EARNINGS RELEASE 2Q23

Curitiba, August 10, 2023 - RUMO S.A. (B3: RAIL3) ("Rumo") announces today its results for the second quarter of 2023 (2Q23). The results are presented on a consolidated basis, in accordance with Brazilian and international accounting rules (IFRS). The comparisons made in this report consider 2Q23 and 2Q22, except when otherwise indicated.

Highlights

  • Rumo's transported volume reached 20.4 billion RTK, up 9% from 2Q22.
  • Consolidated yield increased by 9%, as a result of the higher competitiveness of the railway, despite the 29% fuel price drop.
  • EBITDA totaled R$1,448 million in 2Q23, a 29% growth on a like-for-like basis1.
  • Net income came to R$167 million, fueled by higher volumes and margins versus 2Q22.
  • Financial leverage was 2.0x net debt/LTM like-for-like EBITDA.
  • Capex totaled R$693 million in 2Q23.

2Q23

2Q22

Chg.%

Summary of financial information

(Amounts in BRL mln)

20,388

18,633

9.4%

Total transported volume (millions RTK)

6M23 6M22 Chg.%

36,517 36,741 -0.6%

1,332

1,288

3.4%

Logistics solution volume

2,095

2,525

-17.0%

2,763

2,465

12.1%

Net revenue1

5,147

4,671

10.2%

(1,691)

(1,658)

2.0%

Cost of goods sold

(3,295)

(3,231)

2.0%

1,072

807

32.8%

Gross profit

1,852

1,440

28.6%

38.8%

32.7%

6.0 p.p.

Gross margin (%)

36.0%

30.8%

5.2 p.p.

(129)

(110)

17.5%

Sales, general and administrative expenses

(241)

(217)

11.2%

(54)

(30)

81.3%

Other op. revenues (expenses)

(45)

(85)

-46.3%

21

8

>100%

Equity pick-up

22

15

46.7%

909

675

34.7%

Operational profit

1,588

1,154

37.6%

538

523

2.9%

Depreciation and amortization

1,040

1,046

-0.5%

1,448

1,198

20.9%

EBITDA

2,628

2,200

19.5%

52.4%

48.6%

3.8 p.p.

EBITDA margin (%)

51.1%

47.1%

4.0 p.p.

167

30

>100%

Net profit (loss)

238

(38)

>100%

6.1%

1.2%

4.8 p.p.

Net margin (%)

4.6%

-0.8%

5.4 p.p.

693

678

2.3%

Capex

1,621

1,370

18.4%

Earnings Conference Call

August 11, 2023

Investor Relations

E-mail: ir@rumolog.com

Portuguese* - 2:00 p.m. (Brasília time)

Website: ri.rumolog.com

*With simultaneous translation to English

Phone (BR): + 55 (11) 4090 - 1621

+55 (11) 3181 - 8565

Password: RUMO

1 Rumo sold 80% of equity interest in Elevações Portuárias S.A. (Terminals T16 and T19 in Santos) in 4Q22. The result on a like-for-like basis considers a managerial adjustment in 2Q22 (-R$72 million) referring to EBITDA exclusion from Elevações Portuárias and inclusion of Equity Income from Investments (20% of net income).

Público

Earnings Release

2Q23

1. 2Q23 Executive Summary

In 2Q23, Rumo's transported volume reached 20.4 billion RTK, up 9% from 2Q22, mainly fueled by favorable momentum of logistics service providers, with robust demand for the transportation of agricultural commodities. Performance also evidences a gradual recovery of safety and traffic conditions in the Baixada Santista (SP) region compared to the first quarter of 2023. The transported volume growth in key agricultural commodities, soybean, sugar and fertilizers came up 27%, 26%, and 19%, respectively.

Volume - Consolidated and by Operation

(Bln RTK)

+9%

+7%

20.4

18.6

15.1

16.1

+27%

2.7 3.4

+1%

0.9 0.9

Consolidated

North

South

Container

2Q22 2Q23

Rumo's transported volume heading to the Port of Santos increased 7.5%, while market figures grew 17.3%, resulting in a 48.4% grain exports market share at the Port of Santos in 2Q23. Market share decline reflected a higher level of overflow in the railway terminals operated by Rumo, with surplus demand of an upbeat market directed to alternative railways´ and road transportation terminals.

52.8%

15.2

6.1

1.9

2Q22

Grain Exports in Santos - SP

(Mm tons and %)

-4.4 p.p.

+17.3%

+1.1%

+29.3%

48.4%

17.8

6.2

2.4

2Q23

Central Network

North Network

Market

Source: Orion and Rumo System.

Público

Earnings Release

2Q23

Grains in the state of Mato Grosso transported by Rumo heading to the Port of Santos moved up 7% versus 2Q22. Part of the demand in the quarter was transported by alternative logistics solutions, driving a 2.3 p.p. lower market share in the state of Mato Grosso in 2Q23.

43.6%

Grain Exports in MT

(Mm tons and %)

-2.3 p.p.

41.3%

17.2

15.3+12.6%

+6.6%

6.7

7.1

2Q22

2Q23

Rumo

Market

Source: Orion, Comex Stat, and Rumo System.

