Companhia Brasileira de Alumínio (CBAV3) Q2 2025 earnings summary

Executive summary

• Acquired a stake in wind power assets for BRL 158 million to supply 115 MW from 2027, diversifying the energy matrix and enhancing competitiveness.

• Issued ESG-linked debentures and completed a second debenture issuance to strengthen cash reserves, support early debt repayment, and improve the debt profile.

• Extended alumina refinery shutdown led to lower aluminum production, higher maintenance capex, and one-off alumina purchases, impacting EBITDA and cash flow.

• Aluminum production is ramping up, with normalization expected by year-end and full process stabilization by 4Q25.

• Advanced ESG initiatives, including ASI recertification, GHG Gold Seal, and new low-carbon aluminum certification.

Financial highlights

• Net revenue reached R$2.0 billion, down 3% year-over-year and 14% sequentially.

• Adjusted EBITDA was R$189 million with a 9% margin, down 44% year-over-year and 56% sequentially, pressured by higher costs and lower revenue.

• Net loss of R$73 million, similar to the R$74 million loss in 2Q24, but down from R$335 million net income in 1Q25.

• Free cash flow was negative, mainly due to increased working capital, higher maintenance capex, and inventory buildup.

• Leverage ended at 2.29x Net Debt/LTM EBITDA, reflecting lower EBITDA over the last twelve months.

Outlook and guidance

• Aluminum production and costs expected to normalize by the first quarter of 2026, with gradual cost reduction starting in the fourth quarter of 2025.

• Maintenance capex and production costs to remain elevated in the next two quarters but at lower levels than the second quarter.

• Working capital release anticipated in the fourth quarter, supporting cash generation.

• Energy supply to be strengthened from 2027 with new wind assets, supporting long-term growth.

• Strong demand anticipated in key domestic sectors, with global aluminum market supported by resilient Chinese demand.