EARNINGS RELEASE 1Q24

Curitiba, May 9th, 2024 - RUMO S.A. (B3: RAIL3) ("Rumo") announces today its results for the first quarter of 2024 (1Q24). The results are presented on a consolidated basis, in accordance with Brazilian and international accounting rules (IFRS). The comparisons made in this report consider 1Q24 and 1Q23, except when otherwise indicated.

Highlights

  • Transported volume of 17.4 billion RTK in 1Q24, up 8% over 1Q23.
  • Growth of 20% in consolidated yields, despite the 12% fuel price drop in the period.
  • EBITDA totaled R$1,689 million in 1Q24, a 43% increase.
  • Net income of R$368 million in 1Q24, boosted by higher volumes and margins across all operations over 1Q23.
  • Financial leverage reduced to 1.7x net debt/EBITDA LTM.
  • Capex totaled R$967 million in the quarter.

Summary of financial information

1Q24

1Q23

Chg.%

(Amounts in BRL mln)

Total transported volume (millions RTK)

17,393

16,129

7.8%

Logistics solution volume (millions of TU)

1,453

763

90.4%

Net operating revenue

3,146

2,384

32.0%

Cost of goods sold

(1,826)

(1,604)

13.8%

Gross profit

1,320

780

69.2%

Gross margin (%)

42.0%

32.7%

28.2%

Sales, general and administrative expenses

(163)

(111)

46.8%

Other op. revenues (expenses)

(57)

9

>100%

Equity pick-up

6

1

>100%

Operational profit

1,106

679

62.9%

Depreciation and amortization

583

502

16.1%

EBITDA

1,689

1,181

43.0%

EBITDA margin (%)

53.7%

49.5%

8.4%

Net profit

368

71

>100%

Net margin (%)

11.7%

3.0%

>100%

Capex

967

928

4,2%

Earnings Conference Call

Investor Relations

May 10th, 2024

E-mail: ir@rumolog.com

Português* - 14h00 (horário de Brasília)

Website: ri.rumolog.com

*With simultaneous translation to English

Earnings Release

1Q24

1. 1Q24 Executive Summary

In 1Q24, Rumo's transported volume reached 17.4 billion RTK, up by 8% over 1Q23. In 1Q23, operations were negatively affected by the worsening safety and traffic conditions in the Baixada Santista (SP) region, which jeopardized the circulation efficiency of trains heading to the Port of Santos. In 1Q24, growth was bolstered by improvement in the sugar, fuel, soybean meal and fertilizer portfolios.

Volume - Consolidated and by Operation (Bln RTK)

+8%

16.1

17.4+6%

12.6 13.3

+14%

2.7

3.1

+17%

0.8

1.0

Consolidated

North

South

Container

1Q23

1Q24

Rumo's grain export market share at the Port of Santos grew 51.3%. Rumo's volume remained flat year-on-year,despite the crop failure in the country's midwestern region, which mainly impacted volumes exported by other logistics solutions.

Grain Exports in Santos - SP

(Mm tons and %)

+1.5 p.p.

49.8%

-3.2%

13.3

+1.0%

5.1-4.7%

1.5

1Q23

Malha Central

Malha Norte

Market

51.3%

12.8

5.1

1.4

1Q24

Source: Orion and Rumo System

Rumo's market share in the state of Mato Grosso increased 1.1 p.p. in the quarter. While the overall exports from Mato Grosso reduced 5% over 1Q23, Rumo posted a 2% decline.

Earnings Release

1Q24

Grain Exports in MT

(Mm tons and %)

37.9%

15.2

5.8

+1.1 p.p.

-4.9%

-2.0%

39.0%

14.4

5.6

1Q23

1Q24

Rumo

Market

Source: Orion, Comex Stat and Rumo System.

Rumo's market share in the state of Goiás ended the quarter at 20.7%, registering a 2.9 p.p. growth. Goiás' grain exports by Rumo grew 11% year-on-year.

Grain Exports in GO

(Mm tons and %)

17.7%

+2.9 p.p.

-4.9%

20.7%

4.1

3.9

+10.8%

0.7

0.8

1Q23

1Q24

Rumo

Market

Source: Orion, Comex Stat and Rumo System.

The South Operation gained grain market share at the ports of Paranaguá (PR) and São Francisco do Sul (SC). While the market grew 6%, Rumo grew even further, with a 9% higher volume compared to the same period last year.

