FORM 6-K

 

securities and exchange commission
washington, d.c. 20549

 

report of foreign private issuer
pursuant to rule 13
a-16 or 15d-16 of
the securities exchange act of 1934

 

For the month of October 2020

Commission File Number 1-15224

 

Energy Company of Minas Gerais

(Translation of Registrant’s Name Into English)

Avenida Barbacena, 1200

30190-131 Belo Horizonte, Minas Gerais, Brazil

(Address of Principal Executive Offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F   X   Form 40-F ___

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): _____

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): _____

 

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

 

Yes ___ No   X  

 

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A

 

 
 

Index

  Item      Description of Items
1. Presentation of 2Q 2020 Results.
2. Earnings Release - 2Q 2020 Results.
3. 2Q 2020 Financial Statements.
4. Minutes of the Ordinary and Extraordinary General Meetings of Stockholders Held On July 31, 2020.
5. Notice to Stockholders Dated July 31, 2020: (1) Dividends declared by AGM of July 31; (2) Capital increase with issue of 4.1% in new shares.
6. Market Notice Dated August 5, 2020: Following success in court action, Cemig D files proposal for early return of ICMS tax to customers.
7. Market Notice Dated September 1, 2020: Resignation of member of the Board of Directors.
8. Market Announcement Dated September 8, 2020: BlackRock notifies significant holding in Cemig PN.
9. Material Announcement Dated September 10, 2020: Gasmig completes R$ 850 million debenture issue.
10. Market Notice Dated September 17, 2020: Moody’s upgrades Cemig’s ratings, maintains outlook positive.
11. Convocation Dated September 18, 2020: Extraordinary General Meeting of Stockholders (EGM).
12. Proposal by the Board of Directores to the Extraordinary General Meeting of Stockholders to be held on October 19, 2020, Dated September 18, 2020.
13. Notice to Stockholders Dated September 22, 2020: Interest on Equity: R$ 120 million on account of 2020 dividend.
14. Market Notice Dated September 25, 2020: Banco Clássico reports 16% holding of common shares.
15. Convocation Dated October 9, 2020: Extraordinary General Meeting of Stockholders.

 

 

 

Forward-Looking Statements

 

This report contains statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. Actual results could differ materially from those predicted in such forward-looking statements. Factors which may cause actual results to differ materially from those discussed herein include those risk factors set forth in our most recent Annual Report on Form 20-F filed with the Securities and Exchange Commission. CEMIG undertakes no obligation to revise these forward-looking statements to reflect events or circumstances after the date hereof, and claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

 

 

 

By: /s/ Leonardo George de Magalhães.

Name: Leonardo George de Magalhães

Title: Chief Finance and Investor Relations Officer

Date: October 22, 2020

 

 

 

1. Presentation of 2Q 2020 Results.

 

 

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2. Earnings Release - 2Q 2020 Results.

 

 

36  

 

 

 

CEMIG

REPORTS FOR 2Q20

2Q20 EBITDA: R$ 1,809 MILLION

ADJUSTED 2Q20 EBITDA: R$ 941 MILLION

 

Highlights of 2Q20:

 

§  Revenue from supply of electricity lower due to the pandemic:

down 8.5% YoY for Cemig GT; down 5.6% YoY for Cemig D.

§  Cemig D distributed 6% less energy in 2Q20 than in 2Q19

o   Captive market: Down 8.0% YoY

o   Transport for clients: Down 3.5% YoY

§  PMSO: 8.3% lower than in 2Q19 (excluded Programmed Voluntary Retirement Plan)

§  Gain from Periodic Tariff Review of Transmission Revenue: R$ 430 million

§  Restatement of asset held for sale (Light):

o   Gain of R$ 475 million = R$ 314 million, net of taxes

 

 

Indicators (GWh) 2Q20 2Q19 %
Electricity sold (excluding CCEE) 12,989 13,120 -1.0%
Total energy carried 4,739 4,910 -3.5%
Indicators – R$ million 2Q20 2Q19 %
Sales on CCEE 7.1 144.8 -95.1%
Net debt 12,157.2 12,449.9 -2.4%
Net debt (excluding hedge) 8,875.7 11,065.6 -19.8%
Gross revenue 8,621.8 9,973.2 -13.6%
Net revenue 5,934.4 7,016.8 -15.4%
Ebitda (IFRS) 1,809.0 1,811.8 -0.2%
Adjusted Ebitda 941.2 1,061.0 -11.3%
Net profit 1,044.0 2,115.0 -50.6%
Adjusted Ebitda margin 17.10% 19.02% -1,92p.p.
Ebitda of Cemig D and GT 2Q20 2Q19 %
Ebitda Cemig D 530.7 1,237.1 -57.1%
Ebitda Cemig GT 741.9 299.1 148.0%

 

37  


Conference call

 

Publication of 2Q20 results

 

Webcast and Conference call

August 17 (Monday), at 2:00 p.m. (Brasília time)

 

The transmission of results will have simultaneous translation in English and can be seen by Webcast, at

https://vcasting.voitel.com.br/?transmissionId=8393 (English)

 

or by conference call on:

+ (55) 11 3127-4971

+ (1) 929-3783440

Playback of Video Webcast:

http://ri.cemig.com.br

 

Click on the banner and download.

Available for 90 days.

Playback of Conference call:

Tel: (+55-11) 3127-4999

Password: 70732138

 

 

 

 

 

Cemig Investor Relations

 

http://ri.cemig.com.br/

ri@cemig.com.br

Tel.: +55 (31) 3506 5024

Fax: +55 (31) 3506 5025

 

Cemig’s Executive Investor Relations Team

 

 

§ Chief Finance and Investor Relations Officer

Leonardo George de Magalhães

 

§ General Manager, Investor Relations

Antônio Carlos Vélez Braga

 

 

38  

 

CONTENTS

 

Conference call 1
Cemig Investor Relations 2
Cemig’s Executive Investor Relations Team 2
CONTENTS 3
Disclaimer 4
Our shares 5
Cemig’s long-term ratings 6
INCOME STATEMENT 7
2Q20 RESULTS 8
Cemig’s consolidated electricity market 10
The electricity market of Cemig D 12
Sources and uses of electricity – MWh 14
The electricity market of Cemig GT 14
SUPPLY QUALITY INDICATORS – DECi and FECi 15
Consolidated operating revenue 16
Taxes and charges reported as Deductions from revenue 20
Operating costs and expenses 21
Share of profit (loss) in associates and joint ventures 25
Financial revenue and expenses 26
EBITDA 27
DEBT 28
Covenants – Eurobonds 30
Results separated by business segment – 2Q20 31
Appendices 32
Investments 32
Sources and uses of power – billed market 33
Losses 34
Generation plants 35
RAP (Permitted Annual Revenue – Transmission) – 2020-21 cycle 36
EBITDA/NET PROFIT - Management adjustments 37
Cemig D – Tables (R$ million) 37
Cemig GT – Tables (R$ million) 39
Cemig, consolidated – Tables (R$ million) 40

39  

 

Disclaimer

 

Certain statements and estimates in this material may represent expectations about future events or results, which are subject to risks and uncertainties that may 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 and other factors such as the macroeconomic environment, market conditions in the electricity sector, and expected future results, many of which are not under Cemig’s control.

 

Important factors that could lead to significant differences between actual results and the projections about future events or results include Cemig’s business strategy, Brazilian and international economic conditions, technology, Cemig’s financial strategy, changes in the electricity sector, hydrological conditions, conditions in the financial and energy markets, uncertainty on our results from future operations, plans and objectives, and other factors. Due to these and other factors, Cemig’s 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 the veracity, currentness or completeness of this information or these opinions. The information and opinions herein should not be understood as a recommendation to potential investors, and no investment decision should be based on the veracity, currentness or completeness of this information or these opinions.

 

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 from those estimated by Cemig, please consult the section on Risk Factors included in the Reference Form filed with the Brazilian Securities Commission (CVM) – and in the 20-F Form filed with the U.S. Securities and Exchange Commission (SEC).

 

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Our shares

 

Security Ticker Currency Jun. 2020 Dec. 2019 Change in the period %
Cemig PN CMIG4 R$ 11.02 13.79 -20.09%
Cemig ON CMIG3 R$ 11.89 15.59 -23.73%
ADR PN CIG US$ 2.05 3.34 -38.62%
ADR ON CIG.C US$ 2.21 3.90 -43.33%
Ibovespa IBOV 95,056 115,645 -17.80%
Power industry index IEEX 70,160 76,627 -8.44%

 

Source: Economática – Adjusted for corporate action, including dividends.

 

Trading volume in Cemig’s preferred shares (CMIG4) in 2020 was R$ 17.2 billion, of which R$ 8.25 billion was traded in the second quarter, corresponding to a daily average of R$ 139.88 million – 8.66% higher than in 2Q19. Trading volume in Cemig’s common shares in 1H20 was R$ 2.91bn, with average daily trading volume of R$ 23.66mn in 1H20 and R$ 21.61mn in the second quarter. Cemig’s shares, by volume (aggregate of common (ON) and preferred (PN) shares), were the third most liquid in Brazil’s electricity sector in the period, and among the most traded in the whole Brazilian equity market.

On the New York Stock Exchange the volume traded in ADRs for Cemig’s preferred shares (CIG) in 1H20 was US$1.34 billion. We see this as reflecting recognition by the investor market of Cemig as a global investment option.

