Apresentação do PowerPoint - 2Q19.pdf• On May 8, 2019 the Regional Federal Appeal Court of the...
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RESULTS
Transcript of Apresentação do PowerPoint - 2Q19.pdf• On May 8, 2019 the Regional Federal Appeal Court of the...
RESULTS
DisclaimerCertain statements and estimates in this material may represent expectations about future events or results, which are subject to risks and uncertainties thatmay be known or unknown. There is no guarantee that the events or results will take place as referred to in these expectations.These expectations are based on the present assumptions and analyses from the point of view of our management, in accordance with their experience andother factors such as the macroeconomic environment, and market conditions in the electricity sector; and on our expectations for future results, many of whichare not under our control.
Important factors that could lead to significant differences between actual results and the projections about future events or results include our businessstrategy, Brazilian and international economic conditions, technology, our financial strategy, changes in the electricity sector, hydrological conditions, conditionsin the financial and energy markets, uncertainty on our results from future operations, plans and objectives, and other factors. Because of these and otherfactors, our real results may differ significantly from those indicated in or implied by such statements.
The information and opinions herein should not be understood as a recommendation to potential investors, and no investment decision should be based on theveracity, currentness or completeness of this information or these opinions. None of our professionals nor any of their related parties or representatives shallhave any liability for any losses that may result from the use of the content of this presentation.
To evaluate the risks and uncertainties as they relate to Cemig, and to obtain additional information about factors that could give rise to different results fromthose estimated by Cemig, please consult the section on Risk Factors included in the Reference Form filed with the Brazilian Securities Commission (CVM) – andin the 20-F form filed with the U.S. Securities and Exchange Commission (SEC).
In this material, financial amounts are in R$ million (R$ mn) unless otherwise stated.
Financial data reflect the adoption of IFRS.
HIGHLIGHTS
Structural
reorganization and
operational efficiency
initiatives
Strong growth in
operational cash flow
(measured as Ebitda)
ICMS case:
Court confirms
tax credits
Management of
debt portfolio
Execution of
Disinvestment
Program
Cemig GT –
Auction to purchase
renewable supply
Court confirms tax credits
• On May 8, 2019 the Regional Federal Appeal Court of the First Region gave final judgment – against which thereis no appeal – recognizing Cemig’s right to exclude amounts of ICMS (value-added) tax from the calculationbase for Pasep and Cofins taxes, as from to 5 years prior to filing the case – i.e. backdated to July 2003.
( * ) From the amount to be reimbursed to consumers, R$20 million will be deducted related to Pasep and Cofins.
R$ mn4
Pasep and Cofins credits Cemig H Cemig D Cemig GTOther
investeesTotal
Escrow deposits – 1,138 204 – 1,342
Taxes paid 484 4,833 640 26 5,983
Total 484 5,971 844 26 7,325
Maximum possible value of reimbursement to clients* 4,130 4,130
Effects on statement of income
Recovery of credits of PIS, Pasep and Cofins taxes
charged on amounts of ICMS tax183 830 409 16 1,439
Net financial income 297 991 226 10 1,524
Income tax and Social Contribution tax –163 –594 –212 –9 –978
317 1,227 423 17 1,984
15
383 463 480 234 256 231
-
909
776 794
1,171
- - -
-2019 2020 2021 2022 2023 2024 2025 2026
Cemig D- 7th debenture issue • R$ 3.66 billion, in two series
1st Series: maturity 5 years; total R$ 2.16 billion – pays interest at 0.454% p.a. above CDI Rate.
2nd Series: maturity 7 years; total R$ 1.5 billion – pays 4.10% p.a. plus inflation correction by IPCA index.
• Replaces more expensive debt
Estimated average cost: reduced from 144.13% to 108.61% of CDI rate
Increases average tenor of total debt of Cemig D – from 2.9 years to 5.1 years.
15
383 463 480 234 256 231
--
282
565 565
565 282
700
700
2019 2020 2021 2022 2023 2024 2025 2026
After re-profiling – July 2019
Average tenor: 5.1 years
5
Position on March 31, 2019Average tenor: 2.9 years
Auction to buy renewable supply
Cemig offering to buy supply for delivery from year 2023 - Sep/19
• Cemig GT will hold Free Market auction to buy incentive-bearing solar or wind supply
Contracts for delivery from 2023 for 19 years.