Earnings Release

1Q24

Grain Exports in Paranaguá - PR and São Francisco do Sul - SC

(Mm tons and %)

29.3%

7.3

+1.0 p.p.

+5.7%

+9.1%

30.3%

7.7

2.1

2.3

1Q23

1Q24

Rumo

Market

Source: Orion and Rumo System.

Soybean 23/24 crop estimates indicate a production decrease of about 4% versus the 22/23 crop, totaling to nearly 153 million tons. We can notice a national production redistribution, with the Midwest reducing volumes and the South returning to normalcy.

In the state of Mato Grosso, soybean crop was negatively impacted by climatic issues, which reduced the agricultural productivity of this crop, despite the slight expansion of the planted area compared to the year before. The 23/24 crop production in the state is estimated at 39 million tons, 7 million tons below the previous crop. Exports in the state are estimated at 24 million tons, a decrease of 6 million tons compared to the year before.

Preliminary estimates for the 23/24 corn production signal a level of 121 million tons produced, a decrease of 16 million tons. Exports may reach 43 million tons, approximately 13 million tons below the previous year.

The 23/24 corn harvest in Mato Grosso is estimated at 48 million tons, approximately 7 million tons below the previous year. Production in the state will benefit from favorable rainfall as corn was planted earlier in the year, partially offsetting a reduction in corn's planted area. Estimated exports for the state are of 23 million tons.

Brazilian Soybeans Production and Exports

(Milhões de toneladas e %)

+24%

-4%

Brazilian Corn Production and Exports

(Milhões de toneladas e %)

-12%

+16%

137

160

153

Volume total

129

-6%

+29%

118

121

101

95

Volume

78

outros estados

Volume

41

46

39

MT

26

30

24

21/22

22/23e

23/24e

21/22

22/23

23/24

Prod

Prod

Prod

Produção

MT

Produção outros estados

Source: IM Rumo, AG Rural, Veeries, Orion, Comex Stat. IMEA

Note: (e) - estimate

+26%-23%

44

56

43

42

55

48

26

30

23

21/22

21/22

22/23e

22/23

23/24e 23/24

Prod

Prod

Prod

Exportação MT

Exportação outros estados

Earnings Release

1Q24

Financial Information

In 1Q24, net revenue totaled R$3,146 million, a 32% growth over 1Q23. Improvement was reported across all operations: growth of 33% in the North Operation; 25% in the South Operation; and 35% in the Container Operation. This performance was fueled by higher volumes and yields in the period compared to 1Q23.

EBITDA totaled R$1,689 million, with an EBITDA margin of 54%. Variable costs went up 10%, given stronger transported volumes, despite the 12% decline in fuel prices. Fixed costs and general and administrative expenses expanded R$124 million in the quarter, reflecting the Company's decision to enhance structures and processes aiming at supporting its strategy of capacity expansion, efficiency gains, and risk management.

Net income came to R$368 million in the quarter, more than 100% growth year-on-year.

Financial leverage went down to 1.7x, with a net debt of R$10.4 billion.

Sustainability

Our corporate sustainability efforts were outstandingly recognized in 1Q24. We now compose the S&P Sustainability Yearbook 2024 as "Industry Mover", receiving the sector's highest score.

In terms of climate change management, we successfully completed the external audit of our greenhouse gas (GHG) emissions inventory, reinforcing our commitment to environmental responsibility. In the CDP rating, we achieved a B+ score in climate, highlighting our evolution in this area, while the B- in Water Security and C+ in Forests underline our commitment to various aspects of sustainability.

Concerning our social responsibility performance in the Baixada Santista region, we advanced socio-territorial diagnoses in key areas, such as Cubatão and São Vicente, identifying local needs and consolidating the pillars that will drive our initiatives in the region. We conducted preventive actions against dengue, assisting nearly 3,000 children in public schools of Cubatão. We also took part in the Vila Esperança's re-urbanization project, promoting sustainable development, and quality of life.

In April 2024, we published our 2023 Sustainability Report, a document that consolidates Rumo's key ESG highlights. The report is available for consultation through this link.

Earnings Release

1Q24

2.