The Bovespa index, benchmark for the São Paulo stock exchange, fell strongly, by 17.80%, in 1H20, as a result of the Covid-19 pandemic, despite the 30.18% in 2Q20. Cemig’s preferred shares fell by a similar percentage, 20.09%; and the common shares fell 23.73%. In the 2Q20, CMIG4 rose 23.68% and CMIG3 31.68%. In New York the ADRs for Cemig’s preferred shares were down 38.62% in the half-year and up 20.59% in the 2Q20, and the ADRs for the common shares rose 22.78% in Q2, and were down 43.33% – these figures reflect the strong change in the USD/BRL exchange rate in the year.

41  

 

Cemig stock prices vs. indices

 

 

 

Cemig’s long-term ratings

 

This table shows long-term credit risk ratings and outlook for the Company as provided by the principal rating agencies:

Brazilian ratings:

Agency Cemig Cemig D Cemig GT
  Rating Outlook Rating Outlook Rating Outlook
Fitch A+(bra) Stable A+(bra) Stable A+(bra) Stable
S&P brA+ Positive brA+ Positive brA+ Positive
Moody’s Baa1.br Positive Baa1.br Positive Baa1.br Positive

 

Global ratings:

Agency Cemig Cemig D Cemig GT
  Rating Outlook Rating Outlook Rating Outlook
Fitch BB– Stable BB– Stable BB– Stable
S&P B Positive B Positive B Positive
Moody’s B1 Positive B1 Positive B1 Positive

 

Ratings of Eurobonds:

Agency Cemig Cemig GT
  Rating Outlook Rating Outlook
Fitch BB– Stable BB– Stable
S&P B Stable B Stable

  

42  

 

Adoption of IFRS

 

The results presented below are prepared in accordance with Brazilian accounting rules, which now embody harmonization with IFRS (International Financial Reporting Standards). They are expressed in thousands of Reais (R$ ’000).

 

INCOME STATEMENT

 

 

Consolidated                                     R$'000 2Q/20 2Q/19 Change
NET REVENUE 5.934.414 7.016.793 -15,43%
OPERATING COSTS AND EXPENSES      
Personnel 339.183 312.031 8,70%
Employees’ and managers’ profit shares 7.440 108.478 -93,14%
Post-retirement obligations 118.322 97.790 21,00%
Materials 16.141 19.766 -18,34%
Outsourced services 302.609 302.241 0,12%
Electricity bought for resale 2.755.238 2.526.019 9,07%
Depreciation and amortization 245.697 248.403 -1,09%
Operating provisions / adjustments 197.613 869.373 -77,27%
Charges for use of the national grid 257.441 367.375 -29,92%
Gas bought for resale 231.378 330.180 -29,92%
Infrastructure construction costs 373.405 266.107 40,32%
Other operational expenses, net 84.321 41.922 101,14%
  4.928.788 5.489.685 -10,22%
Impairment of assets held for sale 475.137 0  
Share of profit (loss) in associates and joint ventures 82.534 36.274 127,53%
       
Finance income 670.078 2.272.470 -70,51%
Finance expenses -705.395 -363.883 93,85%
Pre-tax profit 1.527.980 3.471.969 -55,99%
       
Current income tax and Social Contribution tax -198.803 -973.424 -79,58%
Deferred income tax and Social Contribution tax -285.183 -383.559 -25,65%
NET PROFIT FOR THE PERIOD 1.043.994 2.114.986 -50,64%

43  

2Q20 RESULTS

 

In thousands of Reais, unless otherwise stated

 

For second quarter 2020 (2Q20), Cemig reports net profit of R$ 1,043,994, which compares to net profit of R$ 2,113,986 in 2Q19.

 

Leading factors in the 2Q20 result:

§ Gain on the Periodic Tariff Review of Cemig GT: R$ 429,840.
§ Heavy impact of the Covid-19 epidemic on the volume of electricity distributed in 2Q20: down 6% YoY. This effect reached approximately –10.5% in April 2020, and has been showing signs of recovery: load in June and July has been close to that of 2019. Another effect of the pandemic was that the allowance for doubtful receivables in Cemig D was R$ 57,295 higher than in 2Q19. The amount provisioned in 2Q20 was R$ 102,504.
§ The result of Cemig GT was affected by sale of energy at the lower limit of contractual flexibility ranges for a relevant part of the clients, due to the pandemic.
§ Cemig GT posted a gain of R$ 70,770 in Financial revenues (expenses), related to the debt in Eurobonds and the related hedge instrument. In 2Q19, the combined effect of the debt and the hedge on Financial Revenue (expenses) was R$ 557,833 positive.
§ Reversal of part of the impairment of Light posted in 1Q20, with recognition of the market value of the investment at June 30, generating a gain in 2Q20 of R$ 475,137, which net of taxes is R$ 313,590.
§ Continuing reduction of costs of PMSO (Personnel, materials, services and other expenses), which were 8.3% lower YoY – after exclusion of the expenses of R$ 58,850 on the PDVP voluntary retirement plan, posted in 2Q20.
§ Cemig D recorded a revenue from transactions under the Surplus Sales Mechanism (MVE) totaled R$ 41,514 in 2Q20.

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§ In 2Q19, an impairment of R$ 688,031 was recognized of Accounts receivable from Renova; the amount of impairment posted in 2Q20 was R$ 37,361.
§ In 2Q19, was recorded a revenue of R$1,438,563 from Tax credits in ICMS/PIS-Cofins case and financial revenue of R$1,553,112 for updating of these credits.

 

The ‘Covid Account’

On May 18, 2020, in response to the state of public calamity caused by the Covid 19 pandemic, Decree 10350/2020 authorized creation of the ‘Covid Account’, the purpose of which was to cover deficits, or anticipate revenue, of holders of concessions or permissions to distribute electricity – the basis of the financial flows of the electricity sector, especially related to: (i) overcontracting of supply; (ii) the CVA (‘Portion A’ Variation Compensation Account); (iii) neutrality of sector charges; (iv) postponement until June 30, 2020 of the results of tariff review processes for distributors ratified up to that date; and (v) bringing forward of the regulatory asset relating to Portion B, as per an Aneel regulation and timetable decided by the distributor.

 

On June 23, 2020 Aneel issued Normative Resolution 885/2020, setting the criteria and procedures for management of the Covid Account, and also regulating use of the CDE tariff charge. Under this Resolution, the amounts transferred to each distributor are reverted as negative financial components up to the tariff adjustment processes of 2022, duly updated by the Selic rate, with neutrality assured.

 

Cemig D accepted the financial offsetting mechanism of the Covid Account, with a view to strengthening its cash position, enabling compliance with its financial obligations even during the reduction of revenue caused by the severe economic downturn. On July 9, 2020, Aneel informed Cemig D of the amount from the Covid Account to be allocated to it – a total of R$ 1,404,175, to be passed through in stages. The first tranche, of R$ 1,186,390, was received on July 31, 2020, with the remaining total of R$ 217,785 to be received in six monthly payments in August 2020 through January 2021.

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Measures to preserve liquidity

In addition to accepting the terms of the Covid Account, to preserve liquidity and mitigate the effects of the impact on the macro economy, the Company took measures including the following:

 

§ Revision of its program of investments and expenses.
§ Payment of minimum dividends to stockholders, and postponement of the payments of dividends and Interest on Equity to the end of 2020.
§ Negotiation of its contracts with Free Clients.
§ Deferral of payment of employment-law taxes and charges, as authorized by legislation.

 

Cemig’s consolidated electricity market

 

The Cemig Group makes its sales of electricity through its distribution company, Cemig Distribuição (‘Cemig D’), its generation and transmission company, Cemig Geração e Transmissão (‘Cemig GT’), and other wholly-owned subsidiaries:

Horizontes Energia, Sá Carvalho, Cemig PCH, Rosal Energia, the wind power companies Praias de Parajuru and Volta do Rio, Cemig Geração Camargos, Cemig Geração Itutinga, Cemig Geração Salto Grande, Cemig Geração Três Marias, Cemig Geração Leste, Cemig Geração Oeste, and Cemig Geração Sul.

 

These companies sell electricity to:

(i) Captive consumers in Cemig’s concession area in the State of Minas Gerais;
(ii) Free Consumers in both the State of Minas Gerais and other States of Brazil, in the Free Market (Ambiente de Contratação Livre, or ACL);
(iii) other agents of the electricity sector – traders, generators and independent power producers, also in the ACL; and
(iv) Distributors, in the Regulated Market (Ambiente de Contratação Regulada, or ACR).

 

The Cemig group traded a total of 12,988,626 MWh on the CCEE in 2Q20, 1.0% less than in 2Q19. Sales of electricity to final consumers, plus Cemig’s own consumption,

46  

totaled 9,587,085 MWh, or 10.4% less than in 2Q19. Sales to distributors, traders, other generating companies and independent power producers in 2Q20 were 3,401,541 MWh – or 40.4% more than in 2Q19.

 

In June 2020 the Cemig Group invoiced 8,590,483 clients – this was 1.5% more than its number of consumers in June 2019. Of this total number of consumers, 8,590,104 are final consumers, and/or represent Cemig’s own consumption; and 379 are other agents in the Brazilian electricity sector.

This chart shows the percentage of the Cemig Group’s sales to final consumers:

Sales to final consumers as % of total

 

Total consumption of electricity (GWh) – Down 1.0% YoY

 

 

 

47  

 

The electricity market of Cemig D

 

Electricity billed to captive clients and electricity transported for Free Clients and distributors with access to Cemig D’s networks in 2Q20 totaled 10,526,441 MWh, or 6.0% less than in 2Q19. This result is a composition of: (i) lower use of the network by Free Clients – a YoY decrease of 3.5%; and (ii) consumption by the captive market 8.0% lower YoY.

