Earnings call transcript: Aeris Q3 2025 reports revenue decline, net loss

Aeris Industria E Comercio De Equipamentos reported a challenging third quarter of 2025, with a significant decline in revenue and a net loss. The company’s stock saw a slight decrease of 0.73% in its latest trading session, reflecting investor concerns over its financial performance and future prospects. The company emphasized its focus on export markets and services, despite the ongoing difficulties in the Brazilian wind energy sector.

Key Takeaways

• Aeris reported a 26.1% quarter-over-quarter revenue decline.
• The company posted a net loss of BRL 144.4 million for Q3 2025.
• Services division revenue increased by 21.6% quarter-over-quarter.
• Export markets accounted for 51.6% of total revenue.
• The stock price fell by 0.73% post-earnings announcement.

Company Performance

Aeris faced a challenging third quarter, with revenue dropping to BRL 179 million, a 26.1% decline from the previous quarter. The company’s performance was impacted by extraordinary expenses and a decrease in megawatts delivered. Despite these challenges, the services division showed resilience, growing by 21.6% quarter-over-quarter. The company remains focused on export markets, which comprised over half of its total revenue.

Financial Highlights

• Q3 2025 Revenue: BRL 179 million, down 26.1% quarter-over-quarter
• First 9 months 2025 Revenue: BRL 631.5 million, a 51.6% year-to-date decline
• Q3 2025 EBITDA: Negative BRL 48 million
• Q3 2025 Net Loss: BRL 144.4 million

Market Reaction

Aeris’s stock price fell by 0.73% following the earnings announcement, closing at BRL 4.10. The stock remains closer to its 52-week low of BRL 3.54, reflecting investor concerns over the company’s financial health and the broader challenges facing the Brazilian wind energy market.

Outlook & Guidance

Looking ahead, Aeris anticipates improvements starting in 2026, with potential opportunities arising from new data center projects, green hydrogen developments, and long-term wind energy contracts. The company is preparing for a new expansion cycle expected to begin in 2026, aiming for a market recovery by 2027-2028.

Executive Commentary

CEO Alexandre Negrão highlighted the company’s focus on cash management and future growth opportunities, stating, "Cash is a priority for us," and expressing optimism for market recovery by 2027-2028.

Risks and Challenges

• Continued revenue decline due to market challenges.
• High curtailment rates impacting energy delivery.
• Ongoing negotiations with creditors to improve financial position.
• Dependency on export markets amidst global economic uncertainties.
• Competitive pressures from other wind energy companies.

Q&A

During the earnings call, analysts inquired about the company’s expansion timeline and market opportunities. Questions also focused on cash financing strategies and the company’s survival strategy amidst current challenges. CEO Alexandre Negrão reiterated the company’s commitment to improving its financial position and capitalizing on future growth opportunities.

Full transcript - Aeris Industria E Comercio De Equip (AERI3) Q3 2025:

Unidentified Moderator, Conference Moderator, Aeris: Where the complete material of our video conference is available. You can also download the presentation from the chat icon, including slides in English. During the company’s presentation, our participants will have their microphones disabled. After that, we’ll start the Q&A session. To ask questions, click the Q&A icon at the bottom of your screen and write your question to join the queue. When you are announced, a prompt to enable your microphone will appear on the screen, and you must then unmute your microphone to ask questions. We kindly request that our questions be asked at once. We emphasize that the information contained in this presentation and any statements that may be made during this video conference relating to business prospects, projections, and operational and financial goals of Aeris are based on the beliefs and assumptions of the company’s management, as well as on currently available information.

Forward-looking statements are not a guarantee of performance. They involve risks, uncertainties, and assumptions, as they refer to future events and therefore depend on circumstances that may or may not occur. Investors should understand that general economic conditions, market conditions, and other operating factors may affect Aeris’ future performance and lead to results that differ materially from those expressed in such forward-looking statements. Today, we are joined by the company’s executives, Mr. Alexandre Negrão, CEO, and Mr. José Azevedo, CFO. Before we begin the presentation, I would like to invite you to follow today’s agenda, which is on slide 3 of the presentation. We’ll start with Mr. Negrão. We’ll address topics 1 and 2, bringing the highlights of the period, and then commenting on the operational performance. After that, we’ll turn the floor to Mr. Azevedo, who will address topic 3, presenting the company’s results.

Once this part is finished, we’ll start the Q&A session. Finally, Mr. Negrão will return to make his final remarks. You may proceed, Mr. Negrão.

: Bom. Obrigado. Bom dia a todos.

Unidentified Moderator, Conference Moderator, Aeris: Thank you very much. Good morning. Welcome to one more video conference of Aeris. Moving on to slide number 4, for the highlights of the third quarter of 2025. When we talk about the market, we must mention the core topic that’s going on in our country regarding curtailment, which are cuts in the energy generation. We know that given the characteristics of the wind energy potential of Brazil, most wind farms are located in the Northeast, and the wheat season starts in the third quarter. As of July, it’s natural to mention this topic here, in addition to being a hot topic in the capital of the country, Brasília, right now. This is a worrisome topic because curtailment tends to grow with time. Just for you to have an idea, in 2024, the average curtailment was 10% in the year, and this year we have already reached 17%.

