Companhia Energética de Minas Gerais Q2 FY2025 earnings call

• Largest investment program in execution: BRL 2.7 billion invested in the first half of 2025, with plans to open substations, enhance grid, and conclude generation and gas works, including the Midwest gas pipeline. • RBSE: Noncash impact of BRL 199 million in the quarter. • Trading sector: Negative BRL 76 million due to difference among energy submarkets in the second quarter, with expectations of this amount reducing to near zero with ONS criteria review and greater interchange. • GSF auction: Participated and ensured concession extensions for three power plants, disbursing BRL 200 million, with extensions until 2044 for two plants (7 and 3 years respectively). • Distribution investment: Concentrated BRL 2.8 billion investment in distribution to better serve clients, with 9 substations energized and over 2,600 kilometers of low and medium voltage networks built. • Cemig D results: 15% increase in EBITDA in the recurring effect,得益于tariff subsidies reimbursement, ARFA receivables collection index around 99%, and progress in regulatory losses calculation. • Cemig GT: Impact of trading contracts, and positive effect in adjusted net profit due to bond repayments. • Gasmig: EBITDA in line, net profit higher due to efficient cost management, and close to opening the Central West gas pipeline.

Cemig is executing its largest investment program ever. In the first half of the year, it has invested BRL 2.7 billion. Adjusted EBITDA is BRL 2.2 billion. For the distribution segment, it has invested BRL 2.8 billion for the year, with 9 substations energized and over 2,600 kilometers of low and medium voltage networks built in the initial months. In terms of revenue contribution, the adjusted EBITDA of BRL 2.2 billion is a key figure. For Cemig D, there was a 15% increase in EBITDA in the recurring effect, boosted by the reimbursement of tariff subsidies via CDE. For Cemig GT, trading contracts had an impact on results. For Gasmig, EBITDA is in line and net profit is higher due to efficient cost management.

• Continue with the investment plan, focusing on distribution to address unmet load and distributed generation needs, then moving to increase resilience and automation. • Monitor the regulatory process for concession renewals of plants, awaiting ANEEL recommendations and Ministry of Mines and Energy decisions. • Continue working on efficiency improvements in all segments, including collection, smart meter installation, and loss reduction.

• Uncertainty regarding the final ruling of the Supreme Court on PIS/COFINS and ICMS, which may impact the company's financials. • Energy market price pressure, affecting the short and long-term energy balance positions. • Regulatory changes and their potential impact on the company's profitability, especially in terms of tariff modes and loss calculations.

Q: Comment about capital allocation, focus for next transmission auction, and concession renewals.

A: Capital allocation follows the BRL 59 billion investment plan from 2019 to 2029, with bulk of investment in distribution. Focus for transmission auction is part of the strategic plan. For concession renewals, ANEEL has recommended approval for Sá Carvalho's concession extension, and other plants are under analysis by ANEEL.

Q: Comment on the Supreme Court ruling about PIS/COFINS and ICMS.

A: Allows deduction of taxes and honoraries paid, but we need to wait for the final ruling to check impacts.

Q: Rationale for increase in short position for '27, '28.

A: We have been working to close positions, the short exposure in those years is still a gold effect due to counterpart contracts where we had to buy energy and expose ourselves a bit more, but we are looking to close positions.

Q: How current regulatory environment changes affect distribution profitability and when to expect expense reduction in pension plan.

A: Regulatory environment changes need to be followed, and efficiency improvement is a mantra, but it's too early to say on pension plan expense reduction as negotiations are ongoing.