Earnings call transcript: Companhia Brasileira de Aluminio beats Q3 2025 expectations

Companhia Brasileira de Aluminio (CBAV3) reported Q3 2025 earnings that surpassed market expectations, with an EPS of -0.0104 against a forecast of -0.0125, marking a 16.8% surprise. Revenue reached 2.25 billion USD, exceeding the anticipated 2.18 billion USD by 3.21%. In response, the stock rose 3.21%, reflecting investor optimism.

Key Takeaways

• Companhia Brasileira de Aluminio exceeded both EPS and revenue forecasts for Q3 2025.
• The company’s stock price increased by 3.21% following the earnings release.
• Strategic acquisitions and production recovery efforts contributed to the positive results.
• Global aluminum demand is projected to grow, supporting future performance.
• Adjusted EBITDA fell 43% quarter-over-quarter, a potential concern for investors.

Company Performance

Companhia Brasileira de Aluminio demonstrated robust performance in Q3 2025, with a 12% year-over-year increase in consolidated net revenue. The company has focused on optimizing its aluminum production and expanding its renewable energy capabilities, aligning with industry trends favoring sustainable practices.

Financial Highlights

• Revenue: 2.3 billion BRL, up 12% YoY
• Earnings per share: -0.0104, beating forecast
• Adjusted EBITDA: 234 million BRL, down 43% QoQ but up 24% YoY
• Cost of goods sold: 2.2 billion BRL, up 3% QoQ

Earnings vs. Forecast

Companhia Brasileira de Aluminio’s Q3 2025 earnings exceeded expectations with an EPS surprise of 16.8% and a revenue surprise of 3.21%. This marks a continuation of the company’s trend of outperforming market forecasts, driven by strategic initiatives and production efficiencies.

Market Reaction

Following the earnings announcement, Companhia Brasileira de Aluminio’s stock rose by 3.21%, reaching a price of 5.14 USD. This movement reflects positive investor sentiment, supported by better-than-expected financial results and strategic positioning in the aluminum market.

Outlook & Guidance

The company is focusing on sustainable growth, with flexible capital expenditure plans and a target to reduce aluminum production costs. The outlook for global aluminum demand remains strong, driven by the energy transition and electric vehicle markets.

Executive Commentary

"Our strategy is focused on sustainable growth and strengthening our competitiveness," said Luciano, highlighting the company’s commitment to leveraging strategic opportunities and enhancing its market position. He emphasized the role of aluminum in the energy transition, despite geopolitical challenges.

Risks and Challenges

• Potential impacts from U.S. tariffs and global trade dynamics could affect market conditions.
• High cost of goods sold may pressure profit margins.
• Macroeconomic pressures and supply chain disruptions pose ongoing risks.

Q&A

During the earnings call, analysts inquired about the company’s capital expenditure flexibility and alumina production recovery progress. Executives addressed the sales mix strategy and analyzed potential market impacts from U.S. tariffs, providing insights into the company’s strategic direction.

Full transcript - Companhia Brasileira de Aluminio (CBAV3) Q3 2025:

Amabile Silva, Investor Relations Manager, CBA: Olá, bom dia a todos. Para quem não me conhece, eu sou a Amabile Silva.

Luciano, Executive/Strategic Leader, CBA: Hello everyone. For those of you who do not know me, I am Amabili Silva, the Investor Relations Manager at CBA. Thank you all for your participation in another earnings call. This edition is even more special because, besides presenting the main results in the quarter, we are going to revisit some important points in our strategy. Before we begin, I will share the disclaimer of this presentation, which is available on the Investor Relations website at CBA, where we will also have the recording available. I want to reinforce that some of the information in this presentation includes statements and expectations about future events and results, which depend materially on general economic, political, and business conditions in Brazil and in the global markets, as well as other factors. This event is being recorded, and all participants are present as listeners only.

At the end, we’ll have a Q&A session wherein participants can also raise their hand to submit questions by audio or send the questions in writing by the Q&A. Before beginning the presentation, I’m going to quickly cover the agenda. I’ll start off with some highlights in the quarter. Luciano will come to talk about the CBA strategy and competitive advantages and provide an overview in the aluminum market. I’ll come back and talk about the company’s financial management, and Luciano will come in with final messages. I want to talk about the highlights in the quarter now. We successfully recovered the production of liquid aluminum in this quarter, which, along with the maintenance of the refinery for alumina, also improved the KPIs of production and the reduction of the alumina costs in the liquid alumina production.

Now, we also had the conclusion of the acquisition of wind energy, or wind power, self-production assets for 2025. This anticipation doesn’t generate any additional costs for CBA, and the volume of 60 MW on average will gradually come into our portfolio. This initiative strengthens our competitiveness and also expands the diversification of CBA’s energy matrix. Another point that’s also very important were the movements to improve our debt profile. We performed the second issuance of debentures and anticipated payments, reducing the average cost and extending the term of the debt. This action reinforces our financial discipline and contributes also to the continuous improvement of our debt profile. Finally, we also had important advances in ESG. CBA earned 74 out of 100 points on this S&P Global Corporate Sustainability Assessment.

With an increase of 32 points in regards to the average in the industry and 5% higher than the previous year. Besides this, for the third consecutive year, we also became part of the ETEVAISTA B3 portfolio, recognizing companies that are really committed to diversity, equity, and inclusion. These results reflect our focus on growth, competitiveness, and also generating a positive impact and transformation, which are pillars that underpin CBA’s strategy. Now, getting into the details of our results, the volume of sales for aluminum in this quarter had a significant increase of 2% compared to the third quarter of 2024 and 10% compared to the second quarter of 2025, mainly driven by the significant increase in sales of ingots and primaries. In regards to the liquid aluminum production, with the resumption of all of the furnaces and the refinery.

