Hidrovias do Brasil (HBSA3) Q3 2024 earnings summary

Executive summary

• Q3 2024 results were significantly impacted by severe draft restrictions and a water crisis in the South Corridor, halting iron ore navigation since mid-August, while other corridors maintained operational consistency and EBITDA growth.

• Despite these constraints, the North Corridor maintained adjusted EBITDA growth, supported by higher average tariffs and improved cargo mix.

• Shareholders approved a capital increase of BRL 1.2–1.5 billion to support growth, expansion, and liability management.

• Santos segment grew with the start of salt operations, and Coastal Navigation remained stable and consistent.

• Continued progress on ESG initiatives, including a technical cooperation agreement with SEMAS in Pará for sustainable development.

Financial highlights

• Net operating revenue for Q3 2024 was BRL 488 million, down 10% year-over-year, mainly due to lower South Corridor volumes; nine-month revenue was BRL 1,484 million, down 6%.

• Adjusted EBITDA + JVs in Q3 2024 was BRL 175 million, down 33% year-over-year; nine-month adjusted EBITDA was BRL 610 million, down 21%.

• EBITDA margin in Q3 2024 was 35% (down 1.6 p.p.); adjusted EBITDA margin was 36% (down 12.7 p.p.).

• Net loss of BRL 49 million in Q3 2024 (vs. net profit of BRL 71 million in Q3 2023); nine-month net loss of BRL 176 million.

• Financial result in Q3 2024 was negative BRL 71 million, mainly due to exchange rate effects on dollarized debt.

Outlook and guidance

• Management expects slightly better results in the North operation for Q4 2024 due to lessons learned and gradual recovery in draft levels.

• 2025 is expected to be a transition year with execution of dredging projects, aiming for normalized navigation and operational improvements by 2026.

• Over 60% of 2025 harvest volumes already contracted long-term, with expectations of continued strong volumes and tariff gains.

• No early debt maturity or short-term pressure; main debt amortization scheduled for 2031.

• Capital increase aims to enable growth and value generation for shareholders.