Captive clients + Transmission service (MWh)

 

Captive clients + Transmission service  (MWh) 2Q20 2Q19 %
Residential 2,657,910 2,547,878 4.32
Industrial 4,782,233 5,112,557 -6.46
Commercial, Services and Others 1,275,441 1,622,920 -21.41
Rural 900,984 917,775 -1.83
Public authorities 169,008 231,943 -27.13
Public lighting 325,162 333,969 -2.64
Public services 339,650 339,955 -0.09
Concession holders (Distributors) 68,082 84,060 -19.01
Own consumption 7,970 7,247 9.98
Total 10,526,441 11,198,304 -6.00

 

Residential

 

Residential consumption, which was 25.2% of the energy distributed by Cemig D in 2Q20, was 4.3% higher than in 2Q19. This increase reflects a total of 122,382 new consumer units being added to the network since the end of June 2019, and also average monthly consumption per consumer approximately 2.5% higher than in 2Q19.

 

Industrial

 

Consumption by the industrial consumer category was 45.4% of the total volume of electricity distributed by Cemig D, and totaled 4,782,233 MWh in 2Q20, or 6.5% less than in 2Q19. Consumption suffered a strong impact from the pandemic: the heaviest reductions were in the automotive, textiles and steel sectors.

Energy consumed by captive clients totaled 406,876 MWh in 2Q20, 34.5% less than in 2Q19. The volume of energy transported for industrial Free Clients was 41.6% of the total of energy distributed, and was 4,375,358 MWh in 2Q20, 2.6% less than in 2Q19.

 

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Commercial and Services

Distribution to this category of client was also strongly impacted by the pandemic, and by the restrictions on opening of stores, etc. – it was 21.4% less than in 2Q19. Volume was down 23.4% YoY in the captive market, and down 13.5% YoY in the Free Market. The total energy used by captive clients, plus energy transported for Free Clients, in the category was 12.1% of the total of energy distributed by Cemig D in 2Q20.

 

Rural

The rural consumer category suffered less from the Covid pandemic than other consumer categories. Its total consumption was 1.8% less in 2Q20 than 2Q19, even with a reduction of 13,023 consumer units in the category, due to re-registry of consumers to comply with Aneel Resolution 800.

 

Number of clients

A total of 8,589,721 consumers were billed in June 2020, or 123,507 more than in June 2019. Of this total, 1,584 were Free Consumers using the distribution network of Cemig D.

Cemig D Number of clients Change, %
2Q20 2Q19
Residential 7,002,932 6,880,550 1.78%
Industrial 29,745 29,712 0.11%
Commercial, Services and Others 773,250 761,017 1.61%
Rural 695,510 708,542 -1.84%
Public authorities 65,737 64,565 1.82%
Public lighting 6,742 6,425 4.93%
Public services 13,516 13,506 0.07%
Own consumption 705 677 4.14%
  8,588,137 8,464,994 1.45%
Total energy carried      
Industrial 766 594 28.96%
Commercial 801 618 29.61%
Rural 14 5 180.00%
Concession holders 3 3 0.00%
  1,584 1,220 29.84%
Total 8,589,721 8,466,214 1.46%

 

49  

 

 

Sources and uses of electricity – MWh

 

Metered market MWh Change,
2Q20 2Q19 %
Total energy carried      
  Transported for distributors (metered) 72,404 86,200 -16.00%
  Transported for Free Clients (metered) 4,517,041 4,945,263 -8.66%
  Own load + Distributed generation (1)(2) 4,589,445 5,031,463 -8.79%
       Consumption by captive market – Billed supply 5,787,773 6,288,496 -7.96%
       Losses in distribution network 1,719,023 1,688,889 1.78%
Total volume carried 12,096,241 13,008,849 -7.02%

 

(1) Includes Distributed Micro-generation.
(2) Includes own consumption

 

The electricity market of Cemig GT

 

Cemig GT billed a total of 7,233,217 MWh in 2Q20, 5.4% more than in 2Q19. Consumption by industrial clients was 627,536 MWh lower than in 2Q19, while commercial consumption was 1.23% higher – reflecting an increase of approximately 29% in the number of clients.

Sales 51.7% higher in the Free Market mainly reflected the higher volume of sales in the spot market to traders especially in April, and less allocation of energy for settlement on the CCEE.

 

Cemig GT (MWh) Change, %
2Q20 2Q19
Free Clients      
   Industrial 2,698,768 3,326,304 -18.87%
   Commercial 1,095,953 1,082,661 1.23%
  Rural 4,590 524 775.52%
Free Market – Free contracts 2,870,210 1,892,134 51.69%
Regulated Market 531,332 530,140 0.22%
ACR – Cemig D 32,363 32,348 0.05%
Total 7,233,217 6,864,111 5.38%

50  

 

SUPPLY QUALITY INDICATORS – DECi and FECi

 

 

Cemig is continuously taking action to improve operational management, organization of the logistics of its emergency services, and its permanent routine of preventive inspection and maintenance of substations, distribution lines and networks. It also invests in training of its staff for improved qualifications, state-of-the-art technologies, and standardization of work processes, aiming to maintain the quality of electricity supply, and as a result maintain satisfaction of clients and consumers.

 

The charts below show Cemig’s indicators for duration and frequency of outages – DECi (Average Outage Duration per Consumer, in hours), and FECi (Average Outage Frequency per Consumer, in number of outages), since January 2016. These quality indicators are linked to the current concession contract of Cemig D (distribution), signed in 2015.

Note: Figures for 2016 and 2017 are according to recalculation presented by the Company to Aneel.

 

51  

 

Consolidated operating revenue

 

Revenue from supply of electricity (a)

Total revenue from supply of electricity in 2Q20 was R$ 5,920,014, 6.4% less than in 2Q19 (R$ 6,327,737).

 

  MWh (1) R$ ’000   Average price billed (R$/MWh)
2Q20 2Q19 Change % 2Q20 2Q19 Change % 2Q20 2Q20
Residential 2,657,910 2,547,878 4.32 2,307,578 2,206,790 4.57 868.19 866.13
Industrial 3,105,644 3,947,233 -21.32 934,197 1,154,786 -19.10 300.81 292.56
Commercial, services and others 2,085,089 2,374,683 -12.20 1,136,848 1,280,841 -11.24 545.23 539.37
Rural 896,651 915,078 -2.01 511,810 460,746 11.08 570.80 503.50
Public authorities 169,009 231,943 -27.13 121,381 158,145 -23.25 718.19 681.83
Public lighting 325,162 333,969 -2.64 142,679 140,508 1.55 438.79 420.72
Public services 339,650 339,954 -0.09 177,860 165,901 7.21 523.66 488.01
Subtotal 9,579,115 10,690,738 -10.40 5,332,353 5,567,717 -4.23 556.66 520.80
Wholesale supply to other concession holders 3,401,541 2,422,273 40.43 726,004 641,532 13.17 213.43 264.85
Total billed 12,980,656 13,113,011 -1.01 6,058,357 6,209,249 -2.43 466.72 473.52
Own consumption 7,970 7247 9.98 0 0 - - -
Retail supply not yet invoiced, net 0 0 - -104,793 80,721 -229.82 - -
Wholesale supply not yet invoiced, net 0 0 - -33,550 37,767 -188.83 - -
Total 12,988,626 13,120,258 -1.00 5,920,014 6,327,737 -6.44 - -

 

Final consumers

Revenue from energy sold to final consumers totaled R$ 5,332,353 in 2Q20, or 4.23% less than in 2Q19 (R$ 5,567,717) – reflecting consumption of electricity 10.40% lower YoY due to the pandemic, partly offset by the effect of Cemig D’s annual tariff increase in force from May 28, 2019 (full effect in 2020), which had an average impact on consumers’ tariffs of 8.73%.

Revenue from Use of Distribution Systems (the TUSD charge)

In 2Q20 this revenue was R$ 674,737, or 6.14% more than in 2Q19 (R$ 635,675). This difference arises mainly from the Company’s annual tariff adjustment, in effect from May 28, 2019 (full effect in 2020), which had an average impact of approximately 15.47% for Free Clients; partially offset by volume of energy transported in 3.49% lower in 2Q20 than in 2Q19.

52  

 

CVA and Other financial components in tariff adjustments

 

In its financial statements Cemig recognizes the difference between actual non-controllable costs (in which the CDE, and electricity bought for resale, are significant components) and the costs that were used as the basis for decision on the rates charged to consumers. In 2Q20 this item comprised a reduction of revenue by R$ 136,254, compared with an addition to revenue of R$ 40,109 in 2Q19. This variation mainly reflects: (1) higher costs of energy from Itaipu, due to the rise in the dollar exchange rate; and (2) the effects of overcontracting resulting from lower consumption of electricity, which generated an increase in the net financial asset to be passed through to the Company by the next tariff adjustment. These effects were partially offset by the passthrough of surplus amounts under the Energy Reserve Account (CONER), established by Aneel Dispatch 986/2020. The Company’s CVA balance receivable is R$ 926,183.

