu was 33.5% lower, due to reduction of its price from U$24.73/kW to U$16.19/kW; |
| § | The costs of energy acquired in the Free Market, which are the Company’s highest costs of purchase of energy, were R$ 1.22 billion, practically stable (down 0.4%) YoY, in spite of the higher volume of energy purchased for resale. |
| § | The cost of physical guarantee quota contracts was 5.4% higher, due to the annual increase in the Annual Generation Revenues (RAG – Receita Anual de Geração) of the plants operating under the quota regime, which is set by a Resolution, always in July. |
Note that for Cemig D, purchased energy is a non-manageable cost: the difference between the amounts used as a reference for calculation of tariffs and the costs actually incurred is compensated for in the subsequent tariff adjustment.
| 1Q23 | 1Q22 | Change, % | |
| Cemig D (R$ ’000) | |||
| Supply acquired in auctions on the Regulated Market | 951,606 | 634,296 | 50.0% |
| Distributed generation | 618,732 | 453,589 | 36.4% |
| Supply from Itaipu Binacional | 262,175 | 394,055 | –33.5% |
| Physical guarantee quota contracts | 239,079 | 226,116 | 5.7% |
| Proinfa | 127,894 | 151,414 | –15.5% |
| Individual (‘bilateral’) contracts | 125,429 | 110,083 | 13.9% |
| Quotas for Angra I and II nuclear plants | 89,917 | 89,298 | 0.7% |
| Spot market – CCEE | 72,151 | 63,807 | 13.1% |
| Credits of PIS, Pasep and Cofins taxes | –163,169 | –144,173 | 13.2% |
| 2,323,814 | 1,978,485 | 17.5% |
Charges for use of the transmission network and other system charges
Charges for use of the transmission network in 1Q23 totaled R$ 700.2 million, 19.4% less than in 1Q22. The lower figure is mainly due to the almost complete elimination of costs on the System Services Charge, due to the lower level of dispatching of plants outside the merit order. This is a non-manageable cost in the distribution business: the difference between the amounts used as a reference for calculation of tariffs and the costs actually incurred is compensated for in the subsequent tariff adjustment.
Gas purchased for resale
The expense on acquisition of gas in 1Q23 was R$ 614.8 million, or 9.0% higher than in 1Q22. This reflects the increases in the price of gas over the 12-month period.
Outsourced services
Total expenses on outsourced services were 23.1% higher than in 1Q22, the main factors being: (i) expenses on maintenance and conservation of facilities and equipment R$ 33.0 million (23.1%) higher; and (ii) expenses on IT R$ 7.5 million (16.9%)higher; and (iii) R$7.2 million higher in consumer unit inspection.
Provisions for client default
The provision for expected losses in 1Q23 was R$ 7.9 million, compared to R$ 43.1 million in 1Q22, mainly due to (a) a change in the measurement of these potential losses, put in place in the second half of 2022 (but still with impact in 1Q23), so as to be more compatible with the actual performance of default by the Company’s clients in practice; and (ii) an increase in settlement of regular debts by clients.
Impairment
An impairment of R$ 46.1 million was posted in 1Q23, recognizing a reduction in the recoverable value of the plants of Cemig GT that are in the process of sale. These plants – 15 Small Hydro Plants (PCHs) and Hydroelectric Generating Units (CGHs) – will be offered as a single unit in an auction scheduled to be held on August 10, 2023.
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 20 |
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Post-retirement obligations
The impact of the Company’s post-retirement obligations on operational profit in 1Q23 was an expense of R$ 103.0 million, compared to an expense of R$ 153.5 million in 2022. The lower figure is due to remeasurement of the post-employment liability, in 1Q23, providing an accounting gain of R$ 56.9 million, reflecting the new health plan being accepted by part of the active employees.
People
The expense on personnel in 1Q23 was R$ 335.2 million, 10.4% higher than in1Q22, mainly reflecting the 6.46% increase in salaries under the Collective Work Agreement as from November 2022.
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Cost of personnel R$ million, excluding voluntary severance agreements |
|
Number of employees – by company |
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 21 |
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CONSOLIDATED EBITDA (IFRS and Adjusted)
(1) Ebitda is a non-accounting measure prepared by the Company, reconciled with its consolidated financial statements in accordance with the specifications in CVM Circular SNC/SEP 01/2007 and CVM Resolution 156 of June 23, 2022. It comprises: Net profit adjusted for the effects of: (i) Net finance income (expenses), (ii) Depreciation and amortization, and (iii) Income tax and the Social Contribution tax. Ebitda is not a measure recognized by Brazilian GAAP nor by IFRS; it does not have a standard meaning; and it may be non-comparable with measures with similar titles provided by other companies. Cemig publishes Ebitda because it uses it to measure its own performance. Ebitda should not be considered in isolation or as a substitute for net profit or operational profit, nor as an indicator of operational performance or cash flow, nor to measure liquidity nor the capacity for payment of debt. (2) The Company adjusts the Ebitda calculated in accordance with CVM Instruction 156/2022, to exclude items which, by their nature, do not contribute to information on the potential for gross cash flow generation since they are extraordinary items.
| Consolidated EBITDA – 1Q23 | ||||||
| 1Q23 EBITDA – R$ ’000 | Generation | Transmission | Trading | Distribution | Holding co. and equity interests | Total |
| Profit (loss) for the period | 348,395 | 154,910 | 232,593 | 369,533 | 292,775 | 1,398,206 |
| Income tax and the Social Contribution tax | 100,990 | 35,885 | 108,152 | 118,970 | -8,812 | 355,185 |
| Finance income (expenses) | -12,517 | 649 | -15,528 | 92,347 | 40,963 | 105,914 |
| Depreciation and amortization | 81,140 | 1 | 4 | 194,240 | 27,281 | 302,666 |
| Ebitda as per CVM Resolution 156 | 518,008 | 191,445 | 325,221 | 775,090 | 352,207 | 2,161,971 |
| Net profit attributed to non-controlling stockholders | - | - | - | - | -668 | -668 |
| Gain on disposal (Santo Antônio plant) | - | - | - | - | -55,391 | -55,391 |
| Remeasurement of post-retirement liability - Healh Plan | -10,679 | -6,599 | -1,512 | -33,990 | -4,181 | -56,961 |
| Impairment of PCHs held for sale | 46,126 | - | - | - | - | 46,126 |
| Other | - | - | -22,511 | - | - | -22,511 |
| Adjusted Ebitda | 553,455 | 184,846 | 301,198 | 741,100 | 291,967 | 2,072,566 |
| Consolidated EBITDA – 1Q22 | ||||||
| 1Q22 EBITDA – R$ ’000 | Generation | Transmission | Trading | Distribution | Holding co. and equity interests | Total |
| Profit (loss) for the period | 467,733 | 176,404 | 176,374 | 375,926 | 259,134 | 1,455,571 |
| Income tax and the Social Contribution tax | 167,973 | 83,333 | 95,335 | 128,030 | 16,825 | 491,496 |
| Finance income (expenses) | -121,741 | -71,502 | -10,344 | -24,803 | -85,773 | -314,163 |
| Depreciation and amortization | 81,875 | 1 | 3 | 175,375 | 26,655 | 283,909 |
| Ebitda as per CVM Resolution 156 | 595,840 | 188,236 | 261,368 | 654,528 | 216,841 | 1,916,813 |
| Net profit attributed to non-controlling stockholders | - | - | - | - | -382 | -382 |
| Adjusted Ebitda | 595,840 | 188,236 | 261,368 | 654,528 | 216,459 | 1,916,431 |
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 22 |
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Cemig D - EBITDA
| 1Q23 | 1Q22 | Change, % | |
| Cemig D Ebitda – R$ ’000 | |||
| Net profit for the period | 369,530 | 375,927 | –1.7% |
