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Companhia Energetica Minas Gerais (CIG)
:CIG
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Companhia Energetica Minas Gerais
(NYSE:CIG)
Rating:80Outperform
Price Target:
$2.00
â–²(0.50%Upside)
Positive Factors
Dividends
The one-offs in the net income could result in a 4% additional dividend yield.
Privatization
The privatization process is the main upside risk, potentially boosting stock value.
Negative Factors
Operational Performance
Cemig reported soft operational results with Adj. EBITDA down 10% YoY.
Privatization Complexity
There is a low likelihood of Minas Gerais state-owned enterprises' privatization concluding due to complexity.
Companhia Energetica Minas Gerais (CIG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.61B
Dividend Yield16.62%
Average Volume (3M)3.07M
Price to Earnings (P/E)4.5
Beta (1Y)0.39
Revenue Growth-4.14%
EPS Growth13.02%
CountryUS
Employees5,028
SectorUtilities
Sector Strength68
IndustryDiversified Utilities
Share Statistics
EPS (TTM)0.06
Shares Outstanding1,905,179,900
10 Day Avg. Volume2,825,527
30 Day Avg. Volume3,066,863
Financial Highlights & Ratios
PEG Ratio0.05
Price to Book (P/B)1.06
Price to Sales (P/S)0.00
P/FCF Ratio146.98
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$2.60Price Target Upside30.65% Upside
Rating ConsensusHold
Number of Analyst Covering0
Companhia Energetica Minas Gerais Business Overview & Revenue Model
Company DescriptionCompanhia Energetica de Minas Gerais (CIG), commonly known as CEMIG, is a prominent Brazilian energy company headquartered in Belo Horizonte, in the state of Minas Gerais. It operates in the electricity sector, focusing primarily on the generation, transmission, and distribution of electrical energy. CEMIG is one of the largest and most important energy companies in Brazil, serving millions of customers and playing a critical role in the country's energy infrastructure. The company is known for its commitment to sustainable energy practices and investments in renewable energy sources.
How the Company Makes MoneyCEMIG generates revenue through several key streams within the energy sector. The primary source of income comes from the generation and distribution of electricity to residential, commercial, and industrial clients. It owns and operates a diverse portfolio of power plants, including hydroelectric, wind, and solar facilities, which contribute to its energy generation capabilities. Additionally, CEMIG earns money through its transmission services, where it maintains and operates extensive power lines to deliver electricity over long distances. The company also engages in energy trading and sells excess power in the national electricity market. Significant partnerships with other energy firms and investments in new technologies and infrastructure projects further bolster its revenue. Regulatory frameworks and government policies in Brazil also impact its financial performance, influencing tariffs and operational efficiencies.
Companhia Energetica Minas Gerais Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: 15.03%|
Next Earnings Date:Aug 13, 2025
Earnings Call Sentiment Neutral
Cemig's Q1 2025 earnings call presented a mixed outlook. The company achieved strong operational and financial highlights, such as a robust EBITDA, successful debenture issuance, and significant investments, indicating resilience and strategic growth. However, challenges in the trading company and the impact of submarket price differences contributed to a decline in EBITDA and net profit. Despite these challenges, the overall sentiment leans towards resilience and strategic focus on growth and efficiency.Q1-2025 Updates
Positive Updates
Strong EBITDA Performance
Cemig reported a significant EBITDA of BRL1.8 billion for Q1 2025, demonstrating sound results across all segments except for the trading company.
Record Investment Program
The company is executing the largest investment program in its history, with investments growing 6x since 2018, reaching BRL6.3 billion in 2025, an 18% increase from 2024.
Successful Debenture Issuance
Cemig successfully issued BRL5 billion in debentures, with a demand over 2.5 times the booking, extending the average debt tenure to 5.5 years.
AAA Credit Rating
Maintained AAA credit rating from Fitch Ratings, highlighting the company's strong financial position.
Significant Dividends Payment
Cemig is paying BRL541 million in dividends, showing a commitment to return value to shareholders.
Operational Efficiency Achievements
Achieved cost efficiencies through the migration of over 1,000 employees to a new healthcare plan, resulting in a BRL28 million reversal of provisions.
Negative Updates
EBITDA Decline in Trading Company
The trading company experienced a significant impact with a 9% decline in EBITDA due to price differences in submarkets and expected lower margins.
Impact of Submarket Price Differences
Submarket price differences, particularly in March 2025, led to a negative impact of around BRL133 million on EBITDA.
Decrease in Net Profit
Net profit was affected by increased financial expenses and lower equity income from Belo Monte due to submarket impacts.
Volume Reduction in Gasmig
Gasmig faced a reduction in the volume of gas sold, affecting both EBITDA and net profit.
