Companhia Energética de Minas Gerais

Good morning, everyone.

I'm Carolina Sena, CEMIG's Investor Relations Superintendent. Welcome to CEMIG's 2nd Quarter 2026 Earnings Videoconference Call. Please note that this videoconference is being recorded and it will be available on the company's IR website at ri.samig.com.br, where you also find the company's presentation. Should you need simultaneous interpretation, the feature is available by clicking on the globe icon located on the bottom of the screen. Upon choosing interpretation, select the language of your choice, Portuguese or English. Should you choose to follow the call in English, you may also select mute original audio.

During the company's presentation, all participants will have their microphones disabled. After that, we will start the Q&A session.

We now start the Mixed Video Conference with Alexandre Ramos Peixoto, CEO, Leonardo Jorge de Magalhães, CFO and IRO, Luiz Claudio Corrêa Bilani, Chief Information Technology Officer Demetrio Alexandre Ferreira Chief Generation and Transmission Officer Fernando Antunes Braga Chief Distribution Officer Sergio Lopez Cabral Chief Trading Officer Sergio Pessoa de Paula Castro Chief Legal Officer Yuri Araujo de Mendonça

for the initial remarks, I now turn the floor to Alexandre Ramos Peixoto, our CEO, who will start the presentation.

Alexandre, the floor is yours. Thank you, Carol. Good morning, everyone. It is a real pleasure to be here with you on my first earnings call as a CEO of our dear CEMIG group. I take on this role with great confidence, confidence in the company we've built, also confidence in the quality of our people Minas Gerais and the real ability to turn plans into tangible outcomes. And it's important to make it very clear right now, the quality of the service provided to our clients, that will always be at the core of our priorities. We want to be recognized not only by our financial results but also by the excellence of our operation and the quality of the experience we deliver to the millions of clients we serve, over 9.5 million consuming units. And that's why we will continue executing a relevant cycle of investment, especially in distribution. We have over R$22 billion in our tariff-free deal cycle, for May of 2028, and we are investing to turn these networks more robust, modern, resilient, and prepared for the new demands of our clients, and also for the transformations in the electric sector, highlighting the full opening of the electric power market in Brazil, which should happen in 2020. November 25th, 2028. As all of you know, the electric sector is undergoing a deep transformation, and I can tell you that we are very well positioned to be part of this future. We have quality assets, knowledge, investment capacity, and an experienced team and very well prepared one to execute our strategy. We have an important advantage. We are an integrated company. The combination of our businesses gives us the scale, complementarity, and also a privileged view of the sector's changes. That integration strengthens our ability to navigate different cycles, seize opportunities, and create value in a sustainable fashion. So, the message I would like to convey to all of you in this first earnings call is of confidence and continuity of the implementation and the success strategy in the long-term view. A management with financial discipline, consistent results and responsibility in our businesses, therefore meeting our commitments and generating value to our shareholders. Today, we have a strong company and we are working and we'll keep on working hard so that it can be even stronger. And with that long-term vision, customer focus and discipline in execution and commitment with results that I start this new cycle, I will continue working on this new cycle of test management ahead of this company. Having said that, I thank you very much for the opportunity to be addressing it. and I turn the floor to our dear CFO, Leonardo Jorge da Magalhães, to start the presentation of the results of the second quarter.

Thank you very much.

Thank you very much, Alexandre, for your message. Good morning, everyone. Thank you for being here with us in this video conference call for the A company, as Alexandre has mentioned, is integrated to a number of businesses that support our cash generation and as well as our results Every quarter bringing you consistent results. Also, we have funding of 4.6 billion. Also, in this quarter, this was very relevant and this was to support our investment program. In the next slide, we'll talk more about that. This is an investment program that is very relevant, especially our distributing company that will be generating value for the next years for shareholder remuneration. Historically, this is a company that has a great remuneration to its shareholders, and we have interest on capital of 631 million. That represents 22 cents per share. Growth strategy or CapEx is of 1.8 billion. We are going to go over that figure. And also, we had a tariff adjustment for a CEMIC distribution with 6.5% of average tariff impacted to CEMIC's consumers. And that's a slide. We have a planned investment for the year, which is 6.7 billion. And up to the first six months, we were able to invest 3.3 billion, 49% of the total amount. And the message is that we are in line with the investments forecasted for the year. As also we had estimated, and we are communicating to the market, we have a large investment in our distribution branch, 2.6 billion in these first six months. Investments in generation of 275 million and to make seeing also a thing is inside like up to 127 million and that's making 92 million and investments especially here and the Midwest project and with 33.5 kilometers of Network built in the quarter now going over the investments of our distribution branch here a company. We see that with this investment, the company is adding a lot of value, not only thinking about the remuneration base that we expect to be included in the next tariff review in 2028, but also in the quality of service that we provide our clients, which surely will be positively affected by all of these investments. In transmission, also we have de Minas Gerais. is frequently being transparent, bringing to the market its investment program, and we are in line with investments that we have forecasted for the next years. And in this quarter, it has been no different. Now we have the consolidated results for the company. These are good results. 9.3% here, recurring results for EBITDA compared to the prior year. Net income, 15.6% here. It was impact by financial expenses because of the funding that the company has to be able to provide support to its investment programs.