Of alumina, we ended the quarter with stabilized production, adding up to 93,000 tons, which is stable, and an increase of 9% compared to the second quarter of 2025. Now, the consolidated net revenue reached BRL 2.3 billion, representing an increase of 5% in regards to the third quarter of 2024 and 12% compared to the previous quarter. In the aluminum business, our revenue was BRL 2.1 billion. That reflected the improvement in our sales and better prices. In the energy segment, the increase of this was leveraged by a higher volume of exceeding energy available for sale and also higher energy prices for commercialization. About the EBITDA, the adjusted EBITDA, we ended with BRL 234 million in reduction of 43% compared to the same period of the previous quarter, but an increase of 24% compared to year-over-year. In the second quarter, we have an important highlight.

Of the aluminum production. Energy also had an improvement, reducing the negative EBITDA from BRL 18 million to an EBITDA that’s still negative, but it’s BRL 6 million due to better prices and energy commercialization. On the other hand, the other segment went from BRL 7 million negative to BRL 22 million negative in this quarter. This is a non-recurring effect. Now I’m going to talk about costs. The average cost of production of liquid aluminum in the third quarter of 2025 was BRL 12,121 per ton, remaining stability in regards to the second quarter of 2025. The reduction of the cost of alumina was favored mainly by higher production, which reduced the need for purchases in the market, which are normally done at higher prices, as well as gains in operational efficiency. The fixed and variable costs also had a drop.

Due to a higher dilution leading to the increase in production. On the other hand, the cost of electricity had a peak influenced by the increase in production, which led to higher energy consumption of the most expensive contracts given the seasonality period and lower of our own generation. Now the COGS reached BRL 2.2 billion in the quarter. In the comparison with the second quarter, the COGS grew 3%, while the cost per ton sold had a reduction in regards to the previous quarter. Now I want to invite Luciano to begin a bit of the strategic update, and I’ll come back to talk about CBA’s financial management. Thank you, Amabile. Good morning, everyone. Thank you once again for participating in another earnings call here at CBA and also this strategic update.

To start off, we want to just remind you all about our strategy. Historically, in the last years from 2018 to 2024, we’ve evolved a lot in the execution of the strategy. I could highlight, for example, the work done to strengthen our culture. Advances in the American market. Naturally, at this moment, this was impacted by the tariffs, but there was an important advance in the American market historically. We also integrated sustainability into our strategy. We had the Tapizuma acquisition, the Alux acquisition, as well as the Novo Mercado and V3M. With that, we were able to consolidate CBA as an ESG reference in the market when it comes to low-carbon aluminum production around the world. We invested a lot in digitalization. Even though there are smaller gains in the operation, they made a big difference for us over time.

Of course, always having an important focus on our people as well. Up ahead, what we can see is what we expect for the future, how we want to develop the strategy in the future. Up until the end of this decade, till the end of 2030, our objective is to continue to evolve in capturing synergies and maximizing value for our assets, strengthening our competitive advantage, and consolidating our stance in the cost curve, not only through management measures and actions, which is already part of our routine, but also through expansion and modernization projects that we are going to show you up ahead in the material. Many of these projects improve our costs and our competitive advantage, and that is something we are going to search for in the next few years. Another important point is we will expand partnerships and.

Also evolve in capturing good shares. These are important points for us in the next few years and accelerate innovation and transformation digitally. We’ve already done a lot, but there’s a lot more to be done from now on. I think this can bring important gains up ahead. Finally, I think what’s really important is to say that considering the strategy, we want to consolidate our position in ESG practices and the transition to low-carbon aluminum. A big focus on these systems and also caring for our people. We want to consider this to be a real safe and healthy environment for everyone. As you can see, there’s not big changes, but there is a really well-set path. We’ve already done a lot. We’ll do a lot more up ahead, and we need to keep up with this trajectory.

Where we will be able to really have a potential to improve our assets and improve competitiveness, which is a big point, not only considering management initiatives, but also the products we have up ahead. CBA, with these assets and all of the projects we are still going to be developing, we see big potential to differentiate ourselves even more and transform a lot of the challenges we see today in all of the geopolitical movements, the tariffs, and everything that is going on. They really bring instability and volatility in the market. We want to transform this all into opportunities and how we can evolve and improve our competitive advantage in the asset and in the scenario. On the next slide, I will bring in some updates on the strategic objectives within each portfolio and each business. In primaries, translating a bit of the strategy into each business, for example.

We are always going to have to search for excellence and operational stability in a sustainable manner. This is part of life, and maybe this is a business that’s maybe a little more exposed to volatility and commodity prices. Also stability. Here, it’s about improving costs and also having more operational stability. Alongside, this will consolidate our position in the first quarter of the cost curve and emissions curve. The main focus here is to grow our primary aluminum with higher added value products. Today, we already have a portfolio that’s very concentrated in products with higher added value, and the idea is that we’ll continue to grow and evolve with a portfolio that’s mainly focused on these products. Then capture more margins and strengthen our differentiation as well in the market.

Besides this, we’re going to also continue to increase our resilience in our portfolio when it comes to value creation with mitigation of the different risks we have in our operation. We also talked about the market issues that we have today in the market and the challenges we have. It’s not only this. It’s also about price, currency, and everything else that in some way impacts us and search for initiatives to reduce volatility in our results. I’m going to talk about recycling as well, but the growth in recycling really helps us to minimize or reduce this volatility in our results. The energy business, the objective is to ensure competitiveness in the generation portfolio and also guarantee competitiveness in our primaries business and aluminum business, prioritizing high production. We just had two deals done with energy generation, which are fundamental.

