Ferbasa (FESA4) Q3 2024 earnings summary

Executive summary

• Net revenue in 3Q24 reached R$597.7 million, up 14.5% sequentially, driven by higher sales volume and a stronger average dollar, but down 14.0% year-over-year for 9M24 due to lower prices and volumes.

• Adjusted EBITDA for 3Q24 was R$127.1 million (margin 21.3%), up 27.7% from 2Q24, but 25.1% lower year-over-year for 9M24.

• Net profit in 3Q24 was R$103.6 million, an 82.4% increase sequentially, but 38.5% lower year-over-year for 9M24.

• Sales volume in 3Q24 was 68.3 thousand tons, up 7.7% sequentially, with domestic sales rising 26.5% and exports down 8.6%.

• CAPEX in 9M24 totaled R$221.4 million, up 1.9% year-over-year, with R$107.4 million in 3Q24, and R$18.0 million in dividends distributed as JCP in September 2024.

Financial highlights

• 3Q24 net revenue: R$597.7 million (+14.5% QoQ, +8.5% YoY); 9M24: R$1.63 billion (-14.0% YoY).

• Adjusted EBITDA: R$127.1 million in 3Q24 (+27.7% QoQ); 9M24: R$305.0 million (-25.1% YoY).

• Net profit: R$103.6 million in 3Q24 (+82.4% QoQ); 9M24: R$201.5 million (-38.5% YoY).

• COGS in 3Q24: R$498.7 million (+23.8% QoQ), including R$25.7 million for biological asset depletion.

• Net cash at 9M24: R$758.7 million, with a consolidated financial reserve of R$1.067 billion and total debt of R$308.3 million.

Outlook and guidance

• Strategic projects focus on securing competitive energy supply and vertical integration to ensure cost efficiency and production security.

• The company expects continued challenges from international protectionism, logistics bottlenecks, and steel industry import pressures, especially from China.

• Investments in renewable energy and forest assets are expected to support long-term cost efficiency and sustainability.

• Market conditions remain challenging with lower ferroalloy prices and international logistics constraints.

• Domestic steel demand in Brazil is stable, but high imports and lower export demand for chromium alloys persist.