CIG Filings — Energy Co of Minas Gerais - FilingSpy
CIG
Energy Co of Minas Gerais
One of Brazil's largest integrated electric utilities, CEMIG generates, transmits, and distributes electricity across the state of Minas Gerais, drawing mostly from hydroelectric plants along with wind, solar, and thermal power. It was founded in 1952 by Juscelino Kubitschek—then governor of Minas Gerais and later Brazil's president—to centralize the state's patchwork of small power providers. Its roots run deeper: the first hydroelectric plant in Minas Gerais was built in 1883 to power a local mine.
20-F · Fiscal year ended Dec 31, 2025 · SEC filing ↗
CEMIG's net income fell 3.2% to $1.15B as a 15.2% revenue drop and higher energy costs offset the prior year's R$1.6B gain on the Aliança stake sale.
The one-time gain that drove last year's profit is gone, and the core business felt the sting of a 75% rise in spot power prices. fell 15.2% to $6.44B while widened 4.9 points to 23.5%, as the company earned more from its regulated transmission assets but paid far more for energy. The company is now carrying R$19.5B in debt to fund its investment plan, just as a new pricing model threatens its trading business.
Key takeaways
Consolidated net in reais rose 7.4% to R$42.8B, driven by a 4.6% increase in energy supply revenue and a 20.1% increase in distribution construction revenue, but the stronger real caused a 15.2% decline in reported USD revenue to $6.44B.
rose 7.2% to $1.51B, with the widening 4.9 percentage points to 23.5%, as the Transmission recognized a favorable Periodic Tariff Review that reset its Permitted Annual .
Section summaries
Quantitative and Qualitative Disclosures About Market Risk
CEMIG faces foreign exchange, energy price, interest rate, and inflation risks, managed through regulatory pass-throughs, hedging, and portfolio diversification.
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CEMIG D's foreign exchange risk from Itaipu power purchases is mitigated by annual tariff adjustments and a regulatory compensation account (CVA).
Cemig GT entered a US$40 million in August 2025 to hedge foreign exchange risk on an external loan.
fell 3.2% to $1.15B, as the absence of the prior year's R$1.6B gain on the sale of the Aliança Energia stake and a 14.9% increase in energy purchased for resale outweighed growth.
The Trading 's fell 68.5% to R$163 million, as a 75% rise in the SE/CO (PLD) compressed margins, and the company warns a new 2025 energy pricing model has increased price zone differences to unprecedented levels.
Total indebtedness from loans and debentures rose 58.5% to R$19.5B, following multiple debenture issuances by subsidiaries to reinforce cash flow and fund the R$6.6B 2025 investment program.
fell 35.1% to $888.6M, while decreased 12.9% to $4.43B, reflecting the payments and the stronger real's impact on the translated balance sheet.
What changed
The prior year's flag on the sustainability of Transmission earnings after the one-time RTP reset is partially resolved: the 's more than tripled to R$1.56B in 2024, and the new RAP level continued to support results into 2025, contributing to the 4.9-point expansion.
The warning that the new 2025 energy pricing model would materially threaten the trading business materialized immediately: the Trading 's fell 68.5% as the 75% rise in the SE/CO PLD and unprecedented price zone differences compressed margins.
The concern that would not fully fund the investment plan without increasing was borne out: operating cash flow fell 35.1% to $888.6M, while total debt rose 58.5% to R$19.5B to fund the R$6.6B 2025 investment program.
The Distribution 's recovery from the 2022 CVA collapse continued, with down only 3.77% to R$2,121M in 2025 despite higher short-term energy costs, compared to the 36.8% rise in 2024 that was aided by one-time tax credits.
The company fully settled its remaining US$381M in Eurobonds in December 2024, eliminating all foreign-currency debt exposure, a milestone flagged in the prior year's watch items.
What to watch
Whether the Trading can adapt to the new 2025 energy pricing model or continues to deteriorate, given the 68.5% drop and management's warning of unprecedented price zone differences.
The trajectory of total indebtedness, now at R$19.5B, against the R$39.2B 2025-2029 investment plan, and whether recovers from the 35.1% decline to service this debt without breaching covenants.