For our competitiveness in the future, and also guaranteeing safe supply of energy from diversified sources. We want to have a mix that’s optimized between hydropower plants and wind power plants. A lot of people already know about this, but there’s significant synergy in MIB. So hydropower plants, when it rains here in Brazil, normally in the first quarter of the year, December, March, and April, and the wind power plants are more in the second semester, which is like the dry period of the hydropower plant. Having a portfolio that’s balanced among both generates important synergies here, especially when it comes to GSF. It also provides the issue with the stability of the synergy over the years. Just as in the primaries, here in energy, we’re also going to search for excellence in cost and maximizing value. This is also part of the business.

From time to time, and actually this year is a great example, you can see this in our results, we’re also searching for ways to capture these opportunities to commercialize the exceeding amounts we have. This is a good year where power costs are higher, rain is less than average in the country, and we’ve been able to capture the opportunities with better power prices in the market with commercialization of our exceeding power. That is also why Amabili mentioned one of the highlights in the quarter is that we’ve been able to also anticipate one of the contracts we have in the wind power plants from 2027 to 2025. Sorry. We have more wind power in our portfolio. Finally, in processed transformed goods, our focus is always to optimize the portfolio and increase productivity. This is something we’ve been doing ever since 2015.

is really long-term, and we search for the production of products that can really bring in more competitive advantage and more margins, working a lot on productivity and competitiveness of these assets. We want to position ourselves strategically in the segments that are considered high income or high profitability. We want to search for what can really bring in better profitability in the overall portfolio. In recycling, we have talked about this a lot. Just to remind you, we want to grow in recycling, but we also want to grow in recycling and prepare to eventually capture additional value when the market evolves with the green premium concept. We can differentiate not only low-carbon aluminum, but also aluminum with high recyclable carbon, right? Both things walk hand in hand. These are two points that we consider to be very important to emphasize.

Also, another example of the moment we’re experiencing now is, as we mentioned, the green premium or this differentiation in the market is still not a reality. Or if it is a reality, maybe it’s still marginal, where they can charge something that’s maybe marginal. We expect in the future that we will have a bit more of a differentiation, right? In Europe, we’ll start off from January onwards. Other countries are organizing, but it was one of these to have the carbon market. With this, in some way, we can also start having some kind of differentiation in the market. I was discussing about the current reality that I think is really important to mention is that with the tariffs in the U.S., not only CBA, but basically the entire aluminum market has a real hard time to sell products there at this moment.

Of course, they continue to buy in smaller volumes. The U.S. is substituting a lot of their volume for scraps. They’re buying a lot of scraps. Also, the market estimates that they would be using a lot of the stocks in the supply chain. At this moment, you have a smaller volume being bought. This generates competition in the markets we operate in, especially Latin America and Europe, where we feel higher levels of competition. Why am I bringing all of this up? We have a low-carbon product and a product that is high quality, and renowned quality, considering CBA’s history, right? At this moment, with the higher competition in the markets, CBA has been able to sell and com bons prêmios. I’d say with good premiums. Of course, it’s natural.

Initially, they would have some premium volatility or some marginal drop in the premiums of the products, but nothing that would concern us too much. Volumes are there, and you can see this in our results, right? A lot of our competitors that have high carbon metal or low quality or both, what we feel in the market is that they’re having a real challenge, right? That’s where they have to give up on more of their premium than we do. That’s where we can really feel that our product has really been able to, we’ve been able to sell it not only in Brazil, but also in the foreign market, but also a lot of our competitors are having challenges. With this, you can already see a possible green premium in the future as well. We’re already feeling this.

Then you also have CBAM. I’m going to talk about this up ahead. What’s interesting is that CBAM is going to come in in January, but it’s still not 100% defined, right? At this moment, the European market is buying a lot of metal to stock up, even before the implementation of CBAM. With this, you can have this metal in-house and not generate any impacts on production. I’d say that the biggest concern is going to be smaller at this moment when it comes to how much you’re going to pay for this. It’s a lot more about the uncertainty, right? Of course, part of the increase of the exports of the ingots that you’ve already seen results for in the third quarter, but it still remains till the end of this fourth quarter.

That is where you can see the additional sales of the ingots, especially in the European market. Recycling is all about this, right? How we can stand out in the market through recycling and use it, as I mentioned, to be a tool to mitigate our exposure in our portfolio overall. The risk-return ratio is better, and you also have more stability for the future, right? I think that is the biggest advantage, right? Heading to the next slide, I am going to talk about our competitive advantages. We brought in what we consider will be the six main competitive advantages. After, we will provide more details on each one. We think that these are the advantages that not only guarantee our competitiveness, but also what will take us to the future when we consider even more differentiation.

The first point is the integration vertically in the entire aluminum chain that offers us, of course, the possibility to increase competitiveness. That is where we manage our assets better over our supply chain, but also more control on costs and emissions. Of course, being able to capture synergies that exist in different phases of the chain. I think we are a lot more optimized in our chain than other competitors. The second point is that this portfolio with the energy generation guarantees the competitive supply of energy for us in a safe way, but also guarantees possibilities or opportunities to optimize our costs through commercializing amounts. That is what we would like to keep from now on. It is really something important. In third place, our positioning with the first quartile of the cost curve. That varies, of course, from time to time.

At this moment, you have the aluminum price in the market that’s really low. Whoever buys aluminum has lower costs at the moment. Last year, for example, the price of aluminum was double what it is today. In practical terms, if you’re buying aluminum, there’s a lot of volatility in results and positioning in the cost curve. In our case, we have more stability in costs and more stability also in our positioning. At moments where you have lower inputs, sometimes you lose a little bit of competitiveness, but nothing that concerns us too much. We always have a more long-term view. This positioning in the first quartile and in the end of the first and second quartiles are really where we believe we should be positioned. That’s the fruit of this integration and also better cost control as well.

