Eletrobrás (ELET3) Q2 2024 earnings summary

Executive summary

• Achieved a 16% year-on-year reduction in PMSO, targeting BRL 6.3 billion in recurring PMSO for 2024, with ongoing efficiency initiatives and a younger workforce; 1,790 new hires since Jan 2022 reduced average employee age.

• Completed sale of thermal units for BRL 4.7 billion, supporting net zero commitments and portfolio optimization, and established a sustainability committee at the board level.

• Incorporated Furnas, simplifying structure, enabling BRL 1.1 billion in deferred tax credits, and improving capital allocation.

• Launched a new share buyback program for up to 10% of shares and sold CTEEP preferred shares for BRL 2.2 billion.

• Major corporate simplification and sustainability initiatives advanced, with a focus on operational efficiency and capital allocation.

Financial highlights

• Regulatory net operating revenue rose 9% year-on-year to BRL 9.7 billion, with recurring regulatory EBITDA up 10% to BRL 6.0 billion.

• IFRS profit dropped 31% due to adjustments, while adjusted IFRS EBITDA was BRL 4.2 billion, down 23% year-on-year.

• Net income reached BRL 1.7 billion, up 7.6% year-on-year, with adjusted net income at BRL 615 million.

• PMSO dropped 17% year-on-year, with nearly 2,000 new hires improving efficiency.

• Free cash flow reached BRL 3.0 billion, with operating cash flow at BRL 4.5 billion in 2Q24.

Outlook and guidance

• Ongoing focus on efficiency, further PMSO reductions, and capturing additional operational gains.

• 245 large-scale transmission projects underway, adding BRL 1.2 billion in RAP between 2024-2028.

• Investment program includes BRL 5.6 billion for transmission auctions and modernization.

• Two wind projects to add 330 MW by 2024, with Coxilha Negra 86% complete.

• Optimism for continued improvement in profitability and efficiency to match industry peers.