Hidrovias do Brasil (HBSA3) Q4 2024 earnings summary

Executive summary

• 2024 was marked by severe droughts and water crises in both the northern and southern corridors, causing significant operational restrictions and a 13% drop in total throughput to 16 million tons.

• Operational focus was on efficiency, resilience, and sustainability, with major dredging, excavation, and ESG initiatives benefiting 23,000 people.

• Ultrapar Logística became a key shareholder, injecting R$500 million via AFAC in 4Q24, supporting a new strategic cycle and growth potential.

• Santos operations benefited from the start of salt operations and increased rail shipments.

Financial highlights

• Net operating revenue for 2024 was R$1.7 billion, down 9% year-over-year, with consolidated cargo volume down 9% and a net loss of R$622 million.

• Adjusted EBITDA with JVs was R$608 million, a 22%–42% decrease versus 2023, with a margin of 35%.

• North Corridor net revenue grew 13% to R$847 million, with a 26% increase in adjusted EBITDA year-over-year due to tariff increases.

• Southern Corridor net revenue fell 37% to R$519 million, with an 80% drop in adjusted EBITDA.

• Coastal navigation revenue rose 8% to R$246 million, with adjusted EBITDA up 28% to R$116 million.

Outlook and guidance

• Navigability restrictions from the 2024 water crisis are expected to continue impacting operations, but normal navigation resumed in the Tapajós River for 2025.

• Southern Corridor started 2025 with improved rainfall and draft, supporting higher volumes and gradual recovery.

• Management expects leverage to decrease in 2025, driven by EBITDA recovery and potential capital increase.

• Expansion CAPEX focused on Modular North and rail shipment operations in Santos.

• Coastal navigation expects slightly lower results in Q1 2025 due to scheduled vessel docking.