Hidrovias do Brasil (HBSA3) Q4 2024 earnings summary

Executive summary

• 2024 was marked by severe droughts and water crises in both North and South corridors, causing significant operational restrictions and a 13% drop in total throughput to 16 million tons.

• Net Operating Revenue fell 9% to R$1.7 billion, and Adjusted EBITDA with JVs dropped 22% to R$608 million, with a margin of 35%.

• Ultrapar Logística became a key shareholder, injecting R$500 million via AFAC in 4Q24, supporting a new strategic cycle and growth potential.

• Santos operations benefited from the start of salt operations and increased rail shipments.

• Sustainability initiatives benefited 23,000 people, reinforcing ESG commitments and community engagement.

Financial highlights

• Net operating revenue reached R$1,749 million for 2024, down 9% year-over-year, mainly due to Southern Corridor weakness and draft restrictions.

• Adjusted EBITDA with JVs was R$608 million for the year, a 22% decrease versus 2023, with a margin of 35%.

• Net loss of R$622 million in 2024, compared to a net profit of R$18 million in 2023, impacted by non-cash FX effects and asset impairments.

• Consolidated cargo volume fell 13% to 16 million tons for the year, with a 23% drop in 4Q24.

• Operating cash flow was R$494 million in 2024, down 34% year-over-year.

Outlook and guidance

• Leverage is expected to decrease in 2025 with EBITDA recovery and potential capital increase.

• Strategic focus on operational resilience, including dredging and rock removal to mitigate climate impacts.

• Normal navigation resumed in the Tapajós River for 2025, but Q1 volumes expected to be lower due to delayed soybean harvest.

• Southern Corridor started 2025 with improved rainfall and draft, supporting higher volumes and gradual recovery.

• Expansion CAPEX focused on Modular North project and rail shipment operations in Santos.