Auren Energia (AURE3) Q1 2026 earnings summary

Executive summary

• Adjusted EBITDA reached R$ 926 million in 1Q26, down 23% year-over-year, mainly due to weaker commercialization and reduced renewable resource availability, but record modulation gains of R$ 97.2 million fully offset curtailment impacts.

• Net debt decreased by R$ 135.4 million, with leverage at 5.2x Net Debt/Adjusted EBITDA, and deleveraging expected to accelerate from 2027.

• Corporate restructuring advanced with Phase 1 approved, consolidating hydro assets and simplifying structure for improved cash and debt management.

• Construction of Cajuína 3 wind project (112.1 MW) reached 72% completion, on schedule and budget, with expected operation in December 2026.

• Net profit was a loss of R$ 601.6 million versus a profit of R$ 54.0 million in 1Q25, mainly due to mark-to-market effects and lower EBITDA.

Financial highlights

• Net revenue increased 4.1% year-over-year to R$ 3,074.5 million, but consolidated Adjusted EBITDA declined 23% due to weaker hydro, wind, and solar generation and lower commercialization margins.

• Generation Adjusted EBITDA fell 7.5%, while Commercialization Adjusted EBITDA dropped sharply, mainly from lower price spreads and contract assignment.

• Dividends from noncontrolling hydro interests increased 53% to R$ 89.3 million.

• PMSO/cost growth was 3.8%, below accumulated inflation of 4.2%.

• Adjusted EBITDA margin fell to 30.1% from 40.8% in 1Q25.

Outlook and guidance

• 2026 expected to be a plateau year for leverage, with accelerated deleveraging projected from 2027, targeting Net Debt/EBITDA of 3.0–3.5x.

• Focus on operational efficiency, zero-based budgeting, process improvement, and AI implementation throughout 2026.

• Well-contracted energy balance of 130% until 2030, with potential for price increases beyond 2027 and over 30% of the portfolio uncontracted from 2029 onward.

• Regulatory discussions on curtailment expected to conclude in 2026, improving predictability for long-term investments.

• Forecasts consistent EBITDA growth, cash generation, and deleveraging from 2027 onward.