COCE3: quote, dividends and indicators for Enel Distribuição Ceará

Enel Distribuição Ceará, formerly known as Coelce and whose shares trade on B3 under the tickers COCE3, COCE5 and COCE6, is the concessionaire responsible for distributing electricity throughout the State of Ceará. The company originated from the merger of four state distributors – Cenorte, Celca, Cerne and Conefor – created by State Law No. 9,477 of July 5, 1971, and incorporated in August of the same year. Initially, its capital was mostly public, with stakes held by municipal governments, Eletrobras and the state government. The company went public in 1995 and was privatized in 1998 in an auction held on the Rio de Janeiro Stock Exchange, coming under the control of the Distriluz consortium. Starting in 2005, its ownership structure was gradually reorganized under the holding company Endesa Brasil S.A., later renamed Enel Brasil S.A., which became the direct controlling shareholder. In 2017, following corporate transactions involving Enel Américas S.A., Enel Brasil came to hold more than 74% of the distributor’s total share capital, reinforcing the Enel group’s control of the business.

The core activity of Enel Distribuição Ceará is the distribution of electricity under a monopoly regime in its concession area, covering around 149 thousand km² and 184 municipalities in Ceará. The commercial base comprises approximately 4.5 million consumer units serving a population of about 8.8 million inhabitants, which corresponds to roughly 30 consumer units per square kilometer. As of December 31, 2025, the concession area accounted for 4.9% of the number of consumers in Brazil and 2.5% of the total volume of electricity distributed in the country. The company’s power grid includes around 161 thousand km of distribution lines, 5.9 thousand km of transmission lines and 131 substations, forming predominantly overhead medium- and low-voltage infrastructure to serve residential, commercial, industrial and other customer classes. In fiscal year 2025, 13,888 GWh were distributed, including energy traded on the short-term market, generating net operating revenue of approximately R$ 9.17 billion.

Enel Distribuição Ceará’s business model is focused on a single operating segment: electricity distribution. The company does not generate the energy it sells, acquiring it primarily through long-term contracts awarded in regulated auctions in the Regulated Contracting Environment, in addition to energy quotas and specific programs such as PROINFA, Itaipu and the Angra 1 and Angra 2 nuclear plants, in accordance with the allocation rules defined by the Brazilian power sector. Revenue largely comes from supplying energy to the captive market and charging the Tariff for Use of the Distribution System (TUSD) to free consumers who contract energy from other agents but use the concessionaire’s grid. In 2025, about 67.1% of gross operating revenue came from energy distribution, while the remainder consisted of revenue from infrastructure sharing, construction of regulatory assets, sectoral tariff subsidies, sectoral financial components and other services associated with the distribution segment.

From the standpoint of the markets served, the company has exclusivity for electricity distribution in its concession area, characterizing a regulated natural monopoly. There is no competition in distribution within the territory of Ceará, but the regulatory framework allows certain consumers to migrate to free consumer status, contracting energy directly from generators or traders. In these cases, the distributor retains the revenue from the use of the distribution and transmission network, through TUSD and TUST, while the energy commodity is negotiated between the consumer and the chosen supplier. In 2025, energy consumption was diversified across customer classes, with the residential segment standing out, totaling 5,963 GWh, and a growing volume of free consumers, which reached 3,961 GWh. The billed consumer base in 2025 comprised approximately 3.86 million residential units, 188 thousand commercial units, 5.4 thousand industrial units and more than 2.6 thousand free consumers, with no single customer accounting for more than 10% of total net revenue.

Enel Distribuição Ceará’s operations and customer relations are heavily shaped by state regulation of the power sector. The distribution concession was granted in 1998 through a contract with the Federal Government, with ANEEL as an intervening party, with an initial term until May 13, 2028. Sector legislation and Decree No. 12,068/2024 allow for a 30-year extension, subject to meeting quality, operating efficiency, financial robustness and governance criteria. In March 2025, the company officially filed for early extension of the concession with ANEEL and submitted a Results Plan to the Ministry of Mines and Energy, which was approved in October 2025. In February 2026, the final report was delivered demonstrating fulfillment of the plan and, in March 2026, ANEEL’s board of directors recommended to the MME that the concession contract be extended. As of the latest date described, the process was awaiting further steps within the MME. In addition to the concession, the company is subject to periodic tariff reviews, sectoral charges and obligations regarding service continuity and quality, and is required to provide financial compensation to consumers when individual indicators of outage duration and frequency exceed regulatory limits.

In managing its grid and customer service, Enel Distribuição Ceará operates under strict regulatory oversight of technical and non-technical losses, service continuity and operational safety. In 2025, the total recorded energy loss rate was 17.83%, while the average frequency of outages per customer was 4.5 times per year and the average annual outage duration per customer was 8.65 hours. The company promotes the expansion and modernization of the distribution network through the construction of new facilities and substation upgrades, although it is subject to potential delays arising from environmental, engineering or permitting constraints. At the same time, it has been accelerating process digitalization, using remote solutions for metering, preventive maintenance and customer service, including a virtual branch that provides services such as duplicate billing, installment plans, outage reports and contract management for residential and corporate consumers.

Enel Distribuição Ceará’s capital structure, represented by the COCE3, COCE5 and COCE6 shares listed on B3, has undergone significant recent developments. In 2022 and 2023, controlling shareholders Enel S.p.A. and Enel Brasil S.A. considered a potential sale of the distributor’s controlling stake, a process later suspended in November 2023, with no sale negotiations in progress at the time referenced that would constitute a probable divestment plan. In 2024 and 2025, the company approved, suspended, canceled and later restructured a capital increase of about R$ 580.58 million, an episode that involved a preliminary court injunction obtained by Eletrobras and, later, court approval of the withdrawal of the lawsuit and its dismissal. The capital increase was reapproved at an extraordinary shareholders’ meeting in July 2025, with the issuance of new common and preferred shares within the authorized capital limit, strengthening the company’s capital base.

In the tax and regional incentives arena, Enel Distribuição Ceará was affected by key decisions from the Northeast Development Superintendence (SUDENE). In January 2025, SUDENE rejected the company’s request to qualify for a tax incentive granting a 75% reduction in Corporate Income Tax and non-refundable surcharges based on operating profit. In December 2025, the same agency reported that it had not approved the request to renew the Modernization tax incentive, which led to the benefit’s expiration on December 31, 2025. These decisions may be appealed, and the company was evaluating appropriate alternatives, in line with its interest in maintaining competitiveness in a sector where regional incentives can influence the cost structure and long-term profitability.

In terms of environmental, social and governance (ESG) practices, Enel Distribuição Ceará is part of the Enel group’s global strategy, reporting indicators and initiatives annually through its Management Report and a Sustainability Report prepared in accordance with Global Reporting Initiative (GRI) guidelines. The declared corporate strategy for Brazil is aligned with the UN 2030 Agenda Sustainable Development Goals, focusing on topics such as community well-being, environmental conservation, ethics and people’s safety. The company adopts an annual Sustainability Plan with goals and indicators monitored by the Board of Directors, structured over short-, medium- and long-term horizons. This plan aims to integrate the management of environmental, social and governance issues with business strategy, including aspects such as the transition to a low-emission energy model, stakeholder engagement and the strengthening of corporate governance, elements that are increasingly relevant in the assessment of companies with shares traded on B3, such as COCE3, COCE5 and COCE6.