Cemig Drops on Lower Rate Changes, Falling Industrial Demand
Cemig, as Brazil’s largest combined power generator and distributor is known, fell 3.2 percent to 34.55 reais in Sao Paulo trading, the lowest since March 31.
CPFL Energia SA (CPFE3), Brazil’s biggest non-state electricity supplier, won rate increases of about 23 percent for industrial clients, the regulator known as Aneel said today. Cemig had increases of up to 19 percent, with the average rise at around 12 percent. CPFL will be allowed to charge residential clients 20 percent more, while Cemig was limited to a 4.9 percent boost.
Centrais Eletricas Matogrossenses SA, the third company whose rates were raised today, won increases of as much as 20 percent for industrial clients and 12 percent for residential customers.
Cemig shares declined because “the price adjustment was lower than for other companies,” said Rosangela Ribeiro, utilities analyst at SLW Corretora in Sao Paulo.
Investors are also speculating that Cemig’s earnings will be hurt by lower demand from the company’s industrial customers such as the mining companies and steelmakers that operate in the state of Minas Gerais, Ribeiro said in a phone interview.
“The distribution is heavy on capital-intensive industrial consumers,” Ribeiro said.
To contact the reporter on this story: Paulo Winterstein in Sao Paulo at firstname.lastname@example.org.
To contact the editor responsible for this story: David Papadopoulos at Papadopoulos@bloomberg.net