By Brazil Stock Guide – Eneva SA generated R$1.68 billion from operations in the second quarter, its best result for the period, even as net income attributable to the company sank to R$31.2 million amid accounting and financial pressures.
The numbers are from Eneva’s earnings release published Wednesday. The company, traded in São Paulo under the ticker ENEV3, posted net operating revenue of R$3.98 billion, a 13.1% increase from a year earlier.
Consolidated EBITDA fell 25.8% to R$1.24 billion, while the margin narrowed by 16.3 percentage points to 31.2%. Excluding a write-down involving the carrying value of Pecém II, EBITDA would have totaled R$1.37 billion.
The company attributed the decline to the expiration of contracts at thermal plants in Espírito Santo, the removal of Pecém II from consolidated accounts and higher long-term incentive expenses.
Pecém II weighs on performance
The pending sale of Pecém II produced a R$127.7 million non-cash charge, reflecting the difference between the investment’s book value and the agreed transaction price.
Eneva also stopped consolidating the plant at the end of the first quarter, reducing the year-over-year EBITDA comparison by another R$75 million.
Long-term incentive costs increased by R$68.7 million. The change reflected the vesting schedule of existing plans, provisions for awards granted in 2026 and the appreciation of Eneva shares.
Financial losses erode the bottom line
The net financial result deteriorated to a negative R$636.9 million from a negative R$251.8 million in the same period last year.
The variation was mainly associated with foreign-exchange effects on the lease of Eneva’s floating storage and regasification unit and a smaller mark-to-market gain from debt swaps.
After taxes and income attributable to non-controlling interests, Eneva’s profit fell 91.4% from R$364.5 million a year earlier.
Trading provides an offset
The Energy Trading division delivered EBITDA of R$134.6 million, compared with R$10 million in the prior-year period. Its commercial margin advanced by R$152.1 million to R$200.3 million as the company realized positions from its portfolio.
A negative R$59.1 million mark-to-market adjustment on forward electricity contracts partly reduced that contribution.
Performance also improved at the Parnaíba Complex, where EBITDA increased to R$353.3 million. Higher regulatory dispatch and contractual adjustments to fixed revenue drove the advance.
Upstream and Parnaíba gas-fired generation produced a combined R$123.6 million EBITDA increase. Oil-fired assets added R$59.1 million, reversing a R$30.6 million loss recorded before new regulated contracts took effect.
The main drag came from third-party gas-fired generation. EBITDA in that division dropped by R$483.9 million following the expiration of agreements covering the Espírito Santo facilities.
Investments absorb liquidity
Cash flow from investing activities showed an outflow of R$1.77 billion. Spending was concentrated on thermal projects awarded in the 2026 auction, the Azulão 950 development, gas fields and a new liquefaction train in Maranhão.
Quarterly capital expenditure reached R$1.59 billion. Projects from the latest auction received R$616.3 million, while Azulão 950 accounted for R$492.4 million and upstream activities absorbed R$204.2 million.
Financing activities consumed a net R$876.2 million, including debt service, lease payments and obligations linked to receivables transactions. Eneva closed June with R$2.54 billion in cash and securities.
Leverage remains elevated
Consolidated net debt ended the quarter at R$19.83 billion, compared with R$15.3 billion 12 months earlier. The ratio of net debt to trailing EBITDA rose to 3.18 times from 2.71 times.
Eneva secured R$500.9 million from Banco do Nordeste to finance its third small-scale LNG train. The 15-year facility bears interest at IPCA plus 3.49%, with principal payments beginning after July 2031.
Contracted portfolio expands
Azulão I entered commercial operation on Aug. 4. The 295-megawatt plant holds a 15-year capacity contract carrying R$278.3 million in annual fixed revenue.
Separate agreements for LORM, LORM 1, Viana 1 and Povoação 1 began in July and August. The new arrangements, including Azulão I, add a combined R$762.6 million in yearly fixed revenue to Eneva’s portfolio from the third quarter.
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