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Energisa SA reported its third-quarter earnings for 2025, showcasing a robust financial performance with a significant earnings per share (EPS) beat. The company posted an EPS of $0.1867, surpassing the forecast of $0.1067 by 74.98%. Despite this strong performance, the stock experienced a decline of 3.04% in the market following the announcement. Revenue remained in line with expectations, totaling $6.72 billion.
Key Takeaways
- Energisa's EPS exceeded expectations by nearly 75%.
- Revenue matched forecasts at $6.72 billion.
- Stock price fell by 3.04% post-earnings announcement.
- Continued growth in recurring EBITDA and energy distribution segments.
- Strategic expansion into biomethane and renewable energy.
Company Performance
Energisa demonstrated solid growth in the third quarter, with a recurring EBITDA increase of 70%, reaching BRL 2 billion. The energy distribution segment grew by 14%, contributing to a net profit of BRL 438 million for the quarter. Over the past five years, the company has maintained an annual growth rate of 15.2%, highlighting its strong position in the Brazilian energy market.
Financial Highlights
- Revenue: $6.72 billion (in line with forecasts)
- Earnings per share: $0.1867 (74.98% above forecast)
- Net profit for the quarter: BRL 438 million
- Recurring EBITDA: BRL 2 billion (70% increase)
- Distribution energy growth: 14%
Earnings vs. Forecast
Energisa's actual EPS of $0.1867 significantly surpassed the forecasted $0.1067, marking a 74.98% surprise. This substantial beat reflects the company's effective cost management and growth in key segments. However, the revenue of $6.72 billion was exactly as projected, indicating steady performance without unexpected gains.
Market Reaction
Despite the impressive EPS beat, Energisa's stock fell by 3.04%, closing at $14.16. This decline contrasts with the company's strong financial results and may reflect broader market trends or investor concerns about future growth prospects. The stock's movement positions it closer to its 52-week low of $9.33, suggesting cautious investor sentiment.
Outlook & Guidance
Energisa remains committed to expanding its biomethane production and exploring renewable energy opportunities. The company plans to establish two new biomethane plants, emphasizing its strategic focus on low-emission energy solutions. Looking forward, Energisa aims to maintain cost efficiency and explore white tariff opportunities, potentially influencing future earnings.
Executive Commentary
"Our growth was 15.2% each year in the last five years," stated Maurício Botelho, Financial Director, highlighting the company's consistent performance. Ricardo, an Energisa Executive, emphasized the strategic focus on regional energy production clusters, while Pedro, another executive, mentioned the company's positioning towards four-ring tariffs.
Risks and Challenges
- Regulatory changes in the distributed generation market could impact growth.
- Macroeconomic pressures in Brazil may affect energy consumption.
- Potential supply chain disruptions could challenge operational efficiency.
- Market saturation in key regions might limit expansion opportunities.
- Fluctuations in global energy prices could influence revenue streams.
Q&A
During the earnings call, analysts inquired about Energisa's biomethane strategy and its expansion plans. The company addressed regulatory changes and their potential impacts on distributed generation. Discussions also covered the implications of MP1304 and upcoming tariff modifications, providing insights into Energisa's strategic adjustments in the evolving energy landscape.
Full transcript - Energisa SA ORD (ENGI3) Q3 2025:
Moderator/Presenter, Energisa: We value that you send in via the Q&A icon located at the bottom area of your screen. By dynamics, your names will then be announced so that you can ask your question live. At this moment, a request to activate your microphone will pop up on your screen. Considering that some of the panelists are remote, oscillations may occur, and stabilizing occurs well at the video conference, impacting on the answering time, especially during the Q&A. We are counting with your comprehension. We highlight that the information contained on this presentation and eventual statements that may be done during the video conference related to business perspectives, projections, and operational goals and financial goals from Energisa. They constitute on beliefs and premises of the administration of the company, such as information currently available. Future statements are not proof of performance.
