Hidrovias do Brasil (HBSA3) Q1 2025 earnings summary

Executive summary

• Navigation conditions normalized in both North and South Corridors, aided by rainfall, dredging, and rock removal, supporting operational recovery and improved logistics performance.

• Record recurring adjusted EBITDA of R$256 million, up 54% year-over-year, driven by improved navigation and tariff adjustments.

• Sale of Coastal Navigation/cabotage operation to Norsul for R$715 million, optimizing the portfolio and enabling redeployment of fleet.

• Capital increase of up to R$1.2 billion nearing completion, with nearly all shares subscribed by April 2025, supporting expansion and deleveraging.

• Sustainability achievements include improved CDP score, AI-driven climate prediction, and recognition among Brazil's most innovative companies.

Financial highlights

• Consolidated net operating revenue reached R$555 million, up 23% year-over-year, with recurring adjusted EBITDA of R$256 million and margin at 46%.

• Net income was R$23 million, reversing a net loss of R$71 million in 1Q24, reflecting operational recovery and portfolio optimization.

• North Corridor moved 1.8 million tons, down 11% year-over-year due to delayed soybean harvest; recurring adjusted EBITDA R$152 million, down 6%.

• South Corridor cargo up 54% year-over-year, recurring adjusted EBITDA R$92 million, reversing prior year losses.

• Coastal Navigation volume down 13% year-over-year, recurring adjusted EBITDA R$21 million, down 13%.

Outlook and guidance

• Navigation conditions expected to remain favorable in both corridors, with continued normalization and improved predictability.

• Gradual reduction in leverage anticipated throughout 2025, driven by EBITDA growth and capital injection.

• Focus on investments in the Northern Corridor and portfolio optimization post-Coastal Navigation sale.

• No formal guidance provided, but management expects improved results as interventions take effect.

• No short- or medium-term operational impacts expected from leverage covenant breaches; restrictions only limit new debt and dividends.