| Income tax and Social Contribution tax | 118,970 | 128,030 | –7.1% |
| Net financial revenue (expenses) | 92,348 | –24,803 | –472.3% |
| Amortization | 194,240 | 175,375 | 10.8% |
| = EBITDA (1) | 775,088 | 654,529 | 18.4% |
| Remeasurement of post-retirement liability – Health Plan | –33,990 | – | – |
| = Adjusted Ebitda (2) | 741,098 | 654,529 | 13.2% |
For Cemig D in 1Q23, Ebitda was R$ 775 million, and adjusted Ebitda was R$ 654 million, 13.2% higher than in 1Q23. The main effects on Ebitda in the quarter were:
| § | Total volume of energy distributed 3.1% higher year-on-year (distribution to the captive market 0.3% lower, and distribution to the Free Market 6.5% higher). |
| § | Positive effect of R$ 33.9 million in 1Q23, resulting from remeasurement of post-obligation liabilities, as a result of the plan being accepted by part of the employees. |
| § | Energy losses, at 11.06%, were below the regulatory limit (11.22%). |
| § | Operational efficiency: regulatory Opex coverage represented 112% of the realized |
| § | Lower provision for default on customer receivables: R$ 10.8 million in 1Q23, compared to R$ 46.0 million in 1Q22, due to (i) a lower level of default, and (2) the change in the method of measurement, put in place in 2H22, but with impact in 1Q23. |
Cemig GT – Ebitda
| Cemig GT: 1Q23 Ebitda | |||||
| Ebitda (R$ ’000) | Generation | Transmission | Trading | Equity interests | Total |
| Profit (loss) for the period | 348,917 | 153,445 | 55,592 | 51,549 | 609,503 |
| Income tax and the Social Contribution tax | 100,990 | 35,140 | 16,970 | –19,039 | 134,061 |
| Finance income (expenses) | –12,517 | 877 | –15,528 | 21,356 | –5,812 |
| Depreciation and amortization | 81,140 | 1 | 4 | – | 81,145 |
| Ebitda as per CVM Resolution 156 | 189,463 | 57,038 | 53,866 | 818,897 | |
| Gain on disposal (Santo Antônio plant) | – | – | –55,391 | –55,391 | |
| Remeasurement of post-retirement liability – Health Plan | –6,600 | –1,512 | –2,032 | –20,823 | |
| Impairment – PCHs held for sale | – | – | – | 46,126 | |
| Adjusted Ebitda | 553,977 | 182,863 | 55,526 | –3,557 | 788,809 |
| Cemig GT:1Q22 Ebitda | |||||
| Ebitda (R$ ’000) | Generation | Transmission | Trading | Equity interests | Total |
| Profit (loss) for the period | 467,566 | 173,913 | 144,434 | 27,601 | 813,514 |
| Income tax and the Social Contribution tax | 167,972 | 82,058 | 78,882 | 17,123 | 346,035 |
| Finance income (expenses) | –121,740 | –71,491 | –10,344 | –93,306 | –296,881 |
| Depreciation and amortization | 81,873 | 1 | 3 | – | 81,877 |
| Ebitda as per CVM Resolution 156 | 595,671 | 184,481 | 212,975 | –48,582 | 944,545 |
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 23 |
|
The Ebitda of Cemig GT in 1Q23 was R$ 818.9 million, 13.3% lower than in 1Q22. Adjusted Ebitda was R$ 788.8 million, 16.5% lower than in 1Q22. Factors in the lower Ebitda include:
| § | Transfer of energy contracts to Cemig Holding, representing a total Ebitda of R$ 243 million. |
| § | Impairment of R$ 46.1 million for the small generation plants that are in the process of disposal. |
| § | Gain, of R$ 55.3 million, on disposal of the equity interest in Mesa – interests in the Santo Antônio plant (R$ 30.5 for the directly held interest, plus R$ 24.9 million via equity income). |
| § | Positive effect of R$ 20.8 million in 1Q23, resulting from remeasurement of post-obligation liabilities, as a result of the health plan being accepted by part of the employees. |
Finance income and expenses
| (R$ ’000) | 1Q23 | 1Q22 | Change, % |
| Finance income | 329,784 | 1,109,025 | –70.3% |
| Finance expenses | –435,698 | –794,862 | –45.2% |
| Finance income (expenses) | –105,914 | 314,163 | –133.7% |
For 1Q23 Cemig reports Net finance expenses of R$ 105.9 million, which compares to Net finance income of R$ 314.2 million in 1Q22. This reflects the following main factors:
| § | The exchange rate of the US dollar against the Real declined by 2.63% (R$ 0.137) in 1Q23, compared with a decline of 15.1% (R$ 0.843) in 1Q22, generating a gain of R$ 103.8 million in 1Q23, compared to a gain of R$ 842.7 million in 1Q22. |
| § | The fair value of the hedge instrument that protects the Eurobond issue declined by R$ 12.7 million in 1Q23, compared to a decline of R$ 456.6 million in 1Q22. The negative variation in 1Q23 is basically the result of the yield curve moving higher, and of the Real appreciating against the dollar. |
| § | Revenue from late payments on electricity bills were R$ 26.8 million lower in 1Q23, reflecting the lower level of default by clients this year, in turn due to increasingly intense use of collection tools, and also to bills being lower due to the reduction of the ICMS tax rate. |
Eurobonds – Effects in 1Q23 and 1Q22 (R$ ’000)
| 1Q23 | 1Q22 | |
| Effect of FX variation on the debt | 103,814 | 842,700 |
| Effect on the hedge | –12,725 | –456,647 |
| Net effect in Finance revenue (expenses) | 91,089 | 386,053 |
Net profit
Cemig reports net profit of R$ 1.398 billion in 1Q23, compared to net profit of R$ 1.456 million in 1Q22.
Adjusted net profit in 1Q23 was R$ 1.27 billion, compared to R$ 1.20 billion in 1Q22.
Factors in this result principally include:
| § | Growth in the trading result: Cemig’s differentiated trading strategy, higher margin and higher volume (+7% approximately) of energy sold by Cemig GT/Holding |
| § | The profit of Gasmig was 75% higher than in 1Q22. |
| § | Cemig D distributed 3.1% more energy in 1Q23 than in 1Q22. |
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 24 |
|
| § | Remeasurement of post-obligation liabilities, as a result of the plan being accepted by part of the employees, resulted in a non-cash gain of R$ 38 million in 1Q23. |
| § | Impairment on the smaller generation plants during the process of sale had an effect of R$ 30 million on profit. |
| § | Gain of R$ 45 million on disposal of the interest in Mesa (Santo Antônio plant). |
| § | Weaker net finance income/expenses: In 1Q23 Cemig reported Net financial expenses of R$ 106 million, compared to net financial income of R$ 394 million in 1Q22. The main component of this difference is the combined effect of the Eurobond debt and its hedge instrument – which posted a gain of R$ 91 million in 1Q23, but a gain of R$ 386 million in finance income in the same period of the previous year. |
| 1Q23 | 1Q22 | Change, | |
| R$ ’000 | |||
| EQUITY INCOME (Gain/loss on equity in non-consolidated investees) – R$ ’000 | |||
| Taesa | 80,785 | 119,667 | -38,882 |
| Aliança Geração | 35,165 | 24,252 | 10,913 |
| FIP Melbourne - indirect stake in MESA (Santo Antonio Plant) | 22,326 | 0 | 22,326 |
| MESA (Santo Antônio Plant) | -9,500 | -9,037 | -463 |
| Guanhães Energia | 16,695 | 36,997 | -20,302 |
| Baguari Energia | 9,426 | 6,534 | 2,892 |
| Hidrelétrica Pipoca | 7,488 | 4,459 | 3,029 |
| Retiro Baixo | 4,103 | 3,565 | 538 |
| Cemig Sim | 3,377 | 9,904 | -6,527 |
| Hidrelétrica Cachoeirão | 3,304 | 3,723 | -419 |
| Paracambi (formerly LightGer) | -345 | 4,511 | -4,856 |
| Belo Monte (Aliança Norte and Amazônia Energia) | -19,783 | -19,477 | -306 |
| Others | 0 | -670 | 670 |
| Total | 153,041 | 184,428 | -31,387 |
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 25 |
|
Investments
Total investments realized in 1Q23 was R$ 749 million. an increase of 50% compared to 1Q22.
Cemig is currently engaged in the largest investment program in its history – which will provide updating and improved reliability of its electricity system – in line with its strategic planning of focusing on the state of Minas Gerais and the Company’s strategic businesses, and providing ever-improving service to the client.