They involve risks, uncertainties, and premises because they refer to future events. Nonetheless, they depend on circumstances that may or may not occur. Investors must comprehend that general market conditions and other factors may affect the performance of Energisa and conduct results that differ materially from those expressed in such future statements. Now, I'd like to give the word to Maurício Botelho, Financial Director and Investor Relations of the company, as we start our presentation. Maurício, please go ahead.
Maurício Botelho, Financial Director and Investor Relations, Energisa: Good morning.
Moderator/Presenter, Energisa: It's a pleasure to be with you guys for the presentation of the third quarter of Energisa. With me today, we have our CEO, Cláudio Botelho, the Vice Presidents, some directors, and the Investor Relations team. I kindly ask you guys to observe the disclaimer at the beginning of the presentation before any decision-taking of investment. Please, on the next slide, starting our presentation, we are going to the highlights of the period that was marked by relevant advances in many segments. On accelerated, just a bit there recurring, had a growth of 70%, totaling BRL 2 billion, with highlighting the distribution of energy that had a growth of 14% on the same indicator. We had a good evolution in many business lines, as we're going to be seeing next year.
Following the discipline at cost management, our PMSO consolidated at a growth of only 2.8% at the quarter and a growth of almost zero considering the nine-month period of 2025. The recurring profitability, they had a loss of 13.6% influenced by the big financial expenses at the period. Given the information for the distribution of energy, a bit adjusted, recurring had an evolution of 14% of the quarter, manufactured by the growth of 2% on the market with a big basis last year. We should highlight on the third quarter of 2024, we registered the biggest consumption in this quarter in 11 years. Talking about a PMSO, despite a growth of 7.9% on the quarter, accumulating the nine months, we had the same financial discipline with a growth of 4.3%, so below the inflation.
Another point for us to highlight at a segment of distribution of energy was the lowest loss from energy in consistent performance on the indicators of quality. On the highlights as well, talking about transmission of energy, we had the expansion of the margin on the regulatory beta with the reduction of 26% of PMSO in the quarter. Talking about the natural gas, we had some evolutions highlighting the ESGás and NorGás distributors. They had a growth of 26% and 28%, respectively. At ESGás, the development of distributed volumes and review, tax review, they contributed for a good performance at the quarter. Between the distributors invested at NorGás, CopyGuys was the highlight with the excellent recovery at the beta and net recovery related to the third quarter 2024. Talking about the distributed generation division from Energisa, we had a great performance, operational, and financial this quarter.
We keep on the continuous recovery with loss of churn and debt. We had a great PMSO that had a reduction of 33.4%, and the EBITDA totaled BRL 43.2 million this quarter, and it had a growth of 24.3% this quarter. Next slide, please. The results, economic, financial, they reflect the consistency on the execution and quality of the portfolio that we have, even in the challenging scenario, macroeconomic. We show a good effort with this. Additional comment here. In our last five, ten years, our growth was 15.2% each year and 17.7% each year, respectively, each one in the last years. On the net profit, despite the tariffs, the challenging in these moments, we had a growth in the last five years of 23.5% in the last few years, and the last ten years and 31.3% as well.
Talking about the quarter as well, on controlling here, net profits totaled BRL 438 million at the quarter and BRL 1.5 billion in the last nine months. Efforts are being made for the recovery of the profit with measures of cost efficiency and improvement overseas without working against our deliveries. We are going to be talking ahead with these measures, successful measures on the cost reduction and endowment. Talking about investments on the next slide, the consolidated investments. In nine months, we are 0.1% below what we did in 2024, mainly with the entrance of the operation of projects in construction and transmission and the smallest expansion park on the distributed generation. On the gas distribution segment, ESGás, we had an expressive growth of 29.1% in the last nine months, highlighting the expansion of net and implying the number of customers.
