Companhia Brasileira de Alumínio (CBAV3) Q1 2025 earnings summary

Executive summary

• Achieved record adjusted EBITDA of R$517 million in 1Q25, nearly triple year-over-year, driven by higher LME aluminum prices, USD appreciation, and Real devaluation.

• Net revenue reached R$2.34 billion, up 38% year-over-year, with net income of R$335 million, reversing a prior-year loss.

• Early debt repayment of R$525 million improved cost and maturity profile, with leverage dropping to 2.15x.

• Strengthened ESG profile: included in S&P Global Sustainability Yearbook, upgraded to MSCI AA, and recognized for climate agenda transparency.

• Cash and cash equivalents decreased to R$653.2 million at March 31, 2025, from R$1.14 billion at year-end 2024.

Financial highlights

• Adjusted EBITDA for the consolidated group was R$429.8 million, with an 18% margin, up from R$146.2 million and 8.63% in Q1 2024.

• Net revenue of R$2.3 billion, 97% from aluminum, reflecting higher prices and currency effects.

• Gross profit in 1Q25 was 5.4x higher than 1Q24, with basic earnings per thousand shares at R$468.43.

• Free cash flow was negative, impacted by working capital and capex, with cash and equivalents at R$858 million.

• CapEx focused on maintenance, modernization, and expansion, with refinery maintenance impacting alumina costs.

Outlook and guidance

• CapEx guidance for the year maintained, with flexibility to adjust modernization projects as needed.

• Expectation of improved cash generation and working capital reversion in Q2.

• Global primary aluminum supply expected to tighten due to China's capacity cap.

• Dollar-linked input inventories and higher exchange rates expected to impact costs in coming quarters.

• Management is monitoring the impact of increased US aluminum import tariffs and reciprocal Brazilian tariffs.