Companhia de Saneamento de Minas Gerais (CSMG3) Q1 2025 earnings summary

Executive summary

• Achieved record Q1 2025 results with EBITDA of BRL 814 million (43.3% margin), net income up 21.9% to BRL 429 million, and net revenue up 10.2% year-over-year, driven by tariff adjustments and higher volumes.

• Fitch upgraded the credit rating to AAA (bra) in April 2025, with Moody’s confirming AAA.br rating, reflecting strong fundamentals.

• Investments reached BRL 543 million in Q1 2025, up 45.9% year-over-year, supporting expansion and modernization.

• Delinquency rate dropped to a record low of 2.86%.

• Confirmed inclusion in B3's Industrial Sustainability Index and ISE portfolio, highlighting ESG commitment.

Financial highlights

• EBITDA reached BRL 814 million (43.3% margin), up 16.1% year-over-year, the highest in company history.

• Net income rose 21.9% to BRL 429 million, with earnings per share at BRL 1.13.

• Operating cash generation exceeded BRL 560 million.

• Dividend payout for Q1 was BRL 181 million, with an additional BRL 154 million scheduled for June 30.

• Distribution loss index improved to 37.5%, the best in company history.

Outlook and guidance

• Investment plan maintained at BRL 17 billion through 2029, focusing on universalization, quality, and water security.

• Ongoing third tariff review (2026–2029) with preliminary WACC increase from 7.924% to 9.152%.

• Dividend payout policy set at 50% for 2025, with potential for extraordinary dividends.

• Targeting universalization of sewage services by 2033, in line with regulatory requirements.

• Leverage expected to increase as investments are incorporated into the regulatory base, with a target reference of up to 3x net debt/EBITDA.