Ferbasa (FESA4) Q2 2024 earnings summary

Executive summary

• Net revenue in 2Q24 was R$522.0 million, up 2.5% sequentially, but down 23.2% year-over-year for 1H24 due to lower sales and prices in both domestic and foreign markets.

• Adjusted EBITDA in 2Q24 reached R$99.5 million (19.1% margin), up 26.9% from 1Q24, but 46.4% lower year-over-year for 1H24.

• Net income for 2Q24 was R$56.8 million, a 38.2% increase sequentially, but 61.4% lower year-over-year for 1H24.

• Cash consumption in 1H24 totaled R$125.6 million, ending with a net cash position of R$738.3 million and consolidated financial reserves of R$1.047 billion.

• Ferroalloy sales volume remained stable sequentially in 2Q24, but down 10.6% year-over-year for 1H24, reflecting weaker demand.

Financial highlights

• 2Q24 net revenue: R$522.0 million (+2.5% QoQ, -16.6% YoY); 1H24: R$1,031.5 million (-23.2% YoY).

• Adjusted EBITDA: R$99.5 million in 2Q24 (+26.9% QoQ); 1H24: R$177.9 million (-46.4% YoY).

• Net income: R$56.8 million in 2Q24 (+38.2% QoQ); 1H24: R$97.9 million (-61.4% YoY).

• CAPEX in 1H24: R$114.0 million, mainly for machinery, mining, and biological assets.

• Net cash at 2Q24: R$738.3 million, down from R$897.6 million at 4Q23.

Outlook and guidance

• Strategic focus on competitive energy supply projects and ongoing cost optimization to ensure long-term efficiency.

• The company expects continued challenges from global protectionism, logistical bottlenecks, and steel import pressures, especially from China and the US.

• Company expects stabilization in revenue trends after price and volume corrections in 2023.