Changes in balances of financial assets and liabilities:

  R$ ’000  
Balance at March 31, 2019 1,147,415
Net constitution of financial assets 87,700
Realized -127,809
 Advances from the Flag Tariff Centralizing Account (‘CCRBT’) -8,581
 Updating – Selic rate 32,140
Balance at June 30, 2019 1,130,865
   
Balance at March 31, 2020 775,885
Net constitution of financial assets 262,167
Realized -125,913
 Advances from the Flag Tariff Centralizing Account (‘CCRBT’) -1
 Updating – Selic rate 14,045
Balance at June 30, 2020 926,183

 

 

53  

 

Transmission concession revenue

 

This revenue in 2Q20 was R$ 299,832, or 138.79% more than in 2Q19 (R$ 125,564). The higher figure is mainly due to the remeasurement of the Remuneration Base in the Periodic Tariff Review of Permitted Annual Revenue (RAP), ratified by Aneel on June 30, 2020, resulting in an adjustment of R$ 198,714. Additionally, these revenues were impacted by the increase in annual RAP, in July 2019 – this includes the effects of inflation and also new revenues resulting from investments authorized. The percentages and indices applied are different for different concessions: the IPCA inflation index is applied to the contract of Cemig GT, and the IGP–M index to the contract of Cemig Itajubá. They also include an adjustment to expectation of cash flow from financial assets, due to the change in the fair value of the Regulatory Remuneration Base of Assets (BRR).

 

Transmission reimbursement revenue

 

The Company records the updating of the balance receivable for the indemnity (reimbursement of asset value) based on the IPCA inflation index, and the average Regulatory cost of capital, as specified in the regulation for the sector.

 

The transmission indemnity revenue in 2Q20 was 348.33% higher than in 2Q19 – at R$ 259,680 compared to R$ 57,921 in 2Q19. This higher figure mainly reflects the upward adjustment to the economic portion of the indemnity base, as a result of the Periodic Review of RAP, which was recalculated in accordance with the applicable regulatory rules, resulting in an increase of R$ 231,126 in the Company’s profit at June 30, 2020.

 

Additionally, these revenues were influenced by the difference in the IPCA inflation index between the two periods. At the beginning of the tariff cycle, which takes place in July of each year, the amounts received for the adjustment set for the cycle, corresponding to the amortization of the debtor balance up to the end of the period, are excluded from the remuneration base for updating, reducing the remuneration. The indemnity (reimbursement) is being received through the RAP (Permitted Annual Revenue) since 2017, over a period of 8 years, for the financial portion, and for the remaining period of the useful life of the assets, for the economic portion.

 

Revenue from transactions on the Wholesale Trading Exchange (CCEE)

Revenue from transactions in electricity on the CCEE in 2Q20 was R$ 7,074, compared to R$ 144,821 in 2Q19 – a reduction of 95.1% year-on-year. This reduction is due to the lower availability of electricity for settlement on the CCEE; higher allocation of

54  

electricity to ‘bilateral’ sales on the spot market in 2Q20, and the lower value of the spot price than in the previous year.

 

Month Spot Price GSF
Sub-market R$/MWh 2020 2019
2020 2019
April SE/CO 39.68 180.41 1.023 1.189
May SE/CO 71.95 135.17 0.956 0.923
June SE/CO 114.79 78.52 0.765 0.669

 

 

Revenue from supply of gas

 

The Company reports revenue from gas 24.62% lower YoY in 2Q20, at R$ 403,227, compared to R$ 534,995 in 2Q19. This difference basically reflects volume of gas sold 17.55% lower, at 183,138m3 in 2Q20, compared to 222,106m3 in 2Q19, led by the industrial consumer category, which consumed 21.75% less volume year-on-year.

 

Market

(’000 m3/day)

2015 2016 2017 2018 2019 1H20 1H19  
 
Residential 1.04 3.38 11.44 17.73 21.28 23.91 19.23  
Commercial 22.42 24.68 32.67 39.37 47.7 47.11 41.87  
Industrial 2,422.78 2,173.76 2,453.22 2,400.41 2,085.32 1,902.09 2,219.07  
Other 119.87 120.19 126.15 155.14 148.44 115.39 154.33  
Total, excluding thermal generation 2,566.11 2,322.01 2,623.47 2,612.65 2,302.74 2,088.50 2,434.50  
Thermoelectric power 1,309.13 591.52 990.89 414.04 793.94 292.13 534.27  
Total 3,875.24 2,913.53 3,614.36 3,026.69 3,096.69 2,380.63 2,968.77  

 

Supply of gas to the residential market began in 2013. In June 2020, a total of 54,552 households were supplied and billed.

 

Number of clients 2015 2016 2017 2018 2019 June 2020  
 
Residential 3,820 14,935 30,605 41,377 50,813 54,552  
Commercial 218 394 591 756 981 978  
Industrial 113 112 107 109 109 98  
Other 62 49 50 57 61 62  
Thermoelectric power 2 2 2 2 2 2  
Total 4,215 15,492 31,355 42,301 51,966 55,692  

 

55  

 

Taxes and charges reported as Deductions from revenue

 

The total of these taxes and charges reported as deductions from revenue in 2Q20 was R$ 2,687,389, or 9.10% less than in 2Q19 (R$ 2,956,432).

The Energy Development Account – CDE

The amounts of payments to the Energy Development Account (CDE) are decided by an Aneel Resolution. The purpose of the CDE is to cover costs of concession indemnities (reimbursements of costs of assets), tariff subsidies, the subsidy for balanced tariff reduction, the low-income-consumer subsidy, the coal consumption subsidy, and the Fuels Consumption Account (CCC). The charges for contribution to the CDE were R$ 608,155 in 2Q20, compared to R$ 679,017 in 2Q19, or 10.44% lower, mainly due to the termination of the Regulated Market Account (‘the ACR Account’), in August 2019.

This is a non-manageable cost: the difference between the amounts used as a reference for setting of tariffs and the costs actually incurred is compensated for in the subsequent tariff adjustment.

Consumer charges – the ‘Flag’ Tariff system

 

The ‘Flag’ Tariff bands are activated as a result of low levels of water in the system’s reservoirs – tariffs are temporarily increased due to scarcity of rain.

Charges to the consumer arising from the ‘Flag Tariff’ system in 2Q20 were 99.16% lower year-on-year – at R$ 73 in 2Q20, vs. R$ 8,712 in 2Q19. This reflects the flag being ‘green’ during the whole of 2Q20. For comparison, in 2Q19 the yellow flag was activated in May (with effect on the billing for June 2019).

The ‘Flag’ Tariff component – history
Mar. 2020 Green Mar. 2019 Green
Apr. 2020 Green Apr. 2019 Green
May 2020 Green May 2019 Yellow
Jun. 2020 Green Jun. 2019 Green

 

56  

 

Operating costs and expenses

 

Operational costs and expenses in 2Q20 were R$ 4,928,788, or 10.22% less than in 2Q19 (R$ 5,489,685).

The following paragraphs comment on the main variations in expenses:

Personnel

 

The expense on personnel in 2Q20 was R$ 339,183, or 8.70% more than in 2Q19 (R$ 312,031). The difference mainly reflects recognition in 2Q20 of R$ 58,850, the cost of voluntary severance programs; and also the effect of the salary increase of 2.55% agreed in November 2019 under the Collective Work Agreement. Excluding the effects of the voluntary severance program, spending on personnel would have been 10.16% lower than in 2Q19.

PDVP Cost, R$ ’000 Number of employees accepting
Consolidated 58,850 396
GT 11,348 61
D 45,584 329

 

57  

 

Number of employees – by company

 

Employees’ and managers’ profit shares

 

The expense on employees’ and managers’ profit shares in 2Q20 was R$ 7,440, compared to R$ 108,478 in 2Q19, reflecting the lower profit in the period and the change in the criteria for shared profit sharing.

 

Electricity purchased for resale

 

The expense on electricity bought for resale in 2Q20 was R$ 2,755,238, or 9.07% more than in 2Q19 (R$ 2,526,019). This arises mainly from the following factors:

§ Expenses on supply from Itaipu 45.31% higher, at R$ 524,601 in 2Q20, than in 2Q19 (R$ 361,021). The difference mainly reflects the higher average US dollar exchange rate – R$ 5.40 in 2Q20, compared to R$ 3.92 in 2Q19; and the higher price of energy in US dollars, at R$ 28.41/kW for the whole of 2020, compared with US$ 27.71/kW for 2019.
§ Expenses on supply acquired at auction were 9.31% higher YoY in 2Q20, at R$ 748,514, compared to R$ 684,774 in 2Q19. This increase reflects: (i) volume of energy acquired approximately 10% higher year-on-year; and (ii) the upward adjustment in power purchasing agreements on the regulated market (CCEARs) taking place at the moment of Cemig D’s tariff adjustment.
§ Higher expenses on distributed generation: R$ 154,315 in 2Q20, compared to R$ 44,892 in 2Q19. This higher figure reflects the increase in the number of

58  

generating facilities installed, and the higher quantity of energy injected into the network (232,076 MWh in 2Q20, compare to 95,965 MWh in 2Q19).

For Cemig D, purchased energy is a non-manageable cost: the difference between the amounts used as a reference for calculation of tariffs and the costs actually incurred is compensated for in the subsequent tariff adjustment.