• Bids accepted from companies:
technically qualified by EPE* for any Aneel New Supply auction in 2018 or 2019,
with share capital above R$ 500 million or installed capacity above 1GW.
• The auctions of June and October 2018 were successful.
In June, contracts for 431.5 MW average were acquired, and in October a total of 152.5 MW average
– for delivery over 20 years, starting in 2022
6* EPE – Brazilian government’s Energy Research Company (Empresa de Pesquisa Energética).
Sale of shares in Light
• Cemig maintains commitment to execute Disinvestment Program
R$625 mm
Total of sale: 33,333,333 shares
For price per share: R$ 18.75
• Stockholding structure after settlement of Restricted Offering – July 17, 2019:
22.6% 6.3% 71.1%
Others
7
Capex Board has approved increase in Investment Plan of Cemig D
• Additional execution of R$ 1.2 billion for the period 2020–22.
• Purposes:
accelerate modernization of Cemig D’s assets base,
reduce costs of operation and maintenance,
improve the company’s quality indicators,
increase client satisfaction.
Cemig’s other Investment Plans are unchanged. 8
2019 2020 2021 2022 2023 TOTAL
Cemig D funding (increased) 1,078 1,632 1,573 1,632 1,386 7,301
Cemig D Funding from clients 178 179 158 114 170 799
Total, Cemig D 1,257 1,811 1,730 1,746 1,556 8,100
Transmission (upgrades and improvements) 263 281 261 276 207 1,289
Generation (operation and maintenance) 30 96 183 117 23 450
Cash injections 46 89 135
Total, Cemig GT 340 466 444 393 230 1,873
1,596 2,277 2,174 2,139 1,786 9,973
Cemig GT
Cemig investment, consolidated
June 2019 R$ mnInvestment
PlanComponents
Results – Highlights
• Revenue from sales on CCEE exchange (Cemig GT): up 148.5% in 1H19
In 1H19: – up R$ 237 mn from 1H18;
In 2Q19: – up R$ 119 mn from 2Q18.
CCEE credit – R$469 mn
• Exclusion of ICMS tax from taxable base for PIS, Pasep and Cofins taxes
Award in legal action: Tax credits totaling R$ 1,439 mn
Financial income gain: R$ 1,524 mn
• Provision for accounts receivable from Renova: R$ 688 mn
• Equity income positive from non-consolidated investees
• In 1H19: – up R$ 130 mn from 1H18;
• In 2Q19: – up R$ 119 mn from 2Q18.9
The electricity market of Cemig D
Cemig D: billed market + transmission
2,558 2,548
5,133 5,113
1,588 1,623
957 918
908 913
71 83
2Q18 2Q19
Residential Industrial Commercial
Rural Other Distributors
0.4%
0.4%
2.20%
16.9%
0.5%
6,342 6,288
4,873 4,910
2Q18 2Q19
Final consumers
Total energy carried
11,215 11,198
0.8%
0.9%
4.1%
0.2%
In 2Q19 – GWh
Cemig D: billed market + transmission
5,151 5,292
10,017 10,106
3,231 3,311
1,727 1,782
1,800 1,838
140 160
1H18 1H19
Residential Industrial Commercial
Rural Other Distributors
2.4%
0.9%
2.5%
14.3%
2.1%
12,556 12,818
9,510 9,670
1H18 1H19
Final consumers
Total energy carried
22,066 22,488
1.9%
1.7%
2.1%
3.2%
In 1H19 – GWh
10
The electricity market of Cemig GT
8,534 8,560
4,329 4,401
1,261 1,162
1H18 1H19
Free Clients Free Market
Regulated Market
14,12314,124