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 26 |
|
Debt
| CONSOLIDATED – R$ ’000 | Mar. 31, 2023 | Dec. 31, 2022 | Change, % |
| Gross debt | 10,279,317 | 10,579,498 | –2.8% |
| Cash and equivalents + Securities | 3,094,184 | 3,318,838 | –6.8% |
| Net debt | 7,185,133 | 7,260,660 | –1.0% |
| Debt in foreign currency | 3,964,520 | 3,959,805 | 0.1% |
| CEMIG GT – R$ ’000 | Mar. 31, 2023 | Dec. 31, 2022 | Change, % |
| Gross debt | 5,001,500 | 4,959,066 | 0.9% |
| Cash and equivalents + Securities | 1,622,529 | 1,650,444 | –1.7% |
| Net debt | 3,378,971 | 3,308,622 | 2.1% |
| Debt in foreign currency | 3,964,520 | 3,959,805 | 0.1% |
| CEMIG D – R$ ’000 | Mar. 31, 2023 | Dec. 31, 2022 | Change, % |
| Gross debt | 4,224,247 | 4,575,998 | –7.7% |
| Cash and equivalents + Securities | 441,107 | 721,469 | –38.9% |
| Net debt | 3,783,140 | 3,854,529 | –1.9% |
| Debt in foreign currency | 0 | 0 | – |
|
Debt amortization timetable R$ mn |
| 1Q23 | |
| DEBT AMORTIZED IN 1Q23 – R$ ’000 | |
| D | –428,531 |
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 27 |
|
* Debt in USD protected by hedge instrument, within an FX variation band – with payment of interest converted to % of Brazilian CDI rate.
Covenants – Eurobonds
| Last 12 months | Mar 23 | 2022 | |||
| R$ mn | GT | H | GT | H | |
| net income (loss) | 1.881 | 4.037 | 2.085 | 4.094 | |
| financial results net | 768 | 1.987 | 477 | 1.567 | |
| income tax and social contribution | -94 | -110 | 118 | 26 | |
| depreciation and amortization | 328 | 1.201 | 328 | 1.182 | |
| minority interest result | -533 | -862 | -519 | -843 | |
| provisions for the variation in value of put option obligations | 42 | 42 | 36 | 36 | |
| non-operating result (which includes any gains on asset sales and any asset write-off or impairments) | 135 | 97 | 119 | 83 | |
| any non-cash expenses and non-cash charges, to the extent that they are nonrecurring | -56 | 773 | -35 | 830 | |
| any non-cash credits and gains increasing net income, to the extent that they are non-recurring | 0 | -187 | 0 | -209 | |
| non-cash revenues related to transmission and generation indemnification | -547 | -561 | -561 | -575 | |
| cash dividends received from minority investments (as measured in the statement of cash flows) | 258 | 807 | 258 | 708 | |
| monetary updating of concession grant fees | -470 | -470 | -467 | -467 | |
| cash inflows related to concession grant fees | 317 | 317 | 309 | 309 | |
| cash inflows related to transmission revenue for cost of capital coverage | 636 | 643 | 601 | 607 | |
| Covenant EBITDA | 2.665 | 7.714 | 2.749 | 7.348 | |
| Mar 23 | 2022 | ||||
| Last 12 months - R$ mn | GT | H | GT | H | |
| consolidated Indebtedness | 5.001 | 10.279 | 4.959 | 10.579 | |
| Derivative financial instruments | -599 | -599 | -612 | -612 | |
| Debt contracts with Forluz | 172 | 758 | 181 | 799 | |
| The carrying liability of any put option obligation | 755 | 755 | 720 | 720 | |
| Consolidated cash and cash equivalents and consolidated marketable securities recorded as current assets. | -1.623 | -3.094 | -1.650 | -3.319 | |
| Covenant Net Debt | 3.706 | 8.099 | 3.598 | 8.167 | |
| Covenant Net Debt to Covenant EBITDA Ratio | 1,39 | 1,05 | 1,31 | 1,11 | |
| Limit Covenant Net Debt to Covenant EBITDA Ratio | 2,50 | 3,00 | 2,50 | 3,00 | |
| Total Secured Debt | - | 2,0 | - | 2,0 | |
| Total Secured Debt to Covenant EBITDA Ratio | - | 0,00 | - | 0,00 | |
| Limit Covenant Net Debt to Covenant EBITDA Ratio | - | 1,75 | - | 0,00 | |
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 28 |
|
Cemig’s long-term ratings
Cemig’s ratings have improved greatly in recent years and is currently at an all-time high. In 2021 the three principal rating agencies upgraded their ratings for Cemig. In April 2022, Moody’s again upgraded its rating for Cemig, this time by one notch.
More details in this table:
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 29 |
|
ESG – Performance
Highlights
| § | As part of its new investment plan, Cemig has announced the largest expansion of investments in its history: The Company plans to invest R$ 13.4 billion in solar and wind generation plants over the period from 2023 through 2027, and an aggregate total investment of R$ 42.1 billion in all the segments of its business. |
| § | The Veredas SoleLares floating solar generating plant is being completed, with generation capacity of 1.2MWp. It occupies an area of 11,000 m² on the lake of the Santa Marta Small Hydro Plant (PCH), in Grão Mogol, Minas Gerais. This project has been important for acquiring experience with hybrid generation technology. |
| § | The Cemig Sim REC is a certificate that ratifies the commitment to reduction of environmental impact, through use of 100% clean, renewable energy, including traceability of its origin. At the 13th annual Hugo Werneck Environmental and Sustainability Awards, this project was recognized in the Best example in solar energy category. |
Environmental
| § | Cemig has filed a request for environmental licensing with the environmental authority Ibama for an ocean offshore wind energy generation project with planned capacity for 1.5 GW. |
| § | As part of the Aneel Energy Efficiency Program, Cemig will invest R$ 67 million in modernization of hospitals and philanthropic entities by the end of 2024. This project has been in its second phase since July 2022, replacing electrical installations with more economic, efficient and up-to-date equipment. |
Social
| § | The Cemig in Schools (Cemig nas Escolas) Program has modernized the lighting of approximately 300 state schools in 443 towns and cities of Minas Gerais, by substituting older lamps with LED lamps. Its purpose is to make the school community aware of efficient use of electricity, and contribute to improvement in learning quality. It is estimated that all the 3,300 state schools of Minas Gerais will have been served by the second half of this year. |
| § | Cemig has expanded the number of families benefited by the Social Electricity Tariff (TSEE) to 1.3 million families. |
Governance
| § | Cemig has signed a partnership with the HubVerde (GreenHub) platform, coordinated by IEBT Innovation, to foster technological development, and evolve in terms of strategic planning. The aim is to identify market solutions linked to the Company’s needs. |
| § | Cemig has published a tender for a public auction to sell 15 generation assets. This disposal aims to comply with the directives of the Company’s strategic planning, one component of which is optimization of its portfolio of assets, seeking to improve operational efficiency and optimize allocation of capital. |
Cemig present in the leading sustainability indices
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 30 |
|
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 31 |
|
Share performance
| mar/23 | 2022 | Change, % | |
| Share prices (2) | |||
| CMIG4 (PN) at the close (R$/share) | 11.34 | 10.84 | 4.54% |
| CMIG3 (ON) at the close (R$/share) | 17.02 | 15.87 | 7.29% |
| CIG (ADR for PN shares), at close (US$/share) | 2.22 | 1.98 | 11.91% |
| CIG.C (ADR for ON shares) at close (US$/share) | 3.43 | 3.12 | 9.94% |
| XCMIG (Cemig PN shares on Latibex), close (€/share) | 2.00 | 1.88 | 6.38% |
| Trading volume (ADTV) | |||
| CMIG4 (PN) (R$ mn) | 119.07 | 120.66 | -1.32% |
| CMIG3 (ON) (R$ mn) | 4.75 | 9.36 | -49.25% |
| CIG (ADR for PN shares) (US$ mn) | 9.48 | 14.99 | -36.76% |
| CIG.C (ADR for ON shares) (US$ mn) | 0.13 | 0.25 | -49.60% |
| Indices | |||
| IEE | 74,827 | 78,679 | -4.90% |
| IBOV | 101,882 | 109,735 | -7.16% |
| DJIA | 33,274 | 33,147 | 0.38% |
| Market valuation at end of period, R$ mn | 29,354 | 28,200 | 4.09% |
| Enterprise value (EV – R$ mn) (1) | 36,754 | 34,805 | 5.60% |
| Dividend yield of CMIG4 (PN) (%) (3) | 12.61 | 12.22 | 0,39 p.p |
| Dividend yield of CMIG3 (ON) (%) (3) | 8.43 | 8.43 | 0,00 p.p |
| (1) | EV = Market valuation ( R$/share x number of shares ) plus consolidated Net debt. |
| (2) | Share prices adjusted for corporate action payments, including dividends. |
| (3) | (Dividends distributed in last four quarters) / (Share price at end of the period). |
Cemig’s shares, by volume (aggregate of common (ON) and preferred (PN) shares), were the third most liquid in Brazil’s electricity sector, and among the most traded in the Brazilian equity market. On the New York Stock Exchange the volume traded in ADRs for Cemig’s preferred shares (CIG) in 1Q23 was US$588 million – reflecting recognition by the investor market of Cemig as a global investment option. The Ibovespa index of the São Paulo Stock Exchange (B3) was down 7.16% in the period, while the preferred shares of Cemig outperformed this, rising 4.54% in the same period. The common shares rose 7.29%. In New York the ADRs for Cemig’s preferred shares were up 11.91%, and the ADRs for the common shares were up 9.94%.