Consolidated Operating and Financial Indicators

Summary of financial information

1Q24

1Q23

Chg.%

(Amounts in BRL mIn)

Total transported volume (millions RTK)

17,393

16,129

7.8%

Agricultural products

14,049

13,232

6.2%

Soybean

8,110

8,145

-0.4%

Soybean meal

2,500

2,155

16.0%

Corn

1,058

1,146

-7.7%

Sugar

1,054

540

95.2%

Fertilizers

1,151

1,013

13.6%

Other

176

232

-24.1%

Industrial products

2,376

2,069

14.8%

Fuels

1,572

1,212

29.7%

Industrial

804

857

-6.2%

Containers

968

828

16.9%

Net revenue

3,146

2,384

32.0%

Transportation

2,888

2,226

29.7%

Logistic solution¹

217

90

>100%

Other revenues²

41

68

-39.7%

Note 1: Revenue from sugar transportation using other railways or road transportation.

Note 2: It includes revenue from the pass-through fee of other railways, and revenue from volumes contracted and not executed according to commercial agreements (take-or-pay), among others.

Yield by Operation

1Q24

1Q23

Chg.%

North Operation

Yield (R$/000 RTK)

165.2

134.0

23.2%

% Volume

76.5%

77.9%

-1.5 p,p,

South Operation

Yield (R$/000 RTK)

176,1

159,4

10.5%

% Volume

18.0%

17.0%

1 p,p,

Container Operation

Yield (R$/000 RTK)

145,6

127,2

14.5%

% Volume

5.6%

5.1%

0.4 p,p,

Consolidated

Yield (R$/000 RTK)

166,1

138,0

20.3%

Earnings Release

1Q24

Results by Business Unit

Business Units

The business units (reportable segments) are organized as follows:

•

North Operation

Malha Norte, Malha Paulista, Malha Central

•

South Operation

Malha Oeste and Malha Sul

•

Container Operation

Container operations, including Brado Logística

Results by business unit

North Operation

South Operation

Container

Consolidated

1Q24

Operation

Transported volume (million RTK)

13,298

3,127

968

17,393

Net operating revenue

2,435

563

148

3,146

Costs of services

(1,271)

(422)

(133)

(1,826)

Gross profit

1,164

141

15

1,320

Gross margin (%)

47.8%

25.0%

10.1%

42.0%

Sales, general and administrative expenses

(125)

(23)

(15)

(163)

Other operating revenue (expenses) & eq. pick-up

(26)

(25)

-

(51)

Depreciation and amortization

407

148

28

583

EBITDA

1,420

241

28

1,689

EBITDA margin (%)

58.3%

42.8%

18.9%

53.7%

Earnings Release

1Q24

North Operation

Operational figures

1Q24

1Q23

Chg.%

Total transported volume (millions RTK)

13,298

12,566

5.8%

Agricultural products -Malha Norte, Paulista e Central

11,584

11,161

3.8%

Soybean

6,827

7,300

-6.5%

Soybean meal

2,311

1,957

18.1%

Corn

802

672

19.3%

Sugar

543

252

>100%

Fertilizers

1,101

982

12.1%

Industrial products - Malha Norte e Paulista

1,714

1,405

22.0%

Fuels

1,161

864

34.4%

Industrials

553

541

2.2%

Average transportation yield

165.2

134.0

23.2%

The transported volumes in North Operation totaled 13.3 billion RTK in 1Q24, a 6% growth over 1Q23. This result was mainly driven by higher volumes of soybean meal, fuel, sugar, fertilizers and corn, besides evidencing the improvement in traffic conditions in the Baixada Santista (SP) region, which curtailed circulation efficiency of trains heading to the Port of Santos in 1Q23.

Financial results

1Q24

1Q23

Chg.%

(Amounts in BRL mln)

Net revenue

2,435

1,825

33.4%

Transportation

2,196

1,684

30.4%

Logistic solution

217

90

>100%

Other revenues3

22

51

-56.9%

Costs of services

(1,271)

(1,088)

16.8%

Variable costs

(565)

(504)

12.1%

Fixed costs

(301)

(247)

21.9%

Depreciation and amortization

(405)

(337)

20.2%

Gross profit

1,164

737

57.9%

Gross margin (%)

47.8%

40.4%

18.4%

Sales, general and administrative expenses

(125)

(83)

50.6%

Other op. revenue (expenses) and equity pick-up

(26)

2

>100%

Depreciation and amortization

407

338

20.4%

EBITDA

1,420

994

42.9%

EBITDA margin (%)

58.3%

54.5%

7.1%

Note 3: It includes revenue from the pass-through fee of other highways, and revenue from volumes contracted and not executed according to commercial agreements (take-or-pay).

