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Engie Brasil Energia SA (EGIEY)
OTHER OTC:EGIEY

Engie Brasil Energia SA (EGIEY) AI Stock Analysis

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Engie Brasil Energia SA

(OTC:EGIEY)

73Outperform
Engie Brasil Energia SA presents a strong investment case with solid profitability and effective equity use. The technical indicators reflect positive market momentum, and the valuation metrics suggest the stock is undervalued. However, cash flow challenges due to high capital expenditures remain a concern.

Engie Brasil Energia SA (EGIEY) vs. S&P 500 (SPY)

Engie Brasil Energia SA Business Overview & Revenue Model

Company DescriptionEngie Brasil Energia SA (EGIEY) is a leading energy company in Brazil, primarily engaged in the generation and commercialization of electricity. The company operates a diverse portfolio of power plants across the country, including renewable energy sources such as hydroelectric, wind, and solar power, as well as conventional thermal power plants. Engie Brasil Energia is a subsidiary of the global energy group Engie, which focuses on providing sustainable energy solutions worldwide.
How the Company Makes MoneyEngie Brasil Energia SA generates revenue primarily through the sale of electricity generated from its diverse portfolio of power plants. The company sells electricity on both regulated and non-regulated markets, providing power to distribution companies, industrial clients, and other consumers. Its revenue streams are bolstered by long-term power purchase agreements and participation in energy auctions, which provide stable and predictable income. Additionally, Engie's investment in renewable energy projects aligns with global trends towards sustainability, enhancing its market position and potential for future earnings. Strategic partnerships and initiatives to optimize operational efficiency further contribute to the company's financial performance.

Engie Brasil Energia SA Financial Statement Overview

Summary
Engie Brasil Energia SA displays solid profitability with stable margins and improved net income. However, cash flow management needs attention due to high capital expenditures affecting free cash flow. The balance sheet remains robust, supporting long-term financial health despite minor leverage increases.
Income Statement
75
Positive
Engie Brasil Energia SA has shown stable gross profit margins over the years. The net profit margin improved to 38.14% in 2024 from 31.91% in 2023, indicating enhanced profitability. However, the revenue growth rate was modest at 4.38% from 2023 to 2024. The EBITDA margin remained strong, showcasing efficient operations despite a decline in EBIT, suggesting potential operational challenges.
Balance Sheet
70
Positive
The balance sheet reflects a strong equity position with a debt-to-equity ratio of 2.14 in 2024, slightly up from 2.33 in 2023, indicating manageable leverage. Return on equity improved significantly to 37.98% in 2024, highlighting effective use of equity. The equity ratio stands at 22.48%, showing a stable capital structure, though slightly lower than the previous year.
Cash Flow
60
Neutral
Cash flow analysis reveals concerns with negative free cash flow growth due to high capital expenditures. The operating cash flow to net income ratio was 0.97, indicating adequate cash generation relative to net income. However, free cash flow to net income was negative, suggesting challenges in cash retention post-investment.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
11.22B10.75B11.91B12.54B12.26B
Gross Profit
6.11B5.91B5.59B5.91B5.43B
EBIT
0.005.47B5.98B5.96B4.88B
EBITDA
8.56B6.88B6.21B7.00B5.79B
Net Income Common Stockholders
4.28B3.43B2.66B1.56B2.80B
Balance SheetCash, Cash Equivalents and Short-Term Investments
4.39B5.33B2.81B5.70B5.16B
Total Assets
50.11B42.22B38.19B38.12B35.19B
Total Debt
24.13B20.68B17.94B20.26B16.89B
Net Debt
20.18B15.42B15.71B15.10B12.35B
Total Liabilities
37.83B32.41B29.75B30.18B27.44B
Stockholders Equity
11.27B8.86B8.44B7.93B7.74B
Cash FlowFree Cash Flow
-2.49B2.02B1.76B748.88M-6.77M
Operating Cash Flow
4.15B4.59B3.34B1.99B1.34B
Investing Cash Flow
-5.91B-2.04B-1.78B-339.05M-996.94M
Financing Cash Flow
459.25M476.35M-4.47B-1.03B323.37M

Engie Brasil Energia SA Technical Analysis

Technical Analysis Sentiment
Positive
Last Price7.00
Price Trends
50DMA
6.67
Positive
100DMA
6.30
Positive
200DMA
6.77
Positive
Market Momentum
MACD
0.12
Positive
RSI
55.83
Neutral
STOCH
-2.18
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EGIEY, the sentiment is Positive. The current price of 7 is above the 20-day moving average (MA) of 6.90, above the 50-day MA of 6.67, and above the 200-day MA of 6.77, indicating a bullish trend. The MACD of 0.12 indicates Positive momentum. The RSI at 55.83 is Neutral, neither overbought nor oversold. The STOCH value of -2.18 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EGIEY.

