(Adds details on Madeira Energia negative equity)
SAO PAULO, Nov 13 (Reuters) - Cia Energetica de Minas Gerais , Brazil’s second-largest utility, said on Thursday that third-quarter profit plummeted 96 percent due to losses from another energy company in which it owns a stake.
Third-quarter consolidated net income was 29 million reais ($11 million), down from 789 million reais a year earlier, Cemig, as the company is known, said in a securities filing.
Cemig said it had recognized 328.9 million reais in negative equity as a result of its stake in Madeira Energia, which has reported recurring losses while developing the Santo Antonio hydro-electric dam in Rondonia state.
Cemig has long been considered one of Brazil’s most profitable power utilities, but its foreign debt in local-currency terms has ballooned in the last year as Brazil’s currency weakened against the dollar.
On Nov. 7, Cemig said it had broken financial covenants outlined in its bylaws and scheduled a shareholder meeting for Dec. 12.
Earnings before interest, taxes, depreciation and amortization, a measure of a company’s ability to generate cash from operations, fell 60 percent in the third quarter to 513 million reais, from 1.29 billion a year earlier.
Cemig is controlled by the government of Brazil’s Minas Gerais state.
$1 = 2.59 Brazilian reais Reporting by Alberto Alerigi Jr and Caroline Stauffer; Editing by David Gregorio and Leslie Adler