CEMIG(CIG) - 2024 Q4 - Annual Report

Financial Exposure and Risk Management - As of December 31, 2024, CEMIG has no outstanding indebtedness denominated in foreign currencies, and its net liabilities exposed to foreign exchange fluctuations amount to R$210 million in a base scenario, with a probable relief of R$16 million and an adverse increase of R$10 million [1054]. - The sensitivity analysis indicates that in a probable scenario, the Selic rate will be 9.15$1,245 million [1062]. - CEMIG's net exposure to inflation indices as of December 31, 2024, shows net liabilities of R$2,565 million, with assets indexed to inflation totaling R$5,905 million and liabilities amounting to R$8,470 million [1065]. - The company reported a positive result of R$521 million from hedging transactions related to US$381.1 million, resulting in a net cash inflow of R$443 million as of December 5, 2024 [1059]. - The company has implemented derivative financial instruments to protect against foreign exchange risks, ensuring that these instruments are not used for speculative purposes [1056]. - The company estimates that in an adverse scenario, the net effect of fluctuations in interest rates could lead to a loss of R$188 million [1064]. Liquidity Management - CEMIG's liquidity management includes monthly cash flow projections over 12 months and daily liquidity projections over 180 days, ensuring sufficient cash flow for operational needs [1070]. - CEMIG's cash equivalents and marketable securities amount to R$4,524 million, while total liabilities are R$4,898 million, resulting in net liabilities exposed of R$374 million [1061]. - The company has 2,462 million reais in principal payments due within 3 months to 1 year [1074]. Financial Obligations - Total financial obligations amount to 22,300 million reais, with principal payments of 19,374 million reais and interest payments of 1,528 million reais [1074]. - Loans and debentures account for 18,646 million reais, with principal payments of 16,000 million reais due over 1 to 5 years [1074]. - Supplier obligations total 2,926 million reais, primarily due within 1 month at 2,761 million reais [1074]. - Fixed rate obligations include 5,672 million reais due over 1 to 5 years, with 5,354 million reais in principal payments [1074]. - Interest payments on loans and debentures amount to 2,217 million reais over 1 to 5 years [1074]. - Total interest payments across all obligations amount to 2,298 million reais over 1 to 5 years [1074]. - The pension plan deficit (FORLUZ) totals 695 million reais, with 304 million reais due over 1 to 5 years [1074]. - The company has 5 million reais in obligations due within 1 month related to the pension plan [1074]. - Total obligations over 5 years amount to 6,124 million reais, with 5,902 million reais in principal payments [1074]. Credit Risk - Any reduction in CEMIG's credit ratings could increase financing costs and complicate debt refinancing, potentially impacting operational capabilities [1073]. Investment Strategy - CEMIG's financial strategy includes investing in private credit investment funds and bank CDs to optimize returns while managing liquidity risk [1071].