Irani Papel e Embalagem (RANI3) Q4 2024 earnings summary

Executive summary

• Net revenue for 2024 reached R$1,627.5 million, up 2.1% year-over-year, with Q4 up 10.1% over Q4 2023, driven by improved prices and volumes in packaging and paper segments.

• Adjusted EBITDA for 2024 was R$475.7 million, down 3.0% year-over-year, with Q4 EBITDA at R$115.4 million and margin at 27.2%.

• Net profit for 2024 was R$304.5 million, down 20.6% year-over-year, but Q4 profit surged to R$186.2 million, mainly due to a R$168.2 million non-recurring tax credit.

• Investments in the Gaia Platform totaled R$1,004.3 million by year-end 2024, with ongoing projects expected to deliver returns in 2025 and beyond.

• Recognized for ESG achievements, including inclusion in B3 Efficient Carbon Index, Zero Waste Certification, and workplace awards.

Financial highlights

• 4Q24 net revenue was R$424.4 million, up 10.1% year-over-year.

• 4Q24 adjusted EBITDA was R$115.4 million, margin 27.2%.

• 4Q24 net profit reached R$186.2 million, with R$168.2 million from non-recurring ICMS tax credits.

• Dividend yield for 2024 was 4.82%, with R$126 million distributed and a payout of 126.04% of net income.

• Adjusted free cash flow for 2024 was R$237.7 million, with a yield of 11.7%.

Outlook and guidance

• Management expects margin recovery and strong demand in 2025, supported by food and export sectors, and continued returns from Gaia investments.

• 2025 expected to be challenging due to high interest rates and fiscal uncertainty in Brazil, but robust liquidity and low leverage position the company well.

• Capital budget of R$223 million approved for 2025, focused on modernization and automation.

• No major new capacity additions expected from competitors in 2025, supporting stable market conditions.

• Anticipates gradual recovery in the paper market, with Argentina's return supporting exports.