Dexco (DXCO3) Q4 2024 earnings summary

Executive summary

• 2024 marked the completion of a major investment cycle, with a focus on operational efficiency, portfolio optimization, and sustainability initiatives.

• Wood and LD Celulose divisions delivered record results, driven by strong demand, pricing, and operational efficiency, while Metals and Sanitary Ware showed recovery.

• The company exited the electric showers and faucets business, sold 50% of Duratex SPE I, and incorporated Dexco Revestimentos Cerâmicos S.A.

• Despite macroeconomic headwinds, net revenue grew 11.5% year-over-year, supported by robust wood panel demand and operational improvements.

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

Financial highlights

• Consolidated net revenue reached R$8,234.6 million, up 11.5% from 2023.

• Adjusted and recurring EBITDA was R$1,649.8 million (margin 20.0%), up 18.4% year-over-year; including LD Celulose, pro forma EBITDA was R$2,440.6 million.

• Recurring net income was R$274.1 million, down 26.1% year-over-year, with recurring ROE at 4.1%.

• Net debt rose 14.7% to R$4,972.9 million; leverage improved to 3.01x Net Debt/EBITDA.

• Earnings per share were R$0.2133, compared to R$0.9772 in 2023.

Outlook and guidance

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

• Completion of the 2021-2025 investment cycle provides a foundation for competitiveness and resilience.

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

• 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.