In fourth place, our production of 100% low-carbon aluminum with the Alinium seal in line with the best practices for sustainability we’ve already been disclosing. That really makes us a market reference. I just mentioned how this reflects in our results, especially in moments where you have more of a competitive market as we currently. I did not mention in the previous slide, but I think it’s important to mention that we’re living this at this moment. What we expect is that in the future, this scenario should be more consistent. The differentiation we’re feeling today and the preference for low-carbon aluminum, that’s really making us sell more even in a competitive market like what we see today. We hope this preference or this volume or even this differentiation in prices can happen in a more consistent manner and recurring in the future.

What we expect is today temporary, could be permanent in the future. In fifth place, our portfolio of aluminum products. I think this is an important differential for CBA, high flexibility in the production mix so that we can service different markets. We can also minimize risks in the business with exposure to other market sectors. Finally, a very robust pipeline for projects in the future for expansion and organization that are modular. We have flexibility to work on a deployment schedule as we prefer. That guarantees a sustainable growth in the future and also the adjustments of this growth and investments that we’ll be taking in the future with cash generation. One thing is going to be really connected to the other. That’s great.

Moving on to the next slide, I’ll provide some details on each of the advantages. First, about the integration in supply chain and our action in the aluminum portfolio as a whole. From the production of bauxite all the way to the transformation of the processed and recycled goods as well. We start off with the mining of the processed bauxite. We produce aluminum hydrate. We have a bit of production of both. We use aluminum more for our productions that feed our furnaces and our pot lines. We produce the primary liquid aluminum. Soon we’ll get into the process with the primary products and the semi-finished products as well that go into the transformed products. In plastic transformation, we have the lamination and the extrusion.

That is when we close the cycle with the recycling and final sale of the finished products. The capacity, as you can see here on the slide. Mostly what sets the pace for our production of bauxite and alumina is primary aluminum. Whatever we are producing as primary aluminum will demand bauxite and alumina. That is where we operate both of these spaces with possible idle capacity eventually. What also sets the production of primary products or products is the demand in the market. Whatever the market is demanding more is what we will produce. We are self-sufficient when it comes to energy generation, as you all know. Also in the production of bauxite and alumina. These three factors guarantee better stability and efficiency in our business as well. This integration in the process. We have very few companies that have this in the strategy.

It’s a lot of benefits. We have more expertise in any of these phases, more competitive costs, better security and supply with these inputs over the chain. We are working to reduce our footprint, our carbon footprint, and more control, of course, and more flexibility in our production, not only the final products but also intermediate products with the raw materials we use over the supply chain process. We have this possibility of really choosing what to produce or how much to produce and sell with a bigger focus on profitability of our global portfolio at CBA. This vertical integration also allows us to have more control, more predictability. We have this close relationship with the customers, which is really valued, and more sustainability, which reinforces our position of leadership in the sector. On the next slide, I’m going to talk about this.

Power issue with our integrated portfolio. What we can say is we have this portfolio that is optimized. It is maybe not completely optimized, maybe, but if we put in a little more wind power, it is going to be more optimized even. I think it is a really competitive moment and really optimized. For the future, of course, we will have some payments and maturities for concessions that are going to reach the end for hydrocarbons. We are going to have to substitute by other renewables. Now we have like 21 hydroelectric plants and about four wind power complexes, which are about 20% of our generation. As I mentioned previously, this diversification, this mix between wind power and others have a lot of synergies that we are capturing. It is fundamental to mitigate this and really optimize our investments in self-production.

Recently, we also decided to make significant advances with the acquisition of new assets this year. You have the Cajonatres wind power complex, 55 megawatts. It gets into operation in 2027, partnering with AREN. The Sagatugiri wind power complex, 60 megawatts, we anticipated this along with Casa dos Ventos. This anticipation, as Amabile already mentioned, has no additional costs. Basically, it is the same conditions for the contract. Basically, this volume, we expect that in a few months, it will be in full capacity. We will have the 60 megawatts, and we will be able to integrate this in our portfolio. One important point at this moment in the market is that these contracts were structured without generation risks for CBA. We have fixed volumes until the end of the contract. That guarantees predictability of this power for 15 years.

For CBA, we will not have an impact in the variation of these volumes of generation. We hired fixed volumes. In the graph to the right, you can see the perspective also for our energetic balance in the next few years with the inflow of these new projects and the exit of what we mentioned in 2028. From 2029 onwards, we will not have this contract anymore. This is the mix we have from now on. You can see how we start having from 2029 onwards an average cost of energy that is a lot more competitive than what we have today in self-generation, but also in the exceeding power, which reinforces our competitive stance. The advantages CBA has also to have these assets in its portfolio. To summarize, our strategy is not only about guaranteeing the security and predictability of our supply, but also strengthening.

Our sustainability in the long run because we guarantee we will have this structure benefiting us for many, many years. Before we expire the contracts and the concessions we have. On the next slide, I’m going to talk about our competitive positioning in the cost curve. What positions us at the end of the day in the first and second quartile is the integration with power and aluminum, right? These are the two factors, right? Of course, besides this, the maximization of value and the synergies that we have throughout our chain. Which is also what allows us to have the cash cost that’s historically below the global average. On the chart on the left, you can see the evolution of our cash cost in relation to the global market. With a historical average, we cost 18% more than the global average historically.

On the graph on the right, you can also see how it’s good that we’re consistently positioned in the first quartile of the global cost curve. When it comes to energy and alumina, there’s more volatility, of course. Regardless of how cheap or expensive it is, we don’t buy alumina, but our competitors, a lot of them do. We become more or less competitive in alumina depending on what goes on in the alumina market. These are the two inputs that are most relevant, and this is where we’ve been guaranteeing our competitiveness. We’ve also just assigned migration to about 100% of our volume in the natural gas market. We had already been about 50% of our volume free, but now we have about 100% from now on. It’s a strategic movement.