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 32 |
|
Cemig generation plants
| Power Plant | Company | Cemig Installed Capacity (MW) |
Cemig Assured Energy (MW) |
Expiration of Concession | Type of plant | Cemig's Stake |
| Emborcação | CEMIG GT | 1,192 | 475 | May-27 | Hydroelectric | 100.0% |
| Nova Ponte | CEMIG GT | 510 | 257 | Aug-27 | Hydroelectric | 100.0% |
| Irapé | CEMIG GT | 399 | 198 | Sep-37 | Hydroelectric | 100.0% |
| Três Marias | CEMIG G. TRÊS MARIAS | 396 | 227 | Jan-53 | Hydroelectric | 100.0% |
| Salto Grande | CEMIG G. SALTO GRANDE | 102 | 74 | Jan-53 | Hydroelectric | 100.0% |
| Queimado | CEMIG GT | 87 | 53 | Jul-34 | Hydroelectric | 82.5% |
| Sá Carvalho | Sá Carvalho S.A | 78 | 54 | Aug-26 | Hydroelectric | 100.0% |
| Rosal | Rosal Energia S. A | 55 | 28 | Dec-35 | Hydroelectric | 100.0% |
| Itutinga | CEMIG G. ITUTINGA | 52 | 27 | Jan-53 | Hydroelectric | 100.0% |
| Camargos | CEMIG G. CAMARGOS | 46 | 22 | Jan-53 | Hydroelectric | 100.0% |
| Volta do Rio | CEMIG GT | 42 | 18 | Dec-31 | Wind Farm | 100.0% |
| Poço Fundo | CEMIG GT | 30 | 17 | May-52 | Hydroelectric | 100.0% |
| Praias de Parajuru | CEMIG GT | 29 | 8 | Sep-32 | Wind Farm | 100.0% |
| Pai Joaquim | CEMIG PCH S.A | 23 | 14 | Sep-32 | Hydroelectric | 100.0% |
| Piau | CEMIG G. SUL | 18 | 14 | Jan-53 | Hydroelectric | 100.0% |
| Gafanhoto | CEMIG G. OESTE | 14 | 7 | Jan-53 | Hydroelectric | 100.0% |
| Peti | CEMIG G. LESTE | 9 | 6 | Jan-53 | Hydroelectric | 100.0% |
| Joasal | CEMIG G. SUL | 8 | 5 | Jan-53 | Hydroelectric | 100.0% |
| Salto Voltão | Horizontes Energia | 8 | 7 | Jun-33 | Hydroelectric | 100.0% |
| Belo Monte | Norte Energia | 1,313 | 534 | Jul-46 | Hydroelectric | 11.7% |
| Aimorés | ALIANÇA | 149 | 78 | Nov-39 | Hydroelectric | 45.0% |
| Amador Aguiar I | ALIANÇA | 94 | 58 | Nov-42 | Hydroelectric | 39.3% |
| Amador Aguiar II | ALIANÇA | 83 | 49 | Aug-36 | Hydroelectric | 39.3% |
| Funil | ALIANÇA | 81 | 36 | May-40 | Hydroelectric | 45.0% |
| Igarapava | ALIANÇA | 50 | 30 | Sep-31 | Hydroelectric | 23.7% |
| Porto Estrela | ALIANÇA | 34 | 18 | Jun-35 | Hydroelectric | 30.0% |
| Gravier | ALIANÇA | 32 | - | Aug-55 | Wind Farm | 45.0% |
| Candonga | ALIANÇA | 32 | 14 | Jul-40 | Hydroelectric | 22.5% |
| Santo Inácio III | ALIANÇA | 13 | 6 | Jun-46 | Wind Farm | 45.0% |
| Garrote | ALIANÇA | 10 | 5 | Jun-46 | Wind Farm | 45.0% |
| Santo Inácio IV | ALIANÇA | 10 | 5 | Jun-46 | Wind Farm | 45.0% |
| São Raimundo | ALIANÇA | 10 | 5 | Jun-46 | Wind Farm | 45.0% |
| Baguari | BAGUARI ENERGIA | 48 | 28 | Mar-46 | Hydroelectric | 34.0% |
| Cachoeirão | Hidrelétrica Cachoeirão | 13 | 8 | Sep-33 | Hydroelectric | 49.0% |
| Pipoca | Hidrelétrica Pipoca | 10 | 6 | Dec-34 | Hydroelectric | 49.0% |
| Paracambi | Lightger | 12 | 10 | Jan-34 | Hydroelectric | 49.0% |
| Retiro Baixo | Retiro Baixo | 42 | 17 | Mar-47 | Hydroelectric | 49.9% |
| Others | 117 | 53 | ||||
| Total | 5,251 | 2,469 |
Note: Generation capacity and physical guarantee figures are proportional to Cemig’s holding in each plant.
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 33 |
|
RAP – July 2022–June 2023 cycle
| Aneel Ratifying Resolution (REH) 3067/2022 (2022–2023 cycle) | ||||
| Company | RAP (R$ ’000) | % Cemig | Cemig (R$ ’000) | Expiration |
| Cemig | 925,247 | 100.00% | 925,247 | |
| Cemig GT | 810,629 | 100.00% | 810,629 | Dec. 2042 |
| Cemig Itajubá | 75,310 | 100.00% | 75,310 | Oct. 2030 |
| Centroeste | 30,575 | 100.00% | 30,575 | Mar. 2035 |
| Sete Lagoas | 8,734 | 100.00% | 8,734 | Jun. 2041 |
| Taesa | 3,453,500 | 21.68% | 748,719 | |
| TOTAL RAP – CEMIG | 1,673,966 | |||
| REIMBURSEMENT FOR ASSETS – NATIONAL GRID** | ||||
| R$ ’000 – per cycle | 2020–2021 | 2021–2022 | 2022–2023 | From 2023-2024, to 2027-2028 |
| Economic | 144,375 | 144,375 | 144,375 | 60,158 |
| Financial | 332,489 | 88,662 | 129,953 | 275,556 |
| TOTAL | 476,864 | 233,038 | 274,328 | 335,714 |
* RAP including amounts of the Adjustment Portion.
