Rumo (RAIL3) Q1 2025 earnings summary

Executive summary

• Transported volumes fell 7% year-over-year to 16.1 billion RTK, mainly due to lower agricultural volumes, export delays, and severe weather disruptions in the South, with market share in grain exports through the Port of Santos dropping 8 p.p. to 44% and gains in Goiás.

• Adjusted EBITDA decreased 3% year-over-year to R$1,635 million, with adjusted net income at R$188 million, reflecting strong margin discipline and asset allocation.

• Financial leverage increased to 1.6x net debt/Adjusted EBITDA, with net debt rising to R$12.6 billion, up 14% sequentially.

• Investments reached R$1,780 million, focused on network expansion and modernization, especially in Mato Grosso, with construction on budget and schedule.

• Continued commitment to sustainability, recognized by inclusion in major indices and the release of the 2024 Sustainability Report.

Financial highlights

• Net revenue for the quarter was R$2,967 million, down 6% year-over-year, primarily impacted by lower transported volumes.

• Adjusted EBITDA margin was 55.1%, up 1.4 p.p. year-over-year, with variable costs down 16% and fixed/SG&A expenses up less than 1%.

• Net financial expense totaled BRL 768 million, with an increase in net debt cost due to higher interest rates and a larger debt balance.

• Recurring CAPEX decreased year-over-year, while total Capex surged 84% to R$1,780 million, with R$353 million invested in the Mato Grosso expansion.

• Gross debt reached R$21.2 billion, with weighted average cost of debt reduced to 102.7% of CDI and average maturity extended to 5.9 years.

Outlook and guidance

• Guidance for volume, CapEx, and financials reiterated, with expectations of volume recovery and increased system pressure in the coming quarters.

• Soybean and corn production in Brazil are expected to grow 8% and 4% respectively, with Mato Grosso achieving record harvests, though commercialization is delayed.

• Ongoing investments in rail infrastructure and terminals, especially in Mato Grosso, underpin confidence in meeting full-year targets.