Companhia Energetica de Minas Gerais (CIG), also known as CEMIG, announced to pay dividends amounting to R$465.35 million to shareholders on December 21, 2010. This payment is part of the company’s dividend disbursement for the year 2009.
CEMIG at its Ordinary and Extraordinary General Meetings of Stockholders on April 29, 2010, had decided to distribute R$930.7 million as dividends for year 2009 in two equal installments. The first installment was paid on June 29, 2010.
CEMIG is one of the largest integrated electric utilities in Brazil. It has more than 6,716 megawatts of installed generation capacity, deriving approximately 97% from hydroelectric power.
In the third quarter 2010, the company’s net earnings dipped 2.4% year over year to R$553.3 million (US$314.4 million), or R$0.89 per share due to higher operating and financial expenses, while its earnings per ADR of US$0.51 were above US$0.49 in the third quarter of 2009 and the Zacks Consensus Estimate of US$0.44 per ADR.
Net revenue jumped 6.5% year over year to R$3,183.2 million (US$1,808.6 million) attributable to higher volumes sold. Electricity sold improved 8.1% year over year to 16,478 GWh versus 15,242 GWh in the year-ago quarter due to higher consumption by all final customers.
We consider CEMIG to be in a position to reap the benefits from the rising demand for electricity in Brazil. Its integrated nature of activity (generating and distributing energy) along with its aggressive expansion plan is making its presence felt among industrial customers all over the southeast and south of Brazil.
However, growth momentum will be restricted in the quarters ahead, being largely affected by escalating operating expenses and energy purchase costs. Besides, adverse impacts are expected from the tariff adjustment announced in 2010, rising debt levels, interference from the state government, competitive pressures in the Brazilian market and extreme dependence on natural water resources.
Prime competitors include Companhia Paranaense de Energia (ELP), DP-Energias de Portugal, S.A. and privately-held Eletropaulo Metropolitana Eletricidade de São Paulo SA.
CEMIG SA -ADR (CIG): Free Stock Analysis Report
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