And this was already in our strategic plan.

And here we highlight some non-recurring facts here. The volunteer dismissal program has an impact in the beginning, but in the long term, it will bring benefits to the company because it is a process where we're naturally replacing our employees that are with us for a longer period of time. They get incentives to leave the company and new employees come in to help in our culture and our performance. Also, we have a free market customer arbitration. There were some questions about some contract clauses and this is being concluded now. And because of the maturity and the current A stage of this process, the company considered to be necessary to have a provision of 191 million for the outcome regarding this topic. This does not have a cash effect as of now, but right now we had to have provisions for that. And in the prior year, we had a few adjustments, non-recurring as well, because of... RVST Remeasurement and also the Remeasurement of Post-Employment Liability. We should highlight as well that the provision for losses for the company because of delinquency and the company adjusted its criteria according to ANEL and the market benchmark and so that generated expected losses reversal of 250 32 million, with a positive effect in this quarter. Moving on, we have here consolidated costs and expenses, which had an increase of 15.5% in this quarter. This was very relevant, but it's important to highlight that we have seasonal effects. This is because of the investments that we had in this period in improving the quality of the network, and all of this is very important so that we can improve our service to clients and also to tackle possible contingencies. And now we are talking about El Niño that we'll be seeing now in the second half of 2026. In any case, we believe that we did have seasonal effects and we do not expect to have a variation or to see a reduction in the variation when we complete 12 months and we compare 2026 to 2025. But in this quarter, we did have a specific impact That was a one-time-off impact, and therefore this variation was of 15.5%, but the company's costs are being controlled because we have financial discipline, and we are balancing out the improvement of the network, the investment in the processes that might help the company to serve the clients better, and we are keeping costs at a very disciplined level.

Moving on, we have the debt profile.

The company still has a high quality of credit. We are tripling into Ratings Agencies and AA Plus at S&P Global and here we have our maturity schedule that has a very adequate supply for the upcoming years and leverage reaches 2.58 in the second quarter of 2026 and we understand that considering recurrent investment a plan doesn't leverage as right and that corresponds to our expectation When we think that we have a tariff review in 2028, therefore, our leverage has a growth up to 2027, but in 2028, it will come down because of the tariff review in our distribution company. But the company is still accessing the capital market in a frequent fashion, and it has great access to the market and also very competitive costs. On the next slide, we have our cash generation. We generate, we have a strong cash generation. Even with the adjusted EBITDA, you see that the EBITDA is reflected and the cash in the operating cash here in this half of year goes to 4 billion reais. So if you double it, we are generating operating cash of almost 8 billion in the year and that's very strong to for this investment program. And here we also have the third-party capital that helps the company in the distribution segment. And here we have the five-year cycle from 2023 to 2028. Now we're turning to CEMIG-D and CEMIG-GT results. CEMIG-D has positive results, 21%. up in EBITDA when compared to Q25 recurring net income is in line 8.9% down but as we mentioned also there was an impact of issues involving higher financial expenses because of the interest rates which are high and also the natural debt para proporcionar para nossos programas de investimento. Também falei sobre o ajuste do PIB. Tivemos um impacto average de 6,5% e a correção de 4,9% e a parte B aqui tem um aumento de 2,7% no mercado residencial. Também falamos sobre a reversão do TCL. Estimadas perdas aqui. Tem a ver com a delinquência atual dos nossos consumidores. Isto é muito controlado.

by CEMIG-D. And here we have the energy market.

