Brazil's Cemig Q2 net falls 17 pct as costs rise

SAO PAULO Aug 13 (Reuters) - Cemig (CMIG4.SA) (CIG.N), the Brazilian power utility controlled by Minas Gerais state, posted 17 percent drop in second-quarter net income on Thursday as financial expenses soared and operational costs climbed.

Net income for Cemig fell to 524 million reais ($286 million), from 635 million reais a year earlier, according to a securities filing.

A 13 percent increase in revenue to 2.98 billion reais was offset by an increase of 16 percent in operational costs and expenses to 2.1 billion reais, the company said in a filing.

The cost of electricity purchases jumped 15 percent in the three months ended June 30 from a year earlier, while payroll-related expenses surged 53 percent to 448.2 million reais following a 191 million reais one-off charge for a voluntary dismissal plan that began in November.

"Nonrecurring events that were booked in the quarter weighed on our results, although the impact was mitigated by our business," Chief Financial Officer Luiz Fernando Rolla said in the filing.

The difference between debt service expenses and financial-related revenues yielded a deficit of 33.2 million reais in the second quarter compared with a surplus of 238.2 million reais a year earlier.

Earnings before interest, taxes, depreciation and amortization, a measure of operational profitability and cash generation known as EBITDA, rose 6 percent to 1.04 billion reais in the second quarter from 980 million reais in the year-earlier period.

($1=1.832 reais) (Reporting by Guillermo Parra-Bernal; Editing by Steve Orlofsky)