Curtailment. As the amount of renewable energy increases in the system, that tends to increase as well. What’s important for us in the industry is to have a clear rule and laws that are effective for us. This last week, the Congress voted MP, the provisional measure, that was initially favorable to us, but it needs to be approved by the president. We have to pay attention to that topic closely. In parallel, now talking about the company’s performance, we remain focused on our services operation, increasing services and improving our operational efficiency. Of course, services also suffer because we had high growth levels in the last three years. When we talk about people, these are people that are providing services on the field. In order to cover this gap that we’re experiencing in the industry, the company, or this low.

Performance period that we are experiencing, the company is focused on exports, and exports are growing more and more, and will continue to do so in the coming quarters. In addition to that, we have taken action to recover the operations and the financial improvement of the company. We negotiated with creditors in the first two quarters of the year, which gave us more peace of mind to focus on the operational aspects of the company. Of course, we are trying to improve the working capital structure and make the company efficient to be able to operate with the idle capacity that we face right now. Moving on to slide number 5, now talk about the operational performance. Here we see exactly what I mentioned. There was a drop in the last 12 months. Looking at 2023-2024 and.

Year to date 2025, there was a drop of 50% from 2023 to 2024 in terms of megawatts delivered, and another drop of 65% regarding 2024 compared to 2025. That is a significant drop, which justifies the compressed margins. Moving on to slide 6. The production lines. Here we see four active production lines in the third quarter, which is worth saying, as we highlighted in the release, that two of these lines are fully operational at their peak capacity and the other two below our capacity. Four lines. We are not operating with the four production lines at full capacity. It is important to highlight that. Now, moving on to slide 7, I turn the floor to our CFO, José Azevedo. Thank you, Alexandre. Moving on to slide 7, revenue was BRL 179 million in the third quarter of 2025 and BRL 631.5 million in the first nine months of 2025.

EBITDA was negative by BRL 48 million in the quarter and BRL 55 million in the nine months of 2025. We closed the quarter with BRL 5.8 million in investments and BRL 62.1 million in the first nine months of 2025. Finally, we had a loss of BRL 144.4 million in the third quarter of 2025 and BRL 412.9 million in the first nine months of 2025. On slide 8 of the revenue report, we saw a 26.1% drop in the quarter, a 51.6% drop in year-to-date. This contraction reflects the significant decrease in investments in wind farms over the last few years, which has directly impacted the demand for both existing and new projects.

Despite this, we had a good result in the sale of blades for export, which represented 51.6% of total revenue in the quarter, and the services division, which also represented 29.3% of revenue, with a growth of 21.6% compared to the second quarter of 2025. On slide 9, we show the EBITDA results for the quarter and the last 12 months. In this quarter, we had three recurring factors that resulted in a negative EBITDA of $48 million. The first factor was due to extraordinary expenses amounting to $28.4 million, resulting from the regularization of the drawback regime related to the nationalization of inputs for exports in the period of 2024. Basically, we had an abrupt cancellation of the export volumes. As you may know, there were two O&Ms that left the country, and the O&M, which we continue to have a relationship with, has decreased the orders.

We could not maintain the import taxes. The second factor was the temporary mismatch between exports and the recognition of tax incentives under the drawback regime amounting to approximately $2.5 million, referring to August and September 2025. The demand we had foreseen for the domestic market, which is set forth in the contract, can reduce the demand. In the past, customers used to make a plan with a lot of advance, and we could provide a concession for such. We could file for the tax exemption. Since the market is no longer working with inventories, we filed this concession, but it takes three to four months to be granted. In December, it will probably be granted. The good news is that, yes, we can go back to blades exported in the last two years, so we can recover that amount.

Lastly, a lower productivity in some older production lines, which reduced operational efficiency and limited the dilution of fixed costs. Nonetheless, we enforce that the fact that all effects occurred in this quarter are non-recurring, and the company remains focused on initiatives to improve efficiency, secure new contracts, as well as to optimize costs and expenses. Slide 10 shows the investments that represent BRL 5.8 million in the quarter. The amount is in line with and in accordance with the projects already included in the company’s budget. On slide 11, we see the cash flow for the quarter at BRL 29.4 million. The company is committed and continues to work on several fronts to ensure adequate short-term liquidity until it recovers its operational volume in coming quarters. Finally, on slide 12, we show our capital structure. What changed here.

Is that we ended the period with an increase of $57 million in gross debt. Related to the accrual of interest on debts renegotiated in May of this year. Just to reinforce and remind you that this process will be an ongoing process until March 31, 2027. That’s when we will pay the first interest on the total amount of the debt. There is another point also. When we look at the chart for the third quarter of 2025, there is a debt. This BLS. It shows here because we broke the covenants. We breached the covenants, and we started a renegotiation. It’s taken a bit longer than we expected. We are renegotiating with the bank, and we are advanced in the negotiations. Until the end of this year, December 31, we expect to finish the negotiations.

