Energisa S A : Dados Econômico-Financeiros

Energisa S/A | Results for the 1st quarter of 2023

Cataguases, May 11, 2023 - The management of Energisa S/A ("Energisa" or "Company") hereby presents its results for the first quarter of 2023 (1Q23). The following interim quarterly financial information has been prepared and is being presented in accordance with accounting practices adopted in Brazil and International Financial Reporting Standards ("IFRS" issued by the International Accounting Standards Board ("IASB"), comprising the standards issued by the Brazilian Securities Commission ("CVM") and the pronouncements, instructions and interpretations issued by the Accounting Pronouncement Committee ("CPC") and when applicable the regulations of the regulatory agency, the National Electricity Regulatory Agency- ANEEL, unless stated otherwise.

In 4Q22 the methodology used to calculate electricity sales to consumers not invoiced was reviewed, resulted in the restatement of the 2021 financial statements. Company Management then decided to present the results of the 1st quarter of 2022 to facilitate a comparative analysis between the quarters.

For further information see Note 2.3.

Summary

• EBITDA rose by 12.6% to R$ 1,858.9 million in the 1st quarter of 2023. Adjusted consolidated recurrent EBITDA (excluding VNR, Corporate EBITDA of TransCos and adjusted by regulatory EBITDA from transmission companies) amounted to R$ 1,641.7 million in 1Q23, an increase of 19.4% (R$ 266.7 million) on 1Q22.
• PMSO expenses (Personnel, Materials, Services and Other) rose by 20.4% (R$ 126.0 million), amounting to R$ 744.3 million in the 1st quarter of 2023.
• Net income before noncontrolling interest profit shares rose by 6.4% to R$ 509.0 million in the 1st quarter of 2023. Adjusted recurrent net income rose by 33.2% (R$ 142,9 million) and closed the quarter at R$ 287.6 million
• Consolidated investment of R$ 1,354.9 million in the 1st quarter, a decrease of 3.9% (R$ 54.9 million) on the same period of the previous year.
• Energy sales (captive sales + TUSD) remained steady in the first quarter of 2023 compared to the same period the previous year, reaching 9,405.9 GWh.
• Consolidated net debt amounted to R$ 21,739.3 million as of March 31, 2023, compared with R$ 22,181.9 million at the end of December 2022. The position of cash and equivalents in march was R$ 6,879.2 million and sector credits amounted to R$ 163.0 million. The ratio between net debt and Adjusted EBITDA closed the quarter at 2.9 times, compared with 3.0 at the end of 2022.
• Total consolidated energy losses accounted for 12.42% of the injected energy, remaining below the regulatory level (13.10%). The DisCos' DEC and FEC quality indicators continued outperforming regulatory requirements.
• (re) energisa closed 1Q23 with an installed distributed generation capacity of 211.3 MWp and 59 operating plants in the states of Minas Gerais, Mato Grosso, Mato Grosso do Sul and Rio de Janeiro. At the end of April, installed capacity reached 231.0 MWp. This segment received total investment of R$ 162.9 million in the period.
• On March 31, 2023 the Company prevailed in the privatization auction held the same date to acquire 100% of the share capital of Companhia de Gás do Estado do Espírito Santo - ES Gás, for R$ 1,423 million, to be paid in cash on the auction settlement date adjusted by the positive variation of the IPCA calculated between the month of the public session of the auction and the month immediately preceding the auction settlement, under the terms of the Notice. Additionally, sellers will be entitled to dividends to be calculated up to the date prior to the signature of the Purchase and Sale Agreement, under the terms of the notice. This company holds the concession for the exploration of piped gas services and other related activities in Espírito Santo state, with a concession period until 2045. The closing of the acquisition is subject to regulatory authorization by the
  Administrative Council for Economic Defense ("CADE").

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Quick Facts
		Quarter
Description	1Q23	1Q22	Change %
(re-stated)
Financial Indicators - R$ million
Revenues	9009.6	9,250.3	- 2.6
Net operating revenue without construction revenue (1)	5,370.1	5,402.5	- 0.6
EBITDA	1,858.9	1,651.0	+ 12.6
Recurrent Adjusted EBITDA (2)	1,641.7	1,375.0	+ 19.4
Covenants Adjusted EBITDA (3)	1,953.0	1,758.9	+ 11.0
Net income (4)	509.0	478.4	+ 6.4
Recurrent adjusted net income (5)	287.6	430.6	- 33.2
Net indebtedness (6)	21.739.3	17,223.5	+ 26.2
Investment	1,354.9	1,401.3	- 3.9
EBITDA Margin (%)	28.4	25.8	+ 2.6 p.p.
Net income margin (%)	7.8	7.3	+ 0.5 p.p.
Consolidated Operating Indicators
Captive sales + Billed TUSD (GWh)	9,405.9	9,405.5	+ 0.0
Number of consumers	8,449,754	8,255,744	+ 2.4
Number of own staff	16,686	16,737	- 0.3

1. Construction revenue: infrastructure construction revenue + transmission infrastructure maintenance and operation revenue + revenue from construction performance obligation margins + remuneration of the contract asset (electricity transmission). (2) EBITDA discounted from the distribution VNR and corporate transmission EBITDA and nonrecurrent and noncash effects and addition of the transmission regulatory EBITDA 3) EBITDA plus arrears surcharge revenue 4) Net income before noncontrolling interest (5) Net income discounted from the distribution VNR and corporate transmission net income and nonrecurrent and noncash effects and addition of the transmission regulatory net income; 6) Includes sector credits (CDE, CCC, CVA).