Goiás' grains exports advanced by 10% compared to the same period last year, evidencing the Malha Central competitiveness to serve such market. Rumo's market share came in line at 23.6% in this state.

Grain Exports in GO

(Mm tons and %)

23.7%

5.0

-0.1 p.p.

+10.5%

+10%

23.6%

5.5

1.2

1.3

2Q22

2Q23

Rumo

Market

Source: Orion, Comex Stat, and Rumo System.

The South Operation gained 4.1 p.p. grains market share at the ports of Paranaguá (PR) and São Francisco do Sul (SC), primarily driven by the higher competitiveness of the railway mode amid the stronger demand in the logistics market compared to the crop failure in 2022, besides a positive performance seen in the state of Mato Grosso do Sul.

Público

Earnings Release

2Q23

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

(Mm tons and %)

23.2%

6.8

+4.1 p.p.

+39.1%

27.3%

9.5

+58.6%

1.6

2.5

2Q22

2Q23

Rumo

Market

Source: Orion and Rumo System.

In 2Q23, net revenue totaled R$2,763 million, a 12% year-on-year growth across all operations, 7% in the

North Operation, 35% in the South Operation, and 18% in the Containers Operation. The result was driven by higher volumes and yields versus 2Q22.

EBITDA totaled R$1,448 million, with an EBITDA margin of 52.4%. On a like-for-like basis, considering the sale of terminals T16 and T19 in 4Q22, growth stood at 29%. The variable cost went down 8%, mainly reflecting a 29% fuel price drop. Fixed costs and general and administrative expenses were impacted by approximately R$ 40 million in expenditures to remedy public security events that occurred in 1Q23, such as collection and disposal of product waste and ballast cleaning, on top of maintenance works carried out on the railway.

Rumo posted net income of R$167 million. Financial leverage came at 2.0x, and comprehensive debt of R$9.6 billion.

Regarding the soybean 2022/23 crop, specialized consultancies' projections still indicate a record harvest in Brazil of 156 million tons, while 95 million should be exported. With regards to commercialization, +100 million tons have already been sold, and the farmer selling stood at 76% by the end of July, virtually in line with the previous crop. Concerning the 23/24 crop, preliminary estimates signal planted area growth, between 1 and 2 million hectares, proportional to a 4% growth, resulting in a crop primarily estimated at nearly 163 million tons.

With respect to the 22/23 corn crop, specialized consultancies' projections indicate a record harvest of 132 million tons in Brazil and exports of approximately 49 million tons. The states of Mato Grosso and Goiás should produce nearly 52 and 18 million tons, and 29 and 4 million tons, respectively, should be exported. In the states of Mato Grosso do Sul and Paraná, production should reach 13 and 18 million tons, respectively. While in the states of Mato Grosso and Goiás harvest is slightly ahead of the last five-year average, in the states of Mato Grosso do Sul and Paraná, harvest still stands at its early stage, behind the long-term average. Commercialization in Brazil's Mid-South region was close to 50% in July, slightly ahead of 2022 figures.

Público

Earnings Release

2Q23

Brazil's Soybean Production and Exports

Brazil's Corn Production and Exports

(Mm tons)

(Mm tons)

+21.4%

-6.7%

156

138

129

Crop

+22.0%

Disruption

-10.3%

20/21

87

95

78

37

25

41

26

45

28

+6.6%

87

+35.7%

118

131

+10.2%

+115.3%

49

44

21

42

50

33

26

29

16

20/21

21/22

22/23e

20/2120/21

21/22

22/23e

20/21

21/22

22/23e

21/22

22/23e

Prod

Prod

Prod

Prod

Prod

Prod

MT Production

Other states production

MT Exports

Other States Exports

Source: IM Rumo /AG Rural / Veeries / Orion / Comex Stat/ IMEA | Note: (e) - estimate

Rumo remains committed and recorded advances in its environmental, social, and governance (ESG) agenda.

In 2Q23, Rumo wrapped up reports on relevant sustainability indexes, such as i) the Corporate Sustainability Assessment (CSA), related to Dow Jones Sustainability Index, a key global sustainability index; ii) Financial Times Stock Exchange (FTSE4Good) - London Stock Exchange ESG index; iii) Global Compact's Communication on Progress (COP)- since 2020, Rumo has been a signatory of the UN Global Compact, and it is committed to implementing the Global Compact 10 Principles in its business strategies and daily operations; iv) also sent an annual report on the monitoring and progress of goals and actions related to its adhesion to Biodiversity and Water Safety Commitments of the Brazilian Business Council for Sustainable Development (CEBDS).

In addition, Rumo was recognized with the improvement in its score by the Sustainalytics ESG Risk Rating, going down from 28.77 to 27.8 (standing at the average risk) and the Institutional Shareholder Services (ISS ESG) - wherein it received the Prime rating, bestowed to businesses leading in their sector, and meeting demanding sustainability performance expectations. Also, Rumo was awarded by Exame's 'Best ESG Companies' ranking, standing among the top three outstanding companies in the Transportation & Logistics sector in Brazil.

Público

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Rumo SA published this content on 10 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 August 2023 22:05:07 UTC.