Talking about endowment, the quarter was marked with many numbers that we had a total of BRL 7.6 billion with an average cost of 100% of CDI. We did an exchange offer operation, and 84% of the people worked with this, corresponding to BRL 3.2 billion, which resulted in an enlargement of five years of our endowments on the cost of the operation. Today, we did another ventures action with the cash flows with here in the group, BRL 1.77 billion. The leverage indicator remained stabilized in 3.2 times the net debt in EBITDA adjusted for the three quarters consecutive. We keep here compromise dedicated here, working with all the opportunities to work our debt profile and structure with the capital of the company.
Talking about the distribution of energy here and all the results that we have here, highlighting the cost control and evolution of operational indicators, such as we talked here before. The permanent focus here and to do the correct allocation of capital, we have a lot of consistent results for our customers that benefited with the investments and improved quality. As we talked here before as well, on this quarter, we had the lowest historic level of total losses at all settings of actives, with seven of the nine distributors operating below the regulatory limit. At the same time, we expanded the tax consolidated with 97.16%, the best historical results for the third quarter. We are keeping excellence, talking about losses and recoveries, despite the challenging scenario that we have here, the country.
We are adopting here a lot of methods and with AI and working with a lot of frontiers with recoveries of receipts in here. Talking about quality with like DEC and FEC, we keep inside the limits with some distributors overflowing with our own records. With the general indicators and quality, talking about the individual results of the electric groups, and we're going to be working here with greater attention. Talking about energy consumption, we surprised here in the quarter, despite the temperatures more cool, with 40% of the day above the average, again, 65% on the third quarter 2024. We are observing the growth in segments like commercial, industrial, highlighting Centro-Oeste and Sudeste, and Nordeste. Talking about Paraíba and Sergipe with a great growth. We are talking about Brazil as well.
Talking about consumption, the regions that we operate keep having a growth bigger than the average growth, with 2.3% on the quarter and 0.8% accumulating the last nine months, despite the big penetration of the distributed generation. Talking about transmission, we reach a 3.2% influenced by the reduction of 25.6% from the PMSO. We highlight the authorization of reference by the regulator, which generated a ref of BRL 8 million. Talking about construction losses, we keep compromise with the entrance with these projects. In the energies and the free market, the revenue grew 46.3%, driven by prospecting new customers. Despite the spread results and market-to-market of directional trading operations from previous years, have been hurting the division's results. With gradual elimination of exposures, these effects tend to be eliminated. In distributed generation, we are performing a turnaround after a very negative period of sales and results in 2024.
Results have been improving each quarter, churn reduced 3 percentage points, and sales increased 60% in the quarter-over-quarter comparison. As a consequence, we showed 24% of the evolution in the EBITDA, which reached BRL 43 million in the quarter. In the value-added service segment, we had a recovery, and the sales pipeline for upcoming quarters also recovering. With new expansion projects for industrial and commercial clients, energies and specialized services are increasingly valued. In the gas distribution segment, ESGás continues producing excellent results. 6.3% EBITDA growth and 17% gross margin growth in the quarter. Investments remain intense with more than 30% increase compared to the last year. Contributing to the results, distributed volumes expanded by 14%, number of customers by 8.5%, and we went through the first tariff review cycle at the privatization.
All gas distributors, the scenario is similar, gross margin with 21.6% growth, totaling BRL 143.5 million in the quarter, and the EBITDA of BRL 85 million. The equity equivalence result at Energisa was BRL 25.4 million in the quarter. These results reinforce the growth potential of the natural gas segment, and we are beginning to see the first results of implementing good regulatory and operational management practice from Energisa, which confirm the success of capital allocation in the segment. Next slide, please. Now we're going to be talking about, as we announced on November 3, we completed the acquisition transaction of 52% of Lurian, which operates in waste treatment and organic fertilizer commercialization. The plant is strategically located near various industries generating all green juice organic waste, agricultural producers demanding fertilizers, and large natural gas-consuming industries.
