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- Global net revenue was R$ 7.4 billion in 3Q23, down 3% on 3Q22. In the first 9 months of 2023, the company recorded a 4% increase in net revenue;
- Adjusted EBITDA totaled R$ 1.9 billion, an increase of 9% over the same period in 2022;
- EBITDA margin in the period was 26%, an increase of 3 p.p. compared to 3Q22;
- The leverage ratio, measured by the net debt/adjusted EBITDA ratio, closed the third quarter at 1.50x, a reduction of 0.14x and 0.26x compared to 2Q23 and 3Q22, respectively;
- Fitch Ratings reaffirmed Votorantim Cimentos’ credit rating at “BBB-” and raised the outlook from “stable” to “positive”;
- In Brazil, EBITDA from adjacent businesses grew 53% in 3Q23 compared to the same period in 2022.
Votorantim Cimentos, a construction materials and sustainable solutions company, ended the third quarter of 2023 with a net profit of R$ 824 million, an increase of 36% compared to the income of R$ 604 million obtained in the same period last year. The company had overall net revenue of R$ 7.4 billion in the quarter, down 3% on 3Q22, mainly due to market dynamics and the negative impact of the appreciation of the Real. In the third quarter of 2023, the company’s global cement sales totaled 10.3 million tons, an increase of 1% compared to the same period last year.
“The positive income for both the third quarter and the first nine months of 2023 reinforce our operational leverage and the execution of our strategic mandate, with discipline and resilience. Despite the uncertain global macroeconomic scenario and market challenges, our geographic and product diversification improves the company’s ability to face challenges and be ready to capture good opportunities,” says the global CEO of Votorantim Cimentos, Osvaldo Ayres.
The consolidated adjusted EBITDA reached R$ 1.9 billion in the third quarter of 2023, an increase of 9% compared to the same period in 2022, due to better operating incomes combined with margin management. The EBITDA margin in the period was 26%, an increase of 3 percentage points on the third quarter of 2022.
Leverage, as measured by the net debt/adjusted EBITDA ratio, closed the third quarter of 2023 at 1.50x, already below the annual closing of 2022, in line with the improvement in operating performance. The income represents a reduction of 0.14x and 0.26x compared to 2Q23 and 3Q22, respectively.
In September, the risk rating agency Fitch Ratings reaffirmed Votorantim Cimentos’ global credit profile at “BBB-“, resulting in it being one of the few Brazilian companies to obtain the investment grade label from the three main agencies, and also raised the outlook from stable to positive.
“We closed the nine months of 2023 with a reduction in leverage, in line with the better operating income and cash generation in the period. Fitch’s credit rating upgrade reinforces our commitment to financial metrics and high liquidity,” says Votorantim Cimentos’ Global CFO, Bianca Nasser.
Performance by Region
In Brazil, Votorantim Cimentos’ net revenue was R$ 3.5 billion in 3Q23, a decrease of 5% compared to the same period last year. Adjusted EBITDA for the quarter was R$ 805 million, impacted by the market dynamics in the country. Cost reductions, mainly in pet coke and power, partially mitigated the operating income drop. In 2023, the company recorded a 5% increase in operating income compared to the same period in 2022. In addition, the operating income of adjacent businesses also contributed positively, posting 53% growth in the third quarter compared to the same period in 2022.
In North America, net revenue reached R$ 2.3 billion in the third quarter of 2023, a 7% slowdown compared to 3Q22, but with a 5% growth in consolidated 2023 compared to the same period in 2022. The price dynamics in the year partially mitigated the cooling of the market and the negative impact of the exchange rate variation in the period. Net revenue in North America was stable in local currency. Adjusted EBITDA in the region was R$ 753 million, up 7% on 3Q22, a result mainly due to price management.
In Europe, Asia and Africa, net revenue increased 31% in 3Q23 compared to 3Q22, reaching R$ 1.2 billion. The positive income is mainly explained by the market recovery in Turkey, which recorded growth in sales volume and positive price dynamics, and in Spain, with the full integration of the new plant in Malaga, an acquisition completed in November 2022. The region’s adjusted EBITDA was R$ 256 million in the quarter, up 50% on the same period last year, as a result of the positive market dynamics in the region, as well as the synergies already captured with the acquisitions made in Spain and the reduction in costs, mainly fuel, energy and freight.
In Latin America, net revenue in the third quarter of the year was R$ 239 million, an increase of 11% compared to the same period in 2022. The positive income was due to better market dynamics in Uruguay and favorable demand in Bolivia. Adjusted EBITDA in the region was R$ 47 million in 3Q23, an increase of 21% compared to the same period last year. In addition to the improvement in the market, the Uruguayan operation was also positively impacted by the capture of operational synergies with the unification of industrial activities in the city of Minas. In Bolivia, positive demand combined with costs reduction was enough to overcome challenging price dynamics.