Minerva Q3 2025 slides reveal strong EBITDA growth and successful deleveraging

Introduction & Market Context

Minerva SA/Brazil (BEEF3) presented its third quarter 2025 results on November 6, showcasing substantial financial growth despite facing market headwinds. The company reported significant revenue and earnings beats, with net revenue reaching R$15.5 billion, representing an 82% year-over-year increase.

Despite these strong results, Minerva’s stock fell 10.24% following the announcement, closing at R$6.66, reflecting broader market concerns about global beef supply constraints and potential regulatory impacts in key markets like China.

Quarterly Performance Highlights

Minerva delivered exceptional financial results for Q3 2025, with gross revenue of R$16.3 billion and net revenue of R$15.5 billion. The company achieved an EBITDA of R$1,388.3 million, representing a 71% increase compared to the same period last year, while maintaining a healthy EBITDA margin of 8.9%.

As shown in the following financial and operating highlights from the presentation:

The company reported a net profit of R$120.0 million for Q3 2025 and R$763.3 million for the first nine months of 2025. Notably, Minerva generated a record free cash flow of R$2,461.5 billion in the quarter, significantly strengthening its financial position.

The quarterly performance shows consistent growth trends across key metrics when compared to previous periods:

New Assets Integration

A significant driver of Minerva’s growth has been the successful integration of new assets acquired from Marfrig South America. These assets contributed R$3,762 million to the company’s net revenue in Q3 2025, representing approximately 24% of total net revenue.

The normalized performance of these new assets shows an EBITDA of R$387.6 million for the quarter (R$1,550.4 million annualized) with a 9.0% EBITDA margin, demonstrating successful operational integration.

The following chart illustrates the progressive contribution of new assets to Minerva’s performance:

Geographic Diversification

Minerva’s geographic diversification strategy continues to be a key strength, with operations spanning across Brazil, Argentina, Uruguay, Paraguay, Colombia, Australia, and Chile. Exports accounted for 61% of gross revenue in Q3 2025, highlighting the company’s strong international presence.

The breakdown of exports and revenue by destination shows Minerva’s global reach:

Brazil remains the dominant source of revenue, accounting for 62% of gross revenue in Q3 2025, followed by Paraguay and Uruguay at 10% each. This geographic diversification helps Minerva mitigate regional risks and capitalize on various market opportunities.

Financial Position & Debt Management

Minerva has made significant progress in strengthening its financial position, reducing its net debt to EBITDA ratio from 3.16x in Q2 2025 to 2.5x in Q3 2025. This deleveraging was primarily driven by strong free cash flow generation and effective working capital management, including an inventory reduction of R$1,586 million.

The company’s leverage reduction trajectory is illustrated in the following chart:

The strong free cash flow of R$2,461 million for the quarter was achieved through a combination of solid EBITDA performance and significant working capital improvements:

Minerva maintains a robust liquidity position with a cash balance of R$14.9 billion and a well-structured debt maturity profile with an average duration of approximately 4.2 years. The company also completed a R$2.0 billion debenture issuance in July 2025 and executed a bond buyback of USD 75.7 million, further optimizing its capital structure.

Forward Outlook & Challenges

While Minerva’s Q3 2025 results demonstrate strong operational execution and financial discipline, the company faces several challenges moving forward. Global beef supply constraints, regulatory changes in China, and challenges in the US market due to a depleted cattle herd could impact future performance.

The company’s continued focus on sustainability initiatives, including its traceability program and carbon projects, positions it well to address evolving market demands. Minerva has achieved 100% compliance in Paraguay’s socioenvironmental audit and expanded traceability of indirect suppliers.

The disconnect between Minerva’s strong financial performance and its stock price decline suggests market concerns about the sustainability of current growth rates and external factors affecting the global beef industry. According to the earnings call, the company has set a net revenue guidance of R$50-58 billion for 2025, with expected annual EBITDA from new assets around R$1.6 billion.

As Minerva continues to execute its strategy of geographic diversification and operational efficiency, investors will be closely monitoring the company’s ability to navigate market challenges while maintaining its growth trajectory and improving its financial metrics.

Full presentation:

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