Consolidated 2Q20 2Q19 Change
Supply from Itaipu Binacional 524,601 361,021 45.31%
Physical guarantee quota contracts 189,617 185,427 2.26%
Quotas for Angra I and II nuclear plants 75,742 67,293 12.56%
Spot market 251,066 278,055 -9.71%
Proinfa 77,933 95,309 -18.23%
Individual (‘bilateral’) contracts 84,216 78,883 6.76%
Electricity acquired in Regulated Market auctions 748,514 684,774 9.31%
Acquired in Free Market 900,703 973,506 -7.48%
Distributed generation 154,315 44,892 243.75%
Credits of PIS, Pasep and Cofins taxes -251,469 -243,141 3.43%
  2,755,238 2,526,019 9.07%

 

Cemig D 2Q20 2Q19 Change
Supply from Itaipu Binacional 524,601 361,021 45.31%
Physical guarantee quota contracts      199,970 185,427 7.84%
Quotas for Angra I and II nuclear plants 75,742 67,293 12.56%
Spot market – CCEE 195,334 246,418 -20.73%
Individual (‘bilateral’) contracts 84,216 78,883 6.76%
Acquired in Regulated Market auctions 757,419 702,423 7.83%
Proinfa 77,933 95,308 -18.23%
Distributed generation 154,314 44,892 243.74%
Credits of PIS, Pasep and Cofins taxes -166,429 -154,239 7.90%
  1,903,100 1,627,426 16.94%

 

59  

 

Gas bought for resale

 

The expense on acquisition of gas was 29.92% lower in 2Q20, at R$ 231,378, compared to R$ 330,180 in 2Q19. This basically reflects volume of gas purchased 14.61% lower, at 185,852m3 in 2Q20, compared to 217,646m3 in 2Q19.

 

Post-retirement obligations

 

The impact on operational profit of the Company’s post-retirement obligation was an expense of R$ 118,322 in 2Q20, compared to an expense of R$ 97,790 in 2Q19. This is mainly the result of reduction in the discount rate used in the actuarial calculation – which increased the amount of the actuarial liabilities, and consequently the scale of the expense reported.

 

Charges for use of the transmission network

Charges for use of the national grid in 2Q20 were R$ 257,441, or 29.92% less than in 2Q19 (R$ 367,375).

This is a non-manageable cost in the distribution activity: the difference between the amounts used as a reference for calculation of tariffs and the costs actually incurred is compensated for in the subsequent tariff adjustment.

 

Operating provisions

 

Operational provisions in 2Q20 totaled R$ 197,613, or 77.27% less than in 2Q19 (R$ 869,373). This arises mainly from the following factors:

§ Recognition in 2Q19 of a higher provision for impairment of Accounts receivable from Renova: R$ 688,031, compared to R$ 37,361 in 2Q20.
§ Losses expected on doubtful receivables from clients 142.22% higher, at R$ 115,360 in 2Q20, compared to R$ 47,627 in 2Q19. This difference mainly reflects higher default by clients in the public authorities category, and, especially, worsening of performance in the residential and industrial consumer categories, due to the pandemic.

60  

§ Lower provisions made for employment-law contingencies: R$ 23,375 in 2Q20, compared to R$ 105,122 in 2Q19. This mainly reflects recognition, in 2Q19, of a change in the indexor used for monetary updating of employment-law actions, from the TR reference rate to the IPCA-E inflation rate, for claims between March 25, 2015 and November 10, 2017 – which are at an advanced phase of execution. The chances of loss have been assessed as ‘probable’.

 

Share of profit (loss) in associates and joint ventures

 

The Company reported a gain of R$ 82,534 as share of net profit in associates and joint ventures, which was 127.5% more than in 2Q19. This mainly reflects improvement in the result of Taesa and a less negative result from the stake in Santo Antôniot that was negative R$ 18,528 in 2Q20 and negative R$ 58,154 in 2Q19.

Note: The result of Companhia de Transmissão Centroeste de Minas is no longer included in this account (equity income), since the conclusion of purchase by the Company of the remaining stake in Centroeste in January 2020.

 

Share of profit (loss) in affiliates and joint ventures 2Q20 2Q19
Taesa 90,404 64,858
Aliança Geração 24,939 23,276
Baguari Energia 5,539 5,138
Retiro Baixo 2,609 1,267
Hidrelétrica Pipoca 2,430 858
Hidrelétrica Cachoeirão 2,204 2,730
LightGer 1,339 0
Janaúba photovoltaic plant – distributed generation 480 -78
Ativas Data Center 200 -249
Guanhães Energia 5 0
Companhia de Transmissão Centroeste de Minas 0 1,398
Axxiom Soluções Tecnológicas -73 0
Itaocara -151 0
Aliança Norte (Belo Monte Plant) -11,271 -2,213
Amazônia Energia (Belo Monte Plant) -17,592 -2,557
FIP Melbourne (Santo Antônio Plant) -8,244 -26,241
Madeira Energia (Santo Antônio Plant) -10,284 -31,913
Total 82,534 36,274

61  

 

Financial revenue and expenses

 

For 2Q20, Cemig reports net financial expenses of R$ 35,317, which compares to net financial revenue in 2Q19 of R$ 1,908,587. This reflects two main factors:

 

§ Appreciation of the dollar in 2Q20 by 5.33%, compared to a depreciation of 1.66% in 2Q19, resulting in FX variation expenses on the principal debt in Eurobonds of R$ 415,950 in 2020, compared to revenues in 2Q19, of R$ 96,750.
§ In 2Q20 the fair value of the hedge instrument increased by R$ 486,720, offsetting the effect of FX variation on the principal of the debt in Eurobonds – with a combined positive result of R$ 70,770. In 2Q19 the variation in the fair value of the hedge instrument was R$ 461,083 which added to the positive effect of FX variation, of R$ 96,750, generated a combined gain of R$ 557,833. The increase in the fair value of the hedge instrument in 2Q20 arises, especially, from lowering of the DI curve (short leg), which reduced the expectation of the obligation to pay interest; and appreciation of dollar futures, which resulted in an increase in the value of the call spread options.
Period 2Q20 2Q19
Effect on the hedge 486,720 461,083
Effect on the principal of the Eurobond debt –415,950 96,750
Total effect on Financial revenue (expenses) 70,770 557,833

 

§ Recognition of financial revenue in 2Q19 from monetary updating of the R$ 1,553,112 credits for PIS, Pasep and Cofins taxes.

  

62  

 

EBITDA

 

Cemig’s consolidated Ebitda in 2Q20 was 0.2% lower than in 2Q19; adjusted Ebitda was 11.3% lower. Ebitda margin in 2Q20 was 32.86% – compared to 25.82% in 2Q19 – but adjusted 2Q20 Ebitda margin was 17.10% compared to 19.02% in 2Q19.

EBITDA – R$ ’000 2Q20 2Q19 Change, %
Net profit for the period 1,043,994 2,114,986 -50.6%
+  Income and Social Contribution taxes 483,986 1,356,983 -64.3%
+  Net financial revenue (expenses) 35,317 -1,908,587 -101.9%
+  Amortization and Depreciation 245,697 248,403 -1.1%
 EBITDA 1,808,994 1,811,785 -0.2%
       
Non-recurring and non-cash effects      
+ Net profit attributed to non-controlling stockholders -188 -212 -11.3%
+ Pis/Pasep e Cofins sobre ICMS - -1,438,563 -
+ Write-down for Renova credit risk 37,361 688,031 -94.6%
+ Reversal of Impairment of assets held for sale (Light) -475,137 -  
+ Gain from Periodic Tariff Review of Transmission -429,840 -  
Adjusted EBITDA 941,190 1,061,041 -11.3%

 

 

63  

 

DEBT

The Company’s total consolidated debt on June 30, 2020 was R$ 15,862,429, or R$ 1,086,398 higher than at the end of 2019 (R$ 14,776,031). It is important to note that the Company also records a net positive balance on hedge transactions for the Eurobond issue, in the total amount of R$ 3,281,491: R$ 1,583,727 for the principal of the debt, and R$ 1,697,764 for the interest. The total net asset value of the hedge is R$ 1,590,547 greater than at the end of 2019.

 

In the first half of 2020, debt totaling R$ 1,042,496 was amortized: R$ 488,920 in Cemig GT, and R$ 536,867 in Cemig D. No new loans were raised in the period. The rise in gross debt was due to appreciation of the dollar in the half-year, which increased the principal of the Eurobonds debt by R$ 2.17 billion.

64  

 

 


65  

 

Covenants – Eurobonds

 

 

66  

 

Results separated by business segment – 2Q20

 


67  

Appendices

 

Investments

 

 

 

68  

 

Sources and uses of power – billed market

 

69  

 

 

 

 

Losses

 

70  

 

Generation plants

 

 

 

71  

 

RAP (Permitted Annual Revenue – Transmission) – 2020-21 cycle

72  

EBITDA/NET PROFIT - Management adjustments

 

 

 

Cemig D – Tables (R$ million)

 

73  

 

 

 

 

 

 

74  

 

Cemig GT – Tables (R$ million)

 

 

 

 

 

 

 

 

75  

 

Cemig, consolidated – Tables (R$ million)

 

 

 

 

 

 

 

 

76  

 

 

77  

 

78  

 

79  

 

 

 

80  

 

 

3. 2Q 2020 Financial Statements.

