M. Dias Branco (MDIA3) Q2 2025 earnings summary

Executive summary

• Net income rose 14% year-over-year in 2Q25, reaching R$216 million, with net revenue up 3.6% to R$2.7 billion and EBITDA up 2.4% to R$345 million, driven by higher average prices despite lower sales volume.

• Operating cash flow reached R$416 million, nearly doubling year-over-year, resulting in a net cash position of R$328 million.

• EBITDA margin was 12.7% in 2Q25, supported by expense control and efficiency gains.

• Maintained AAA Fitch rating for the seventh consecutive year, reflecting strong capital structure and low leverage.

• Operational focus included commercial execution, cost structure review, productivity improvements, and digital transformation.

Financial highlights

• Net revenue for 2Q25 was R$2,723.4 million, up 3.6% year-over-year; EBITDA margin was 12.7%.

• Net income reached R$216.4 million, a 14% increase year-over-year; operating cash flow was R$416 million, up 96.7%.

• Total sales volume was 457.3 thousand tonnes, down 9.8% year-over-year but up 16% sequentially; average price per kg rose 14.8% year-over-year.

• SG&A expenses were R$565.3 million (20.8% of net revenue), down 2.8 p.p. year-over-year, reflecting efficiency gains.

• Gross margin for 2Q25 was 33.4%, slightly down from 2Q24 due to higher commodity costs.

Outlook and guidance

• Management remains confident in ongoing commercial and operational initiatives to drive sustainable growth and attractive margins.

• Focus areas include commercial plan execution, cost structure optimization, productivity, and digital transformation.

• No significant price increases expected for the remainder of the year due to stable cost scenario.

• Anticipates volume growth in the third and fourth quarters, supported by seasonal trends and process improvements.

• Consistency in volumes and sellout expected to sustain profitability.