With that, we have reached the end of the presentation, and we’ll begin the Q&A. Thank you. Now we’ll start the Q&A session. I would like to remind you that to send the questions, please click on the Q&A item on the bottom of the screen and type your message. If you prefer to speak, you can use the Q&A icon to enter the queue. When your name is announced, please, you will be prompted to activate your microphone and ask your question. We kindly ask you to ask your questions at once. We’ll be back shortly while we collect the questions. Thank you. A primeira pergunta vem do Ramon. The first question is from Ramon from AxoPetro. Good morning, Aeris. Good, congratulations on the results. I would like to ask two questions. First, in the release, you mentioned that as of 2026.

Aeris starts to capture a new expansion cycle. In the beginning of this year, you said that it would be as of 2027. What positive signs allowed you to have a more positive, optimistic view? Second question. This week, a large data center was announced in Ceará for a Chinese player with Brazilian and Asian capital. In your point of view, could that encourage new orders for Aeris? Good morning, Ramon. Thank you for your question. The positive signs involve talks with customers. We have been talking to our current customer, which is Vestas, for blades. We keep talking to them about new projects, both for Brazil as well as abroad. We also talk to other customers that operate in Brazil and that want to operate in Brazil in the future. Of course, we have to remember that although the scenario is not clear regarding.

Demand for energy. In the wind energy scenario for the purchase of blades, we’re talking about long-term projects in which contracts are defined long before the production starts. Any new customer that may enter the portfolio of Aeris now will become a delivery in 2027. We are talking to Vestas and with other clients, and we foresee a growth. Another positive sign is that if we look at all market studies in our market intelligence area, we look at McKinsey, Bloomberg, GWEC studies, and we see that as of 2027, 2028, there is an expected growth for several reasons. Growth of the industry, new data centers, and green hydrogen entering the country, which answers the second question. Yes, we do believe that this project that was announced will have a positive impact on our company, although indirectly, but it will be a positive impact.

When we look at market analysis and the analysis made by the main agencies that cover the industry, we see that there is a recovery of the industry foreseen for 2027-2028, and we believe it will go back to the level of 2.5-3 gigas per year consistently starting in 2028. Remembering that in 2023, 5 gigas were installed in Brazil. We do not see ourselves reaching that level in coming years, but we do not see Brazil below 1 giga or without selling anything. That is what is happening right now. The positive signs come from conversations with customers, clients, and a lot of market analysis to understand what is going on not only in Brazil, but worldwide. The next question comes from Ricardo Peixinha. It was mentioned that MP-1304 was favorable to Aeris. Is it possible to detail that more? How MP-1304 will solve the curtailment problem?

It doesn’t solve it. It improves this issue that affects the entire industry because currently generators are paying for that. The way that the provisional measure has been written so far, this is something that the consumers would have to pay for, will have to pay for. It will be shared among all consumers. I’m not going to enter into the definition of what’s right and what’s wrong. We believe this to be right because curtailment is not to be, the generator companies are not to be blamed regarding curtailment, for curtailment. We don’t think it’s fair to pay for that. That’s what’s favorable for generation companies. Of course, we have to wait until the law is sanctioned by the president. Next question comes from Luca Cerroni from XP. How do you see the issue of financing yourselves to recompose cash?

I would like to clarify the cash issue, which is the main point of this year and next year. This will be our focus. We’re working not only with banks, but with partners as well. We’re doing specific work on that to have the necessary liquidity until production volumes are resumed. This is what we’re doing. The next question comes from Claudio Nordpirola, shareholder. Good morning. What’s the company’s strategy to survive until 2027 with such a shortage of cash until the industry resumes its activities? I think I have answered that question in the previous, your question, in the previous question. Cash is a priority for us. Again, we are taking several actions to ensure liquidity. A sessão de perguntas e respostas. The Q&A session has now ended. I would now like to hand the floor over to Mr. Negrão for his final remarks. Bom. Pessoal.

As expected, I think as expected. We had one more difficult quarter, where the company operated with a net capacity at around 85%, and that’s the main reason why the margins are so tight. However, we remain focused on exports and services, as I said earlier, and export opportunities are happening, and we want them to remain so in the future. In parallel, we are attentive to new developments regarding MP-1304 to see how that will happen and how the industry can benefit from that. Finally, I think that we still have negative expectations for the last quarter of this year, but with improvements during 2026. As expected, 2025, in its worst year for us, is indeed one of the worst years for us, and we expect to improve in 2026 and 2027.

Thank you all for your attention, and wish you all a good day. The conference call for the third quarter has ended. Investor relations area is available to answer any further questions you may have. Thank you all for attending, and have a good day.

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