Cia Energetica DE Minas Gerais - Cemig (CIG) (Q2 2026) Earnings Call Highlights: Robust EBITDA ...

Release Date: August 14, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript .

Positive Points

• Cia Energetica DE Minas Gerais - Cemig ( NYSE:CIG ) delivered consistent and sound results in Q2 2026, with recurring EBITDA of BRL2.5 billion and a 9.3% increase year-over-year.

• The company is executing a robust investment program, with BRL3.3 billion invested in the first half of 2026, in line with its annual plan of BRL6.7 billion, focusing on distribution network improvements.

• Cia Energetica DE Minas Gerais - Cemig ( NYSE:CIG ) maintains a strong credit profile with AAA ratings from two agencies and AA+ from S&P, and has a manageable leverage of 2.58x, expected to decrease after the 2028 tariff review.

• The company's distribution segment shows improved quality indicators, with DEC and FEC below regulatory limits, reflecting the positive impact of past investments.

• Cia Energetica DE Minas Gerais - Cemig ( NYSE:CIG ) has a strong shareholder remuneration policy, with a minimum dividend payout of 50% of net income, and recently declared BRL631 million in interest on capital.

• The company is optimistic about the renewal of three concessions (including Sa Carvalho) and expects a positive outcome from the Ministry of Mines and Energy.

• Cia Energetica DE Minas Gerais - Cemig ( NYSE:CIG ) is well-prepared for El Nino impacts, with robust contingency plans and no expected budget impact.

• The trading segment is expected to improve in the second half of 2026, with a more favorable environment and settled positions, and the company anticipates significant results for 2028.

• The company is disciplined in capital allocation, considering transmission and battery auctions only when returns are attractive, and is cautiously exploring data center opportunities.

• Cia Energetica DE Minas Gerais - Cemig ( NYSE:CIG ) has a strong cash generation, with operating cash flow of nearly BRL4 billion in the first half of 2026, supporting its investment program.

Negative Points

• Cia Energetica DE Minas Gerais - Cemig ( NYSE:CIG ) experienced a 15.5% increase in consolidated costs and expenses in Q2 2026, partly due to seasonal effects and investments, though the company expects this to normalize over 12 months.

• The trading segment posted a negative recurring EBITDA of BRL180 million in Q2 2026, impacted by a BRL191 million provision related to a major industrial client arbitration and higher energy purchase prices.

• Net income was affected by higher financial expenses due to increased debt for investments, leading to a 15.6% growth but with a noted impact on profitability.

• The captive market in distribution saw a 3.8% decline in energy sales due to large clients leaving the network, and the rural class consumption dropped 11% due to higher rainfall.

• Gasmig's results declined due to client migration to the free market and a 17% reduction in distributed volume, impacting EBITDA and net income.

• The company's leverage is expected to increase up to 2027 before the 2028 tariff review, which may pressure financial results in the near term.

• There is uncertainty regarding the outcome of the free-market client arbitration, which could lead to further provisions or cash outflows.

• The company faces challenges from the full opening of the Brazilian electric power market in 2028, requiring significant investments and strategic adjustments.

• Cia Energetica DE Minas Gerais - Cemig ( NYSE:CIG ) is exposed to El Nino risks, which could affect operations and require additional contingency measures.

• The trading segment's negative results were concentrated in the first half of 2026, and the company acknowledges a difficult market environment with structural issues.

Q & A Highlights

Q: Considering the tariff increase only in 2028 and the rise in indebtedness and debt costs, what will be the direct impact on net income reduction for 2027, and what will be the impact on shareholder remuneration? A: Leonardo George de Magalhaes (CFO and IR Officer) stated that Cemig has historically been one of the best dividend payers in the electric sector, with a minimum mandatory payout of 50% of net income per its bylaws. He acknowledged that 2026 is a year with higher financial expenses but emphasized that results remain very positive for both EBITDA and net income. He assured that the company will continue to deliver attractive dividend yields in 2026 and 2027, even in an adverse market scenario, and that the 2028 tariff review will have a positive impact on results.