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1. Corporate structure and profile

Energisa Group completed 118 years of history on February 26, 2023, and serves roughly 8.4 million consumers in eleven Brazilian states, home to approximately 10% of Brazil's population.

The Company controls 9 DisCos located in the states of Minas Gerais, Sergipe, Paraíba, Rio de Janeiro, Mato Grosso, Mato Grosso do Sul, Tocantins, São Paulo, Paraná, Acre and Rondônia, with a concession area embracing 2,034 thousand Km2, equal to 24% of Brazil's landmass.

Energisa Group's activities also includes (re) energisa, a group brand tasked with managing and trading energy in the free market, providing value-added services and distributed generation of renewable energy sources, with a capacity of 211.3 MWp in 1Q23. The Group also operates in the energy transmission segment, with 3,116 km of transmission lines and 14,372 MVA of transformation capacity including assets in operation and under construction. In centralized solar generation, two photovoltaic plants came into operation in 2022 totaling 70 MWp, all of which is marketed in the free market.

Nb: On April 30, 2023, the corporate merger of EBO into EPB was approved, and the Group now holds 9 electricity distribution concessions, as detailed in the subsequent events item.

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1.1. Corporate Structure of Energisa Group

Energisa Group's share control is exercised by Gipar S.A., controlled by the Botelho Family. The Company is listed in Level 2 Corporate Governance of B3 and its most liquid shares are traded under the symbol ENGI11 (Units- certificates comprising one common share and four preferred shares). In addition to these securities, it has shares traded under the symbols ENGI3 (common shares) and ENGI4 (preferred shares).

See below the simplified ownership structure of Energisa Group:

Voting Capital | CT - Total Capital

Notes:the interests shown in the table are direct or indirect interests of Energisa S.A.

FIA Samambaia - shareholding held directly and indirectly through investment vehicles.

Other noncontrolling interests - share position including treasury stock.

Gemini - holds 100% of LMTE, 85.04% of LTTE and 83.34% of LXTE, all TransCos.

On April 30, 2023, the corporate merger of EBO into EPB was approved

Data as of 04/24/2023

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2. Energisa - consolidated

2.1 Operating revenue

In 1Q23, consolidated net operating revenue excluding construction revenue amounted to R$ 5,370.1 million, a decrease of 0.6% on 1Q22.

See below the net operating revenue by business line before intercompany eliminations and business combination:

	Net revenue by business line
	Amounts in R$ million		1Q23
	➢ Electricity distribution
		6,084.1
	➢ Electricity transmission		281.5
	➢ (re) energisa		251.6
	•	Distributed generation		29.8
	•	Electricity marketing		137.8
	•	Added value services		84.0
	➢ Holding companies and other		95.9
	(=) Total		6,713.1
	Intercompany eliminations and business combination		(172.6)
	(=) Consolidated net revenue		6,540.5
	(-) Infrastructure construction revenue*		1,170.4
	(=) Consolidated net revenue, without infrastructure construction revenue		5,370.1

* Infrastructure construction revenue from the Distribution segment

Quarter

1Q22

(re-stated)

5,924.9

243.0

296.3

17.6

207.2

71.4

73.1

6,537.2

(146.4)

6,390.8

988.3

5,402.5

Change %

• 2.7
• 15.9
• 15.1
• 69.0
• 33.5
• 17.6
• 31.2
• 2.7
• 17.9
• 2.3
• 18.4
  - 0.6

Consolidated operating revenue is detailed in appendix A.1and the breakdown of operating revenue by distribution company can be seen here.

Headlines:

• In the electricity distribution segment, there was a 0.6% increase in operational revenue without construction revenue in the quarter, mainly explained by stable electricity consumption between periods and the existence of flags of water scarcity at a high level in 1Q22 (R$971.2 million in 1Q22 over R$1.3 million in 1Q23). See more details in item 3.1.
• In the Transmission segment, revenue growth is primarily explained by the acquisition of Gemini, completed on June 10, 2022, adding revenue of R$ 133.4 million in 1Q23. See more details in item 4.
• At (re) energisa, Distributed Generation was responsible for a R$ 12.2 million increase in comparison with the first quarter of 2022, mainly because of 35 photovoltaic plants coming into operation over the period. See more details in item 5.

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