Rumo (RAIL3) Q2 2024 earnings summary

Executive summary

• Transported volumes and market share grew in key regions despite adverse weather and crop challenges, with yield increases boosting margins for 2Q24.

• Adjusted EBITDA rose 48% to R$2,142 million, with adjusted net income reaching R$721 million, over four times higher than the prior year.

• Two non-recurring events: R$2,575 million impairment provision due to extreme weather in the South and R$169 million gain from the sale of terminal stakes.

• Announced a strategic joint venture with CHS for a new port facility in Santos, expanding logistics capabilities.

• Released Sustainability and Climate Change Reports and provided social assistance for Rio Grande do Sul disaster.

Financial highlights

• Net revenue rose to R$3,575 million in 2Q24, up 29% year-over-year.

• Adjusted EBITDA: R$2,142 million (+48% YoY); Adjusted EBITDA margin: 60% (+7.5 p.p. YoY).

• Adjusted net income: R$721 million, more than four times higher than the same quarter last year.

• Financial leverage ratio improved to 1.5x net debt/EBITDA, with net debt at R$10.1 billion.

• Capex totaled R$1,176 million (+70% YoY), with recurring capex up 22.9% and expansion capex up 114.8%.

Outlook and guidance

• 2024 guidance: transported volume 80–82 billion RTK, Adjusted EBITDA R$7,600–R$7,900 million, Capex R$5,400–R$5,700 million.

• Guidance excludes non-recurring events and potential M&A or new concessions.

• Anticipates increased soybean and corn production in Mato Grosso, driven by improved yields and expanded planted area.

• Ongoing acceleration of CapEx for the Mato Grosso expansion project, with all licenses and land agreements secured for phase one.