 

 

81  

CONTENTS

 

 

STATEMENTS OF FINANCIAL POSITION 2
STATEMENTS OF INCOME 5
STATEMENTS OF COMPREHENSIVE INCOME 6
STATEMENT OF CHANGES IN CONSOLIDATED EQUITY 7
STATEMENTS OF CASH FLOWS 8
STATEMENTS OF ADDED VALUE 10
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL INFORMATION 11
1.   OPERATING CONTEXT 11
2.   BASIS OF PREPARATION 17
3.   PRINCIPLES OF CONSOLIDATION 18
4.   CONCESSIONS AND AUTHORIZATIONS 20
5.   CASH AND CASH EQUIVALENTS 21
6.   MARKETABLE SECURITIES 21
7.   CUSTOMERS, TRADERS AND POWER TRANSPORT CONCESSION HOLDERS 22
8.   RECOVERABLE TAXES 23
9.   INCOME AND SOCIAL CONTRIBUTION TAXES 24
10.   ACCOUNTS RECEIVABLE FROM THE STATE OF MINAS GERAIS 28
11.   ESCROW DEPOSITS 29
12.   REIMBURSEMENT OF TARIFF SUBSIDIES 29
13.   CONCESSION FINANCIAL AND SECTOR ASSETS AND LIABILITIES 30
14.   CONCESSION CONTRACT ASSETS 37
15.   INVESTMENTS 40
16.   PROPERTY, PLANT AND EQUIPMENT 54
17.   INTANGIBLE ASSETS 57
18.   LEASING TRANSACTIONS 59
19.   SUPPLIERS 62
20.   TAXES PAYABLE AND AMOUNTS TO BE RESTITUTED TO CUSTOMERS 62
21.   LOANS, FINANCING AND DEBENTURES 63
22.   REGULATORY CHARGES 68
23.   POST-EMPLOYMENT OBLIGATIONS 68
24.   PROVISIONS 70
25.   EQUITY AND REMUNERATION TO SHAREHOLDERS 79
26.   REVENUE 80
27.   OPERATING COSTS AND EXPENSES 86
28.   FINANCE INCOME AND EXPENSES 90
29.   RELATED PARTY TRANSACTIONS 91
30.   FINANCIAL INSTRUMENTS AND RISK MANAGEMENT 95
31.   OPERATING SEGMENTS 108
32.   ASSETS AND LIABILITIES CLASSIFIED AS HELD FOR SALE AND DISCONTINUED OPERATIONS 112
33.   NON-CASH TRANSACTIONS 114
34.   SUBSEQUENT EVENTS 114
CONSOLIDATED RESULTS 115
OTHER INFORMATION THAT THE COMPANY BELIEVES TO BE MATERIAL 136
Independent Auditor’s Review Report on Quarterly Information - ITR 145

 

82

Av. Barbacena 1200     Santo Agostinho     30190-131 Belo Horizonte, MG      Brazil     Tel.: +55 31 3506-5024      Fax +55 31 3506-5025

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

STATEMENTS OF FINANCIAL POSITION

AS OF JUNE 30, 2020 AND DECEMBER 31, 2019

ASSETS

(Thousands of Brazilian Reais)

  Note Consolidated Parent Company
Jun. 30, 2020 Dec. 31, 2019 Jun. 30, 2020 Dec. 31, 2019
CURRENT          
Cash and cash equivalents 5 971,314 535,757 32,278 64,356
Marketable securities 6 2,529,359 740,339  106,679  185,211
Customers, traders, concession holders and Transport of energy 7 4,173,334  4,523,540  -  194
Concession financial assets 13 1,268,509  1,079,743 - -
Concession contract assets 14  176,299 171,849 - -
Recoverable taxes 8 2,117,663  98,804 249  248
Income tax and social contribution tax credits 9a 496,822 621,302 - -
Dividends receivables 15 97,398  185,998  1,320,563 1,726,895
Public Lighting Contribution    175,521 164,971 - -
Reimbursement of tariff subsidies payments 12 89,048  96,776 - -
Derivative financial instruments 30b 589,555  234,766 - -
Others   352,706  425,452 8,253 15,876
    13,037,528 8,879,297 1,468,022 1,992,780
           
Assets classified as held for sale 32 1,124,088 1,258,111 1,124,088 1,258,111
           
TOTAL CURRENT   14,161,616 10,137,408 2,592,110 3,250,891
           
NON-CURRENT          
Marketable securities 6 204,561  13,342 8,144 454
Customers and traders and concession holders – Transport of energy 7  74,151  77,065 - -
Recoverable taxes 8 4,237,507 6,349,352   494,975  491,487
Income tax and social contribution tax recoverable 9a 195,622 227,913  192,555  224,846
Deferred income tax and social contribution tax 9c  2,537,820  2,429,789 743,296 680,731
Escrow deposits 11 1,170,254  2,540,239  304,604  310,065
Derivative financial instruments 30b  2,691,936  1,456,178 - -
Accounts receivable from the State of Minas Gerais 10 120,258  115,202 120,258 115,202
Concession financial assets 13 4,728,409  4,850,315 - -
Concession contract assets 14 2,429,995    1,832,380 - -
Investments – Equity method 15  5,455,180 5,399,391 14,181,637  12,631,091
Property, plant and equipment 16 2,422,073 2,450,125  1,368  1,546
Intangible assets 17  11,741,863 11,624,471 3,332 4,175
Leasing – rights of use 18a 242,458  276,824 2,573  3,330
Others   121,437 147,058 22,501 38,407
TOTAL NON-CURRENT   38,373,524 39,789,644 16,075,243 14,501,334
TOTAL ASSETS   52,535,140 49,927,052 18,667,353 17,752,225
           

 

The Condensed Explanatory Notes are an integral part of the Interim financial information.

 

 

 

83

Av. Barbacena 1200     Santo Agostinho     30190-131 Belo Horizonte, MG      Brazil     Tel.: +55 31 3506-5024      Fax +55 31 3506-5025

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

 

 

STATEMENTS OF FINANCIAL POSITION

AS OF JUNE 30, 2020 AND DECEMBER 31, 2019

LIABILITIES

(Thousands of Brazilian Reais)

 

 

 

Note Consolidated Parent Company
Jun. 30, 2020 Dec. 31, 2019 Jun. 30, 2020 Dec. 31, 2019
CURRENT          
Suppliers 19 1,945,496 2,079,891 1,786  2,705
Regulatory charges 22  377,372  456,771 4,624  4,624
Profit sharing   200,715  212,220 14,426  10,235
Taxes payable 20  622,514  358,847 6,473  92,640
Income tax and social contribution tax 9b 65,605 133,868 - -
Interest on equity and dividends payable   745,864 744,591  742,372 742,519
Loans, financing and debentures 21 3,001,664  2,746,249 49,298 -
Payroll and related charges    234,073  200,044  10,968  10,662
Public Lighting Contribution   238,295 251,809 - -
Post-employment obligations 23 311,265  287,538 25,418  23,747
PIS/Pasep and Cofins taxes to be reimbursed to customers 20 714,339 - - -
Leasing 18b 76,251  85,000 914 1,646
Others   519,698 355,623 4,825 11,496
TOTAL CURRENT   9,053,151 7,912,451 861,104 900,274
           
NON-CURRENT          
Regulatory charges 22 286,900  147,266 - -
Loans, financing and debentures 21 12,860,765  12,029,782 -  48,252
Taxes payable 20 671  883 91  91
Deferred income tax and social contribution tax 9c 753,718 661,057 - -
Provisions 24  1,864,956  1,888,064 224,099  223,427
Post-employment obligations 23 6,513,321 6,421,156 705,676 689,761
PIS/Pasep and Cofins taxes to be reimbursed to customers 20 3,522,442  4,193,329 - -
Derivative financial Instruments 30b  505,641  482,841 - -
Leasing 18b  180,000  202,747 1,808  1,833
Other obligations   116,513 96,611 1,971 1,972
TOTAL NON-CURRENT   26,604,927 26,123,736 933,645 965,336
TOTAL LIABILITIES   35,658,078 34,036,187 1,794,749 1,865,610
   

 

 

 

 

EQUITY 25        
Share capital    7,293,763  7,293,763  7,293,763  7,293,763
Capital reserves    2,249,721  2,249,721  2,249,721 2,249,721
Profit reserves   8,750,928 8,750,051 8,750,928 8,750,051
Equity valuation adjustments   (2,415,245) (2,406,920) (2,415,245) (2,406,920)
Retained earnings   993,437 - 993,437 -
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT   16,872,604 15,886,615 16,872,604 15,886,615
NON-CONTROLLING INTERESTS 25 4,458 4,250 - -
TOTAL EQUITY   16,877,062 15,890,865 16,872,604 15,886,615
TOTAL LIABILITIES AND EQUITY   52,535,140 49,927,052 18,667,353 17,752,225

 

The Condensed Explanatory Notes are an integral part of the Interim financial information.

