Neoenergia Profit Rises Amid Customer Rate Hikes

Neoenergia posted third-quarter profit of 1.177 billion reais (about US$234 million), a 27% rise from a year earlier. Regulators also approved tariff increases for customers of two of its distributors. Spain's Iberdrola controls the Brazilian utility, which published the figures on 20 October.

The profit rise included a 292 million reais (about US$58 million) fair-value gain tied to a transmission deal with Singapore's sovereign wealth fund, GIC. The gain counted toward EBITDA, but not cash EBITDA. Neoenergia's profit increased by 253 million reais (about US$50 million), less than the recorded gain. The company didn't disclose the gain's tax effect.

Profit and the networks business

Earnings before interest, tax, depreciation and amortisation climbed 6% to 3.58 billion reais (about US$712 million). Cash EBITDA, which excludes accounting items and corporate deals, rose 12% to 3.15 billion reais (about US$627 million). Net revenue dropped 7% to 12.02 billion reais (about US$2.39 billion), while energy purchasing costs fell 14%.

Neoenergia distributed 19,623 gigawatt hours of electricity, up 6.0%, a change the company attributed to warmer weather and customer growth. At September's end, it served 17.2 million customers, 2.0% more than a year earlier.

The networks business, covering distribution and transmission, earned 1.10 billion reais (about US$219 million), up 34%. Transmission alone brought in 541 million reais (about US$108 million), a 147% increase. The generation and clients unit went the other way. Its gross margin fell 11% to 478 million reais (about US$95 million), and EBITDA dropped 17% to 328 million reais (about US$65 million). Neoenergia linked those declines to weaker wind output and the April sale of the Dardanelos hydro plant.

For the first nine months, profit fell 5% to 3.36 billion reais (about US$669 million), from 3.56 billion reais (about US$708 million). Nine-month income tax and social contribution costs reached 720 million reais (about US$143 million), compared with 79 million reais (about US$16 million) a year earlier. The company said its networks business recorded a 770 million reais (about US$153 million) tax credit in the second quarter of 2025, lifting the prior-year comparison base.

Regulated assets and customer bills

Brazil's electricity regulator Aneel allows a return on the regulatory asset base, which stood at 48.2 billion reais (about US$9.6 billion). Aneel approved an average 9.58% increase for Neoenergia Elektro customers on 27 August. On 20 October, it approved an average 1.92% increase for Neoenergia Brasília customers, effective 22 October.

The Brasília tariff review remains provisional while the distributor switches to a new billing system. Aneel set its regulatory asset base at 2.2 billion reais (about US$437 million); any correction to the provisional review will come with the 2027 tariff adjustment. The article gives no worker pay figures, union response, or organized resistance to the changes.

Neoenergia's five distributors serve customers in Bahia, Pernambuco, Rio Grande do Norte, São Paulo state, Mato Grosso do Sul and Brasília. In May, the company announced 50 billion reais (about US$9.95 billion) in investment across its five distribution areas from 2026 to 2030, following renewal of three concessions.

Debt, ownership and capital spending

Net debt reached 52.2 billion reais (about US$10.4 billion), up 7% since December, and stood at 3.44 times EBITDA, compared with 3.41 times at the end of 2025. Gross debt totalled 71.7 billion reais (about US$14.3 billion), with 88% long term. Neoenergia raised 10.4 billion reais (about US$2.07 billion) during the quarter. Iberdrola provided 9.4 billion reais (about US$1.87 billion) through a 4131 loan, described as a cross-border loan, matched by debentures from five distributors.

Capital spending in the first nine months reached 6.17 billion reais (about US$1.23 billion), including 5.68 billion reais (about US$1.13 billion) for distribution. On 30 September, Neoenergia took a 51% stake and control of Neoenergia Transmissão, previously shared with GIC's vehicles since 2023. The deal delivered 1.7 billion reais (about US$338 million) in cash.

No dividend was announced, and the company gave no date for its next results. It didn't report the market's reaction, and no analyst consensus was available. The release also didn't break down the nine-month profit decline.