EBITDA totaled R$1,420 million in 1Q24, a 43% growth over 1Q23, with a 58% margin. This result reflects the key role of the railway in the transportation of agriculture commodities from the Brazilian Midwest region, fostering a 23% yield growth in the quarter, despite the 11% fuel price drop.

Given that revenue by logistics solution more than doubled in 1Q24, the increase in variable costs derives from the results of this operation in the quarter. Fixed costs, general and administrative expenses went up nearly R$96 million, mainly driven by the strengthening of structures and processes, aiming at supporting the Company's strategy of capacity expansion, efficiency gains, and risk management.

Earnings Release

1Q24

South Operation

Operational figures

1Q24

1Q23

Chg.%

Transported volume (million RTK)

3,127

2,735

14.3%

Agricultural products

2,466

2,070

19.1%

Soybean

1,284

846

51.8%

Soybean meal

189

198

-4.5%

Corn

256

475

-46.1%

Sugar

511

288

77.5%

Fertilizers

50

32

56.3%

Other

176

232

-24.1%

Industrial products

661

665

-0.6%

Fuel

410

349

17.5%

Industrial

251

316

-20.6%

Average transportation yield

176.1

159.4

10.5%

South Operation transported 3.1 billion RTK in 1Q24, a 14% growth over 1Q23. The highlight in the quarter was the improvement in the soy, sugar and fertilizer portfolios, mainly in operations through Paranaguá and São Francisco do Sul ports.

Financial results

1Q24

1Q23

Chg.%

(Amounts in BRL mln)

Net operating revenue

563

450

25.1%

Transportation

551

436

26.4%

Other revenues4

12

13

-7.7%

Cost of services

(422)

(401)

5.2%

Variable costs

(119)

(123)

-3.3%

Fixed costs

(155)

(139)

11.5%

Depreciation and amortization

(148)

(140)

5.7%

Gross profit

141

48

>100%

Gross margin (%)

25.0%

10.7%

>100%

Sales, general and administrative expenses

(23)

(16)

43.8%

Other op. revenue (expenses) and equity pick-up

(25)

3

>100%

Depreciation and amortization

148

140

5.7%

EBITDA

241

175

37.7%

EBITDA margin (%)

42.8%

39.0%

9.8%

Note 4: It includes revenue from volumes contracted and not executed according to commercial agreements (take-or-pay).

EBITDA totaled R$241 million in 1Q24, up by 38% over 1Q23, with a 43% margin. This result was driven by a 11% growth in yields, despite the 17% fuel price drop, leading to flat variable costs in the period. Fixed costs, general and administrative expenses went up by 15%, given higher expenditures to support the Company's growth plan.

Earnings Release

1Q24

Container Operation

Operational figures

1Q24

1Q23

Chg.%

Total volume (Containers '000)

27,983

24,860

12.6%

Intermodal average yield (R$/000 RTK)

145.6

126.8

14.9%

Total volume (millions RTK)

968

828

16.9%

Container Operation's volume moved up 17%, totaling 968 million RTK in 1Q24. This result was driven by pulp and paper growth and was also affected by the Ortigueira terminal project maturity. We also highlight the expansion of the cotton exports market in Mato Grosso, contributing to higher cotton volumes when compared to 1Q23.

Financial results

1Q24

1Q23

Chg.%

(Amounts in BRL mln)

Net operating revenue

148

110

34.5%

Transportation

141

105

34.3%

Other revenues5

7

4

75.0%

Cost of services

(133)

(114)

16.7%

Variable costs

(75)

(62)

21.0%

Fixed costs

(30)

(29)

3.4%

Depreciation and amortization

(28)

(23)

21.7%

Gross profit (loss)

15

(5)

>100%

Gross margin (%)

10.1%

-4.4%

>100%

Seles, general and administrative expenses

(15)

(13)

15.4%

Other op. revenues (expenses) and equity pick-up

-

5

-100.0%

Depreciation and amortization

28

23

21.7%

EBITDA

28

11

>100%

EBITDA margin (%)

18.9%

10.3%

83.7%

Note 5: It includes revenue from service units.

Container Operation's EBITDA totaled R$28 million in 1Q24, with 19% EBITDA margin. This result reflects higher value-added cargo handling, such as cotton and ore. Variable costs increased by 21%, primarily inflated by operations in the foreign market, ore, and cotton, where railroad freight exposure is higher. Fixed costs, general and administrative expenses increased 7% in the quarter, due to inflation adjustment and higher spending with technology.

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Rumo SA published this content on 09 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 May 2024 22:14:37 UTC.