We’re pioneering in the sector, and other companies also did this, but very few made this decision, actually. It was really important to reinforce our competitiveness in the future. In an economy that’s estimated to be about BRL 30 million per year, just considering the reduction of the natural gas and migration to the free market. On the next slide, I’m going to talk about our aluminum production that’s considered low carbon. We produce 100% of our aluminum with low carbon emissions certified by the Alinium seal. We use what would bring this competitive advantage to the fact that we use electric power in a process that is completely traced from end to end, from bauxite all the way to the projects. These emissions are almost four times more than the average. Our carbon emissions are 2.86 tCO2.

The main differentials that position us in the first quartile of emissions, not only in the cost curve, but also in the emissions curve. Just to remind you, to be considered low carbon has to be below four. Here we are at 2.87. We still have reducing this reduction of about 40% all the way to 40%, let’s say. What you can see is 40%, right? This path we’ve generated. I was at the LME week last month in October, and one of the topics was the green premium issue. I discussed how at this moment. What’s interesting is that LME announced they’re going to start recognizing this with a differentiated price curve, and there’s traceability, right? There’s also a possibility of proving this stability, right? They can start with aluminum, with copper, nickel, and zinc.

It’s an important movement. It’s still recent. However, there’s a huge potential for value creation in the next few years, and that reinforces our competitive advantage. Here, we have to be keeping our eyes open. In the future, with more maturity in the market and changes in the way we do business, the fact that we have the low carbon aluminum production can be transformed into a major competitive advantage in the future. This is what we believe in, and we’re going to work to make this all happen. On the next slide, we’re going to talk about our portfolio. We talked about this in the previous slide a lot. What we can see here is the strength of our portfolio that’s complete, right? As I mentioned, we service many different sectors in the economy: productive, transportation, consumer goods, transmission.

Energy, etc., and also the packaging sector. We offer a full scope of products, right? Ingots, billets, sheets, and extruded sheets as well. At this moment, we’re seeing this happen in practical terms. This competitive advantage we have is really being exercised at this point. In terms of this full portfolio, it allows us to adjust production according to market demands. If the market’s demanding more of one product or the other, we’ll have more flexibility, and we can adjust this quickly. That guarantees our competitiveness and our growth possibilities. With this, we also have greater speed in the operation to modulate production and sales, and also transform the market changes into business opportunities, keeping the strategic presence in all chains. As I mentioned, in the last quarter, this migration of billets, ingots.

Capture part of this, and part of this has already impacted the third quarter. Basically, in September, we’ll see this based on the sales that will happen from now on, right? This is what we’re experiencing at this moment and showing you. There are a lot of companies that only make ingots or only billets. With this, we can work on the opportunities and the challenges in the world. Our plant is strategically positioned in the state of São Paulo, very close to the consumer market. It also increases our speed and delivery. The imports as well, and sometimes it should be in bigger batches. Working capital gives us more flexibility for customers as well, that differentiates us in regards to the supported products. In the next slide, we’re going to talk about our pipeline of future projects.

These are the same projects, and we’re adapting this. If we see normality in the market, we will keep up with this investment and adapt these projects according to our cash generation. Depending on this, as I mentioned initially, we want to reinforce the efficiency and competitiveness of CBA and also work with sustainability. There are a lot of projects, and really guaranteeing that it is sustainable. We are going to grow in primary and also processed, in sheets as well, and in the short term. We can always have, as we can see in each phase of the chain. When it comes to the strategy, that is pretty much it. There are not going to be big changes. We also really believe in the strategy. Our idea is to continue to have the same pace we have had for a while.

It’s not about the market. We have some new important things we’ve captured also from the LME week. We want to have an important debate as well during the Q&A session, right? When we consider the evolution of the prices we’ve had in the last few years, you can see clearly that the impact in this market, in this macroeconomic market, and also the geopolitical issues, wars and the tariffs, etc., and what we’ve been experiencing day to day, this, of course, brings volatility. You can see this in the graph. On the other hand, it’s really important to mention that you can also see the aluminum prices have demonstrated a lot of resilience even with these uncertainties. You can see all of this basically considering the levels of the aluminum price.

It’s been a while since we’ve had an offering that’s pretty much controlled of aluminum with a cap of capacity that China has considered about 45 million tons. You can see that these prices, despite volatile, if you compare with the historical prices of aluminum, they’re at levels that are a lot higher, right? If you consider the market dynamic at the moment, even with a lot of volatility, we’ve been parking the prices of aluminum at levels that are higher than historical levels. This is really important because it reflects a bit of the market dynamic with an offering that I consider is not only controlled, but there’s a lot of capacity growth as well. I’m going to talk about this up ahead.

There is not much more growth or capacity in the next few years if we consider the growth in demand that we are going to have. Now, about these points in 2022, we had the maximum in our prices. We reached almost $4,000 per ton at some moments. Soon after, it dropped in 2022 to the minimum rate, which was very close to $2,000. It migrated from $2,000 to $4,000 on average. This was the volatility in the year of 2022, mainly due to the war at the time in Russia and Ukraine. The growth in the price was due to this uncertainty in the beginning of the war. After, with China getting back to new capacities and a drop in consumption, prices got back to lower levels and reached about $2,080, I pretend.

When we look at 2023 and 2024, the price stabilized. We have some volatility, but it pretty much stabilized between $2,100-$2,500. The stability at this level is a lot greater than the historical price of aluminum. Now we see an important gradual change, and that is where we consider the rates in March. Now we have more positive perspectives. Now the price is above, which is a pretty high price if you consider this graph that we can see here. It is a reflex of this, right? Of the world with the offering and the demand that is maybe not that booming. Relatively, it is growing, but dropping too much a bit. Always considering a positive perspective for the future, right? If you consider the.

