Companhia de Saneamento de Minas Gerais (CSMG3) Q4 2024 earnings summary

Executive summary

• Achieved record-high CapEx of R$2.2 billion in 2024, up 33% from 2023, with a multi-year investment plan of R$16.9 billion through 2029.

• Adjusted EBITDA reached R$2.8 billion in 2024 (39.7% margin), with operational cash generation of R$2.1 billion.

• Net income for 2024 was R$1.32 billion, down 4.5% year-over-year, mainly due to exchange rate effects.

• Distributed R$906 million in dividends (11.5% yield), including regular and extraordinary payments.

• Maintained water coverage above 99% and increased sewage coverage to 77.3% by December 2024.

Financial highlights

• Net revenue for 2024 was R$7.0 billion, up 6.8% year-over-year, driven by tariff adjustments and higher measured volumes.

• Adjusted EBITDA for Q4 2024 was R$641 million (36% margin), down 10% due to higher costs and flat revenue.

• Costs and expenses rose 4.5% in 2024 to R$4.8 billion, mainly due to third-party services and non-manageable costs.

• Net debt increased to R$5.37 billion in December 2024, with Net Debt/EBITDA at 1.9x.

• Cash flow from operations was R$2.06 billion in 2024.

Outlook and guidance

• Investment plan targets R$16.9 billion from 2025–2029, focusing on universalization, regulatory compliance, and operational improvements.

• Tariff review process underway, with a 6.42% increase authorized for 2025 and new structure effective January 2026; WACC preliminarily set to rise from 7.2% to 9.15%.

• Board maintains a 50% payout of net income for 2025; extraordinary dividends to be discussed in future meetings.