Rumo (RAIL3) Q3 2024 earnings summary

Executive summary

• Achieved record quarterly results with adjusted EBITDA of R$2,214 million (up 22%) and adjusted net income of R$794 million, driven by higher transported volumes, improved yields, and market share gains in key agribusiness corridors.

• North Operation led growth with a 6% volume increase, while South Operation was impacted by weather-related disruptions and the suspension of a key railway segment.

• Completed major infrastructure projects, including the viaduct over BR-163, and advanced the Mato Grosso Greenfield Railway to peak mobilization.

• Industrial and container product volumes grew, supported by new plant operations and over 100% growth in the container segment.

• Operational records set in multiple months, with the northern operation as the main growth driver.

Financial highlights

• Net revenue increased 18% year-over-year to R$3,752 million, with adjusted EBITDA margin at 59% and adjusted net margin at 21.2%.

• Financial leverage ratio improved to 1.4x net debt/EBITDA, with net debt stable at R$10.2 billion.

• Capex totaled R$1,468 million, up 64% year-over-year, driven by expansion projects, especially in Mato Grosso.

• Recurring CAPEX increased 31.5% to R$455 million; expansion CAPEX rose 84.2% to R$529 million.

• Quarterly financial result was R$575 million, supported by strong operational performance.

Outlook and guidance

• Soybean and corn production and exports are expected to grow in the 24/25 season, with Brazilian soybean output projected at 171 million tons (+9%) and corn at 130 million tons (+6%).

• Mato Grosso's planted area and export volumes are forecasted to increase, supporting future rail demand.

• Management is optimistic about 2025, expecting a strong crop season and robust operational execution.