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

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

Revenue

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

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

Expenses/Income

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

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

Balance Sheet/Cash Flow

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

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

CEMIG is one of the largest integrated electric utilities in Brazil with approximately 97% of the company’s installed generation capacity being hydroelectric power. The stock currently has a Zacks Rank #3 (Hold).

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

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