** The figures for indemnity of National Grid components are included in the RAP of Cemig (first table).
Regulatory transmission revenues – 1Q23
| Regulatory Transmission revenue – 1Q23 | |||
| R$ ’000 | GT | Centroeste | Sete Lagoas |
| REVENUE | 345,161 | 7,452 | 2,397 |
| Revenue from transactions in electricity | 345,161 | 7,452 | 2,397 |
| Taxes on revenue | -29,691 | -272 | -222 |
| PIS and Pasep taxes | -5,294 | -48 | -40 |
| Cofins tax | -24,384 | -224 | -182 |
| ISS tax | -13 | - | - |
| Sector charges | -84,818 | -222 | -98 |
| Research and Development (R&D) | -2,119 | -61 | -18 |
| Global Reversion Reserve (RGR) | - | -125 | -70 |
| Energy Development Account (CDE) | -65,907 | -8 | -2 |
| Electricity Services Inspection Charge (TFSEE) | -884 | -28 | -8 |
| Others | -15,908 | - | - |
| Net revenue | 230,652 | 6,958 | 2,077 |
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 34 |
|
Complementary information
Cemig D
| CEMIG D Market | ||||
| Quarter | Captive Consumers |
TUSD ENERGY1 | T.E.D2 | TUSD PICK3 |
| 1Q21 | 6,157 | 5,461 | 11,618 | 34.1 |
| 2Q21 | 6,147 | 5,350 | 11,497 | 34.5 |
| 3Q21 | 6,098 | 5,592 | 11,689 | 35.5 |
| 4Q21 | 6,116 | 5,629 | 11,746 | 35.2 |
| 1Q22 | 6,013 | 5,612 | 11,626 | 36.1 |
| 2Q22 | 5,738 | 5,397 | 11,136 | 36.2 |
| 3Q22 | 6,050 | 5,853 | 11,904 | 36.7 |
| 4Q22 | 5,942 | 5,790 | 11,733 | 34.7 |
| 1Q23 | 5,723 | 5,566 | 11,289 | 38.0 |
| 1. Refers to the quantity of electricity for calculation of the regulatory charges charged to free consumer clients ("Portion A") | ||||
| 2. Total electricity distributed | ||||
| 3. Sum of the demand on which the TUSD is invoiced, according to demand contracted ("Portion B"). | ||||
| Cemig D | 1Q23 | 4Q22 | 1Q22 | chg. % | chg. % |
| Operating Revenues (R$ million) | 1Q/4Q | 1Q/1Q | |||
| Revenue from supply of energy | 4,722 | 4,241 | 5,993 | 11.3% | -21.2% |
| Reimbursement of PIS/Pasep and Cofins credits to customers | 696 | 718 | 437 | -3.1% | 59.4% |
| Revenue from Use of Distribution Systems (the TUSD charge) | 988 | 935 | 868 | 5.7% | 13.8% |
| CVA and Other financial components in tariff adjustment | 21 | 221 | -700 | -90.6% | - |
| Construction revenue | 658 | 1,030 | 430 | -36.2% | 53.1% |
| Adjustment to expectation of cash flow from indemnifiable financial assets of distribution concession | 31 | 11 | 20 | 181.2% | 56.3% |
| Others | 395 | 529 | 519 | -25.3% | -23.9% |
| Subtotal | 7,510 | 7,685 | 7,566 | -2.3% | -0.7% |
| Deductions | 2,133 | 1,612 | 2,818 | 32.3% | -24.3% |
| Net Revenues | 5,377 | 6,073 | 4,748 | -11.5% | 13.2% |
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 35 |
|
| 1Q23 | 4Q22 | 1Q22 | chg. % | chg. % | |
| Cemig D - Expenses | 1Q/4Q | 1Q/1Q | |||
| Personnel | 225 | 248 | 200 | -9.3% | 12.3% |
| Employees' and managers' profit sharing | 25 | -22 | 24 | - | 2.6% |
| Forluz – Post-retirement obligations | 73 | 106 | 103 | -30.8% | -28.6% |
| Materials | 25 | 49 | 16 | -48.5% | 55.8% |
| Outsourced services | 401 | 429 | 324 | -6.5% | 24.0% |
| Amortization | 194 | 196 | 175 | -0.8% | 10.9% |
| Operating provisions | 67 | 152 | 105 | -56.0% | -36.2% |
| Charges for Use of Basic Transmission Network | 729 | 682 | 889 | 6.9% | -18.0% |
| Energy purchased for resale | 2,324 | 2,475 | 1,978 | -6.1% | 17.5% |
| Construction Cost | 658 | 1,030 | 429 | -36.1% | 53.4% |
| Other Expenses | 75 | 124 | 27 | -39.5% | 177.8% |
| Total | 4,796 | 5,469 | 4,269 | -12.3% | 12.3% |
| Cemig D | 1Q23 | 4Q22 | 1Q22 | chg. % | chg. % |
| Statement of Results | 1Q/4Q | 1Q/1Q | |||
| Net Revenue | 5,377 | 6,073 | 4,748 | -11.5% | 13.2% |
| Operating Expenses | 4,796 | 5,469 | 4,269 | -12.3% | 12.3% |
| EBIT | 581 | 604 | 479 | -3.9% | 21.3% |
| EBITDA | 775 | 801 | 655 | -3.2% | 18.3% |
| Financial Result | -92 | 11 | 25 | - | - |
| Provision for Income Taxes, Social Cont & Deferred Income Tax | -119 | -154 | -128 | -22.7% | -7.0% |
| Net Income | 370 | 461 | 376 | -19.8% | -1.6% |
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 36 |
|
Cemig GT
| Cemig GT - Operating Revenues | 1Q23 | 4Q22 | 1Q22 | chg. % | chg. % |
| (R$ million) | 1Q/4Q | 1Q/1Q | |||
| Sales to end consumers | 1,105 | 1,291 | 1,366 | -14.4% | -19.1% |
| Supply | 475 | 563 | 652 | -15.6% | -27.1% |
| Revenues from Trans. Network | 174 | 182 | 152 | -4.4% | 14.5% |
| Gain on monetary updating of Concession Grant Fee | 135 | 114 | 132 | 18.4% | 2.3% |
| Transactions in the CCEE | 23 | 49 | 23 | -53.1% | 0.0% |
| Construction revenue | 39 | 137 | 68 | -71.5% | -42.6% |
| Financial remuneration of transmission contractual assets | 175 | 126 | 189 | 38.9% | -7.4% |
| Others | 49 | 64 | 35 | -23.4% | 40.0% |
| Subtotal | 2,175 | 2,526 | 2,617 | -13.9% | -16.9% |
| Deductions | 419 | 471 | 493 | -11.0% | -15.0% |
| Net Revenues | 1,756 | 2,055 | 2,124 | -14.5% | -17.3% |
| Cemig GT - Operating Expenses | 1Q23 | 4Q22 | 1Q22 | chg. % | chg. % |
| (R$ million) | 1Q/4Q | 1Q/1Q | |||
| Personnel | 86 | 89 | 81 | -3.6% | 6.2% |
| Employees' and managers' profit sharing | 9 | 5 | 9 | 95.7% | 0.0% |
| Forluz – Post-retirement obligations | 12 | 33 | 32 | -63.4% | -62.5% |
| Materials | 3 | 11 | 4 | -73.6% | -25.0% |
| Outsourced services | 53 | 73 | 45 | -27.9% | 17.8% |
| Depreciation and Amortization | 81 | 82 | 82 | -1.1% | -1.2% |
| Operating provisions | 9 | 19 | 15 | -51.9% | -40.0% |
| Charges for Use of Basic Transmission Network | 63 | 64 | 58 | -2.2% | 8.6% |
| Energy purchased for resale | 682 | 1,050 | 907 | -35.1% | -24.8% |
| Construction Cost | 27 | 93 | 51 | -70.9% | -47.1% |
| Gain in disposal of asset held for sale | -30 | - | - | - | - |
| Other Expenses | 93 | -12 | 34 | - | 173.5% |
| Total | 1,088 | 1,507 | 1,318 | -27.8% | -17.5% |
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 37 |
|
| Cemig GT - Statement of Results | 1Q23 | 4Q22 | 1Q22 | chg. % | chg. % |
| (R$ million) | 1Q/4Q | 1Q/1Q | |||
| Net Revenue | 1,756 | 2,055 | 2,124 | -14.5% | -17.3% |
| Operating Expenses | 1,088 | 1,507 | 1,318 | -27.8% | -17.5% |
| EBIT | 668 | 548 | 806 | 22.0% | -17.1% |
| Equity gain in subsidiaries | 70 | 71 | 56 | -1.4% | 25.0% |
| EBITDA | 819 | 700 | 944 | 16.9% | -13.2% |
| Financial Result | 6 | -92 | 297 | - | - |
| Provision for Income Taxes, Social Cont & Deferred Income Tax | -134 | -95 | -345 | 41.1% | - |
| Net Income | 610 | 432 | 814 | 41.4% | -25.1% |
Cemig, Consolidated
| Energy Sales | 1Q23 | 4Q22 | 1Q22 | chg. % | chg. % |
| (in GWh) | 1Q/4Q | 1Q/1Q | |||
| Residential | 2,985 | 2,901 | 2,842 | 2.9% | 5.0% |
| Industrial | 4,308 | 4,714 | 4,158 | -8.6% | 3.6% |
| Commercial | 2,343 | 2,248 | 2,276 | 4.2% | 2.9% |