Company Guidance
During Cemig's first quarter 2025 earnings call, the company reported a strong EBITDA of BRL1.8 billion and a net profit of BRL1 billion, despite some challenges in their trading company. The company emphasized a significant investment program, with CapEx growing from BRL950 million in 2018 to BRL5.7 billion in 2024, and a forecasted BRL6.3 billion in 2025, marking an 18% increase from the previous year. Over 75% of these investments are dedicated to infrastructure and network development, crucial for energy transition. Cemig maintains a focus on efficiency and compliance with regulatory standards, ensuring cash generation to support investments. The company highlighted the issuance of BRL5 billion in debentures, maintaining a AAA credit rating by Fitch. Cemig's strategic objectives include regionalization to enhance client proximity and operational efficiency, supported by IT innovations like a new ADMS and SAP S4/HANA system. Despite a 9% drop in EBITDA due to submarket price differences, Cemig remains committed to its investment and dividend distribution plans, aiming to maintain its leverage within comfortable levels.Companhia Energetica Minas Gerais Financial Statement Overview
Summary
Companhia Energetica Minas Gerais demonstrates solid revenue growth and profitability, with a strong net profit margin and a balanced debt-to-equity position. However, there are concerns regarding declining EBITDA margins and reduced free cash flow, which could impact future financial flexibility. The company shows overall financial stability with room for improvement in operational efficiency and cash flow management.Income Statement
The company has shown a consistent growth in revenue over the years, with a TTM (Trailing-Twelve-Months) revenue of 39.89 billion compared to 39.82 billion in the previous annual period. Gross Profit Margin has decreased to 7.20% in the TTM from 7.90% in the last annual report, while the Net Profit Margin slightly improved to 17.56% in the TTM, indicating effective cost management. However, the EBIT and EBITDA margins have declined, suggesting potential challenges in operational efficiency.80
Positive
Balance Sheet
The company's debt-to-equity ratio is healthy at 0.56, reflecting a balanced approach to leveraging debt. The Return on Equity (ROE) for the TTM stands at 25.09%, showcasing strong profitability relative to equity. The equity ratio is at 43.67%, indicating a solid equity base. Despite these strengths, a slight increase in total liabilities suggests increased leverage, which could pose future risks.75
Positive
Cash Flow
Free Cash Flow has decreased significantly in the TTM to 1.67 billion from 4.58 billion in the previous annual period, indicating reduced cash generation capacity. The Operating Cash Flow to Net Income ratio is robust at 1.16, demonstrating good cash conversion efficiency. However, the Free Cash Flow to Net Income ratio dropped to 0.24, raising concerns about the sustainability of cash flow generation.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 39.89B | 39.82B | 36.85B | 34.46B | 33.65B | 25.23B |
| Gross Profit | 2.87B | 3.15B | 3.81B | 6.81B | 6.72B | 5.38B |
| EBITDA | 7.33B | 11.74B | 8.88B | 5.48B | 6.82B | 5.70B |
| Net Income | 7.00B | 7.12B | 5.76B | 4.09B | 3.75B | 2.86B |
Balance Sheet | ||||||
| Total Assets | 63.90B | 59.73B | 55.00B | 53.67B | 52.05B | 54.08B |
| Cash, Cash Equivalents and Short-Term Investments | 6.03B | 3.45B | 3.13B | 4.24B | 4.05B | 5.30B |
| Total Debt | 15.66B | 12.71B | 10.26B | 10.94B | 11.61B | 15.25B |
| Total Liabilities | 35.98B | 32.34B | 30.34B | 31.89B | 32.58B | 36.60B |
| Stockholders Equity | 27.91B | 27.38B | 22.79B | 21.78B | 19.46B | 17.47B |
Cash Flow | ||||||
| Free Cash Flow | 1.67B | 4.58B | 5.38B | 6.32B | 3.45B | 8.43B |
| Operating Cash Flow | 8.15B | 5.50B | 6.64B | 6.61B | 3.69B | 8.61B |
| Investing Cash Flow | -2.65B | -2.38B | -3.97B | -3.21B | 1.37B | -5.08B |
| Financing Cash Flow | -1.51B | -2.76B | -2.58B | -2.79B | -5.91B | -2.39B |
Companhia Energetica Minas Gerais Technical Analysis
Positive
1.99
Price Trends
1.82
Positive
1.76
Positive
1.75
Positive
Market Momentum
0.04
Negative
67.11
Neutral
95.21
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CIG, the sentiment is Positive. The current price of 1.99 is above the 20-day moving average (MA) of 1.87, above the 50-day MA of 1.82, and above the 200-day MA of 1.75, indicating a bullish trend. The MACD of 0.04 indicates Negative momentum. The RSI at 67.11 is Neutral, neither overbought nor oversold. The STOCH value of 95.21 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CIG.
Companhia Energetica Minas Gerais Risk Analysis
Companhia Energetica Minas Gerais disclosed 60 risk factors in its most recent earnings report. Companhia Energetica Minas Gerais reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 3 New Risks
1.
A member of our board of directors is party to judicial proceedings. Q4, 2022
2.
Increases in energy generated by MMGD in Cemig D's concession area could cause an imbalance in its cash flows and financial results. Q4, 2022
3.
The continuing impact of the ongoing military conflict between Russia and Ukraine, or any widening of the conflict, may have a material adverse effect on the global economy, certain material and commodity prices and potentially on our business. Q4, 2022
Companhia Energetica Minas Gerais Peers Comparison
Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $6.61B | 4.51 | 26.38% | 16.62% | -4.14% | 13.02% | |
78 Outperform | $6.63B | 12.80 | 9.22% | 3.45% | -7.02% | 17.33% | |
77 Outperform | $6.63B | 12.04 | 9.22% | 3.33% | -7.02% | 17.33% | |
74 Outperform | $49.68B | 16.76 | 9.76% | 3.39% | -0.39% | 0.75% | |
67 Neutral | $16.54B | 17.06 | 4.47% | 3.55% | 4.77% | 6.10% | |
64 Neutral | $21.89B | 2,867.59 | 0.47% | 5.13% | 12.40% | -108.27% | |
58 Neutral | $7.67B | 5.88 | 29.79% | 6.53% | -3.22% | 141.11% |
* Utilities Sector Average
Performance Comparison
CIG
Companhia Energetica Minas Gerais
1.98
0.39
24.53%
BIP
Brookfield Infrastructure
33.79
6.80
25.19%
ELP
Companhia Paranaense de Energia Pfd
8.85
2.15
32.09%
SRE
Sempra Energy
74.82
1.09
1.48%
AES
AES
11.13
-5.95
-34.84%
ELPC
Companhia Paranaense de Energia Sponsored ADR
8.26
2.33
39.29%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.