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CEMIG Posts Impressive 4Q Results

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Brazil-based integrated electric utility, Companhia Energetica de Minas Gerais, 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 .

We currently maintain a Neutral rating on the stock.

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