Companhia Energetica de Minas Gerais Reports 1Q

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On May 13, 2009, Companhia Energetica de Minas Gerais(CIG Quote) reported a 31.4% year-over-year decline in its Q1 FY09 earnings, which were hurt by lower revenue. Net income declined to Brazilian Real (R$) 336.24 million or R$0.68 per share from R$490.28 million or R$1.01 per share a year ago.

Net revenue plunged 14.1% to R$2.37 billion from R$2.75 billion due to a decline in revenue from gross supply of electricity and revenue for use of the network. Operating revenue from the supply of electricity dropped 12.3% to R$3.14 billion due to a negative impact of tariff adjustment to the extent of R$264.63 million, along with a decrease in volumes of electricity sold to Industrial, Rural, and Public service consumers. Revenues from energy sold to other concession holders, bilateral contracts, and sales in the wholesale energy market (CCEE) advanced 12.8% to R$359,504. Revenue for use of the network slipped 6.1% to R$452.09 million, as Tariff for Use of the Electricity Distribution Systems (TUSD) fell 11.4%, and revenue from use of the basic network dropped 3.9%, partially offset by a 71.7% growth in revenue from connection to the system. Meanwhile, other operational revenues inched down 5.5% to R$138.27 million, following 21.7% and 7.0% declines in revenue from retail supply of gas and services provided.

Total volume of electricity sold decreased 1.6% to 10,958,930 MWh from 11,140,910 MWh in the prior year's quarter, fueled by an 8.3% decrease in industrial sales, a 0.2% drop in rural sales and a 1.0% decline in public service sales. On the positive side, sales volumes to residential, commercial, services and others, public authorities and public service categories grew 9.4%, 6.0%, 9.3%, and 3.3%, respectively.

Total customers increased 2.7% to 10.66 million from 10.38 million in the prior year quarter.