Cia de Ferro Ligas da Bahia FERBASA (FESA4) Q4 2025 earnings summary

Executive summary

• Net profit reached R$99.8 million in 4Q25, up 117% from 3Q25, but for the full year 2025, net profit declined 42.4% to R$188.7 million due to lower alloy prices and higher costs.

• Adjusted EBITDA was R$4.3 million in 4Q25, down 91.5% sequentially, and R$183.8 million for 2025, a 47.8% year-over-year decrease, with margin dropping to 7.9%.

• Sales volume rose 14.8% quarter-over-quarter in 4Q25 and 6.8% year-over-year in 2025, with exports up 34.5% in 4Q25 but down 3.4% for the year due to protectionism.

• Distributed R$240 million in dividends in 2025, maintaining a payout ratio of 127% of net profit.

• Celebrated 50 years of the José Carvalho Foundation, emphasizing social responsibility and educational impact.

Financial highlights

• Consolidated net revenue for 2025 was R$2,334.5 million, up 4.4% year-over-year, driven by higher sales volume and a 5% higher average dollar, despite a 7.4% drop in average dollar prices.

• COGS increased 12.3% year-over-year, mainly from higher electricity and chromium ore costs, with COGS/revenue ratio at 88.5%.

• Cash and equivalents at year-end were R$1.085 billion; net cash position was R$718.4 million after deducting R$366.9 million in debt.

• CAPEX reached R$300.1 million in 2025, focused on metallurgy, mining, and forestry.

• Financial revenue in 4Q25 was R$48.0 million, up 29.7% from 3Q25, mainly from monetary adjustment of recovered tax credits.

Outlook and guidance

• 2026 global GDP projected to grow 3.3%; Brazil's GDP expected to rise 1.8%.

• Steel demand forecast to expand 1.3% globally, but Brazil's crude steel output may contract 2.2%.

• Focus on geographic diversification, cost management, and new investments in mining and bioreductant production.

• Dividend distribution of R$100 million (JCP) scheduled until December 2025, with remaining R$140 million in June 2026.

• Ongoing adaptation to tax reform and continued challenges in wind power generation due to regulatory restrictions.