CBA posts net profit of R$ 89 million in 1Q23

Sales volumes remain flat in the period   Summary financials - 1Q23 vs 1Q22Profit of R$ 89 million compared with net income of R$ 426 million in 1Q22 (-79%)Aluminum sales volume of 106,000 metric tons (-3% vs 1Q22)Net revenue of R$ 1.9 billion (-16% vs. 1Q22)Net revenue from aluminum sales of R$ 1.8 billion (-18% vs. 1Q22)Average aluminum price on the LME (London Metal Exchange) of USD 2,395/metric ton (-27% vs. 1Q22)Diversification of renewable energy sources, with 10% coming from wind farmsSale of Niquelândia plant - shifting focus to aluminumMSCI ESG AA Rating   Companhia Brasileira de Alumínio (CBAV3) posted a net profit of R$ 89 million in the first quarter of 2023, compared to R$ 426 million in 1Q22. The variance is mainly due to the lower net revenue, in contrast with the higher cost of goods sold in the compared periods. In 4Q22 the company reported a net loss of R$ 80 million.   Other operating results also showed fluctuations, both compared to 1Q22 and 4Q22, due to the reversal of a liability from the sale of the Niquelândia Plant amounting to R$ 121 million, and recognition of the first sale of carbon credits through the REDD+ project in the Brazilian Cerrado.   The volume of aluminum sales remained stable during the period (-3%) compared to 1Q22, totaling 106,000 tons. Despite immediate uncertainties, aluminum demand in Brazil proved resilient in the first quarter of 2023, driven by the transportation and packaging segments (excluding cans).   The consolidated net revenue of R$ 1.9 billion achieved in the first three months of the year decreased by 16% compared to the same period last year but remained stable compared to the fourth quarter of 2022. Net revenue from the aluminum business was R$ 1.8 billion in 1Q23, an 18% reduction on the same period of the previous year and 5% on 4Q22. Compared to 1Q22, the main effect is mainly due to a 73% reduction in the average aluminum price on the LME between the compared periods.   Aluminum prices maintained their volatility in recent months, with the average for the period at USD 2,395/ton, a 27% decrease compared to the same period last year. Following a spike in January, at the end of March LME prices recovered slightly as international markets stabilized and China’s economic prospects improved.   In CBA's specific operational performance situation, the Company was impacted by a gradual worsening of the quality of coke and coal-tar pitch used in the production of anodic paste suitable for the aluminum production process. The production volume contracted by 9% this quarter compared to 4Q22. Operational stabilization is currently in progress.   Moreover, the Company has already noticed the slight easing of costs of some of the main inputs for aluminum production in the industry, triggering a reduction in production costs in the first quarter of 2023 compared to the last quarter of 2022.  It should be noted that even in a challenging short-term situation, CBA remained in the first quartile of the global cost curve in the first quartile of 2023.   Focusing on aluminum - The Company also progressed in its strategic plan, with the aim of reinforcing its focus on the core business of the aluminum industry. In April, CBA signed the contract for the sale of the Niquelândia Plant in Goiás state, including the nickel mine and processing plant. Last year, the Company had already sold the São Miguel Paulista refinery, and is now permanently pulling out of nickel.   CBA has also taken an important step this year in diversifying its renewable energy sources. On-site generation in the first quarter of 2023 was 18% higher than the volume in the same period of 2022 and 15% higher than the volume recorded in 4Q22. In addition to larger rainfall volumes during the period, the performance was boosted by the start of operations of the Ventos de Santo Anselmo and Ventos de Santo Isidoro wind complexes, which provide 10% of CBA's total energy generation capacity.   Regarding the ESG agenda, the company continued to make progress in the first quarter, achieving another milestone: an AA rating in MSCI ESG Ratings, an upgrade on its A rating in 2022. For further information please see: https://ri.cba.com.br/   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$ 8.8 billion in 2022 and R$ 1.6 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 www.cba.com.br   Press Office - CBA - 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