Dexco (DXCO3) Q4 2024 earnings summary

Executive summary

• Consolidated net revenue grew 11.5% year-over-year to R$8.23 billion, led by strong results in the Wood and LD Celulose divisions, and recovery in Metals & Sanitary Ware, despite a challenging macroeconomic environment and higher costs.

• Adjusted and recurring EBITDA reached R$2.44 billion (including LD Celulose), up 22% year-over-year, with margin at 20.8%.

• Recurring net income was R$274.1 million, a decrease of 26.1% year-over-year, impacted by higher financial expenses and one-off events.

• The company completed the sale of its electric showers and faucets business and 50% of Duratex SPE I S.A., generating a gain of R$106.1 million.

• CEO transition occurred, with Antonio Joaquim stepping down and Raul Guaragna assuming operational leadership.

Financial highlights

• Net revenue for 2024 was R$8.23 billion (+11.5% YoY); adjusted and recurring EBITDA was R$2.44 billion (+22% YoY); recurring net income was R$274.1 million (-26.1% YoY).

• EBITDA margin improved to 20.8% in 2024 from 18.0% in 2023.

• Free cash flow (sustaining) was R$390.8 million; net debt at year-end was R$4.97 billion (+14.7% YoY); leverage at 3.01x net debt/EBITDA.

• ROE recurring was 4.1% (vs. 7.5% in 2023); earnings per share for 2024 was R$0.2133.

• Dividend and interest on equity payments totaled R$43.4 million.

Outlook and guidance

• Focus for 2025 is on reducing leverage, prioritizing cash generation, and maintaining operational efficiency amid ongoing market uncertainties.

• Price increases are being implemented to offset rising input costs, with ongoing diligence in cost and cash management.

• Completion of the 2021-2025 investment cycle is expected to support competitiveness and mitigate economic pressures.

• Botucatu tile plant ramp-up will continue, with expectations for improved cost structure and product portfolio by year-end 2025.

• LD Celulose expected to maintain high productivity and begin small dividend payments, with larger payouts anticipated from 2027.