It is down 1.6%. When compared to the second quarter of 2026 to 2025, you see that the total power carried has increased a little bit, and we have 3.8% of drop in the capital market because we had large clients leaving CEMIG's network Distribution Network this year, and that did have an impact when you compare that to QQ25. And when we compare the different consumers' classes, we have residential growing 2.7%, and we also can highlight the rural classes with a reduction of 11% because of the rainy season, which was greater in the second half of the year. Therefore, there's lower... Consumption by the Rural Segment, and CENIC EEG has a relevant impact. It now represents 25.8% of the competitive market of CENIC distribution. Moving on, the company is still very much disciplined, and its costs, as I mentioned, are outbacked today. It's $416 million lower than the regulatory limit in this first quarter of 2026. Operating efficiency, also this is very important, and we see great financial results, consistent results for SEMIC-D, and also they are in line with operating efficiency. All the investments that the company is making, they have provided improvements in our quality indicators, our efficiency, FEC is 8.43, lower than the regulatory limit, so in the downward trend, and FEC also 4.86 compared to 5.37, which is the regulatory indicator, that's the limit established by ANL, so we have good room here. That is thanks to the investments that the company has been making in the past few years, which are bringing results in these indicators that we have a good quality of service to our clients. Regulatory losses are still low and lower than the real losses, and we have already talked about the reversals for expected credit losses in this half of year. So, the quality indicators for the company are in an upward trend, a positive trend. Now, talking about SemicGT, also have great results, 10.6% vis-a-vis the prior year in EBITDA and recurring net income with a reduction of 11.4% because of the increase of financial expenses as highlighted. We have increased revenue from sales to end customers, 124 megawatts average, and also inflation adjustment on RBO revenue or plans that received by quota. There was an adjustment of RBO revenue because we had a cumulative IPCA inflation here, and all of them are related to these grants. Now we have a breakdown for SEMIC generation and transmission, and then I turn up the business for generation. Here we have a positive result both in EBITDA as well as in recurring net income. EBITDA up 13.3% and recurring net income also up, but here it's 3.6% and average GSF here was better than what we had in 2025 and that has reflected in higher revenue that we have seen in 26 compared to the prior year and for transmission positive results with an added RAPE and also the regulatory assets of transmission that allowed that our transmission results were 50% higher when measured by EBITDA compared to 2025 and recurring net income to 50%, 190 million compared to 120 million in the prior year. Only not, the unique trading results were 180 million negative, a recurring evidence compared to the prior year. We talked about this provision of 191 million, but this is a one-time-off result. This stems from a specific action related to a major industrial client, which he has gerado um efeito de previsão na segunda-feira. Isto não é um efeito de dinheiro, agora é apenas uma previsão. Portanto, isso ainda está sendo discutido. E este efeito negativo na segunda-feira vem das posições que foram estabelecidas e de preços de energia mais altos comprados. This was already expected by the company, and also the effects that have been related to sub-markets, especially regarding the south. We understand that the trading company effects that generated this impact of minus 180 million have been very much concentrated in the first half of the year, and we understand that the trading company results in the second half of the year will have positive results. comparado com a primeira metade do ano, o que já sabíamos. Isso já estava planejado. Sabíamos que teria esse tipo de efeito, especialmente por causa das posições das empresas. Mas, para a segunda metade do ano, entendemos que teremos um ambiente mais favorável, tanto na hidrologia quanto porque já estabilizamos posições que foram necessárias para o ano de 2026. Na próxima tela, temos os resultados do GASMEG. A still sound result, this reduction that we see both in EBITDA as well as in recurring net income for gas mix, it was already expected because we had migration of clients to the free market. Therefore, we have a lower margin affecting the EBITDA and net income of the company. Also, that had an impact of the reduction of the volume distributed of 17%. All of these factors combined brought this reduction in the results. GASMIC has a tariff review that should happen by the end of the year. We are very optimistic about the project, and GASMIC should be bringing sound and consistent results to the group in the next quarters. Basically, these were the main highlights of our presentation. We understand that these were consistent and sound results. and the different CEMEX businesses. We understand that, especially in the trading company, it was a more difficult half of year, but we have a positive outlook for the next six months, and we'll continue executing our investment program that will generate a lot of value to CEMEX in the next few years, considering the tariff review that we will have ahead. I turn the floor now to Carolina so that we can start our Q&A session. Thank you very much, Leonardo. So, right now, we will start our Q&A session. So, you may click on the Q&A icon on the bottom of your screen, and then you can write your name, and you can send your questions by writing. Please send all the questions at once and wait for the company's answer. During the session, we will be announcing the names of participants, and we'll be reading the questions so that the company can answer them. Our first question is from Marco Aurelio, and the question is, considering that there was an increase in tariffs only in 2028, and with the increase of the indebtedness and the debt cost, what will be the direct impact on the profits or the net income reduction for 2027, and what will be the impact in the shareholders' remuneration?

