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CBA enjoys a positive quarter with net income of R$ 100 million



Summary financials – 2Q22 vs 2Q21
  • Adjusted EBITDA of R$ 331 million (+5% vs. 2Q21)
  • Net income of R$ 100 million (vs. loss of R$ 41 million in 3Q21)
  • Aluminum sales volume of 129,000 metric tons (+4% vs 3Q21)
  • Adjusted EBITDA margin of 15% (+1 p.p. vs. 3Q21)
 São Paulo, November 09, 2022 – Companhia Brasileira de Alumínio (CBAV3) reported net income of R$ 100 million in the third quarter of 2022, compared with a loss of R$ 41 million in the same period last year. CBA sold 129,000 metric tons of aluminum in 3Q22, up 4% on 3Q21. The adjusted EBITDA also rose by 5% in the compared periods, from R$ 314 million in 3Q21 to R$ 331 million in 3Q22, with EBITDA margins in the respective periods of 14% and 15%, bolstering our healthy financial performance, despite the ongoing global macroeconomic uncertainties in 3Q22, driving down aluminum prices on the LME (-11% vs. 3Q21). Consolidated net revenue of R$ 2.2 billion, just shy (-2%) of the R$ 2.3 billion reported in the third quarter last year. Aluminum sales in the quarter were spurred by the primary and recycling sectors.  Primary segment net revenue rose by 6% in 3Q22 compared with 3Q21, due to the 4% increase in the sales volume and also the average premium for primary products in the compared periods. In recycling, the sales volume was 30,000 metric tons in 3Q22, an increase of 34% on the volume in 3Q21, owing to the integration of Alux, which contributed 7,000 metric tons in the quarter. The increase on 2Q22 was 20%, due to the thriving do-it-yourself construction market, driving sales of Metalex’s recycled billets, as well as the positive performance of the automotive and motorcycle market, the main recipients of Alux’s products. In comparison with 2Q22, downstream sales rose by 5%, from 32,000 metric tons to 34,000 metric tons, driven by sales of packaging foils and transportation sheet. The civil construction and consumer goods sectors presented marginal growth in the period. The downstream volume contracted by 12% compared to 3Q21, amassing sales of 34,000 metric tons in the quarter. The main driver behind the decrease was the lower volume of sales to the consumer goods sector, in which aluminum is used to produce household appliances, bicycles, ladders, parasols, deckchairs and other products. Lower cookware consumption in the sector significantly impacted the volume of sheet sold, although the performance continues to outperform the pre-pandemic levels. The sale of pans rose sharply during the pandemic due to changing consumer habits. There was also an 18% reduction in the volume of extruded products in the compared periods, although profitability improved due to the greater contribution by products in the new Primora line. Furthermore, in downstream products the sales of foil also rose to certain packaging subsegments such as flexible packaging (e.g.: coffee packaging, sauce sachets, candies, juice sachets) and aseptic packaging (e.g. milk, juice and yogurt cartons). Given the three packaging markets it operates in (HHF, aseptic and flexible), CBA outgrew the market, primarily due to its higher market share in aseptic products compared with 2Q22. We emphasize that CBA’s market-share in the packaging sector (excluding cans) has been growing since 2019. Global Market and Brazil – Global primary aluminum consumption was up 0.6% in 3Q22 compared to 2Q22, led primarily by China, where exports have been higher than average and the transportation and energy sectors have performed well. Aluminum production rose by 2.2% on 2Q22 and 4.1% on 3Q21, led primarily by China as previously curtailed operations came back online. In Brazil, aluminum demand in 3Q22 remained at healthy levels exceeding those of the previous quarter, reflecting a moderate seasonal effect in the second half of the year. Year on year, aluminum demand remained virtually flat. It is important to note that aluminum consumption recorded two-digit growth across most segments in 2021 as industrial activity resumed after Covid-19 restrictions were lifted.   Long-term strategy In line with CBA’s growth strategy, the reconnection of Pot Room 3 was scheduled for 3Q22, increasing the molten aluminum production capacity by 30,000 metric tons a year. The sale of the São Miguel Paulista nickel refinery was also concluded this quarter, in line with the Company’s objective of maintaining its focus on the core aluminum business. CBA is looking into alternatives for its other nickel assets. A milestone for CBA in the quarter was the launching of the CBAV3 share on the B3 IBrX100 index just one year after the IPO. This index reports the average performance of the 100 most traded assets in the Brazilian stock market. ESG agenda The main ESG news this quarter was the announcement of a new issuance of Cerrado carbon credits via the REDD+ Cerrado program, by CBA and Reservas Votorantim. The program covers 11,500 hectares of land yielding an average of 50,000 carbon credits per year. The first issuance generated 316,000 carbon credits for the period 2017 to 2021, now available for sale via auction. In addition, CBA has joined other companies in different industries to create the “Brazilian Voluntary Carbon Market Initiative”. The program, led by McKinsey & Company, will implement actions to develop a voluntary carbon market in Brazil and help to build a high-integrity carbon credit market globally. Among the key deliverables from the program are practical measures to address the biggest barriers to the carbon market, including mechanisms to activate high-integrity supply and demand and general governance measures. In relation to diversity indicators, in 3Q22, CBA reported 16.7% women at the company, versus 16.4% in the previous quarter. This figure is 21% for leadership, compared with 20% in 2Q22. One of the initiatives is the free technical training course for women, administered by CBA in partnership with SENAI, with a view to helping women enter and work in industry.   Our Governance highlight was the creation of a Finances Committee, consisting of 3 members, including an independent member, all with proven expertise in the field. The Committee is responsible for advising the Board of Directors on financial matters.   Also this quarter, CBA has joined the Leadership with ImPact Program in Brazil of the UN’s Global Compact, which aims to attract, engage, raise awareness of and empower business leaders to expedite delivery of the SDGs (Sustainable Development Goals), established by the United Nations (UN), through 2030. The CBA CEO, Ricardo Carvalho, is joining the group of other leaders and CEOs who are changing the way of thinking and doing business in their companies, aligning their managerial and operational practices with Global Goals. After a detailed selection of the Global Compact, Ricardo Carvalho was assigned the mission of being the spokesperson of the SDG 17 – Partnerships for the goals, which has the target of strengthening the means of implementation and revitalizing the global partnership for sustainable development. For further information please see:   About CBA   Founded in 1955, Companhia Brasileira de Alumínio – CBA is a vertically integrated producer, from cradle to gate. Able to generate 100% of energy consumed from renewable sources, CBA provides sustainable solutions for the packaging, transportation, automotive, civil construction and consumer goods sectors, as well as leading the recycling of industrial aluminum scrap.   Following its flotation in 2021 (CBAV3), it became the first Company in its segment to be traded on B3. With net revenue of R$ 8.4 billion in 2021 and R$ 1.5 billion in adjusted EBITDA in the period, CBA is committed to guaranteeing a supply of low-carbon aluminum in partnership with stakeholders, developing communities in its geographies and conserving biodiversity.   Would you like to know more? Go to CBA Press Office – Agência Fato Relevante[email protected]Giulia Castro – [email protected] | (11) 9.7575-0225 Nayana Arruda – [email protected] | (21) 9.9932-9732 Cleide Rodriguez – [email protected] | (11) 9.9935-0102 Marcos Viesi – [email protected] | (11) 9.7642-3998 Fernando Rubino – [email protected] | (11) 9.8268-2838

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