Companhia Brasileira de Alumínio (CBAV3) Q1 2025 earnings summary

Executive summary

• Achieved record adjusted EBITDA of R$517 million in 1Q25, nearly triple year-over-year, driven by higher LME aluminum prices and USD appreciation.

• Net income reached R$335 million, reversing a loss of R$30 million in 1Q24 and marking the highest since 2Q22.

• Early debt repayment of R$525 million improved cost and maturity profile, supporting deleveraging.

• Leverage improved significantly, with net debt/EBITDA dropping to 2.15x from 7.89x in March 2024.

• Strengthened ESG profile with inclusion in S&P Global Sustainability Yearbook, B3 ISE, and MSCI AA rating.

Financial highlights

• Net revenue rose 38% year-over-year to R$2.3 billion, with 97% from aluminum sales.

• Adjusted EBITDA surged 195% year-over-year to R$430 million, with margin up to 18%.

• Free cash flow was negative, impacted by working capital and capex, expected to normalize in Q2.

• Capex focused on maintenance, modernization, and upgrades, with refinery maintenance impacting alumina costs.

• Gross profit in 1Q25 was 5.4x higher than 1Q24.

Outlook and guidance

• Capex guidance for the year maintained, with flexibility to adjust modernization projects.

• Expectation of improved cash generation and working capital reversion in Q2.

• New 14-year, 50 MWm fixed-USD energy contract in effect to secure optimal energy portfolio.

• Global primary aluminum supply expected to tighten due to China's capacity cap.

• Dollar-linked input inventories and higher exchange rates expected to impact costs in coming quarters.