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Brazil-based integrated electric utility, Companhia Energetica de Minas Gerais (CIG - Analyst Report), also known as CEMIG reported financial results for third quarter 2013 on Nov 14, 2013. Net earnings in the quarter were R$789 million (US$346.1 million), up 3% year over year.


CEMIG generated net revenues of R$3,546 million (US$1,555.3 million) in the third quarter 2013, down 3.6% compared with the year-ago revenues. The decline can be attributed to the impact of renewal of concession transmissions and extraordinary tariff review.
Electricity sold (Cemig GT+ Cemig D) in the quarter increased 2.5% year over year to 15,399 GWh.


CEMIG’s operational costs and expenses in the quarter totaled R$2,793 million (US$1,225 million), down 0.1% year over year. Costs including construction costs, use of network, royalties and profit shares, among others decreased in the quarter. Partially offsetting these were increased costs related to energy bought, personnel, operational provisions and other expenses, among others.

EBITDA grew 1.7% year over year to R$1,289 million (US$565.4 million) in the quarter. EBITDA margin was 36.4% versus 34.5% in the year-ago quarter.

Balance Sheet/Cash Flow

Exiting the third quarter 2013, CEMIG’s cash and cash equivalents increased 3.4% sequentially to roughly R$2,111 million (US$946.6 million).

For the nine months ended Sep 30, 2013, CEMIG generated roughly R$2,654 million in cash from operating activities, up 35% over the year-ago period. Capital spend on fixed and intangible assets purchase were R$609 million.

CEMIG is one of the largest integrated electric utilities in Brazil with approximately 97% of the company’s installed generation capacity being hydroelectric power. The stock currently has a Zacks Rank #5 (Strong Sell).

Other stocks to watch out for in the industry are Tractebel Energia S.A. (TBLEY) with a Zacks Rank #1 (Strong Buy) and Alliant Energy Corporation (LNT - Snapshot Report) and Brookfield Infrastructure Partners L.P. (BIP - Snapshot Report) each with Zacks Rank #2 (Buy).

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