 

 

 

84

Av. Barbacena 1200     Santo Agostinho     30190-131 Belo Horizonte, MG      Brazil     Tel.: +55 31 3506-5024      Fax +55 31 3506-5025

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

 

STATEMENTS OF INCOME

FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2020 AND 2019

(In thousands of Brazilian Reais – except earnings per share)

 

 

 

Note Consolidated Parent Company
Jan to Jun 2020 Jan to Jun 2019 Jan to Jun 2020 Jan to Jun 2019
CONTINUING OPERATIONS          
NET REVENUE 26 11,993,629 12,929,971 6 186,932
           
OPERATING COSTS          
COST OF ENERGY AND GAS 27        
Energy purchased for resale     (5,569,733) (5,120,200) - -
Charges for use of the national grid         (622,453) (701,171) - -
Gas purchased for resale            (543,303) (725,162) - -
    (6,735,489) (6,546,533) - -
OTHER COSTS 27        
Personnel   (520,779) (534,273) - -
Materials              (27,613) (34,076) - -
Outsourced services         (534,815) (512,676) - -
Depreciation and amortization   (425,481) (407,737) - -
Operating provisions   (69,843) (100,827) - -
Infrastructure construction cost       (683,676) (465,225) - -
Others   (45,542) (31,795) - -
    (2,307,749) (2,086,609) - -
           
TOTAL COST   (9,043,238) (8,633,142) - -
           
GROSS PROFIT   2,950,391 4,296,829 6 186,932
           
OPERATING EXPENSES 27        
  Selling expenses       (215,100)          (126,978) - -
  General and administrative expenses   (263,090) (286,038) (28,556) (36,886)
  Operating provisions             (71,786)          (692,966)          (48,986)            (35,845)
 Other operating (expenses) income, net   (353,837)  (500,677) (35,560) (32,794)
    (903,813) (1,606,659) (113,102)  (105,525)
           
Result of business combinations 15d 51,736 - 51,736 -
Impairment (reversals) of assets held for sale 32 (134,023) - (134,023) -
Share of loss, net, of subsidiaries and joint ventures 15 164,476 103,500 1,106,407 2,672,831
Finance income 28    2,152,813  2,622,988        15,393  305,114
Finance expenses 28 (2,914,876)  (815,961)        (2,272) (18,451)
Income before income tax and social contribution tax   1,366,704 4,600,697 924,145       3,040,901
           
Current income tax and social contribution tax 9d     (394,319)      (1,278,146)                   (19)            (97,959)
Deferred income tax and social contribution tax 9d 14,763          (410,326)             62,565 (31,092)
NET INCOME  FOR THE PERIOD   987,148 2,912,225 986,691 2,911,850
Total of net income for the period attributed to:          
Equity holders of the parent   986,691 2,911,850 986,691 2,911,850
Non-controlling interests 25 457 375 - -
    987,148 2,912,225 986,691 2,911,850
Earnings per preferred share – R$ 25 0.68 2.00 0.68 2.00
Earnings per common share – R$ 25 0.68 2.00 0.68 2.00

 

The Condensed Explanatory Notes are an integral part of the Interim financial information.

 

85

Av. Barbacena 1200     Santo Agostinho     30190-131 Belo Horizonte, MG      Brazil     Tel.: +55 31 3506-5024      Fax +55 31 3506-5025

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

STATEMENTS OF INCOME

FOR THE THREE-MONTH PERIODS ENDED JUNE 30, 2020 AND 2019

(In thousands of Brazilian Reais – except earnings per share)

 

 

 

Note Consolidated Parent Company
Apr to Jun 2020 Apr to Jun 2019 Apr to Jun 2020 Apr to Jun 2019
CONTINUING OPERATIONS          
NET REVENUE 26 5,934,414 7,016,793 1 184,195
           
OPERATING COSTS          
COST OF ENERGY AND GAS 27        
Energy purchased for resale        (2,755,238) (2,526,019) - -
Charges for use of the national grid      (257,441) (367,375) - -
Gas purchased for resale           (231,378) (330,180) - -
    (3,244,057) (3,223,574) - -
OTHER COSTS 27        
Personnel   (288,140) (271,186) - -
Materials           (17,237) (21,604) - -
Outsourced services           (303,285) (292,920) - -
Depreciation and amortization   (214,589) (212,827) - -
Operating provisions          (33,121) (100,193) - -
Infrastructure construction cost          (373,405) (266,107) - -
Others   (42,516) (29,635) - -
    (1,272,293) (1,194,472) - -
           
TOTAL COST   (4,516,350) (4,418,046) - -
           
GROSS PROFIT   1,418,064 2,598,747 1 184,195
           
OPERATING EXPENSES 27        
  Selling expenses           (115,360)  (47,627) - -
  General and administrative expenses         (71,110)  (63,328)          (14,254)         (15,019)
  Operating provisions           (49,132)   (663,945)        (47,144) (17,832)
 Other operating (expenses) income, net         (176,836) (296,739) (16,743) (16,438)
    (412,438) (1,071,639) (78,141) (49,289)
           
Impairment (reversals) of assets held for sale 32 475,137 - 475,137 -
Share of loss, net, of subsidiaries and joint ventures 15 82,534 36,274 777,614 1,837,876
Finance income 28  670,078         2,272,470                 6,093  302,108
Finance expenses 28 (705,395)         (363,883)                  (744) (8,786)
Income before income tax and social contribution tax   1,527,980 3,471,969 1,179,960 2,266,104
           
Current income tax and social contribution tax 9d      (198,803) (973,424) -  (97,959)
Deferred income tax and social contribution tax 9d (285,183)  (383,559) (136,154) (53,371)
NET INCOME FOR THE PERIOD   1,043,994 2,114,986 1,043,806 2,114,774
Total of net income for the period attributed to:          
Equity holders of the parent   1,043,806 2,114,774 1,043,806 2,114,774
Non-controlling interests 25 188 212 - -
    1,043,994 2,114,986 1,043,806 2,114,774
Basic earnings per preferred share – R$ 25 0.72 1.45 0.72 1.45
Basic earnings per common share – R$ 25 0.72 1.45 0.72 1.45

 

The Condensed Explanatory Notes are an integral part of the Interim financial information.

 

86

Av. Barbacena 1200     Santo Agostinho     30190-131 Belo Horizonte, MG      Brazil     Tel.: +55 31 3506-5024      Fax +55 31 3506-5025

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

STATEMENTS OF COMPREHENSIVE INCOME

FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2020 AND 2019

(In thousands of Brazilian Reais)

 

  Consolidated Parent Company
Jan to Jun 2020 Jan to Jun 2019 Jan to Jun 2020 Jan to Jun 2019
NET INCOME FOR THE PERIOD 987,148 2,912,225 986,691 2,911,850
OTHER COMPREHENSIVE INCOME        
Items not to be reclassified to profit or loss in subsequent periods        
Post retirement liabilities – remesurement of obligations of the defined benefit plans - (1,316) - -
Income tax and social contribution tax on restatement of defined benefit plans - 448 - -

Equity gain (loss) on other comprehensive income in

subsidiary and jointly-controlled entity

- - - (864)
Others (702) - (702) -
  (702) (868) (702) (864)
COMPREHENSIVE INCOME FOR THE PERIOD 986,446 2,911,357 985,989 2,910,986
         
Total of comprehensive income for the period attributed to:        
Equity holders of the parent 985,989 2,910,986 985,989 2,910,986
Non-controlling interests                 457 371 - -
  986,446 2,911,357 985,989 2,910,986

 

 

 

STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE-MONTH PERIODS ENDED JUNE 30, 2020 AND 2019

(In thousands of Brazilian Reais)

 

  Consolidated Parent Company
Apr to Jun 2020 Apr to Jun 2019 Apr to Jun 2020 Apr to Jun 2019
NET INCOME FOR THE PERIOD 1,043,994 2,114,986 1,043,806 2,114,774
         
COMPREHENSIVE INCOME FOR THE PERIOD 1,043,994 2,114,986 1,043,806 2,114,774
         
Total of comprehensive income for the period attributed to:        
Equity holders of the parent 1,043,806 2,114,774 1,043,806 2,114,774
Non-controlling interests                 188 212 - -
  1,043,994 2,114,986 1,043,806 2,114,774

 

The Condensed Explanatory Notes are an integral part of the Interim financial information.

 

87

Av. Barbacena 1200     Santo Agostinho     30190-131 Belo Horizonte, MG      Brazil     Tel.: +55 31 3506-5024      Fax +55 31 3506-5025

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

STATEMENT OF CHANGES IN CONSOLIDATED EQUITY

FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2020 AND 2019

(In thousands of Brazilian Reais– except where otherwise stated)

 

  Share capital Capital reserves Profit reserves Equity valuation adjustments Retained earnings Total

Non-controlling

interests

Total

Equity

AS OF DECEMBER 31, 2019 7,293,763 2,249,721 8,750,051 (2,406,920) - 15,886,615 4,250 15,890,865
Net income for the period - - - - 986,691 986,691 457 987,148
Other Comprehensive Income - - - (702) - (702) - (702)
Realization of PP&E deemed cost - - - (7,623) 7,623 - - -
Tax incentives reserve (1) - - 877 - (877) - - -
Interest on equity and dividends payable - - - - - - (249) (249)
AS OF JUNE 30, 2020 7,293,763 2,249,721 8,750,928 (2,415,245) 993,437 16,872,604 4,458 16,877,062
  (1) To be determined in the Annual General Meeting that decide on the allocation of net income for 2020.

 

  Share capital Capital reserves Profit reserves Equity valuation adjustments Retained earnings Total

Non-controlling

interests

Total

Equity

AS OF DECEMBER 31, 2018 7,293,763 2,249,721 6,362,022 (1,326,787) - 14,578,719 1,360,608 15,939,327
Proposed dividends from prior years - - - - - -               (489)                 (489)
Prior period adjustments in jointly-controlled subsidiaries - - - - (193)           (193) - (193)
Capital Increase - - - - - - 10,290 10,290
Reversal of reserve for tax incentives, prior periods - - (1,166) - 1,166 - - -
Net income for the period - - - - 2,911,850 2,911,850 375 2,912,225
Other Comprehensive Income - - - (864) - (864) (4) (868)
Realization of PP&E deemed cost - - - (11,583) 11,583 - - -
AS OF JUNE 30, 2019 7,293,763 2,249,721 6,360,856 (1,339,234) 2,924,406 17,489,512 1,370,780 18,860,292
                 

 

The Condensed Explanatory Notes are an integral part of the Interim financial information.

