Strong EBITDA growth in the middle of surgical …

Appearance date: May 15, 2025

You can find the complete copy of the earnings call in the complete earnings call.

• Equatorial SA (Equey) recorded an increase in adjusted EBITDA by 14.5% and reached 2.9 billion, which contradicts the strong financial performance.

• The company achieved a cutting of costs, with the adjusted PMSO decreasing by almost 4% in the quarter.

• Investments rose by 34% compared to the first quarter of 2024 and focused on the distribution segment.

• Equatorial SA (Equey) kept net debt with EBITDA ratio of 3.2 -fold and showed a slight improvement compared to the previous year.

• The company achieved compliance with quality indicators for four out of seven distributors with significant improvements in the DEC and FEC metrics.

• Due to deconsolidation and other effects, the transmission segment recorded a decline in regulatory EBIT by 13.3%.

• Despite improvements, Rio Grande Do Sul remains above the regulatory level, which indicates the ongoing challenges in quality conformity.

• The company has a competitive environment in the Sanitation segment, which may have an impact on future growth opportunities.

• The interest rates are at a top value, which could affect the leverage and the financial flexibility of the company.

• The company is still working on reducing losses and improving quality indicators in some regions, which indicates the ongoing operational challenges.

Q: We have seen a solid PMSO cost output in the sales segment, especially in the concessions acquired in recent years such as Goyas and Rio Grande do Sul. How high will the company cost of the costs in the future? A: Augusto Miranda da Paz, CEO: We focused on aligning our PMSO on quality, especially in Goyas, where quality was an important problem. Despite the high PMSO for consumers, we have made progress in terms of quality and cost management. There is a strong recovery plan in Rio Grande Do Sul, and if the events stabilize, we expect further improvements.

Q: What are the company's expectations of the next steps in the sanitary segment in the face of the competitive environment in the latest tenders? A: Augusto Miranda da Paz, CEO: We see significant possibilities in the sanitation segment and have a committed team that explores these opportunities. We strive to pursue growth in this area and at the same time maintain a strategic approach.

Q: With the proceeds from sales with transfer, is your target attempt for the next year and is there space to expand investments in sales companies? A: Augusto Miranda da Paz, CEO: The use of proceeds is discussed, with options such as debt reduction, M&A, share buyback or dividends. Depending on the interest rates, we strive for a lever destination by 3 or below. We have space to maneuver and will act responsibly.