Thank you for your question.

It's important to mention that CEMIG has always been a great dividend payer in the electric sector. This is a company that we can say that has been one of the best in paying dividends by our bylaws. tem uma dívida mínima de 50% de renda. Então, este é um pagamento relevante. Nós entendemos que agora, em 2026, este é o ano em que as empresas resultam, por causa de custos financeiros mais altos, vai ter resultados muito positivos, tanto para EBITDA quanto para renda neta, e acreditamos que continuaremos a trazer dividendos positivos, seja agora ou nos próximos anos. Teremos uma revisão de tarifas em 2028, teremos um impacto positivo nos resultados, mas mesmo nos próximos anos, 2026 e 2027, considerando o desempenho atual da empresa estabelecido pelas leis, 50% de renda neta, isso é uma remuneração muito atrativa to our shareholders, even considering an adverse scenario to all the markets. And we understand that this dividend yield will continue being relevant and positive for our shareholders this year and also in 2027.

Next question is from Ricardo Bello. How is your perspective for El Nino Impact

in the different areas of businesses. Are you going to have a prefix of pre-payment in the distribution and transmission companies to avoid possible incidents? For this question, we will have our Chief Distribution Officer to answer. Hernando, please, Hernando.

Good morning, everyone. Thank you very much for your question.

O'Neill requires a robust planning, which we have for a maintenance plan. We have a contingency plan. Considering that we have the largest investment plan in history, we are executing our maintenance plan, also the largest one in history, our OPEX, nós temos meios AME, automação, sistema elétrico, então, para a segunda metade de 2026, nós estamos totalmente preparados para o impacto do El Nino, em adição a esses investimentos, nós temos a penetração de nossa estrutura no estado como um todo para enfrentar essa diversidade, então, em resumo, nós não teremos nenhum impacto no nosso budget por causa do El Nino. Thank you, Hernando. Now, to talk about generation and transmission, I would like to ask our Chief Generation and Transmission Officer, Demetrio, to take that question. Good morning, everybody. For generation and transmission, starting by generation, we have a permanent routine to manage these assets that is based in RIFs. We need to guarantee the availability of different pieces of equipment during higher demand. So we run periodic tasks for all the plants to make sure that when they are demanded, they will be working. We do not have above the average rainfall with El Niño. So we should have more rainfall for the south, not for the southeast region. So in our point of view, we do not need contingency plants that are Just more elaborated than the ones that we already have to our large plants and reservoirs. For storms, for the small plants that have smaller reservoirs, we are reviewing our contingency plans to guarantee access to them and also to control flooding. That's what we have for generation. We are fine about it. For transmission, we do have assets of high resilience. This is thanks to the work that we have been developing for preventive maintenance, modernization, management based on risks. This contingency plan that we have in transmission is very robust. We maintain vegetation at low levels in the right of ways. We also have weather forecast that will issue alerts in case that is needed so that we can tackle all the contingencies if needed. We have devices all over the state. These are previously placed in the state of Minas Gerais. In case of contingencies, we can return the lines at a lower period of time. So prevention is the key word here, and we are prepared for any problems that might happen in terms of contingencies, both for generation and transmission. Thank you, Demetrio. We have another question. Now, regarding auctions, I will ask our CFO and IR officer to answer. And the question is if we are interested in taking part in transmission auctions, and then Sergio Lopez is going to talk about the auctions for batteries. Please, Leonardo. Regarding auctions, yes. The company is considering transmission auctions, and the last ones that happened in the country We were following, and it's important to highlight the company's discipline in allocating capital. We studied. We considered all these options. If we understand that the return is interesting, we take part in them. But if the return is not attractive, the company rather allocates its capital in assets where we understand that we will have more value for shareholders. So the answer is yes. We are still keeping an eye on that. but we have discipline and capital allocation and we'll just be winners in the areas where we are sure that we'll be generating value to the company, considering that we have several businesses and this is one of the key areas of the company and we can diversify our capital allocation. And right now, as I have already mentioned, we understand that the regulated businesses and investing in reinforcements, even in transmission, They have been bringing more value and they are very important in the value generation for shareholders. About data centers, I will turn the floor to Sergio. He can talk more about it. But we will also be analyzing the battery auctions, only taking into consideration the return to our shareholders in value generation. And this is something that is key to us.

