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 output, export volumes, and severe weather disruptions in the South, with resilience shown through commercial discipline and operational efficiency.

• 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 14% to R$12.6 billion.

• Continued progress on the Mato Grosso railway extension and BR070 terminal, with construction on budget and schedule, and investments totaling R$1,780 million focused on network expansion and modernization.

• Sustainability commitments reaffirmed 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, mainly due to lower transported volumes in the Southern Operation.

• Adjusted EBITDA margin was 55.1%, up 1.4 p.p. year-over-year, with net financial expense at R$768 million and net debt at R$12.6 billion.

• Total costs and expenses (ex-depreciation) fell 8%, with variable costs down 16% and fixed/SG&A expenses up less than 1%.

• Recurring CAPEX decreased to R$390 million, while expansion CAPEX fell to R$495 million; total investments reached R$1,780 million.

• Net debt to adjusted EBITDA ratio at 1.6x, with leverage remaining healthy.

Outlook and guidance

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

• Seasonality is different this year, with a weaker start but anticipated volume growth in Q2 and the second half, supported by record soybean and corn crops in Mato Grosso.

• Soybean and corn market outlooks indicate stable to slightly increasing production and exports for 2024/25, though commercialization is delayed.

• Investments in operational efficiency and capacity expansion underpin confidence in meeting full-year targets.