CEMIG Provides 2012-2016 Guidance - Analyst Blog


Companhia Energetica de Minas Gerais ( CIG ), also known as CEMIG, recently announced its financial guidance for the period 2012-2016.

The company's distribution unit, CEMIG D is expected to post healthy results in the years ahead, driven by healthy domestic demand. Energy distribution in the retail market (captive market) is expected to escalate from an estimated 24.0-25.2 TWh range in 2012 to 26.3-29.0 TWh range in 2016; while its total energy distribution (Captive+Free) is likely to rise from 45.0-47.3 TWh range expected in 2012 to 49.9-55.0 TWh in 2016.

It is anticipated that CEMIG GT, the company's energy generation unit, would generate over 38.3 TWh of energy in the fiscal year 2012. This includes over 2.3 TWh secured through participation in the secondary energy market.

Generation in 2016 is estimated to be roughly 35.4 TWh after reaching 38.1 TWh in 2014. Moreover, the company expects the existing contracts at CEMIG GT to be renewed at higher prices starting 2015.

EBITDA for the full company is very likely to be on a rising trend in the years ahead. For 2012, EBITDA is expected to be within R$5.4-6.2 billion range and reach R$5.74-6.6 billion range by 2016.

Presumably, the economic recovery in Brazil will prove to be extremely efficacious in promoting growth for the company. Demand for electricity in the country, which is already on the rise and would probably get a boost as the country hosts two major sporting events in the coming years.

CEMIG, one of the largest integrated electric utilities in Brazil, has more than 6,896 megawatts of installed generation capacity, deriving approximately 97% from hydroelectric power.  It faces stiff competition from its peer companies like Companhia Paranaense de Energia ( ELP ).

CEMIG SA -ADR (CIG): Free Stock Analysis Report
COPEL-ADR PR B (ELP): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: CIG , ELP



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