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• Adjusted EBITDA: BRL2.2 billion, up 22% year-over-year.

• Adjusted Net Income: BRL794 million, marking the best quarterly result.

• Financial Leverage Ratio: 1.4 times, a decrease from previous quarters.

• Transported Volume Growth: 2% increase, totaling 21.7 billion RTK.

• Financial Result: BRL575 million for the quarter.

• Cash Position: BRL9 billion in cash.

• Investments: BRL1.5 billion, with BRL455 million in recurring investments, BRL484 million in Mato Grosso expansion, and BRL529 million in other projects.

• Local Debentures Issuance: BRL800 million with 12 years maturity at 98% of the CDI.

• Early Redemption: BRL750 million originally due in October 2027 at 112% of the CDI.

• Warning! GuruFocus has detected 4 Warning Signs with BSP:RAIL3.

Release Date: November 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Rumo SA (BSP:RAIL3) achieved a record quarterly adjusted EBITDA of BRL2.2 billion, marking a 22% increase year-over-year.

• The company reported an adjusted net income of BRL794 million, the best quarterly result to date.

• Rumo SA successfully reduced its financial leverage ratio to 1.4 times, indicating a strong deleveraging trend.

• The Mato Grosso Greenfield Railway project is progressing well, with accelerated disbursements due to physical construction advancements.

• Rumo SA increased its market share in key regions, including Mato Grosso and Goias, and ports such as Santos, Paranagua, and Sao Francisco do Sul.

Negative Points

• The southern operation experienced a volume decline due to extreme weather events in May, impacting overall performance.

• The Tronco Sul railway segment remains indefinitely suspended, affecting operational capacity.

• Despite improvements, the transit time for the northern operation still stands at 82 hours, indicating room for further efficiency gains.

• The company faces challenges in fully executing its CapEx plans for the Lucas do Rio Verde project, with current execution levels not meeting past expectations.

• Rumo SA's operations are subject to fluctuations due to climate effects, which can impact project timelines and operational efficiency.

Q & A Highlights

Q: Should we consider the current CapEx level for the Lucas do Rio Verde project as full-speed execution, and what is the update on the project's progress? A: Pedro Palma, CEO, explained that the current CapEx execution pace is expected to continue in the coming quarters, with full mobilization and work fronts advancing well. The project is on track to be completed by the end of 2026, with further advancements in terminal construction expected in 2025 and 2026.