Free Market: Sales to traders and generators, and
‘bilateral’ contracts with other agents
Market of Cemig GT 0.01%
1.66%
0.30%
7.85%
In 1H19 – GWh
Market of Cemig GT
4,586 4,410
2,340
1,892
630
562
2Q18 2Q19
Free Clients Free Market
Regulated Market
10.79%
6,864
7,556
Free Market: Sales to traders and generators, and
‘bilateral’ contracts with other agents
19.15%
3.84%
9.2%
In 2Q19 – GWh
11
Net revenue - 2Q19
R$ mn
12
2Q19/2Q18 25.15%
Cemig Consolidated
2Q19 AJ/2Q18 0.52%
Cemig D Cemig GT2Q19/2Q18 19.50%
2Q19 AJ/2Q18 3.92%
2Q19/2Q18 30.94%
2Q19 AJ/2Q18 6.19%
5.607 5,578
7,017 1439
2Q18 2Q19Adjusted
ICMS taxruling
2Q19
3,544 3,405
4,235 830
2Q18 2Q19Adjusted
ICMS taxruling
2Q19
1,713 1,819
2,243 424
2Q18 2Q19Adjusted
ICMS taxruling
2Q19
Net revenue – 1H19
10,542
11,491
12,930
1439
1H18 1H19Adjusted
ICMS taxruling
1H19
1H19/1H18 22.65%
Cemig Consolidated
1H19 AJ/1H18 9.00%
Cemig D Cemig GT1H19/1H18 19.27%
1H19 AJ/1H18 6.56%
1H19/1H18 28.14%
1H19 AJ/1H18 15.20%
13
6,528
6,956
7,786
830
1H18 1H19Adjusted
ICMS taxruling
1H19
3,276
3,774
4,198 424
1H18 1H19Adjusted
ICMS taxruling
1H19
R$ mn
Operating costs and expenses
1 - After making a credit risk assessment, Cemig recognized a loss of R$ 688 mn on accounts receivable from Renova. Provisions for employment-law legal actions were R$ 125 mn higher than in the same period of 2018.
-37
1 48
-43
105
12
735
50
-48
-293
37 63
2Q18 to 2Q19 12.96%
PMSO 4.38%
4,1984,750
4,860
5,490
1H18 1H19
2Q
1Q
12.96%
13.15%
9,058
10,24013.05%
14
R$ mn
2 - The difference mainly reflects the change in accounting for leasing and rentals – now under IFRS16 / CPC 06 (R2).
(1)
(2)
717
887
734 743 649
707 723
925
700 676
400
542
359
352
332 349308
422 344 312
1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
PMSO
Personnel
PMSO
2Q18 to 2Q19
4.38%
2Q18 to 2Q19
10.60%
15
R$ mn
16
1,438 1,427
324
134 18 3759
64
OpexRegulatório
PMSO Pós-Emprego PDVP MultasCompensações
Provisões PECLD OpexReal
Opex
Ebitda1,083
913
1,743
12 11 121101 29
830
LajidaRegulatório
OutrasReceitas
OPEX PRL PerdasNãoTécnicas
OutrosDesvios
Lajidaajustado
ICMS LajidaReal
Ebitda Adjusted/Regulatory = 84.3%
Difference: - R$170 MM
Opex Regulatory /Real = 100.8%
Difference: R$ 11 MM
Cemig D: 1H19 Ebitda, Opex – Regulatory vs. Real
R$ mn
Ebitda – 2Q19
457
563
299
424 688
2Q18 2Q19Adjusted
ICMS ruling Renovaprovision
2Q19
372 407
1,237
830
2Q18 2Q19Adjusted
ICMS ruling 2Q19
Lajida Cemig GTLajida Cemig D
Cemig D Cemig GT1H19/2Q18 232.53%
2Q19 AJ/2Q18 9.41%
2Q19/2Q18 34.57%
2Q19 AJ/2Q18 23.19%
17
883
1,061
1,812
1,439
688
2Q18 2Q19Adjusted
ICMSruling
Renovaprovision
2Q19
Cemig Consolidated2Q19/2Q18 105.21%
2Q19 AJ/2Q18 20.16%
R$ mn
691
913
1,743
830
1H18 1H19Adjusted
ICMS ruling 1H19
Ebitda Cemig D1H19/1H18 152.24%
1H19 AJ/1H18 32.13%
970
1,478
1,229
439688
1H18 1H19Adjusted
ICMSruling
Renovaprovision
1H19
Ebitda Cemig GT1H19/1H18 26.70%
1H19 AJ/1H18 53.92%
18
1,890
2,522
3,273
1,439
688
1H18 1H19Adjusted