| Rural | 526 | 774.041 | 546 | -32.0% | -3.7% |
| Others | 766 | 855.638 | 829 | -10.5% | -7.6% |
| Subtotal | 10,928 | 11,493 | 10,651 | -4.9% | 2.6% |
| Own Consumption | 7 | 7 | 10 | 0.0% | -30.0% |
| Supply | 4039 | 4585 | 3701 | -11.9% | 9.1% |
| TOTAL | 14,974 | 16,085 | 14,362 | -6.9% | 4.3% |
| Revenue from supply of electricity | 1Q23 | 4Q22 | 1Q22 | chg. % | chg. % |
| (R$ million) | 1Q/4Q | 1Q/1Q | |||
| Residential | 2,395 | 2,214 | 3,116 | 8.2% | -23.1% |
| Industrial | 1,439 | 1,529 | 1,393 | -5.9% | 3.3% |
| Commercial | 1,503 | 1,416 | 1,743 | 6.1% | -13.8% |
| Rural | 393 | 477.177 | 489 | -17.6% | -19.6% |
| Others | 446 | 452.075 | 595 | -1.3% | -25.0% |
| Subtotal | 6,176 | 6,089 | 7,336 | 1.4% | -15.8% |
| Unbilled supply | 13 | -300.852 | 78 | -104.3% | -83.3% |
| Supply | 906 | 1116.291 | 890 | -18.8% | 1.8% |
| TOTAL | 7,095 | 6,904 | 8,304 | 2.8% | -14.6% |
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 38 |
|
| Operating Revenues - consolidated | 1Q23 | 4Q22 | 1Q22 | 1Q/4Q | 1Q/1Q |
| (R$ million) | |||||
| Sales to end consumers | 6,189 | 5,788 | 7,414 | 6.9% | -16.5% |
| Supply | 906 | 1,116 | 890 | -18.8% | 1.8% |
| TUSD | 980 | 927 | 859 | 5.7% | 14.1% |
| CVA and Other financial components in tariff adjustment | 20 | 221 | -700 | -91.0% | - |
| Reimbursement of PIS/Pasep and Cofins over ICMS credits to customers | 696 | 718 | 437 | -3.1% | 59.3% |
| Transmission revenue plus RTP | 88 | 97 | 84 | -9.4% | 4.8% |
| Financial remuneration of transmission contractual assets | 177 | 129 | 192 | 37.6% | -7.8% |
| Transactions in the CCEE | 29 | 50 | -18 | -41.7% | - |
| Gas supply | 1,124 | 1,242 | 956 | -9.5% | 17.6% |
| Construction revenue | 715 | 1,183 | 509 | -39.6% | 40.5% |
| Others | 640 | 739 | 758 | -13.4% | -15.6% |
| Subtotal | 11,564 | 12,210 | 11,381 | -5.3% | 1.6% |
| Deductions | 2,917 | 2,457 | 3,534 | 18.7% | -17.5% |
| Net Revenues | 8,647 | 9,753 | 7,847 | -11.3% | 10.2% |
| Operating Expenses - consolidated | 1Q23 | 4Q22 | 1Q22 | 1Q/4Q | 1Q/1Q |
| (R$ million) | |||||
| Personnel | 335 | 368 | 304 | -9.0% | 10.2% |
| Employees’ and managers’ profit sharing | 38 | -15 | 37 | -353.3% | 2.7% |
| Forluz – Post-Retirement Employee Benefits | 103 | 157 | 153 | - | -32.7% |
| Materials | 29 | 61 | 20 | -52.5% | 45.0% |
| Outsourced services | 467 | 524 | 380 | -10.9% | 22.9% |
| Energy purchased for resale | 3445 | 3939 | 3103 | -12.5% | 11.0% |
| Depreciation and Amortization | 303 | 313 | 284 | -3.2% | 6.7% |
| Operating Provisions | 121 | 186 | 163 | -34.9% | -25.8% |
| Charges for use of the national grid | 700 | 654 | 869 | 7.0% | -19.4% |
| Gas bought for resale | 614 | 697 | 564 | -11.9% | 8.9% |
| Construction costs | 703 | 1139 | 491 | -38.3% | 43.2% |
| Loss due to reduction to recoverable value | 46 | -37 | - | - | - |
| Gain in disposal of asset held for sale | -30 | - | - | - | 0.0% |
| Other Expenses | 67 | 227 | 31 | -70.5% | 116.1% |
| Total | 6,941 | 8,213 | 6,399 | -15.5% | 8.5% |
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 39 |
|
| Financial Result Breakdown | 1Q23 | 4Q22 | 1Q22 | 1Q/4Q | 1Q/1Q |
| (R$ million) | |||||
| FINANCE INCOME | |||||
| Income from cash investments | 98 | 153 | 74 | -35.9% | 32.4% |
| Arrears fees on sale of energy | 69 | 65 | 95 | 6.2% | -27.4% |
| Monetary variations – CVA | 27 | 36 | 52 | -25.0% | -48.1% |
| Monetary updating on Court escrow deposits | 15 | 26 | 15 | -42.3% | 0.0% |
| Pasep and Cofins charged on finance income | -43 | -32 | -24 | 34.4% | 79.2% |
| Exchange | 104 | 164 | 842 | -36.6% | -87.6% |
| Others | 60 | 67 | 55 | -10.4% | 9.1% |
| 330 | 479 | 1,109 | -31.1% | -70.2% | |
| FINANCE EXPENSES | |||||
| Costs of loans and financings | 242 | 235 | 224 | 3.0% | 8.0% |
| Foreign exchange variations | 0 | 0 | 0 | - | - |
| Monetary updating – loans and financings | 72 | 34 | 65 | 111.8% | 10.8% |
| Charges and monetary updating on post-retirement obligation | 8 | 6 | 14 | 33.3% | -42.9% |
| Negative effect on financial instruments - Hedge | 13 | 136 | 457 | -90.4% | -97.2% |
| 0 | 58 | 0 | - | ||
| Others | 101 | 80 | 35 | 26.3% | 188.6% |
| 436 | 549 | 795 | -20.6% | -45.2% | |
| NET FINANCE INCOME (EXPENSES) | -106 | -70 | 314 | 51.4% | - |
| Statement of Results | 1Q23 | 4Q22 | 1Q22 | 1Q/4Q | 1Q/1Q |
| (R$ million) | |||||
| Net Revenue | 8,647 | 9,753 | 7,847 | -11.3% | 10.2% |
| Operating Expenses | 6,941 | 8,213 | 6,399 | -15.5% | 8.5% |
| EBIT | 1,706 | 1,540 | 1,448 | 10.8% | 17.8% |
| Equity gain (loss) in subsidiaries | 153 | 74 | 184 | 106.8% | -16.8% |
| Result of Periodic Tariff Review and RBSE reprofiling | 0 | 0 | 0 | - | - |
| Result of business combination | 0 | -3 | 0 | - | - |
| EBITDA | 2,162 | 1,924 | 1,916 | 12.4% | 12.8% |
| Financial Result | -106 | -70 | 314 | - | - |
| Provision for Income Taxes, Social Cont & Deferred Income Tax | -355 | -180 | -490 | - | - |
| Net profit for the period | 1,398 | 1,361 | 1,456 | 2.7% | -4.0% |
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 40 |
|
| Cash Flow Statement | 1Q23 | 1Q22 |
| (R$ million) | ||
| Cash at beginning of period | 1,441 | 825 |
| Cash generated by operations | 957 | 977 |
| Net income for the period from going concern operations | 1,398 | 1,455 |
| Tributos compensáveis | -105 | 259 |
| Depreciation and amortization | 303 | 283 |
| CVA and other financial components | -21 | 700 |
| Equity gain (loss) in subsidiaries | -153 | -184 |
| Provisions (reversals) for operational losses | 119 | 163 |
| Dividends receivable | 0 | 0 |
| Interest paid on loans and financings | -98 | -141 |
| Result of Periodic tariff review | 0 | 0 |
| Net gain on derivative instruments at fair value through profit or loss | 13 | 457 |
| Interest and monetary variation | -104 | -843 |
| PIS/Pasep and Cofins Credits | -696 | -437 |
| Escrow deposits | 17 | -26 |
| Others | 284 | -709 |
| Investment activity | -353 | 455 |
| Securities - Financial Investment | 348 | 913 |
| Financial assets | 30 | 0 |
| Fixed and Intangible assets/distribution and gas infrastructure | -731 | -458 |
| Financing activities | -445 | -848 |
| Lease payments | -16 | -19 |
| Payments of loans and financings | -429 | -829 |
| Interest on Equity, and dividends | 0 | 0 |
| Proceeds from Loans, financings and debentures | 0 | 0 |
| Cash at end of period | 1,600 | 1,409 |
| BALANCE SHEETS - ASSETS | 1Q23 | 2022 |
| (R$ million) | ||
| CURRENT | ||
| Cash and cash equivalents | 1,600 | 1,441 |
| Marketable securities | 1,357 | 1,745 |
| Customers, traders, concession holders and Transport of energy | 4,911 | 4,769 |
