BRAZIL · MARKETS
Key Facts
- —What is happening Neoenergia, the Brazilian utility controlled by Spain’s Iberdrola, saw third quarter profit rise 27% to 1.18 billion reais (about US$234 million) on Tuesday, 20 October, while nine month profit fell 5%.
- —Why it matters The quarter includes a 292 million reais (about US$58 million) fair value gain from the transmission deal with Singapore’s GIC, which helps the comparison with last year’s 924 million reais (about US$184 million).
- —The numbers EBITDA, operating profit before interest, tax and depreciation, rose 6% to 3.58 billion reais (about US$712 million), while net debt reached 52.2 billion reais (about US$10.4 billion), or 3.44 times EBITDA.
- —Who is who Neoenergia runs five power distributors serving 17.2 million customers in Bahia, Pernambuco, Rio Grande do Norte, São Paulo state, Mato Grosso do Sul and Brasília, and Iberdrola is its Spanish parent.
- —What to watch Aneel, Brazil’s electricity regulator, put a provisional tariff review for Neoenergia Brasília into effect on Thursday, 22 October, and any correction would come in the 2027 tariff adjustment.
- —Power Index Brazil ranks 1st of 14 in The Rio Times Latin America Power Index, with 75.0 points (October 2026 edition).
- —What it means for you US investors in Brazilian utilities or in Iberdrola should read the 27% jump with care, because nine month profit is down 5% and net debt is up 7% since December.
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Neoenergia, the Brazilian power group controlled by Spain’s Iberdrola, earned 1.18 billion reais (about US$234 million) in the third quarter, up 27%. Nine month profit is still down 5%.
Neoenergia, a Brazilian power group controlled by Spain’s Iberdrola, earned 1.18 billion reais (about US$234 million) in the third quarter. That is 27% more than a year earlier.
The company published the figures on Tuesday, 20 October. Over nine months, profit is down 5%, so the quarterly jump needs a closer look.
What Neoenergia Reported for the Third Quarter
Profit attributable to controlling shareholders was 1.177 billion reais (about US$234 million), against 924 million reais (about US$184 million) a year earlier. EBITDA, which measures operating profit before interest, tax and depreciation, rose 6% to 3.58 billion reais (about US$712 million).
Cash EBITDA, which strips out accounting items and corporate deals, grew 12% to 3.15 billion reais (about US$627 million). Net revenue fell 7% to 12.02 billion reais (about US$2.39 billion), while the cost of buying energy dropped 14%.
The company distributed 19,623 gigawatt hours of electricity, up 6.0%, and the release credits warmer weather and more customers. It served 17.2 million customers at the end of September, 2.0% more than a year earlier.
Conversions in this article use the rate of 22 October 2026, 5.02 reais to the US dollar, from open.er-api.com. Neoenergia’s own release, dated Rio de Janeiro, 20 October, is the source for every company figure.
How a One Off Gain Lifts the Quarter
Equity income and corporate deals added 345 million reais (about US$69 million), up from 31 million (about US$6 million) a year earlier. That includes a 292 million reais (about US$58 million) fair value gain on the transmission deal with GIC, Singapore’s sovereign wealth fund.
The release counts that gain inside EBITDA but not inside cash EBITDA. The profit rise of 253 million reais (about US$50 million) is smaller than the gain, but no tax effect is given.
Over nine months, profit fell 5% to 3.36 billion reais (about US$669 million), from 3.56 billion reais (about US$708 million). Income tax and social contribution cost 720 million reais (about US$143 million), against 79 million reais (about US$16 million) a year earlier.
The release says the networks business booked a 770 million reais (about US$153 million) tax credit in the second quarter of 2025. It stemmed from removing a state sales tax from the base of two federal taxes, and it lifted last year’s base.
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Networks Gain While Generation Slips
The networks business, which covers distribution and transmission, earned 1.10 billion reais (about US$219 million), up 34%. Transmission alone earned 541 million reais (about US$108 million), up 147%.
Neoenergia Coelba, the Bahia distributor, earned 201 million reais (about US$40 million), down 19%. Its finance costs rose as its average debt grew.
The generation and clients unit, which runs the power plants, saw gross margin fall 11% to 478 million reais (about US$95 million). Its EBITDA dropped 17% to 328 million reais (about US$65 million).
