ISA Energía Brasil (ISAE4) Q1 2025 earnings summary

Executive summary

• Q1 2025 focused on sustainable value creation, profitability, and supporting Brazil's energy transition, with solid results and strategy execution.

• Net revenue reached R$1,131.9 million, up 2.1% year-over-year, while EBITDA increased 2.9% to R$923.3 million, with margin improving to 81.6%.

• Net income fell 17.6% to R$337.4 million, mainly due to higher financial expenses, depreciation, and lower RBSE revenue.

• Investments surged 33% to R$1,108.0 million, driven by greenfield and retrofitting projects.

• Sustainability initiatives included a 52% reduction in SF6 gas losses and the opening of a new solar plant for self-consumption.

Financial highlights

• Net revenue (ex-RBSE) grew 18% year-over-year; total net revenue up 2.1% to R$1,131.9 million.

• EBITDA increased 2.9% to R$923.3 million, with margin up to 81.6%.

• Net income fell 17.6% to R$337.4 million, mainly due to higher financial expenses and depreciation.

• Joint subsidiaries' EBITDA grew 1.8% to R$165 million.

• Operating costs and expenses (PMSO) decreased 5.4%, reflecting cost control.

Outlook and guidance

• Six greenfield projects under construction with remaining CAPEX of ~R$7.5 billion, supporting long-term growth.

• Three greenfield projects in advanced execution, with Riacho Grande and Água Vermelha expected to go live within 12 months.

• Leverage expected to temporarily rise as investments continue, with net debt/EBITDA potentially reaching 4–5x before declining as projects go live.

• Dividend payout practice of at least 75% of regulatory net income to be maintained.

• RAP for 2024/2025 cycle set at R$6,288.9 million, with 57% from the renewed contract and 43% from auctioned projects.