Hidrovias do Brasil (HBSA3) Q2 2024 earnings summary

Executive summary

• Q2 2024 was marked by operational challenges in the South due to draft restrictions, while the North Corridor achieved record EBITDA driven by higher tariffs and operational flexibility.

• Coastal Navigation and Santos operations expanded, with new fertilizer and salt rail operations and consistent performance supported by positive FX effects.

• Net loss was recorded for Q2 and H1 2024, reflecting operational and tax effects, despite increased cash reserves.

• The company is entering a new growth phase under a new controlling shareholder and Board, emphasizing long-term value, ESG commitments, and operational consolidation.

• Interim financial statements for H1 2024 were reviewed and approved with an unqualified report from independent auditors.

Financial highlights

• Consolidated net operating revenue for 2Q24 was BRL 995.9 million, down 4.3% year-over-year; H1 2024 net revenue was BRL 802.2 million, down from BRL 1,075.6 million in H1 2023.

• Adjusted EBITDA for 2Q24 reached BRL 435.5 million, a 12.8% decrease from 2Q23; EBITDA margin declined by 5.0 p.p. to 43.7%.

• Net loss for H1 2024 was BRL 127.1 million, versus net profit of BRL 137.9 million in H1 2023.

• Cash and equivalents increased to BRL 848.0 million at the end of 2Q24, up from BRL 726.2 million year-over-year.

• Depreciation and amortization increased 16.1% year-over-year in 2Q24 due to fleet expansion.

Outlook and guidance

• Investments are focused on short-term capacity expansion, including new transshipment equipment and rail projects.

• Management anticipates a more stable mid- to long-term scenario if climate risks are managed and infrastructure concessions proceed.

• No short-term pressure for debt repayment, with main obligations due in 2031.

• New ESG targets set for 2024-2025, including carbon neutrality and increased diversity.

• Long-term contracts with key customers support revenue stability.