By Brazil Stock Guide – Axia Energia, the Brazilian power company formerly known as Eletrobras, reported a sharp turnaround in first-quarter adjusted profit as stronger power sales and lower operating provisions helped offset weaker transmission revenue.
The company, traded on B3 under AXIA3, AXIA5 and AXIA6 and on the New York Stock Exchange under AXIA, said adjusted IFRS net income reached R$3.7 billion in the first quarter of 2026, compared with an adjusted loss of R$80 million a year earlier.
Adjusted regulatory Ebitda rose 60% from a year earlier to R$8.6 billion, while net operating revenue increased 22.1% to R$12.7 billion. Gross revenue climbed 19.3% to R$14.6 billion, reflecting a stronger contribution from generation, where revenue rose 35.3% under IFRS accounting.
Generation was the main driver of the quarter. Axia said its generation contribution margin rose 136.4% to R$5.98 billion, supported by higher short-term power prices, a narrower price gap between Brazil’s North and Northeast submarkets and the Southeast/Central-West region, and additional available energy following the gradual release of plants from quota-based contracts.
The company’s margin from energy sold in the free market and settled in the short-term market reached R$4.6 billion, with a unit margin of R$171 per megawatt-hour. That compares with R$899 million in the same line a year earlier.
Transmission was weaker. Axia’s transmission contribution margin fell 13.3% to R$3.43 billion after the company recognized a R$725 million regulatory restitution provision. The accounting treatment has no cash effect and was adopted to smooth the impact of pass-through items across tariff cycles, the company said.
Costs also helped the bottom line. Adjusted PMSO expenses under IFRS fell 3% to R$1.44 billion, while adjusted regulatory provisions dropped to R$22 million from R$77 million a year earlier. Axia said those gains, together with stronger generation revenue and lower energy purchase costs, more than compensated for the decline in transmission revenue.
Net income under IFRS was R$2.63 billion, compared with a R$354 million loss in the first quarter of 2025. Adjusted Ebitda under IFRS nearly doubled to R$8.54 billion from R$4.42 billion.
Axia’s net debt stood at R$46.05 billion at the end of March, down R$439 million from the previous quarter and up R$6.77 billion from a year earlier. The company said its average debt cost fell to CDI plus 0.03% a year from CDI plus 0.15% a year, while average debt maturity declined by four months.
Investment totaled R$1.36 billion in the quarter, up 36.2% from a year earlier. Transmission accounted for R$977 million of the total, followed by R$185 million in generation, R$86 million in environmental spending, R$67 million in infrastructure and R$41 million tied to the Itaipu high-voltage direct current project.
The company said it is implementing 286 large transmission projects expected to add R$2 billion in annual permitted revenue from 2026 to 2030, with estimated capital expenditure of R$15.1 billion. Axia also secured 190 megawatts of capacity in Brazil’s 2026 reserve capacity auction, tied to about R$1 billion in investment for a new generating unit at the Luiz Gonzaga hydroelectric plant.
Axia also continued to reduce risks linked to compulsory loan litigation. Provisions tied to the issue fell to R$11 billion in the quarter, down R$2.2 billion from a year earlier, while agreements and favorable decisions generated a net reversal of R$36 million.