Eternit (ETER3) Q1 2025 earnings summary

Executive summary

• Net revenue grew 6.3% year-over-year to R$283.4 million, driven by record sales in fiber-cement roofing panels (+15.1%) and construction systems (+38.8%), with significant market share gains in the North and Northeast regions.

• Gross profit declined 25.3% year-over-year to R$42.1 million, with gross margin dropping to 14.9% from 21.2%, mainly due to margin compression in the chrysotile segment.

• Recurring EBITDA dropped 78.8% to R$3.6 million, with margin falling to 1.3% from 6.4% in 1Q24.

• Net result turned negative at -R$10.8 million, reversing a small profit in 1Q24, impacted by narrowed margins and reduced chrysotile exports.

• Investments included SAP S4/HANA implementation, modernization of construction systems lines, and appointment of new executive board members to reinforce innovation and brand consolidation.

Financial highlights

• Revenue reached R$283.4 million (+6.3% YoY); domestic sales up 13.3%, exports down 10.6%.

• Gross profit was R$42.1 million (-25.3% YoY); gross margin 14.9% (-6.3 p.p. YoY).

• Recurring EBITDA was R$3.6 million (-78.8% YoY); margin 1.3% (-5.1 p.p. YoY).

• Net loss was R$10.8 million (vs. profit of R$0.2 million in 1Q24); net margin -3.8%.

• Operating cash flow was R$13.5 million, down from R$39.9 million in 1Q24.

Outlook and guidance

• Focus on innovation, digital transformation (SAP S4/HANA), and diversification of product lines to drive future growth.

• Strengthening relationships with resellers and presence at specialized fairs.

• ESG initiatives underway, including review of the Materiality Matrix and 2030 targets.

• Sector faces challenges from inflation, high household indebtedness, and low consumer confidence, despite construction materials sector growth.

• Brazilian GDP growth forecasted at 2.0% for 2025, down from 3.4% in 2024.