ICMS ruling Renovaprovision
1H19
Ebitda Consolidated1H19/1H18 73.17%
1H19 AJ/1H18 33.44%
Ebitda – 1H19
R$ mn
-180
591
342
439 688
2Q18 2Q19Adjusted
ICMS ruling Renovaprovision
2Q19
112 152
1,379 1,227
2Q18 2Q19Adjusted
ICMS ruling 2Q19
Net profit (loss) – 2Q19
2Q19/2Q18
Cemig Consolidated
2Q19 AJ/2Q18
Cemig D Cemig GT2Q19/2Q18 1,131.25%
2Q19 AJ/2Q18 35.71%
2Q19/2Q18
2Q19 AJ/2Q18
19
-11 819
2,115
1,984
688
2Q18 2Q19Adjusted
ICMSruling
Renovaprovision
2Q19
R$ mn
67
1,175
926
439 688
1H18 1H19Adjusted
ICMS ruling Renovaprovision
1H19
178 340
1,567 1,227
1H18 1H19Adjusted
ICMS ruling 1H19
Net profit – 1H19
20
1H19/1H18 541.41%
Cemig Consolidated
1H19 AJ/1H18 255.95%
Cemig D Cemig GT1H19/1H18 780.34%
1H19 AJ/1H18 91.01%
1H19/1H18 1,282.09%
1H19 AJ/1H18 1,653.73%
454
819
2,912
1,984
688
1H18 1H19Adjusted
ICMSruling
Renovaprovision
1H19
R$ mn
Cemig, consolidated: debt profile
Maturities timetable – Average tenor: 3.8 years
1,450 1,902 2,030 2,053
257
5,948
234
2019 2020 2021 2022 2023 2024 2025
Total net debt: R$ 12.4 billion
Maturities timetable – July 2019
Cost of debt – % Main indexors
3.74
8.40
6.01 5.234.58
5.53
14.28
15.89
9.09 9.12 9.32 9.04
2015 2016 2017 2018 mar/19 jun/19
Real Nominal
50.446.1 44.3 43.2
39.8
2016 2017 2018 mar/19 jun/19
4.98 3.52 3.46 3.01 2.82
Net debt
Adjusted Ebitda*
Net debt
Equity + Net debt
21 * Adjustments for ICMS tax ruling, and Renova provision.
Average tenor: 4.5 years
541 1,126 1,236 882
257
5.948
234 -
282 565
565
565
282
700 700
2019 2020 2021 2022 2023 2024 2025 2026
Cemig GT – debt profile
Maturities timetable – Average tenor: 4.6 years
Total net debt: R$ 7.2 billion
Main indexors
Cost of debt – % Leverage – %
3.66
8.59
6.145.45
4.715.77
14.41
16.03
9.23 9.36 9.46 9.30
2015 2016 2017 2018 mar/19 jun/19
Real Nominal
62.9
60.6 60.7
57.7
55.1
2016 2017 2018 mar/19 jun/19
5.60 3.78
5.14 3.95 3.55
Hedge instrument
transformed debt in US
dollars into debt costing a
fixed percentage of the CDI
rate, within an FX variation
band.
11%
14%
73%
2%
CDI
IPCA
DÓLAR
OUTROS
22
Net debt
Adjusted Ebitda*
Net debt
Equity + Net debt
* Adjustments for ICMS tax ruling, and Renova provision.
423685 668
3470
5,696
2019 2020 2021 2022 2023 2024
Cemig D – Debt profile
Maturities timetable – Average tenor: 2.7 years
Total net debt: R$ 5.3 billion
Maturities timetable – July 2019
Cost of debt – % Leverage – %
4.01
8.06
5.875.08
4.565.37
14.31
15.87
8.93 8.94 9.28 8.86
2015 2016 2017 2018 mar/19 jun/19
Real Nominal
68.5
56.5 53.5 51.546.0
2016 2017 2018 mar/19 jun/19
12.55
5.84 3.49 2.99 3.06
In July 2019 – prepayment of debt totaling R$ 3.644 billion, with funds from
7th debenture issue.
23
Net debt
Adjusted Ebitda*
Net debt
Equity + Net debt
* Adjustment for ICMS tax ruling..
15
383 463 480 234 256 231
--
282
565 565
565 282
700
700
2019 2020 2021 2022 2023 2024 2025 2026
After re-profiling – July 2019
Average tenor: 5.1 years
954
1,1671,265
1,656
237 252 234
2019 2020 2021 2022 2023 2024 2025
