Companhia Brasileira de Alumínio (CBAV3) Q2 2025 earnings summary

Executive summary

• Advanced energy matrix diversification by acquiring wind generation assets for BRL 158 million to secure 115 MW from 2027, enhancing competitiveness and sustainability.

• Maintenance shutdowns at the alumina refinery led to lower aluminum production, higher maintenance capex, and one-off alumina purchases, impacting EBITDA and cash flow.

• Returned to profitability in H1 2025 with consolidated net income of R$261.8 million, reversing a loss of R$104.4 million in H1 2024.

• Maintained focus on ESG initiatives, achieving ASI recertification, GHG Gold Seal, and launching new sustainability partnerships.

• Issued R$530 million in ESG-linked debentures with a 7-year maturity, supporting cash reserves and early debt settlement.

Financial highlights

• Net revenue reached R$2.0 billion in 2Q25, down 3% year-over-year and 14% sequentially.

• Adjusted EBITDA was R$189 million with a 9% margin, pressured by higher costs and lower revenue.

• Net loss of R$73 million in 2Q25, similar to the R$74 million loss in 2Q24, but down from R$335 million net income in 1Q25.

• Free cash flow was negative, impacted by working capital investment, refinery shutdown, and increased inventory.

• Net debt at R$3.5 billion, with leverage at 2.29x Net Debt/LTM EBITDA and average debt maturity extended to 5.12 years.

Outlook and guidance

• Aluminum production and costs expected to normalize by the first quarter of 2026, with gradual cost reduction starting in the fourth quarter of 2025.

• Maintenance capex expected to remain high in the next two quarters due to ongoing alumina refinery maintenance.

• Energy supply to be strengthened from 2027 with new wind assets, supporting long-term growth.

• Working capital release anticipated in the fourth quarter, supporting cash generation.

• Management is monitoring the impact of the US aluminum tariff hike (now 50%) and is taking mitigation measures.