| Concession financial assets | 1,029 | 1,055 |
| Concession contract assets | 759 | 728 |
| Tax offsetable | 1,530 | 1,917 |
| Income tax and Social Contribution tax recoverable | 778 | 775 |
| Dividends receivable | 157 | 146 |
| Public lighting contribution | 225 | 207 |
| Refund tariff subsidies | 97 | 97 |
| Other credits | 695 | 584 |
| TOTAL CURRENT | 13,138 | 13,465 |
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 41 |
|
| NON-CURRENT | ||
| Securities | 137 | 134 |
| Consumers and traders | 46 | 43 |
| Tax offsetable | 1,402 | 1,358 |
| Income tax and Social Contribution tax recoverable | 144 | 173 |
| Deferred income tax and Social Contribution tax | 3,132 | 3,120 |
| Escrow deposits in legal actions | 1,205 | 1,207 |
| Derivative financial instruments – Swaps | 709 | 703 |
| Accounts receivable from the State of Minas Gerais | 13 | 13 |
| Financial assets of the concession | 5,156 | 4,937 |
| Contractual assets | 6,370 | 5,976 |
| Investments | 5,124 | 5,106 |
| Property, plant and equipment | 2,408 | 2,409 |
| Intangible assets | 14,644 | 14,622 |
| Leasing – rights of use | 377 | 329 |
| Other credits | 80 | 76 |
| TOTAL NON-CURRENT | 40,947 | 40,206 |
| TOTAL ASSETS | 54,085 | 53,671 |
| BALANCE SHEETS LIABILITIES AND SHAREHOLDERS' EQUITY | 1Q23 | 2022 |
| (R$ million) | ||
| CURRENT | ||
| Suppliers | 2,448 | 2,832 |
| Regulatory charges | 531 | 510 |
| Profit sharing | 147 | 105 |
| Taxes | 909 | 885 |
| Income tax and Social Contribution tax | 254 | 240 |
| Interest on Equity, and dividends, payable | 2,247 | 1,863 |
| Loans and financings | 1,091 | 955 |
| Payroll and related charges | 232 | 260 |
| Public Lighting Contribution | 330 | 312 |
| Accounts payable related to energy generated by consumers | 563 | 455 |
| Post-retirement liabilities | 399 | 388 |
| PIS/Pasep and Cofins taxes to be reimbursed to customers | 459 | 1,155 |
| Derivative financial instruments | 110 | 91 |
| Derivative financial instruments - options | 705 | 672 |
| Leasing operations | 72 | 57 |
| Other obligations | 525 | 423 |
| TOTAL CURRENT | 11,022 | 11,205 |
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 42 |
|
| NON-CURRENT | ||
| Regulatory charges | 47 | 65 |
| Loans and financings | 9,188 | 9,624 |
| Income tax and Social Contribution tax | 370 | 370 |
| Deferred Income tax and Social Contribution tax | 916 | 932 |
| Provisions | 2,060 | 2,029 |
| Post-retirement liabilities | 5,223 | 5,304 |
| PASEP / COFINS to be returned to consumers | 1,873 | 1,808 |
| Leasing operations | 334 | 297 |
| Others | 255 | 253 |
| TOTAL NON-CURRENT | 20,266 | 20,682 |
| TOTAL LIABILITIES | 31,288 | 31,888 |
| TOTAL EQUITY | ||
| Share capital | 11,007 | 11,007 |
| Capital reserves | 2,250 | 2,250 |
| Profit reserves | 10,395 | 10,395 |
| Equity valuation adjustments | -1,837 | -1,873 |
| Profit reserves | 976 | 0 |
| NON-CONTROLLING INTERESTS | 22,791 | 21,779 |
| Non-Controlling Interests | 6 | 5 |
| TOTAL EQUITY | 22,797 | 21,784 |
| TOTAL LIABILITIES AND EQUITY | 54,085 | 53,671 |
Disclaimer
Certain statements and estimates in this material may represent expectations about future events or results which are subject to risks and uncertainties that may be known or unknown. There is no guarantee that events or results will occur as referred to in these expectations.
These expectations are based on the present assumptions and analyses from the point of view of our management, in accordance with their experience and other factors such as the macroeconomic environment, market conditions in the electricity sector, and expected future results, many of which are not under our control.
Important factors that could lead to significant differences between actual results and the projections about future events or results include Cemig’s business strategy, Brazilian and international economic conditions, technology, our financial strategy, changes in the electricity sector, hydrological conditions, conditions in the financial and energy markets, uncertainty on our results from future operations, plans and objectives, and other factors. Due to these and other factors, our results may differ significantly from those indicated in or implied by such statements.
The information and opinions herein should not be understood as a recommendation to potential investors, and no investment decision should be based on the veracity, currentness or completeness of this information or these opinions. None of our staff nor any party related to any of them or their representatives shall have any responsibility for any losses that may arise as a result of use of the content of this presentation.
To evaluate the risks and uncertainties as they relate to Cemig, and to obtain additional information about factors that could give rise to different results from those estimated by Cemig, please consult the section Risk Factors included in the Reference Form filed with the Brazilian Securities Commission (CVM) – and in the 20-F Form filed with the U.S. Securities and Exchange Commission (SEC).
COMPANHIA ENERGÉTICA DE MINAS GERAIS S.A. | 43 |
|
| 6. | Material Fact dated May 8, 2023 – Award in an Arbitration PUT SAAG to be paid by May 12, 2023 |
COMPANHIA ENERGÉTICA DE MINAS GERAIS - CEMIG
PUBLICLY-HELD COMPANY
Corporate Taxpayer’s ID (CNPJ): 17.155.730/0001-64
Company Registry (NIRE): 31300040127
CEMIG GERAÇÃO E TRANSMISSÃO S.A.
PUBLICLY-HELD COMPANY
Corporate Taxpayer’s ID (CNPJ): 06.981.176/0001-58
Company Registry (NIRE): 31300020550
MATERIAL FACT
COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG (“CEMIG” or “Company”), a publicly-held company with shares traded on the stock exchanges of São Paulo, New York, and Madrid, and CEMIG GERAÇÃO E TRANSMISSÃO S.A. (“CEMIG GT”), a publicly-held company and wholly-owned subsidiary of CEMIG, pursuant to CVM Resolution 44/2021, of August 23, 2021, hereby announces to the Brazilian Securities and Exchange Commission - CVM, B3 S.A. – Brasil, Bolsa, Balcão (“B3”), and the market in general that, further to the Material Fact disclosed by the Company on February 10, 2023, an Agreement (“Agreement”), between Cemig GT and Private Pension Foundations (“Foundations”) participating in the investment structure in the Santo Antônio Plant, through SAAG (structure composed of FIP Melbourne, Parma Participações S.A., and FIP Malbec, jointly referred to as “Investment Structure”), has been signed today.
The Agreement ends the arbitration proceeding instituted in the Brazil-Canada Chamber of Commerce to discuss the value of the put options exercised by the Foundations related to their share in the Investment Structure.