Engie Brasil Energia SA Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
81
Outperform
$17.57B9.659.37%3.84%-0.26%107.20%
73
Outperform
$5.82B7.3944.32%5.95%-2.15%-30.01%
POPOR
73
Outperform
$4.66B14.838.33%4.72%11.83%9.53%
70
Outperform
$4.88B19.669.89%3.00%1.65%162.78%
PNPNW
70
Outperform
$11.16B18.669.08%3.86%10.69%12.37%
68
Neutral
$5.16B28.103.67%5.65%-12.73%-74.65%
63
Neutral
$8.48B10.795.35%4.36%3.55%-11.17%
* Utilities Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
EGIEY
Engie Brasil Energia SA
7.00
-0.94
-11.84%
EBR.B
Centrais Elc Braz Pfb B Elbras
8.59
0.84
10.84%
PNW
Pinnacle West Capital
91.61
17.45
23.53%
TXNM
TXNM Energy
52.89
16.24
44.31%
POR
Portland GE
42.44
-0.14
-0.33%
ENIC
Enel Chile SA
3.96
1.10
38.46%

Engie Brasil Energia SA Earnings Call Summary

Earnings Call Date:May 08, 2025
(Q3-2024)
|
% Change Since: 2.49%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Neutral
The earnings call presented a balanced outlook with notable achievements in strategic project wins, early operations of renewable energy projects, and advancements in diversity and award recognitions. However, the company faced challenges with a decline in adjusted EBITDA, significant reduction in net profit, high curtailment levels, and increased financial costs and debt. The achievements in project execution and strategic wins are offset by financial and operational challenges.
Q3-2024 Updates
Positive Updates
Winning Aneel's Bid for Strategic Lot
Engie Brasil Energia won Aneel's bid for Lot 1 with 780 kilometers of strategic connecting lines in the state of Parana and Santa Catarina.
Early Commercial Operation of Wind Turbines
50 wind turbines at Serra do Assurua Wind Complex began early commercial operation, with 27% of the project installed.
Operational Start of Assu Sol Photovoltaic Complex
The first plant of the Assu Sol Photovoltaic Complex is operational, with 15 megawatts available out of a total of 755 megawatts.
Issuance of Debentures
Issued BRL 2 billion in debentures as part of CapEx funding for 2024.
Awards and Recognitions
Received Anefac Transparency Trophy for the 14th time and ranked as the best energy company by Melhores e Maiores Exame Magazine.
Significant Increase in Women in Leadership
Advancement in leadership positions from 26% to 30% and overall workforce from 28.8% to 31.4%.
Expansion Projects on Track
Projects like the Serra do Assurua Wind Complex and Asa Branca are progressing well, with anticipated completions ahead of schedule.
Negative Updates
Adjusted EBITDA Decline
Adjusted EBITDA saw a negative variation of 7%, from BRL 1.707 billion to BRL 1.65 billion, due to lower participation of TAG.
Significant Reduction in Net Profit
Net profit reduced by about 30% from BRL 867 million to BRL 658 million, impacted by lower EBITDA and higher financial costs.
High Curtailment Levels
Curtailment reached high levels in the third quarter, especially impacting the Santo Agostinho wind energy site with a 30% curtailment rate.
Increased Financial Costs
BRL 160 million additional financial costs due to higher IPCA and increased net debt.
Debt and Leverage Increase
Net debt increased, reaching 2.7x EBITDA, with gross debt at BRL 20.5 billion.
Company Guidance
During the third quarter of 2024 earnings call for Engie Brasil Energia (EGIE3.SA), several key metrics and developments were highlighted. The company reported an adjusted EBITDA of BRL 1.65 billion, marking a 7% decrease from BRL 1.707 billion in the previous year. Net income also saw a significant reduction of about 30%, falling from BRL 867 million to BRL 658 million, primarily due to lower EBITDA and increased financial costs. Engie Brasil's net debt increased to BRL 19 billion, with a leverage ratio of 2.7x EBITDA. The company successfully secured Aneel's bid for Lot 1, involving 780 kilometers of connecting lines, and commenced early operations of 50 wind turbines at Serra do Assurua Wind Complex, achieving 27% of the project’s total installation. Additionally, the Assu Sol Photovoltaic Complex began operations, contributing 15 megawatts of its total 755 megawatts capacity. The issuance of debentures worth BRL 2 billion was part of the funding strategy to meet the projected CapEx of BRL 10 billion for 2024. Engie Brasil also received the Anefac Transparency Trophy for the 14th time, reflecting its commitment to excellent financial practices.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.