We intend to modernize and expand the waste treatment and biofertilizer production unit and build the second biomethane production plant of similar size to Agriq that works in Santa Catarina. This transaction accelerates the company's strategy and the biomethane segment and reinforces our positioning as a provider of complete low-emission energy solutions to meet our customers' demands. We conclude here the main highlights of the quarter and move to the question and answer section. Operator, please. Now we're going to be starting the question and answer session. We kindly ask that you make all the questions at once, waiting for the company's answer. Remember to ask questions. You send them via the Q&A icon located at the bottom area of your screen. By Dynamics, your names will then be announced so that you can ask your question live.
At this moment, a request to activate your microphone will pop up on your screen. Please wait while we are collecting the questions. Remembering that to ask some questions, you send them via the Q&A icon located at the bottom area of your screen, and then by Dynamics, your names will then be announced so that you can ask your question live. The first question is from Raul Cavendish, sell-side analyst from XP Investimentos. We're going to be opening our audience so that you can ask your question live. Please go ahead. Good morning, everyone. Thanks for the call. I have actually two questions. The first one is referring on the NL that they publish the technical note. Talking about investments of high investments going to the white tariff and with consumption at each point we're checking. How Energisa is going to be positioned on these market solutions?
Talking about the agenda of peak shaving generation with the measure, or if this is a vertical that's going to be relevant with Energisa as a distributor for leveling onto penetrate on this market, to enter on this market with a high number of rentability. And talking about Devon. And we didn't advance this on 1304. In the public statement, talk about the politics. We're going to be talking about this with lots and how the company is going to be talking about this debate. We're busy in the next few months, how the company is going to be moving on this. Okay, Raul? I'm going to be splitting the. Into people. Pedro is going to be talking with this, with Energisa. In the second part, Fernando Maia is going to be answering, okay? Can you listen to me? Okay, thank you so much. Thanks for your question.
Talking about the peak shaving and the time shift, we are positioned. We are focused on the four ring tariff. We are working on this area. No distributors with north and northeast where we have a bigger difference each point. In the white tariff here, it's too recent. We have to counsel on this. We're still digesting, as we say, this new reality to adapt ourselves or action points. Okay, Raul? Complementing with the tariff, the white tariff, that is a measure that I know still thinking about taking. Looking at the reality that we have in here, that we have an excess of energy and white tariff. When it was implanted as an option, it didn't work as much. Now that's a mandatory. We're going to be providing an economical value for their consumers that they can use this with a cheaper price.
When we have an excess of energy, it's going to be a benefit for the systems. It's going to be a win-win. We were already testing sandbox with tariffs. Energisa is really advancing with this to implement this with these tariffs. Talking about the second question, it's about Sudan-Sudan. It was an attempt, and it came from an error to capture those benefits. The distributors insist that this should be a disvirtuing of the fiscal benefit. It was created to incentivize investments in the regions of north and northeast. If you capture it, we are not helping it. The distributor would be without the benefit and with a restriction of the usage of this reserve, Sudan-Sudan. This would be working against it. It's going to be worse for the consumers.
Working like this, even if this comes back as a law, the debate is going to be long, and I do not believe that this will be implemented. Okay, thank you so much. Remembering that to ask some questions, we ask that you send in via the Q&A icon located at the bottom area of your screen. By Dynamics, your names will then be announced so that you can ask your question live. Please wait while we are collecting new questions. The next question comes from Daniel Trevisci, sell-side analyst from Safra.
We're going to be opening your audio so that you can ask your question live. Daniel, please go ahead. Thanks for the opportunity. I have two questions as well. The first one is about the Lurian acquisition, intensifying the entrance of the company on the segment of production of biomethane. I would like to understand if you guys expect to keep expanding the segments, if you guys see anything like on the integration on this business with the business of distribution of gas at any moment. The first question is this. The second question is still about the MP1304. What do you guys think about the potential of the recovery of the curtailment with the charms from ESS? The second part, how do you guys interpret the attempt of implementing a tariff for new projects of distributed energies that went out of the text?
