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Brazil-based integrated electric utility, Companhia Energetica de Minas Gerais(CIG - Analyst Report), also known as CEMIG reported its fourth quarter and fiscal year 2011 results on March 28, 2012. Net income in the quarter was R$709 million (US$393.9 million), up 6% year over year.

In the fiscal year 2011, net income jumped 7% to R$2,415 million (US$1,446.1 million).

Revenue: Net revenue in the fourth quarter escalated 18% year over year to R$4,341 million (US$2,411.7 million), primarily driven by rising prices of electricity sold. Electricity sold in the quarter improved modestly by 2.0% year over year to 17,848 GWh.

In the fiscal year 2011, the company generated net revenues of R$15,814 million (US$9,469.5 million).

Expenses/Income: Operational costs and expenses (excluding financial revenue/expenses) totaled R$2,572 million (US$1,428.9 million) in 4Q11, up 14.0% year over year.

EBITDA in the quarter soared 20% year over year to R$1,290 million (US$716.7 million) while margin stood at 29.7%. Operating margin in the quarter increased 60 basis points to 24.2%.

Balance Sheet/Cash Flow: Exiting the fourth quarter, the company’s cash and cash equivalents were R$2,862 million (US$1,538.7 million) compared with R$3,851 million (US$2,104.4 million) in the previous quarter. Loans and financing exiting the year were R$5,358 million (US$2,880.6 million).         

Cash generated by operations increased 15% in 2011 to R$3,376 million (US$2,021.6 million). Capital spending at R$2,776 million (US$1,662.3 million) registered a year- over- year increase of 5%.

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 competes with its other players including Companhia Paranaense de Energia (ELP - Analyst Report).

We currently maintain a Neutral rating on the stock.

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