Recent developments highlight CEMIG’s financial performance, strategic acquisitions, corporate reorganizations, and sustainability recognitions.

• CEMIG reported substantial profit growth in 2Q24, reflecting strong operational results [N1].
• The company completed a corporate reorganization of 11 photovoltaic power plants, resulting in full ownership of 6 plants with 27.0 MWp capacity, aligning with its strategic plan [S2].
• CEMIG acquired 51% of Hidrelétrica Pipoca S.A., increasing its ownership to full control of a 20 MW hydroelectric asset, subject to regulatory approvals [S2].
• The acquisition of Empresa de Transmissão Timóteo-Mesquita S.A. was completed, adding transmission assets with annual permitted revenue of BRL 6 million [S2].
• CEMIG was included in the S&P Global Sustainability Yearbook, the Clean200™, and recognized as one of the 10 most sustainable corporations in Latin America by Corporate Knights [S2].

CEMIG’s substantial asset base in generation and transmission, combined with strategic acquisitions such as Hidrelétrica Pipoca and Empresa de Transmissão Timóteo-Mesquita, supports operational scale and potential efficiency gains. The company’s focus on renewable energy through photovoltaic power plants aligns with global sustainability trends. Its inclusion in prominent sustainability indices and awards reflects strong ESG practices, which may enhance its reputation and stakeholder relations. The company’s declared dividends and interest on equity payments demonstrate a commitment to shareholder returns.

CEMIG faces liquidity constraints as indicated by a current ratio below 1.0 and a low cash ratio, which may limit financial flexibility. The company operates under Brazilian foreign investment regulations and exchange controls that could affect capital flows and shareholder returns, especially for foreign investors. Regulatory approvals for acquisitions are ongoing, introducing execution risk. The energy sector’s exposure to regulatory changes, market competition, and economic conditions in Brazil presents operational and financial risks. Tax withholding on dividends and interest payments may affect investor returns.

CEMIG’s moat is supported by its integrated energy infrastructure in Minas Gerais, including generation, transmission, and distribution assets. Its regulatory approvals and ownership of key transmission lines and power plants provide operational barriers to entry. The company’s strategic acquisitions and asset reorganizations enhance its control over energy assets, while its recognized sustainability practices may contribute to stakeholder trust and regulatory goodwill. However, the company operates in a regulated market subject to government policies and foreign investment restrictions, which can impact competitive dynamics.

• Liquidity Risk: The company’s current ratio of 0.86 and cash ratio of 0.22 as of December 31, 2024, indicate limited short-term liquidity, which could constrain operational flexibility.
• Regulatory and Foreign Investment Restrictions: CEMIG is subject to Brazilian foreign investment laws, exchange controls, and tax regulations that may restrict capital repatriation and affect foreign investors’ returns.
• Execution Risk on Acquisitions: Pending regulatory approvals for recent acquisitions such as Hidrelétrica Pipoca introduce uncertainty in completing strategic transactions.
• Market and Operational Risks: The company operates in a regulated energy market subject to policy changes, economic fluctuations, and competitive pressures that may impact financial performance.

• ENERGY CO OF MINAS GERAIS (CEMIG) is a publicly-held company with shares traded on the São Paulo and New York stock exchanges [S2].
• The company operates in Brazil and reports financials in Brazilian Real (BRL) [S2].
• For the fiscal year ended December 31, 2024, CEMIG reported revenue of BRL 39.82 billion and net income of BRL 7.119 billion [S1].
• As of December 31, 2024, CEMIG had cash and cash equivalents of BRL 1.898 billion and short-term investments of BRL 1.19 billion [S1].
• The company’s current assets totaled BRL 12.231 billion and current liabilities were BRL 14.145 billion as of December 31, 2024, resulting in a current ratio of 0.86 and a cash ratio of 0.22 [S1].
• CEMIG declared dividends and interest on equity payments for fiscal year 2024, with specific payment dates and amounts disclosed in shareholder notices [S2].
• The company completed a corporate reorganization of 11 photovoltaic power plants, resulting in full ownership of 6 plants with 27.0 MWp capacity, aligning with its strategic plan to optimize asset portfolio and operational efficiency [S2].
• CEMIG acquired 51% of Hidrelétrica Pipoca S.A., increasing its ownership to full control of a 20 MW hydroelectric asset, subject to regulatory approvals [S2].
• The company completed the acquisition of Empresa de Transmissão Timóteo-Mesquita S.A., a transmission asset connected to its network, with an annual permitted revenue of BRL 6 million [S2].
• CEMIG maintains a strong commitment to sustainability, being included in the S&P Global Sustainability Yearbook, the Clean200™, and recognized as one of the 10 most sustainable corporations in Latin America by Corporate Knights [S2].
• The company’s dividend and interest on equity payments are subject to Brazilian tax withholding rules, with specific tax treatments for foreign investors detailed in its 20-F filing [S1].
• Foreign investment in CEMIG shares is regulated under Brazilian law, including registration requirements with the Central Bank and CVM, and subject to exchange controls and tax considerations [S1].