LME week, there are two metals that stood out with more optimistic perspectives or more favorable perspectives in the future, which were basically copper and aluminum. Of course, you have a correlation between both. We know aluminum could substitute copper for energy transition applications and vice versa. I would say that those are the metals that are going to be demonstrating the most positive perspectives in the sector at the LME week. On the next slide, I am going to talk about the global aluminum offerings and the perspectives for the next years. Here, we are always talking about primary aluminum. Here, we also consider this volume of recycling. We are going to talk about this later. The growth of the global aluminum offering has been led by China historically. We know about this. It is nothing different than what we see, what we know already. Because of this.

Limitation on capacity of 45 million in China, I’d say we’re almost there. We have very little additional capacity to be reaching the limit of 45 million. What we expect is that this growth should come from other spots. It could be Chinese investments. This is, of course, we can see in Indonesia, but also could happen from other players. In China specifically, there’s not much of a perspective that you’re going to have a drop in this limit. China is about 60% of the primary aluminum offering. From 2026 onwards, since they have the cap, this starts gradually dropping. It is probable that most of this growth out of China will take place through Chinese investments in other countries. Indonesia is this first example, right? We also have Vietnam and other similar examples.

India as well, which is an important hub for aluminum production. There is growth in this market. This should drop to about 1% from 2025 to 2029. There is a lot of lower growth due to the growth capacity in China. I would say there are some challenges and also the fact that a lot of the producers of aluminum around the world do not have projects for expansion at this moment. It is natural that the supply would grow at a lower pace. This change in the access of aluminum around the world brings in opportunities, especially for countries that have clear competitive advantages. In Brazil, we have alumina, we have bauxite, we have renewable energy available. I think Brazil really stands out as a possible growth in the future.

We’ve had a sector that’s really focused in China and impacted by this production. From now on, we’re going to have a lot more production out of China with other dynamics, other costs. That brings in a change in this competitive advantage from now on. Great. I’m going to talk about the demand. That was already greater in the past, but 1.7, it would be having a slight of a correlation of the GDP globally. That’s going to be levered mainly by the new technologies and their applications in the energy transition. This demand of growing more than the supply is probably what’s going to bring a more favorable perspective to the aluminum market. China is still the big consumer with 60% of the demand of primary aluminum.

What we did not bring as information is that on the slide on the bottom here, you can see the total demand of aluminum. You can also see the demand for recycled aluminum, which is at about 100 million tons or 102 million tons. Then it goes to about 118 million tons. This is a growth of 16 million tons in four years. This is the point we are talking about that brings in perspectives that are positive. This should also happen, but we need to have more growth in the primary aluminum to balance out the market. If not, we are going to eventually have maybe some impact in prices due to this imbalance we have from now on, right? What is going to make the market grow for these almost 120 million tons of 2029? Basically, solar power and wind power.

Hydro and other sources, electric vehicles that take about 40% more than the internal combustion. As you can see, electric networks around the world. The production not only that we have, but also other customers that are close to their full capacity. This market should grow. This is considering the energy transition, which should grow 54%. Most of this up until 120 million tons comes from these new applications. The traditional applications as well that grow in a period of five years. It’s pretty low. That is what pushes this downwards. That continues to grow. There are, of course, some natural challenges of greater growth. In China, investments have also become the main factor for growth. Also part of this slowdown in civil construction. When we consider the sales and demand.

Of what the rest of the world is like. We want to continue with this standard of consumption, which should be a normalized view. The Chinese growth should come from these other applications. All of this shows us that when we look at the aluminum market up ahead, we can see clearly that there’s a bigger demand towards energy transition or materials that will be more used by this transition and decarbonization as well in different supply chains. We’re always going to emphasize this, that this consolidates and makes the importance of aluminum as a material for a low carbon strategic material. We really believe in this. There’s still space to also put in bauxite and aluminum as well as strategic material because it’s fundamental for the growth. I’m going to talk about the balance a little bit.

The balance is really well balanced. What we have as a growth, demand will be providing the offering, the supply in a really balanced manner. In the past, the volatility that was greater with a lot of deficit, but also a lot of surpluses, as you can see in 2020 with the pandemic. In the next few years, what we expect is a balanced market. Occasionally, depending on the growth of demand, we could have an imbalance, right? This is a projection. If you have a growth of demand on the pace we mentioned back then and a growth in supply that does not come in in the same proportion, naturally, you will have market imbalances, right? These stocks, as you can see, there is also this balance scenario, and they remain pretty much at the same levels of days. It goes to about.

This will really in the Southeast Asia, we can see this a lot with Chinese capital as well. And Sahu, which is the consulting firm we use for all of the numbers and projections we actually show you in this last slide, they already consider this. The project here is that the market’s heading towards this with prices that can keep this. Basically in considering the reorganization of international trade. Considering the matrix of production to other countries. On the next slide, we’re going to talk about price perspectives. Now we’re going to understand how this impacts price, right? Here you can see that the volatility and the potential of the price of aluminum in the next few years is pretty big. You have about, here we can show the max and minimum in the market consensus.

It is all going to depend on this ratio between supply and demand, the market fundamentals, right? These projections that are maybe higher, that elevate price of aluminum to higher than $3,000 per ton, that reflects the scenario of if you have a demand that is growing and restricted supply, then this could lead to prices that are higher, as you can see here. On the other hand, in prices where you have a market that is more balanced or even a bigger supply, you have more pressure as well in the price. Even with this minimum level of pricing, it is going to be greater than the average historically. It is still pretty high. What we expect here is stability in the base scenario, as you can see, at about new capacities that are going to come into Indonesia, Vietnam, and India. That is another challenge of these projects.

Demand will come from these clean energies. As I also mentioned, data centers have an important demand for energy. They also consume a lot of this. Robots and other applications. In Indonesia, that is fundamental, right? To understand the price projections. If we were to choose one item to monitor, it is going to be what Indonesia is going to bring in in the next few years. That is what also makes us differentiate these scenarios. How quick this offering of supply from Indonesia will come into the market, right? If the market comes in gradually, which is what we expect in this base scenario, there is a trend of having higher prices because this supply or this offering will not be sufficient, right? If this inflow is quicker, stronger, you will naturally have a scenario with prices that are more pressured.

