Ferbasa (FESA4) Q1 2025 earnings summary

Executive summary

• FERBASA, the main ferroalloy supplier in Brazil and sole ferrochrome producer in the Americas, reported 1Q25 results under Brazilian and international standards.

• Net revenue in 1Q25 was R$549.8 million, down 9.5% from 4Q24 but up 7.9% year-over-year.

• Adjusted EBITDA reached R$61.1 million, up 30% sequentially but 22.1% lower year-over-year.

• Net income was R$24.2 million, down 80.8% from 4Q24 and 41.1% lower than 1Q24, mainly due to prior tax credit adjustments.

• Operations span 18 municipalities in Bahia, with 4,800 jobs and a metallurgical capacity of 342,000 t/year.

Financial highlights

• Adjusted EBITDA margin improved to 11.1% from 7.7% in 4Q24 but was below 15.4% in 1Q24.

• Net cash position at quarter-end was R$786.6 million, up from R$709.9 million in 4Q24.

• CAPEX was R$42.5 million, 61.9% lower than 4Q24, focused on machinery, equipment, and biological assets.

• Financial result fell 47.3% sequentially, mainly due to a 59.6% drop in financial revenue after a prior quarter boost from tax credits.

• Cost of goods sold (COGS) was R$475.6 million, down 9.7% sequentially but up 15.4% year-over-year.

Outlook and guidance

• The company is preparing for Brazil's tax reform, with consultancy and system adjustments planned for 2025 and full transition by 2033.

• Ongoing global protectionist actions and tariffs, especially in the US and Europe, are expected to impact sales and pricing.

• The company is monitoring the effects of new US steel tariffs and European safeguard measures.

• Chromium alloys and ore are not included in new US tariffs, but silicon alloys are affected.