We ended Third Quarter 2024 With Net Profit of R$1 billion, an Increase of 24% Compared to Third Quarter 2023
- Consolidated global net revenue in the quarter was R$7.6 billion, on par with 3Q23, excluding the effects of foreign exchange rate variations.
- Adjusted EBITDA totaled R$2.2 billion, up 11% over the same period in 2023, excluding foreign exchange rate variations.
- EBITDA margin in the quarter was 29%, an increase of 3 percentage points compared to 3Q23.
- Our global cement sales totaled 10 million tonnes, up 3% compared to third quarter 2023.
- Investments (Capex) in the quarter increased 22%, in line with our strategy of accelerating investments in structural competitiveness.
- Fitch Ratings upgraded Votorantim Cimentos’ global credit profile rating from BBB- to BBB, with a stable outlook.
- In the third quarter, we issued R$1.1 billion in debentures in the domestic market, in a single series maturing in 2031 and at a rate of CDI +0.58% per year.
- In July, we signed an agreement for the full sale of our assets located in Tunisia.
- In September, we signed an agreement for the full sale of the shares of our subsidiary that holds all assets located in Morocco.
- The completion of the transactions in Tunisia and Morocco are subject to certain condition precedents. During the assessment of the transactions, all Votorantim Cimentos plants and offices in the two countries will continue to operate normally.
We ended the third quarter of 2024 with a net profit of R$1 billion, a 24% increase compared to R$824 million in the same period last year, primarily due to better operating results.
Our global net revenue in the quarter totaled R$7.6 billion, on par with 3Q23, excluding foreign exchange rate variations. This result was primarily due to positive performance in countries in Europe and Asia, and stability in Brazil, which offset the results in North America and Latin America. Our global cement sales in 3Q24 totaled 10 million tonnes, up 3% compared to the same period last year.
Consolidated adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was R$2.2 billion in the third quarter of 2024, up 11% compared to 3Q23 in local currency. The increase resulted mostly from the balanced portfolio, especially with regard to operating results in Europe and Asia, operational efficiency combined with lower variable costs. The EBITDA margin in the period was 29%, up 3 percentage points over 3Q23.
“Votorantim Cimentos posted record operating results in the quarter, with significant margin growth, as a result of our diversification and higher sales volumes. In line with our strategic mandate and comprehensive growth and structural competitiveness program, we increased our investment in the quarter to further strengthen our operations, especially in Brazil, without compromising our financial discipline,” said Osvaldo Ayres, our global CEO.
Our investments (Capex) in the third quarter totaled R$635 million, 22% higher than in 3Q23. This increase was primarily driven by our global strategy of investing in modernization and structural competitiveness, in addition to projects linked to its decarbonization commitments. The previously announced R$5 billion investment plan in Brazil continues to be implemented.
We ended 3Q24 with leverage (measured by the net debt/adjusted EBITDA ratio) of 1.76x, up 0.16 compared to 3Q23, considering only continuing operations. This increase was due to foreign exchange rate variations, which were partially offset by improved operating results.
In September, Fitch Ratings upgraded Votorantim Cimentos’ global credit rating from BBB- to BBB, with a stable outlook, reaffirming the company’s investment grade rating.
“Votorantim Cimentos continues to advance its investments in structural competitiveness, decarbonization and new businesses, maintaining financial discipline, as reflected in the upgrade of Fitch’s credit rating. We have also maintained strong liquidity, with a cash position of R$5 billion, which gives us financial flexibility to execute our strategic mandate,” said Antonio Pelicano, our global CFO.
Taking advantage of good market conditions in the third quarter, we issued R$1.1 billion in debentures in the domestic market, in a single series maturing in 2031 at a rate of CDI +0.58% per year. We used the funds to pay off loans with shorter maturities and higher costs ahead of schedule.
In July, we signed an agreement for the full sale of our assets in Tunisia. The completion of the transaction, including the effective transfer of operations in the country and the payment of proceeds, is subject to customary condition precedents.
In September, we signed an agreement for the full sale of the shares of our subsidiary that holds all assets in Morocco. The completion of the transaction, including the effective transfer of the assets in the country and the financial settlement, is subject to customary condition precedents for this type of transaction, including approval by the Moroccan competition authority.
The decision to divest in Tunisia and Morocco is in line with our strategy of maximizing value for our shareholders and balancing its geographic distribution between mature and emerging markets, optimizing the risk management of our established portfolio. During the assessment of the transactions, all Votorantim Cimentos plants and offices in the two countries will continue to operate normally.
Performance by Region
In Brazil, our net revenue was R$3.5 billion in 3Q24, on par with the same period last year. Adjusted EBITDA in the quarter was R$848 million, up 5% compared to 3Q23, due to lower variable costs and higher sales volume, resulting in margin growth in the quarter. The National Cement Industry Union (SNIC) revised its 2024 year-end growth expectation for the sector to 2.8%, from 1.4% in 2023.
In North America, net revenue totaled R$2.6 billion in the third quarter of 2024, a slight decrease of 1% compared to 3Q23, excluding foreign exchange rate variations, due to a market slowdown, which was partially offset by higher prices. Adjusted EBITDA in the region was R$923 million, up 8% in local currency compared to 3Q23, driven by improved margins and the sale of property from the concrete business.
In Europe and Asia, net revenue in 3Q24 was up 10% compared to 3Q23, totaling R$1.1 billion, excluding foreign exchange rate variations. The increase resulted from higher sales volume and positive price dynamics, both in Spain and Turkey. Adjusted EBITDA in the region was R$332 million, up 59% compared to the same period last year in local currency. The positive operating result was due to market dynamics and lower variable costs. As Tunisia and Morocco are now classified as discontinued operations, the consolidated information does not include the results of these countries. Dividends received from these operations are included as part of adjusted EBITDA from continuing operations.
We announced the launch of Blenture, a new cement and concrete brand in the Iberian Peninsula (Portugal and Spain), designed to reduce CO2 emissions and support more sustainable construction. Blenture is the result of a significant investment in research and development. It is in line with our sustainability commitments and decarbonization strategy, which is based on process efficiency, the use of recycled raw materials and the consumption of non-fossil fuels to support a circular economy and the use of renewable energy. Blenture cement and concrete offer competitive solutions for many applications, with the same quality, resistance and performance, combined with a 30% reduction in carbon footprint.
In Latin America, net revenue in the third quarter was R$244 million, down 6% compared to 3Q23 in local currency, due to market conditions in both Uruguay and Bolivia. Adjusted EBITDA in the region was R$62 million in 3Q24, up 18% compared to the same period last year, excluding foreign exchange rate variations. The increase was due to the sale of an asset in Uruguay, which offset the negative results driven by challenging market dynamics.