The release blames weaker wind output and the April sale of the Dardanelos hydro plant. Financial costs eased 7% to 1.41 billion reais (about US$281 million) in the quarter, helped by more interest income.
Debt, Investment and Rating
Net debt stood at 52.2 billion reais (about US$10.4 billion), up 7% since December. That is 3.44 times EBITDA, against 3.41 times at the end of 2025.
The ratio would be 3.29 times if transmission assets counted for a full year, the release says. Gross debt is 71.7 billion reais (about US$14.3 billion), 88% of it long term.
The company raised 10.4 billion reais (about US$2.07 billion) in the quarter. Iberdrola supplied 9.4 billion reais (about US$1.87 billion) through a 4131 loan, a cross border loan, matched by debentures from five distributors.
Nine month capital spending was 6.17 billion reais (about US$1.23 billion), of which 5.68 billion reais (about US$1.13 billion) went to distribution. That lifted the regulatory asset base, the value on which Aneel allows a return, to 48.2 billion reais (about US$9.6 billion).
S&P Global Ratings affirmed Neoenergia at BB on its global scale on 17 March, capped at Brazil’s sovereign rating. On Brazil’s national scale it holds the top grade, brAAA.
Tariffs and the GIC Deal
On 30 September, Neoenergia took 51% of Neoenergia Transmissão and control, which it had shared with GIC’s vehicles since 2023. The deal brought 1.7 billion reais (about US$338 million) in cash.
Aneel, Brazil’s electricity regulator, approved a 9.58% average increase for Neoenergia Elektro customers from Thursday, 27 August. On 20 October it approved a 1.92% average increase for Neoenergia Brasília, effective Thursday, 22 October.
The Brasília review is provisional because the distributor is switching to a new billing system. Aneel set its regulatory asset base at 2.2 billion reais (about US$437 million).
What It Means for US Readers
Neoenergia is one of Brazil’s large private power groups, and Iberdrola’s loan shows how much parent funding supports its investment plan. US investors can follow it through its São Paulo shares, coded NEOE3, its debt, or its Spanish parent.
The headline 27% rise should be weighed against the 5% nine month decline and the GIC gain. Rising debt and a rating capped by Brazil’s sovereign grade are the other points to watch.
Background is in the first quarter results and the Neoenergia company profile. See also the Aneel move against Enel, Axia’s share redemption and Brazil coverage.
What Is Not Known
The release announces no dividend, and it does not say how the market reacted to the figures. It also gives no tax effect for the GIC fair value gain.
No analyst consensus for the quarter was found, so it is unknown whether profit beat expectations. The release gives no split of the nine month decline, so the effect of last year’s tax credit is unknown.
What Comes Next
The Brasília tariff took effect on Thursday, 22 October, and Aneel can adjust it in the 2027 tariff process. The release gives no date for the next results, which would cover the full year.
In May the company announced 50 billion reais (about US$9.95 billion) of investment in its five distribution areas for 2026 to 2030. That plan follows the renewal of three concessions, and it does not guarantee higher profit.
Frequently Asked Questions
How much profit did Neoenergia make in the third quarter?
Neoenergia earned 1.18 billion reais (about US$234 million), up 27% from 924 million reais (about US$184 million) a year earlier. It published the result on Tuesday, 20 October.
Why is nine month profit down 5%?
Profit for January to September was 3.36 billion reais (about US$669 million), against 3.56 billion reais (about US$708 million). Tax costs rose sharply, partly because a 2025 tax credit did not repeat.
Who owns Neoenergia?
Spain’s Iberdrola controls Neoenergia, a Brazilian electricity group whose shares trade in São Paulo as NEOE3. Iberdrola also lent it 9.4 billion reais (about US$1.87 billion) in the quarter.
How much debt does Neoenergia carry?
Net debt was 52.2 billion reais (about US$10.4 billion) at the end of September, or 3.44 times EBITDA. That is up 7% since December.
What is Neoenergia’s credit rating?
S&P Global Ratings rates it BB on the global scale, capped at Brazil’s sovereign grade. On Brazil’s national scale it is brAAA.
Sources: Neoenergia, Release 3T26, 20 October; Neoenergia press release, 20 October; ADVFN, 21 October; Money Times, 12 March; Money Times, 29 April; exchange rate, open.er-api.com, 22 October (all accessed 22 October 2026).
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief
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