How do you guys interpret this attempt? Okay, Daniel, we're going to be splitting this. Ricardo is going to be answering the first one. We are going to be continuing with Fernando Maia. Good morning, Daniel. Thanks for your question. That's the second investment that we done on the biomethane area. It shows that we have increases on keep expanding this activity. Just give some parameters on this first. We're working just so. We have a lot of residue that we can access this residue for the production and treatment and be fertilizers and biomethane. Our strategy is also to create regional clusters where this energy is going to be worked between the two plants. The second plant is going to be located in Canaviba, close to Ponta Grossa. It has a strategic location.
Interesting because we have a lot of industrial areas, a lot of producers. They demand fertilizers and a lot of natural gas consumers in that area with our operations. It is situated less than 4 km from the distribution area. It is going to be facilitating the logistics on this. Talking about production of biomethane, the area is like the goal is 28,000 cubic meters. It is like Santa Catarina. It is going to be reaching 25,000. This represents a consolidation of our working on this segment with natural gas, renewable natural gas, and the consolidation of this business area that we are going to be applying there. We are going to be applying everything that we learned on the first case.
With your question about how this integrated with the distribution, these two plants, the area becoming a cluster, it's not stopping them with the working on other projects that we have the distribution, but not necessarily. That's our intention. We are working with areas that we can work on implementing our model. And where we have availability for residues and market for fertilizers and for natural gas, renewable natural gas. Daniel? Good morning. Related second question. The internal system that was created, created for compensate generators that couldn't generate by any restrictions, any positive or negative on the system. As we talk about concern of concern of talking about limitations on the network or transmission network that came on this MP. This is working because it excludes any resource of an excess of offers or generation.
Talking about the generator, but why we do the coding for because the transmission is just fair or to have the reimbursement. So it's justice, the MP, the conversion. It wasn't sanctioned yet. It still can be vetoed. It has two articles. One of the two, they can still go out, leave it. Talking about the second theme, talk about the tariff of our EGD. It wouldn't be applied for micro GBs. It would be for mini GBs connected, starting now. This incentivizes, dissimulates with the offer with GD. It was taken out. It was a polemic way and take it out. When do we see a lot of reasons for those tariffs? Thank you. Thank you. Remembering that to ask some questions, we ask you to send in via the Q&A icon located at the bottom area of your screen.
By Dynamics, your names will then be announced so that you can ask your question live. Please wait while we are collecting new questions. The next question comes from Andrea Guijarra Silva, investor. We're going to be opening our audio so that you can ask your question live. Andrea, please go ahead. Good morning. Good morning. We'd like to ask about the minority shareholders, how the company sees this leverage here. Talk about dividends and leverage as the company thinks the money for the shareholders for 2026 and moving forward. Good morning, Andrea. Referring to this situation, we have a politics here. It was approved by the council that we have some flexibility between 35%-50% each year. So we're going to be always double-checking this with great attention with the company on the network markets. For now, we're still following this line.
We have a polemic of pursued talking about the approval that was not sanctioned by the president or the PL 287 that opened some possibilities for payments, different payments for dividends. We are paying attention to the theme. Once it clears up, how it is going to be working on because we have some difficulties of interpretation on this with this PL 1087. Sorry. We are going to be checking on this to clear this out on another PL. That is why we are checking how they are going to be clarifying this for us to position ourselves on any eventual transactions that we are going to be working on. Okay. Thank you so much. Remembering that to ask some questions, we kindly ask you to make them via the Q&A icon. Look at it at the bottom area of your screen.
By Dynamics, your names will then be announced so that you can ask your question live. Please wait while we are collecting new questions. Without further questions, we are finishing our Q&A session. We are finishing as well the video conference call with the third quarter 2025 from Energisa. The investor relations department is available to answer any doubts and questions. Thank you so much. Have a good afternoon.
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