CEMIG posts 110 percent rise in first half net on strong growth in energy sales.

BELO HORIZONTE, Brazil--(BUSINESS WIRE)--Aug. 14, 1996--Companhia Energetica de Minas Gerais - CEMIG - (OTC: CEMCY/Brazilian EX: CMI3), Brazil's largest fully integrated energy company, today reported a 110 percent rise in first half net income to R$145.13 million ($139.01 million), adjusted for inflation, compared with a net of R$59.36 million ($64.38 million) in the 1995 first half. Unadjusted, first half 1996 net income rose 99 percent to $116.38 million ($111.47 million).

Cemig's Chief Financial Officer, Francisco Moreira Penna, said the exceptional financial results for the period were due largely to a 5.3 percent rise in energy consumption in the Company's service concession, the State of Minas Gerais, and an effective 8 percent energy rate readjustment granted by the Brazilian government in November 1995.

"The growth in energy consumption during the first half was well above the overall economic growth rate in Brazil," Mr. Penna pointed out. "This fact shows that economic stabilization has contributed to the purchasing power of the population."

Rural energy consumption increased 13 percent due to irrigation loads, residential consumption was up 11 percent from new customers connected to the grid and a rise in per capita energy use, and commercial consumption rose 9 percent in the face of restraints placed on the economy early in the year. Industrial consumption was down roughly 0.5 percent due to a suspension of the temporary energy supply coordinated by Eletrobras, the government owned energy company

Mr. Penna said reservoirs in Minas Gerais currently are at 60 percent capacity, and Eletrobras is again expected to take measures to assure a firm energy supply for the rest of the year.

The large gain in first half net income was achieved in spite of a 21 percent increase in operating expenses, although at R$44 per megawatt hour, Cemig remains the low cost energy provider among Brazil's major utilities.

Net operating revenue for the six months reached R$921.12 million ($882.30 million), up 8 percent from R$852.85 million ($816.91 million) in last year's first half.

Since June 30, 1995, Cemig has reduced its employee headcount by 9.1 percent to 15,423 from 16,966, while its customer headcount has increased to 4.14 million compared with 4.09 million, producing a consumer per employee ratio of 269.

The cost of energy purchased from third parties was up 11 percent or R$20.16 million due to the devaluation of the real against the dollar. Depreciation and amortization rose 14 percent or R$26.68 million, and labor costs rose R$51.66 million to R$249.60 million.

Total debt at June 30 was R$860 million, up from R$822 million at the end of the first quarter of this year, with 58 percent denominated in local currency, representing 10 percent of shareholder equity. Of the total foreign debt, 62 percent is dollar denominated.

Cemig management will conduct a group conference call at 11 a.m. US Eastern time on Thursday, August 15. Anyone wishing to take part may call 1-800-967-7140, or 1-719-448-2000 for international callers, confirmation code 266231, about 5 minutes before start. A replay will be available at 2 p.m. by calling 1-800-967-8210 or 1-719-444-0803 for international callers, confirmation code 266234. -0-

                                   CEMIG
                          First Half Year Results
                              Income Statement
            (Values in Constant R$ Thousands, as of June 30, 1996)

Exchange rate as of June 30, 1996: R$1.044=US$1.00
Exchange rate as of June 30, 1995: R$.922=US$1.00

                                           June 30, 1996   June 30, 1995
Net Operating Revenue                          921,116         852,868
Operating Expenses                            (735,076)       (741,579)
Electric Power Purchase for Resale            (212,987)       (230,262)
Depreciation and Amortization                 (218,005)       (228,200)
Personnel                                     (249,853)       (229,529)
Other Expenses                                 (54,251)        (53,588)
  Third Party Services                         (59,819)        (47,406)
  Supplies                                     (18,041)        (16,612)
  Royalties                                    (11,983)        (11,825)
  Rentals and Leasing                           (8,373)         (6,784)
  Others                                        43,965          29,039
Income before Financial (Income) Expense       186,040         111,289
Financial (Income) Expense, Net                 28,705          25,598
Non-operating (Income) Expense, Net             (1,684)         (9,503)
Income (Loss) before Taxes on Income           213,061         127,384
Income Tax Charge (Credit)                      55,800          58,366
Profit Sharing                                 (12,135)
Net Income (Loss)                              145,126          69,018
Earnings Per 1000 Shares                          0.90            0.47

                                Balance Sheet
              (Values in Constant R$ Thousands, as of June 30, 1996)

                                         June 30, 1996   June 30, 1995
Assets                                      12,405,140      12,402,168
  Current                                      633,678         711,766
  Long Term Receivables                        887,997         873,240
  Permanent                                 10,883,465      10,817,162
Liabilities                                  3,046,554       3,156,864
  Current                                      737,681         861,581
  Long Term                                  2,308,873       2,295,283
Shareholders' Equity                         9,358,586       9,245,283
-0-

                                   CEMIG
                            First Half Year Results
                                  Energy Sold
                                   (in MWh)

                         June 30, 1996   June 30, 1995     %
Residential                  3,132,756      2,810,583    11.46
Industrial                  10,184,438     10,230,466   (0.45)
Commercial                   1,303,155      1,191,451     9.38
Rural                          568,786        502,470    13.20
Public Entities                218,770        202,100     8.25
Public Lighting                401,431        381,120     5.33
Public Utilities               402,106        376,863     6.70
Own Consumption                 39,151         39,465   (0.80)
Total                       16,250,593     15,734,518     3.28
Other Utilities
Interconnected Systems       2,089,201    1,673,722.0    24.82
Total                       18,339,794     17,408,240    5.35%

CONTACT: CEMIG

CONTACT: CEMIG

Luiz Fernando Rolla, Asst. to CFO

Tel. [phone]

Internet address: [e-mail]

or

The Anne McBride Company

Jane Valdez, 212/752-0504

Internet address: [e-mail]