Eletrobras (ELET6), a leading Brazilian energy company, reported a regulatory net revenue of R$9.7 billion ($1.9 billion) for Q1 2024.
This represents a 9% increase from Q1 2023. Primarily, tariff adjustments in the transmission segment propelled this growth.
Meanwhile, the generation sector faced challenges due to low energy prices and selling the Candiota power plant.
Energy sales and network costs climbed by 15% compared to Q1 2023, significantly impacting Eletrobras’ overall financial results.
Provisions of R$639 million ($125.3 million) for Amazonas Energia further strained these results.
Nevertheless, the company maintained strong control over manageable expenses, which fell by 11% through privatization restructuring and a voluntary redundancy plan.
Despite these efforts, EBITDA only experienced a modest 5% growth to R$5.4 billion ($1.06 billion), falling below market expectations.
Net profit comparisons proved challenging against Q1 2023, which had benefited from non-recurring factors. Net profit dropped by 22% to R$865 million ($169.6 million).
However, progress was made by reducing mandatory reserves by R$1.14 billion ($223.5 million) compared to 2023’s end, due to newly established agreements.
Since Q1 2023, the reduction reached R$8.2 billion ($1.6 billion).
Eletrobras Reports Strong 9% Revenue Growth Amid Economic Shifts
Eletrobras capitalized on early-year price improvements to reduce uncontracted energy from 15% to 8%.
This move allowed the company to secure favorable pricing near R$200/MWh ($39.2/MWh), despite oversupply concerns.
While these results fell short of expectations after two strong quarters, most negative effects appear temporary.
Eletrobras remains a promising investment, trading at under six times enterprise value/EBITDA.
Strong dividend yields, enhanced financial performance, and a strategic vision for success make the company a recommended buy.