ANEEL's decisions on CEMIG D's energy loss targets and service quality metrics, which can restrict payments if not met, as the company invests R$4.2B in grid modernization.
The outcome of concession renewal negotiations for generation, transmission, and distribution assets, which the company identifies as a material risk that could prevent full recovery of investment value.
Energy price risk in the free market (ACL) is managed via long-term contracts and portfolio monitoring, though adverse conditions may not be fully offset.
A shows a R$26 million adverse impact on net liabilities from a Real to R$6.28 per US dollar.
Net interest rate exposure is a R$2.4 billion liability, with an adverse scenario of Selic at 16% potentially increasing the net effect by R$474 million.
The company has a R$6.2 billion net liability exposure to inflation indexes (IPCA/IGP-M), partially offset by inflation-adjusted concession assets.
CEMIG faces material risks from concession renewal uncertainty, extensive regulation, high debt, hydrological dependence, and Brazilian macroeconomic volatility.
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The company cannot guarantee its generation, transmission, and distribution concessions will be extended on similar terms, with non-extension potentially not covering the full investment value.
A 58.5% increase in total loans and debentures to R$19.5 billion heightens liquidity risk, and breaching financial could trigger debt acceleration and cross-defaults.
CEMIG D's financial sustainability is threatened by energy losses exceeding regulatory caps and a cash flow imbalance from the rapid expansion of distributed generation (MMGD) in its area.
Adverse hydrological conditions can force the company to purchase energy at volatile spot prices, while a new energy pricing model introduced in 2025 has increased price zone differences to unprecedented levels.
As a state-controlled company, CEMIG is subject to political interference from the State of Minas Gerais, and its business is vulnerable to changes in Brazilian tax, regulatory, and foreign exchange policies.
The company faces significant operational risks including dam failures, cyberattacks, and strict environmental licensing requirements that can delay projects and impose substantial costs.
CEMIG is a Brazilian state-controlled utility operating across generation, transmission, distribution, gas distribution, and energy solutions, primarily in Minas Gerais.
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The company operates through wholly-owned subsidiaries CEMIG GT (generation and transmission) and CEMIG D (distribution), with a total installed generation capacity of over 4,674 MW, predominantly from hydroelectric plants.
CEMIG D holds a near-monopoly in its Minas Gerais area, serving 9.6 million customers and distributing 47,708 GWh in 2025, while facing increasing competition from the free energy market.
A major strategic focus is a R$6.6 billion investment program in 2025 for electrical infrastructure expansion and modernization, alongside a divestment program to refocus on core assets in Minas Gerais.
The company is executing a 2026–2030 strategic plan centered on the energy transition, customer satisfaction, and efficiency, with goals to reach 4.0 GW of centralized generation capacity and expand leadership.
CEMIG's operations are subject to extensive federal and state environmental regulations, including licensing, biodiversity management programs like Peixe Vivo for fish conservation, and compliance with PCB equipment phase-out under the Stockholm Convention.
Consolidated revenue rose 7.4% to R$42.8B in FY2025, driven by distribution volume growth and tariff adjustments, while net income fell sharply due to higher energy costs and a prior-year gain on sale.
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Consolidated net increased 7.36% to R$42,751 million, primarily from a 4.55% rise in energy supply revenue and a 20.06% increase in distribution construction revenue.
Total energy sales volume grew 8.21% to 73,342 GWh, led by a 20.46% jump in wholesale supply to other concession holders and broad-based growth across residential, industrial, and commercial customer classes.
Operating costs and expenses rose 9.04% to R$36,377 million, mainly due to a 14.87% increase in energy purchased for resale, driven by higher spot market prices (PLD) and distributed generation costs.
for the Distribution decreased 3.77% to R$2,121 million, as growth was offset by higher short-term energy costs and a swing in the net financial result to an expense of R$886 million.
The Generation 's increased 18.67% to R$1,519 million, while the Trading segment's net income fell 68.5% to R$163 million, both significantly impacted by the 75% rise in the SE/CO PLD spot price.
Total indebtedness from loans and increased to R$19,466 million from R$12,280 million, following multiple debenture issuances by subsidiaries to reinforce cash flow and fund investments.