That’s pretty much the dynamic. In line with the rest of Indonesia, I’d say that most of the projects are Chinese companies investing in Indonesia. Besides these uncertainties, the consensus is that LME will continue to be resilient. In the graph, you see in the past natural volatility you can have throughout time, but it’s going to be sustained by the solid fundamentals of supply and demand. It’s a market that really brings in security for us to think about the future projections, right? You have this balance between supply and demand and also the strategic role that it has. The strategic demand and additional need also bring in the optimism that a lot of people consider that the market’s heading into this direction. With prices at these levels of about $2,500-$2,600, of course, there could be some higher prices.

At this moment, we’ve been talking about this, and we consider the commodities as well. The loss in value of the dollar impacted the price of the commodities and the price of aluminum. Part of this impact is also related to the fact that the dollar is weaker. You value the price of commodities. When you consider, now on the next slide, we’re going to show you a bit of the perspectives in this macro global context and potential impacts in the aluminum market. At the LME a few weeks ago, we had the chance to talk to a lot of people, and we had perspectives that were maybe a little deeper in this global context and potential impacts for industry. I wanted to share a bit of what we believe would be.

Important in these market movements, right? Three transversal strengths that will in some way change the scenario. For aluminum in the future: conflicts and global instability, and competition, and everything in the geopolitical scenario. A lot of uncertainty. That pretty much increases the uncertainties we have on energy insecurity and global logistics. Conflicts in the Middle East also impacted the flows of global logistics. That can, of course, affect the critical inputs, right? That should be something to be monitored and prepare for possible impacts up ahead. All of the economic nationalism and disputes we see with the tariffs, etc. Of course, seem to be something a little different than what was the last decade with growth of trade among countries. Now we have this moment in the market where everyone’s looking in-house more and creating other barriers.

We create this market environment with more competition and also more protection of local production and jobs. It is a scenario that we consider will remain as it is soon ahead of us. Climate crisis and environmental regulations should continue. That pressures governments, but also companies, in accelerating decarbonization actions and also expanding these traceability trends, right? This is all very positive for CBA. We already have a lot of initiatives like this. We already have low-carbon aluminum, traceability, and circularity of our product. In some way, if we have restrictions or regulations, CBA is really prepared to move in this market. I think it is also important to mention three potential impacts that I would say also represent opportunities in the aluminum market. First, energy is the big driver here. That is why I say Brazil is a major driver, right, with this rush for.

Power, self-sufficiency in many countries, and a lot of people are investing in renewable energy. Here in Brazil, this is even more competitive. It leverages projects, promotes more generation and transmission, and especially continuing these renewable sources. We should see the world heading in this direction. Then restructuring supply, right? Ever since the pandemic, where you accelerate more diversification partners. You can see that example with the pace that generated an impact. We were a single supplier, then we had three or four. This diversification of suppliers is also really important. We see a lot of countries searching for this and also regionalization of the production, right? The nearshoring, frame shoring. This is also something that brings in major potential impacts for us in the market, but also opportunities as we can really differentiate ourselves.

Finally, the updates on green aluminum, which is the third point. In the global context, that is a little more uncertain and disputes for more cleaner scraps or better quality scraps, and also demand for lower footprint aluminum production. All of this, along with the demand and ESG strategies, naturally, you will have more value for green aluminum and differentiation of these products. Of course, this is still initial. As time goes by, we can understand that this trend is going to become more concrete. Despite all of these geopolitical and regulatory challenges we have, aluminum is positioned as strategic material for the energy transition and for these more sustainable supply chains. For us, this represents a lot of opportunities, especially for who is prepared to service these demands and requirements, which is our case here at CBA.

Very well, moving on to the next slide, I’m just going to talk about some of the trends we see in the sectors that most influence our operations, right? Especially at this moment when you consider the global market restructuring. Here on the left side, you can see the energy sector, major increase in demand due to greater energy or power security and digitalization. Energy is an important factor here. You have generation and transmission projects, especially for renewable sources, accelerating investments, constructors, and components. Also, you have a growth in consumption in data centers and artificial intelligence. Both of these factors together bring in a lot of demand for energy and also demand for aluminum. Of course, that has an interesting impact and growth perspective up until 2030. Here you can see a possible opportunity to be captured by the company.

In transportation, electrification has been advancing, although in different ways, in different regions. In Europe, subsidies support growth. In the U.S., the demand is really supported by fiscal incentives. In India, it is still an emerging movement, but potential is relevant due to the size of the country. In packaging, transformation is guided by sustainability. Global demand for cans is growing around many countries. You have a lot of growth still happening, but there is also pressure for weight reduction and innovation to meet regulatory requirements and avoid substitution of aluminum by other materials. Finally, in construction, it is a sector that keeps up a relevant role in the aluminum market and moderate costs due to China. Certification, such as the LEED and the BREEAM, really drives smarter solutions for construction.

Europe and China also have energy efficiency policies that are really important for these new constructions. Among all of the sectors I mentioned here, I think energy and transportation are the big engines for growth, right, in the future. Packaging, as you can see, is really guided by sustainability, and construction is still searching for adapting, especially with China, considering the important impact and volumes. In all of these cases, aluminum has always been really well positioned as an essential material to meet all of these demands and changes that we just discussed. On the next slide, we talk about Brazil. If we consider the energy sector first, Brazil is already a highlight. As a reference, also in renewable sources, we know about this a lot. Brazil has been really reinforcing this highlighted position.

