Companhia Energetica de Minas Gerais (CIG), known as CEMIG, reported encouraging results for the first quarter of 2011 as the company’s net income rose 1% year over year to R$526 million (US$316.9 million).
Revenue
In the first quarter 2011, the company’s net revenue escalated 18% year over year to R$3,387 million (US$2,040.4 million) due primarily to recovery of economy leading eventually to higher demand for electricity.
Electricity sold improved 16.0% year over year to 17,981 GWh in the first quarter of 2011 versus 15,518 GWh in a year-ago period due to higher demand in all consumer categories.
Residential sales grew 7% year over year, industrial sales increased 10%, rural consumption went up by 6%, commercial consumption grew 7% while sales to miscellaneous category went up by 5%. Transactions on CCEE were down by 35% year over year.
Margins
Operating expenses in the first quarter 2011 jumped 21% year over year to R$2,327 million (US$1,401.8 million), attributed to an increase in expenses for electricity bought for resale. Expenses also rose modestly for outsourced services, gas, depreciation and provisions.
EBITDA in the quarter soared 11% year over year to R$1,292 million (US$778.3 million) while margin declined 230 basis points to 38.1%.
Balance Sheet/Cash Flow
The company’s total debt in the quarter was R$13,317 million (US$8,120.1 million) while cash and cash equivalents were R$2,733 million (US$1,666.5 million) versus R$2,980 million (US$1,817.1 million) in the previous quarter.
Net cash flow from operating activities plummeted to R$474 million (US$285.5 million) from R$1,156 million (US$638.7 million) in the year-ago quarter. Capital spending was also down to R$168 million (US$101.2 million) from R$1,175 million (US$649.2 million) in the comparable quarter of 2010.
Investments in the first quarter 2011 were R$217 million (US$130.7 million). Management plans to spend approximately R$2,319 million and R$1,134 million in the fiscal year 2011 and 2012, respectively.
CEMIG is one of the largest integrated electric utilities in Brazil with approximately 97% of the company’s installed generation capacity being hydroelectric power. The company is in stiff competition with its peers like Companhia Paranaense de Energia (ELP), EDP-Energias de Portugal, S.A. and privately-held Eletropaulo Metropolitana Eletricidade de S
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