Companhia de Saneamento de Minas Gerais (CSMG3) Q3 2025 earnings summary

Executive summary

• Achieved record CapEx of BRL 2.0 billion for 9M25, a 26% year-over-year increase, with market recognition of growth potential and strategic transformation underway.

• EBITDA for 9M25 reached up to BRL 2.2 billion, with a 40.2% margin, and operating cash flow in 3Q25 was BRL 701 million, 26% higher than 3Q24.

• Net income in 3Q25 declined 2.0% versus 3Q24, mainly due to higher depreciation and financing costs, but offset by improved FX results.

• Progressed in de-statization, with legislative approval supporting privatization and universalization of sanitation services.

• Emphasized sustainable growth, operational efficiency, and value creation for shareholders and the state.

Financial highlights

• CapEx investments reached nearly BRL 2 billion, up 26% year-over-year, nearing the 2025 target of BRL 2.5 billion.

• Net debt increased to BRL 6.06 billion in Sep 2025; Net Debt/EBITDA ratio at 2.1x.

• EBITDA margin for 9M25 at 40.2%; for 3Q25 at 39.3%.

• Delinquency rate slightly increased to 3.01% in Sep 2025.

• Dividend payout policy maintained at 50%, with BRL 345 million paid in H1 2025 and BRL 170 million planned for November.

Outlook and guidance

• Investment guidance of BRL 17 billion through 2029, with annual CapEx expected to average BRL 3.5 billion in the next tariff cycle.

• Preliminary result of the 3rd periodic tariff review indicates a 5.5% average tariff effect, effective Jan 2026.

• Multi-year investment program (2025–2029) targets BRL 3.2–3.8 billion annually for system expansion and modernization.

• Strategic planning review launched for 2026–2030.

• Leverage expected to approach 3x in coming years to support investment and maintain competitive dividends.