Localiza Rent a Car (RENT3) Q1 2025 earnings summary

Executive summary

• Consolidated net revenue reached R$10.1 billion in 1Q25, up 16.7% year-over-year, driven by strong performance in all divisions and strategic priorities such as fleet renewal, price adjustments, cost efficiency, and system integration.

• EBITDA grew to R$3.3 billion (up 13.9%), with net income rising 14.8% to R$842 million compared to 1Q24.

• Fleet was reduced by over 40,000 cars post-peak season to improve utilization and productivity, following significant purchases at the end of 2024.

• Prioritized ROIC spread restoration, business portfolio optimization, customer experience, and ongoing system integration.

Financial highlights

• Car Rental net revenue reached R$2.57 billion (+9.1% YoY), Fleet Rental R$2.24 billion (+13.3% YoY), and Seminovos R$5.3 billion (+22.2% YoY), with 74,720 cars sold (+15% YoY).

• Consolidated EBIT was R$2.06 billion, up 11.5% year-over-year; basic EPS for the quarter was R$0.80, up from R$0.69 in 1Q24.

• Annualized ROIC was 13.7%, with a 4.4p.p. spread over the post-tax cost of debt.

• Net debt at quarter-end was R$32.2 billion, up 7% from 12/31/2024, mainly due to reduced accounts payable to automakers.

• Debt ratios remain healthy: net debt/fleet value at 0.62x, net debt/equity at 1.22x, and net debt/EBITDA LTM at 2.61x.

Outlook and guidance

• Management expects gradual improvement in debt ratios and continued focus on ROIC spread, cost efficiency, and system integration for further synergies in 2H25.

• Depreciation per car remains within guidance; no new guidance will be issued, but ongoing monitoring will continue.

• Tax rate expected in the high teens for the remainder of the year, with one-off tax benefits not recurring.

• Gradual fleet rejuvenation process may extend into 2026, with ongoing reduction in average car age and mileage.