Good morning everyone.

I will talk about data centers and of course we are talking to some market players to understand the segment and to see how we can turn the profitable the sale of energy or the participation of CEMEG in this process. We understand that there is an opportunity in the market but it has to be analyzed cautiously and We want to extract the best and the greatest value of this opportunity, understanding the assets and what are the benefits that they bring to the company. So, data centers are assets that we are considering, but cautiously, how we can bring profit to CEMIGs and shareholders in this investment.

Thank you, Sergio.

The next question is about the maturity of the concessions. He's asking how the process is going because the next maturity of Sacarvalho, I'll turn the floor to Leonardo. The market knows that we have three concessions that will have the maturity closed in 2026 Sacarvalho and two others in 2027. And so we may say that the process is moving forward. We have already a favorable note from Anel. So now this is being discussed in the Ministry of Mines and Energy. And what we can tell you that we are very optimistic about the process. Of course, we have to wait for the granting power approval, but we believe that's going to have a positive result for the company in this concession renewals process. Our next question is about the trading area, and I will turn the floor to Sergio Lopez. It's about the losses that we had that negative impact in the trading company's results. And how is the company prepared to overcome this loss? And what is its future outlook? Thank you for your question. I think we can go back to last year and this year and then talk about the future. The trading company... is undergoing a moment when it has to settle positions. There was a change. There was a moment when we had price model changes and scenario changes, and we have been working in a very cautious way. Last year, we did have net income. Maybe in the market, we were one of the few companies that were able to have this result. and this year we expected a possible negative evidence and also we had situations where we had a detachment of the south sub-market. This was an unprecedented case. I think this was the first time that this is happening. We were able to purchase energy, although it is expensive and we are selling positions, we did that in-house so we exchanged positions with Generation, and therefore it remained in the group itself. Although we posted negative results in the trading company, it became positive in the Generation company, so the positive, and the final impact was zero. So we were able to end this year, and for 2027-2028 we have brought down our position. Of course, we have to, we have A patient and we have to be cautious to be able to settle these positions in the best time possible. We have been able to do that. And for 2028, we already expect significant results for the trading companies. So, we have results of around 1 billion, 1.8 billion. That's what we expect to reach. We understand that we are prepared to undergo this moment. Right now, we are applying the best practices and the best strategies to serve the markets. But the whole market is having a hard time because of a structural issue. And we are having better results than our competitors thanks to our strategies. So for the future, we believe we will have good results. This is a difficult moment now. Again, this was expected. And we are looking at the best time to close to settle positions, reduce losses, and also para ter as we had last year. Thank you, Sergio. And for the final remarks, I turn the floor to Leonardo. Once again, I would like to thank you all very much for being here in this call for the second quarter of 2026. I came back to the company in June, but when I was in the company from 2020 to 2024, we have always been very transparent na nossa estratégia, que é diversificar complexos e atos não-cores, priorizar investimentos nos setores regulados, especialmente nossa empresa distribuidora, sempre investindo Operating Efficiency, and this strategy is already bringing results to the company. This is a winning strategy. This is delivering value to shareholders, also to our clients, and we have the best quality indicators. We thank our investors for their trust, and we are very optimistic about the strategy. for the continuity of implementation of this strategy and the company greater operating efficiency and discipline in capital allocation. Thank you very much. So, thank you very much for your participation in this video conference call and the Investor Relations Superintendent is available to take any further questions that you might have. Therefore, we conclude and make the second quarter 2026 earnings conference call. Have a nice day. Thank you.