Q: How is the company preparing for the potential effects of El Nino across its business areas, and will there be CapEx prepayment in distribution and transmission to avoid incidents? A: Ernando Antunes Braga (Chief Distribution Officer) explained that Cemig has a robust contingency plan, including its largest-ever maintenance plan and OpEx, AMI meters, and automation in electric systems. He confirmed the company is fully prepared for El Nino impacts in the second half of 2026 with no impact on its budget. Demetrio Alexandre Ferreira (Chief Generation and Transmission Officer) added that for generation, they run periodic tests to guarantee equipment availability, and for transmission, they maintain high-resilience assets with preventive maintenance, vegetation control, and pre-positioned devices across Minas Gerais to handle contingencies quickly.

Q: Is Cemig interested in participating in upcoming transmission and battery auctions? A: Leonardo George de Magalhaes (CFO and IR Officer) confirmed the company is considering transmission auctions but emphasized capital allocation discipline, stating they will only participate if returns are attractive and generate value for shareholders. He noted that regulated businesses and investments in reinforcements are currently bringing more value. Sergio Cabral (Chief Trading Officer) added that regarding data centers, Cemig is in talks with market players to understand the segment and explore profitable energy sales or participation, but any investment will be approached cautiously to maximize value for the company and shareholders.

Q: What is the status of the concession renewal process, particularly for Sa Carvalho, which matures soon? A: Leonardo George de Magalhaes (CFO and IR Officer) stated that three concessions will mature in 2026 and 2027. The process is moving forward, with a favorable note already received from ANEEL, and discussions are now taking place at the Ministry of Mines and Energy. He expressed optimism about a positive outcome for the company in the concession renewal process, pending approval from the granting power.

Q: How is the trading company prepared to overcome the negative results, and what is its future outlook? A: Sergio Cabral (Chief Trading Officer) explained that the trading company faced a difficult moment due to price model changes and an unprecedented detachment of the South submarket. However, the company exchanged positions with generation, resulting in a net zero impact on the group. He noted that positions have been reduced for 2027 and 2028, and they expect significant results of around BRL1 billion to BRL1.8 billion for 2028. He emphasized that the company is applying best practices and strategies, and despite the current challenging market, they expect better results than competitors and are looking for the best time to settle positions and reduce losses.

Q: Can you provide more details on the BRL191 million provision related to the free-market customer arbitration and its impact on the trading results? A: Leonardo George de Magalhaes (CFO and IR Officer) clarified that the provision stems from a specific action involving a major industrial client and contract clauses. This is a one-time, non-cash effect provision recorded in the second quarter. The negative impact in the trading company's results was concentrated in the first half of the year, driven by settled positions and higher energy purchase prices, as well as submarket effects, especially in the South. The company expects more favorable conditions in the second half, with positive results compared to the first half.

Q: What is driving the 15.5% increase in consolidated costs and expenses this quarter, and is this a sustainable trend? A: Leonardo George de Magalhaes (CFO and IR Officer) attributed the increase to seasonal effects related to investments in network quality improvement and preparation for potential El Nino contingencies. He stated that this is a one-time impact and that the company does not expect the variation to persist when comparing 12-month periods from 2026 to 2025. He reaffirmed that costs are being controlled with financial discipline, balancing network improvements with client service quality.

Q: How is the company's leverage and debt profile positioned given the large investment program? A: Leonardo George de Magalhaes (CFO and IR Officer) reported that leverage reached 2.58x in the second quarter of 2026, which is in line with expectations given the investment plan. He noted that leverage is expected to grow until 2027 but will decrease in 2028 following the tariff review for the distribution company. The company maintains a high credit quality with AAA ratings from two agencies and AA+ from S&P Global, and it continues to access the capital market frequently with competitive costs.

For the complete transcript of the earnings call, please refer to the full earnings call transcript .