Serena Energia (SRNA3) Q1 2025 earnings summary

Executive summary

• Q1 2025 production was 1,899.2 GWh, down 3% year-over-year due to non-recurring curtailment events, notably a major transmission line collapse; production would have grown 9% YoY without these events.

• EBITDA for the quarter was R$310.3 million, down 16% year-over-year, impacted by curtailment, end of PTC special allocation, and higher opex & expenses.

• Net income was -R$176.5 million, a R$72 million decrease year-over-year, driven by lower EBITDA and higher financial expenses.

• A take-private proposal at R$11.74/share offers a 122.3% premium to the 02/01/2025 closing price and 24.6% premium to the last 30-day VWAP.

• Transmission issues are now resolved, and improved results are expected for the remainder of 2025.

Financial highlights

• Consolidated net revenue for Q1 2025 was R$1,156.3 million, up from R$687.9 million in Q1 2024.

• Adjusted energy gross profit was R$506.9 million, down 3% year-over-year; unit gross profit was R$269.8/MWh, down 1%.

• Cash earnings dropped 89% YoY to R$2 million; recurring FCF fell 56% YoY to R$124 million.

• Net loss for the period was R$155.8 million, compared to net income of R$135.8 million in Q1 2024.

• Free cash flow conversion was 37.9% of EBITDA, impacted by seasonality and one-time working capital events.

Outlook and guidance

• Expects solid results for the remaining nine months and full year 2025, with resolved transmission issues and favorable market conditions.

• Seasonality and favorable energy positions in 2H25 are expected to improve results.

• US energy market conditions remain favorable; new as-gen PPA for Goodnight 1 in the US de-risks 2025 gross profit.

• Distributed Generation projects progressing, with 32 plants (83.9 MW) connected by April 2025 and full COD expected in 2025.

• Expectation to remain within capital structure policy by year-end.