The total value of the Agreement is R$781 million, to be paid by Cemig GT until May 12, 2023. Considering the provision that has already been recorded, the additional effects to be recorded in the financial statements for the second quarter of 2023 will correspond to the approximate value of R$26 million.
With the acquisition of the shares then held by the Foundations in the Investment Structure, Cemig GT will be the holder of the correlated assets totaling about R$50 million.
The Company reaffirms its commitment to keep shareholders and the market in general duly and timely informed, according to the applicable legislation, in compliance with the restrictions of CVM rules and other applicable laws.
Belo Horizonte, May 8, 2023.
Leonardo George de Magalhães
Chief Financial and Investor Relations Officer
| 7. | Notice to the Market dated May 16, 2023 – Cemig has filed 2022 Form 20-F |
COMPANHIA ENERGÉTICA DE MINAS GERAIS - CEMIG
PUBLICLY HELD COMPANY
Corporate Taxpayer’s ID (CNPJ): 17.155.730/0001-64
Company Registry (NIRE): 31300040127
NOTICE TO THE MARKET
A COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG (“CEMIG”), a publicly held company with shares traded on the stock exchanges of São Paulo, New York and Madrid, hereby informs the Brazilian Securities and Exchange Commission (CVM), B3 S.A. – Brasil, Bolsa, Balcão (“B3”) and the market in general that it has filed on May 16, 2023, Form 20-F for the 2022 fiscal year (“2022 Form 20-F”) with the U.S. Securities and Exchange Commission (“SEC”).
2022 Form 20-F can be accessed on SEC’s website, at www.sec.gov, or the Company’s
Investor Relations website, at http://ri.cemig.com.br.
Shareholders who wish to receive a free printed copy of the report, including the financial statements for the fiscal year ended December 31, 2022, shall send an email to ri@cemig.com.br.
Belo Horizonte, May 16, 2023.
Leonardo George de Magalhães
Chief Financial and Investor Relations Officer
| 8. | Notice to the Market dated May 23, 2023 - Periodic Tariff Revision (RTP) of Cemig Distribuição |
COMPANHIA ENERGÉTICA DE MINAS GERAIS - CEMIG
PUBLICLY-HELD COMPANY
Corporate Taxpayer’s ID (CNPJ): 17.155.730/0001-64
Company Registry (NIRE): 31300040127
CEMIG DISTRIBUIÇÃO S.A.
PUBLICLY-HELD COMPANY
Corporate Taxpayer’s ID (CNPJ): 06.981.180/0001-16
Company Registry (NIRE): 31300020568
NOTICE TO THE MARKET
Periodic Tariff Revision (RTP) of Cemig Distribuição
COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG (“CEMIG or Company”), a publicly-held company with shares traded on the stock exchanges of São Paulo, New York, and Madrid hereby informs to the Brazilian Securities and Exchange Commission (CVM), B3 S.A. – Brasil, Bolsa, Balcão (“B3”), and the market in general that the Brazilian Electricity Regulatory Agency (ANEEL) has approved today the result of the Periodic Tariff Revision of CEMIG DISTRIBUIÇÃO S.A. (“CEMIG D”), a wholly-owned subsidiary of Cemig. The Periodic Tariff Revision will become effective on May 28, 2023.
The approved tariff adjustment index is shown below:
| Voltage Level | Average Consumer Effect |
| High Voltage | 8.94% |
| Low Voltage | 15.55% |
| Total | 13.27% |
The main items associated with the electricity distribution service – which is the object of said tariff revision process – have been approved by ANEEL, as shown in the table below:
| Reevaluated Items | 2023 Revision |
| Gross Base (R$ million) | 25,587 |
| Net Base (R$ million) | 15,200 |
| WACC | 7.43% |
| Depreciation Rate | 3.95% |
| Technical Losses | 8.01% |
| Non-technical losses | 6.41% |
| 2023 Revision (R$ thousand) | |
| Operating Costs | 3,546,068 |
| CAIMI (Annual Cost of Movable and Immovable Facilities) | 484,105 |
| Remuneration on Equity | 1,704,245 |
| Remuneration on Special Operations | 272,746 |
| Depreciation | 1,007,249 |
| Portion B adjustment associated with the SCEE (Electricity Compensation System) | 137,625 |
| PORTION B | 7,152,039 |
Detailed information about Cemig Distribuição’s tariff revision process is available in Technical Note No. 12/2023 at www.gov.br/aneel.
Belo Horizonte, May 23, 2023.
Leonardo George de Magalhães
Chief Financial and Investor Relations Officer
| 9. | Notice To The Market dated April 27, 2023 - Cemig requested a postponement on the deadline to file the 20-F Form |
COMPANHIA ENERGÉTICA DE MINAS GERAIS - CEMIG
PUBLICLY HELD COMPANY
Corporate Taxpayer’s ID (CNPJ): 17.155.730/0001-64
Company Registry (NIRE): 31.300.040.127
NOTICE TO THE MARKET
COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG (“CEMIG”), a publicly held company with shares traded on the stock exchanges of São Paulo, New York, and Madrid, hereby informs the Brazilian Securities and Exchange Commission – CVM, B3 S.A. – Brasil, Bolsa, Balcão (“B3”), and the market in general, under the regulatory prerogatives of the U.S. Securities and Exchange Commission - SEC, that it requested a postponement on the deadline to file the 20-F Form, as it has not yet concluded the preparation of said form, but will do so before May 16, 2023.
Belo Horizonte, April 27, 2023.
Leonardo George de Magalhães
Chief Financial and Investor Relations Officer
| 10. | Notice To Shareholders dated April 27, 2023 - Dividends/Interest on Equity |
COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG
PUBLICLY HELD COMPANY
Corporate Taxpayer’s ID (CNPJ) 17.155.730/0001-64
NOTICE TO SHAREHOLDERS
We hereby inform our shareholders that the Annual and Extraordinary Shareholders’ Meeting (AESM) held on April 27, 2023, resolved on the following:
| 1. | DIVIDENDS: |
| a) | to the net income for 2022, totaling R$4,092,313 thousand, R$2,232,463 thousand be allocated as minimum mandatory dividends to the Company’s shareholders, as follows: |
ü Ratify R$1,983,650 thousand as Interest on Equity (“IoE”), already declared as follows:
• R$245,000 thousand, equivalent to R$0.14473821881 per common/preferred share, declared on March 28, 2022, paid on December 30, 2022.
• R$353,000 thousand, equivalent to R$0.16041629900 per common/preferred share, declared on June 24, 2022, to be paid in two equal installments: 50% by June 30, 2023, and 50% by December 30, 2023.
• R$471,529 thousand, equivalent to R$0.21428027494 per common/preferred share, declared on September 23, 2022, to be paid in two equal installments: 50% by June 30, 2023, and 50% by December 30, 2023.
• R$398,607 thousand, equivalent to R$0.18114181218 per common/preferred share, declared on December 21, 2022, to be paid in two equal installments: 50% by June 30, 2023, and 50% by December 30, 2023.
• R$515,514 thousand, equivalent to R$0.23426869112 per common/preferred share, declared on December 27, 2022, to be paid in two equal installments: 50% by June 30, 2023, and 50% by December 30, 2023.
ü Declare R$248,813 thousand as dividends for 2002, corresponding to R$0.11306986008 per common/preferred share, payable to shareholders registered in the Book of Registry of Registered Shares on the date of the holding of the AESM, that is, April 27, 2022, to be paid in two equal installments: 50% by June 30, 2023, and 50% by December 30, 2023. The shares will be traded “ex-rights” starting April 28, 2023.
Shareholders whose shares are not held in custody at CBLC (Companhia Brasileira de Liquidação e Custódia) and whose registration data is outdated are advised to go to a branch of Banco Itaú Unibanco S.A. (the institution administering CEMIG’s System of Registered Shares) bearing their personal documents for the due update of their registration data.
Belo Horizonte, April 27, 2023.
Leonardo George de Magalhães
Chief Financial and Investor Relations Officer
Av. Barbacena, 1200 - Santo Agostinho - CEP 30190-131
Belo Horizonte - MG - Brazil - Phone: (0XX31) 3506-5024 - Fax (0XX31) 3506-5025