 

 

88

Av. Barbacena 1200     Santo Agostinho     30190-131 Belo Horizonte, MG      Brazil     Tel.: +55 31 3506-5024      Fax +55 31 3506-5025

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

 

STATEMENTS OF CASH FLOWS

FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2020 AND 2019

(In thousands of Brazilian Reais)

 

 

    Consolidated Parent Company
Jan to Jun 2020 Jan to Jun 2019 Jan to Jun 2020 Jan to Jun 2019
CASH FLOW FROM OPERATIONS          
Net income for the period   987,148 2,912,225 986,691 2,911,850
Expenses (revenues) not affecting cash and cash equivalents:          
Deferred income tax and social contribution tax 9d (14,763) 410,326           (62,565) 31,092
Depreciation and amortization 27            488,449 479,299                  1,552 2,398
Loss on write-off of net residual value of unrecoverable concession financial assets, concessional contract asset, PP&E and Intangible assets 13, 14,16 and 17 17,422 8,638 157 -
Result of business combinations 15d               (51,736) - (51,736) -
Impairment (reversals) of assets held for sale 32             134,023 - 134,023 -
Impairment (reversals) for contract assets 14 3,233 (26,016) - -
Share of loss, net, of subsidiaries and joint ventures 15 (164,476) (103,500) (1,106,407) (2,672,831)
Adjustment to expectation of contractual and financial cash flow from the concession 13 and 14 (227,404) (283,372) - -
Interest and monetary variation   516,348 590,478 (18,491) (15,400)
Recovery of PIS/Pasep and Cofins taxes credits over ICMS   - (2,962,564) - (481,069)
Exchange variation on loans 21 2,162,364 (70,470) - -
Periodic Tariff Reset adjustments 13 and 14 (429,840) - - -
Appropriation of transaction costs 21                   7,101 13,948 104 81
Provisions for operating losses 27c          356,729 978,379 48,986 35,845
Provision for reimbursement for suspension of energy supply –Renova   - (62,575) - -
Variation in fair value of derivative financial instruments – Swaps 30       (1,800,960) (613,394) - -
CVA (Parcel A items Compensation) Account and Other financial components in tariff adjustments                 (81,652) (80,241) - -
13
Post-employment obligations 23 245,476 232,277 25,055 23,398
Other   1,531 - 1,531 -
    2,148,993 1,423,438 (41,100) (164,636)
(Increase) decrease in assets          
Customers and traders and Concession holders – Transport of energy   139,744 (537,832) 194 3,100
CVA and Other financial components in tariff adjustments   62,771 83,115 - -
13
Recoverable taxes   18,144 15,276 - (3,357)
Income tax and social contribution tax credits   84,987 8,953 34,265 15,901
Escrow deposits           1,424,416 33,518                  15,633 28,525
Dividends received from investees 15               169,064 126,791                  63,788 160,864
Contract assets and concession financial assets 13 and 14 250,114 195,952 - -
Advances to suppliers   19,931 43,722 - -
Other   65,266 18,081 6,987 14,053
    2,234,437 (12,424) 120,867 219,086
Increase (decrease) in liabilities          
Suppliers               (134,442) 39,542 (919) (1,723)
Taxes payable                 268,294 (123,566) (86,002) (37,784)
Income tax  and social contribution tax payable   325,781 1,273,327 19 97,959
Payroll and related charges                  34,029 (27,420) 306 (4,588)
Regulatory charges                   59,626 (17,784) - (11)
Advances from customers                             -    (80,862) - -
Post-employment obligations 23             (129,584) (163,037) (7,469) (9,268)
Other   49,995 (77,801) (7,016) (18,693)
    473,699 822,399 (101,081) 25,892
Cash generated by operating activities   4,857,129 2,233,413 (21,314) 80,342
Interest paid on loans and financing  21             (616,033) (706,605) - -
Interest in leasing contracts 18                 (1,049) (18,332) (20) (286)
Income tax and social contribution tax paid   (210,325) (459,345) - (8,495)
Cash inflows from settlement of derivatives instruments   177,086 34,138 - -
NET CASH FROM OPERATING ACTIVITIES   4,206,808 1,083,269 (21,334) 71,561
           
INVESTING ACTIVITIES          
Marketable securities   (1,985,217) 140,292 70,842 29,248
Restricted cash                   (3,413) (9,943) 50 -
Investments          
      Acquisition of equity investees 15 (44,850) (1,028) (54,085) (16,102)
     Cash arising from business combination   27,110 - - -
Settlement received through merger   - - - 22,444
Loans from related parties   (26,500) - (26,500) -
Property, plant and equipment 16         (63,225) (34,414) - -
Intangible assets 17              (13,514) (14,677) (2) -

89

Av. Barbacena 1200     Santo Agostinho     30190-131 Belo Horizonte, MG      Brazil     Tel.: +55 31 3506-5024      Fax +55 31 3506-5025

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

 

Contract assets – gas and distribution of energy infrastructure 14          (574,678) (345,997) - -
NET CASH USED IN INVESTING ACTIVITIES   (2,684,287) (265,767) (9,695) 35,590
           
FINANCING ACTIVITIES          
Interest on capital and dividends paid   (147) (78,707) (147) (78,262)
Payment of loans with related parties   - - - (46,599)
Payment of loans, financing and debentures 21 (1,042,496) (849,821) - -
Leasing liabilities paid 18             (44,321) (31,238) (902) (1,474)
NET CASH USED IN FINANCING ACTIVITIES   (1,086,964) (959,766) (1,049) (126,335)
Net (decrease) increase in cash and cash equivalents for the period   435,557 (142,264)              (32,078) (19,184)
Cash and cash equivalents at the beginning of the period 5            535,757 890,804           64,356 54,330
Cash and cash equivalents at the end of the period 5 971,314 748,540 32,278 35,146

 

The Condensed Explanatory Notes are an integral part of the Interim financial information.

 

90

Av. Barbacena 1200     Santo Agostinho     30190-131 Belo Horizonte, MG      Brazil     Tel.: +55 31 3506-5024      Fax +55 31 3506-5025

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

 

STATEMENTS OF ADDED VALUE

FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2020 AND 2019

(In thousands of Brazilian Reais)

 

  Consolidated Parent Company
Jan to Jun 2020   Jan to Jun 2019   Jan to Jun 2020   Jan to Jun 2019  
REVENUES                
Sales of energy, gas and services 16,548,107   16,848,601   9   4,338  
Distribution construction revenue      609,632   382,236   -   -  
Transmission construction revenue         74,044   82,989   -   -  
Gain on financial updating of the Concession Grant Free       146,412   176,151   -   -  
Adjustment to expectation of cash flow from reimbursement of distribution concession financial assets (955)   8,967   -   -  
Transmission assets – reimbursement revenue       316,218   90,420   -   -  
PIS/Pasep and Cofins taxes credits -   1,438,563   -   183,595  
Investment in PP&E 29,645   17,763   -   -  
Other revenues -   9,329   -   -  
Allowance for doubtful receivables (215,100)   (126,978)   -   -  
  17,508,003   18,928,041   9   187,933  
                 
INPUTS ACQUIRED FROM THIRD PARTIES                
Energy bought for resale (6,075,166)   (5,614,077)   -   -  
Charges for use of national grid    (696,504)   (782,254)   -   -  
Outsourced services    (866,067)   (754,119)   (15,793)   (11,376)  
Gas bought for resale    (689,909)   (920,841)   -   -  
Materials (376,456)   (268,691)               (100)   (94)  
Other operating costs (445,201)   (972,135)   (187,243)   (38,192)  
  (9,149,303)   (9,312,117)   (203,136)   (49,662)  
                 
GROSS VALUE ADDED 8,358,700   9,615,924   (203,127)   138,271  
RETENTIONS                
Depreciation and amortization (488,449)   (479,299)   (1,552)   (2,398)  
NET ADDED VALUE PRODUCED 7,870,251   9,136,625   (204,679)   135,873  
                 
ADDED VALUE RECEIVED BY TRANSFER                
Share of (loss) profit, net, of associates and joint ventures 164,476        103,500   1,106,407   2,672,831  
Result of business combinations 51,736   -   51,736   -  
Financial revenues 2,152,813       2,622,988   15,393   305,114  
ADDED VALUE TO BE DISTRIBUTED 10,239,276   11,863,113   968,857   3,113,818  
                 
DISTRIBUTION OF ADDED VALUE                
    %   %   %   %
Employees     868,004 8.48       993,796  8.37        38,942    4.02       48,074    1.54
Direct remuneration      484,927      4.74       660,041  5.56     10,713    1.11  21,692  0.70
Post-employment obligations and other benefits     294,249    2.87       280,142  2.35       25,499     2.63  24,433  0.78
FGTS fund       29,978    0.30          32,122  0.27             813    0.08  1,041  0.03
Voluntary retirement program     58,850  0.57         21,491  0.19        1,917  0.20  908  0.03
                 
Taxes 5,440,041 53.13 7,114,055 59.97      (59,498)  (6.14) 134,003     4.31
Federal 2,502,582   24.44 4,160,162 35.07      (60,227)    (6.22)     132,831     4.27
State  2,929,098 28.61  2,944,512  24.82              364     0.04             615  0.02
Municipal        8,361     0.08  9,381      0.08             365  0.04            557    0.02
                 
Remuneration of external capital 2,944,083 28.75 843,037      7.11