Dexco (DXCO3) Q3 2025 earnings summary

Executive summary

• Consolidated net revenue for 3Q25 was R$2,128.0 million, down 5.0% year-over-year, reflecting a highly competitive environment and price/volume pressures across all divisions, partially offset by a richer product mix in Wood and Metals & Sanitary Ware divisions.

• Adjusted & recurring EBITDA (pro forma) reached R$566.5 million, including R$121.5 million from LD Celulose, with a margin of 20.9%.

• Net income for 3Q25 was R$14.2 million, but recurring net income was a loss of R$42.8 million, mainly due to higher financial expenses and lower LD Celulose contribution.

• Transformation plan launched in 2025, focusing on financial deleverage, go-to-market, tiles turnaround, wood innovation, and Deca competitiveness.

• Sustaining free cash flow was R$81.6 million, marking the end of the 2021-2025 investment cycle.

Financial highlights

• 3Q25 consolidated net revenue: R$2,128.0 million (-5.0% YoY); 9M25: R$6,152.2 million (-0.3% YoY).

• Adjusted & recurring EBITDA for 3Q25 was R$445.0 million, down 3.2% year-over-year, but up 0.5% sequentially; margin: 20.9%.

• Gross profit for 3Q25: R$490.1 million (-26.5% YoY); pro forma gross margin fell 7.7 p.p. to 24.9%.

• Net income: R$14.2 million (down from R$92.6 million YoY); recurring net income: -R$42.8 million.

• Net debt: R$5,585.1 million; leverage (Net Debt/EBITDA): 3.48x.

Outlook and guidance

• Operational discipline and focus on value creation are expected to support more favorable conditions for the remainder of 2025.

• The company is intensifying its focus on higher value-added products and manufacturing reorganization, especially in the Tiles Division, to drive a gradual return to profitability.

• Wood panels demand expected to remain strong, supporting Wood Division performance.

• LD Celulose expected to maintain efficient operations post-maintenance, despite volatile pulp prices and FX.

• Dividend payments from LD Cellulose expected to begin next year, with a gradual ramp-up.