Companhia Energética de Minas Gerais Q1 FY2026 earnings call

New CEO Alexandre Ramos Peixoto appointed. Sanegi is a diversified company with consistent results. Investment in distribution, transmission, and generation. Post-employment agreement reduces expenses. Debt profile adjusted to match investment, average maturity 6.6 years, 76% debt due after 2028 tariff review. Operating efficiency indicators like DEC and FEC are positive. Trading area affected by price volatility, generation company has negative results due to high energy prices. Distribution company has increased residential consumption, rural down due to rainfall. Semixim has recurring EBITDA increase of ~100%, GASME margin reduced due to client migration to free market.

Semigi achieved EBITDA of $1.79 billion and profit of $9.79 billion in the quarter. Investment plan was $1.48 billion, shareholder remuneration $658 million, and there were small acquisitions. Also, post-employment agreement led to $80 million expense reduction. Distribution had the highest investment, $1.28 billion for distribution, with 6 new substations and 1 modernized in the more energy program. Transmission had $103 million investment. Generation had 7 new solar photovoltaic plants adding 19 megawatts capacity. Distribution's investment represents the highest proportion.

Distribution company has five years of investments up to 2028 tariff review, extending debt. Expect investments to be recognized in tariff review. Leverage at healthy level, planning $44 billion investment in next five years, leverage to increase then decrease. High credit ratings from Pitch and Moody's prove positive credit quality.

Energy prices volatile from 2025, trading and generation companies have negative results from closing positions due to high prices. GSF impact, purchase of energy to tackle hydrological risk had $49 million EBITDA impact. Change in SAVAR risk parameter may affect trading prices and positions.

Q: I would like to understand how the discussion on the plant renewal is going.

A: Renewal of Sacra Vale, Emburcação e Nova Ponte is going well, great contact with Ministry of Energy and ANEL, expect renewal in next few months before due.

Q: How can we reduce hydrological risk with alternative energy so that we can address these deficiencies?

A: Diversify portfolio with wind and solar components to avoid dependency on single generation, already have adequate reserve.

Q: What can we expect from the next tariff review in 2028?

A: Investments in distribution company will be acknowledged in tariff review.

Q: Related to the increase of the debt vis-a-vis the investments, considering that we have a two-digit...

A: Leverage at healthy stage, investment program $44 billion in next five years, leverage to grow then come down, high credit ratings.

Q: Which are the possible impacts with the change of the risk parameter of SAVAR in the price curve. Is that already impacting you at the trading level?

A: Following SAVAR parameter change discussion, if changes, prices could be lower beneficial for open positions.

Q: How can we talk more about the strategy of the company's trading branch and considering that for 2026 we have a challenging GSF and what are going to be the impacts on the market?

A: 2026 challenging, margins in Tennessee to recover, but 2026 has challenging factors like price differences, hydrological risk impact.

Q: Can you tell us how is the season profile of our plants, if it's like MRE? And what is our discussion in the respirators?

A: Seasonality close to MRE, small difference in January, discussion on Sevar risk parameter with room for reduction from public hearing contributions.