With a need for investments in distribution and electrical infrastructure overall. Solar is advancing, wind is advancing a lot, along with the installation of data centers. That is already a reality that also increases the demand for aluminum cables and, of course, for the conductors. CBA is really well positioned in the segment with leadership in market share and also sustainable solutions for extrusion. In transportation, as you can see, the electrification is advancing, and there is still room for more efficiency and weight reduction in vehicles that favors, of course, aluminum. CBA has been working with major players, and it is also a pioneer in projects for the agribusiness sector with products such as battery foil for electric vehicles. It is a recent development, and that could be something important in the future. That reinforces our presence in markets that are very strategic.

For packaging, the trend is that we will have circularity and also how you can have the circularity of this product, so recycling of this product and pressure also to remove aluminum. I think that really concerns us, right? The construction and also the primary vector or opportunity we have to capture energy and transportation with innovation and packaging as well, and also grow in the construction. Aligning this strategy to the market trends, as we all see. That is what we had to share at this moment. I want to calmly back to the stage here to talk about the work in financial management. I will come back just for my final remarks and be available for speaking in. Thank you very much.

To wrap up the presentation today, I just want to highlight the excellent work we’ve been doing in financial management at the company level. Starting off with the current debt position. We’re in a very comfortable situation, with robust cash, average cost of debt very competitive, and extended average term. Our average term is 5.5 years. The average cost in dollars is 5.7% a year. Besides this, 96% of our debt is dollarized, along with the revenue that’s also dollarized. This schedule does not consider concentration of maturities in the short or long term. When it comes to leverage after the peak of 7.7 times in 2023, we went back to 2.45 times now in the third quarter of 2025. That’s a reflex of our recovery in EBITDA. On this slide, we’re going to analyze the main actions in our cross-debt, right?

In the last few years, we had many optimizations for our capital structure. We had more than BRL 1.3 billion in anticipated maturities and payments. We had refinanced older debts with longer terms and more attractive costs. We performed international fundraising with SACE, an Italian agency, diversifying our source of funding. We also had a second issuance of debentures, BRL 530 million. That, as I mentioned at the beginning of the presentation, was really intended to rescue about BRL 230 million in the first issuance and reinforce cash. We also had the approval from BNDES and FINEP for modernization projects and R&D. With this, in our accumulated 12 months, our gross debt reduced 12%. With the important assessment of the first quarter of 2025 as an important reflex. In the next slide, you can also see a comparison of the schedule we had with the base scenario in September.

2024 and how we’re doing now after the exclusion of the initiatives related to the debt management plan presented in the previous slide. As we extend the average term of 466 to 5.5 years and reduce the average cost of 599 to 5.52%, in the graph, it’s possible to see a healthier curve. That’s really well planned. That releases maturities in the short term and reallocates them to long term between 2030 and 2032. That reflects our strategy for active debt management and really taking advantage of the market conditions. The new operations do not have financial covenants, and they have contractual conditions that are favorable in the market. Now I’m going to quickly talk about our financial policies, which are conservative and focused on capital preservation. Our policy has three main pillars: maintenance of liquidity, maintenance of market risks and hedges, and credit risk management.

In the first pillar, we talk about reducing the liquidity risk with the following targets: keeping leverage at two times, the average term above four years. Today, we’re at 5.5 years, as I mentioned previously. We limited annual amortization to the first three years between 10% and 15% of the total debt to avoid concentration of our payments in the short and medium terms. We define a minimum necessary cash calculated with a model that simulates scenarios of cost and revenue variations. Thus, even in times of volatility, we have the capacity to honor our commitments. Besides this, we also have a revolving credit facility of $100 million with 10 international banks, which can be accessed at any time. In the second pillar, the company is exposed to variations in exchange rates, interest rates, commodity prices, and the energy market.

In addition to constant monitoring, we use two strategies to mitigate risks: financial hedging, which is matching income and expenses in the same coin. As we have revenues in dollars, it also makes sense to have debts and operational contracts such as energy purchases also in dollars and derivatives such as swap contracts, which exchange indexes and currency, transforming a debt that’s linked to CDI into a fixed rate in dollars. The focus of our third pillar, which is credit risk management, is the minimum allocation of 20% in government securities. When we invest in private securities, we only use private financial institutions that are respected and certified. We define the minimum limits in the policy, such as the minimum rating of the counterparties. Finally, I’m going to detail our hedge strategy.

We currently have two main types of hedges: the debt hedges and the operational contract hedges. In the debt hedges, operations are designated as hedge accounting. These are swaps to convert debts, which originally were dollarized or in euros, and especially to provide predictability and not rely on the variation of CDI or the inflation. Besides this, we also have dollarized results adding up to $331 million. They were designated as hedge accounting to cover cash flows related to future revenues in dollars, recognizing other broad results. That is going to be considered in the original maturities of the day. If we consider a currency of BRL 5.50 in the next 12 months, we should have a reduction of BRL 147 million in revenue, considering the currency variations of these operations. Every 10 cents of the currency, we have an additional currency variation of BRL 11 million.

This effect is non-cash because part of these loans were refinanced, and the maturities will take place between 2027 and 2032, while the hedge account should be taking place in the original dates till the beginning of 2029. In the energy hedge, we have swap contracts with maturities in 2028, as you all know. These were signed off to reduce risk exposure and lead to fixed values in dollars. This was considered as hedge accounting to provide protection on a mismatch and also the cost of acquisition in electric power index according to the inflation. This is also considered in other broader results. This is going to be considered in the results in the cost monthly until the end of the operation. In 2025, we had an increment in the cost of BRL 60 million about the financial payment of these swaps.

Besides the financial instruments, we also have a natural hedge coming from our contracts for power that were already dollarized or priced in dollars in line with our hedge strategy. Even with the dollar variations in the inflation or the interest, we can keep our cash flow stable and our results predictable. With this, we end our presentation. Now, Luciano will come back to just go over some final messages, and then we will be together with him as well for the Q&A. Thank you, Amabile. Guys, heading here to the final messages just to wrap up on the call. After, we can keep up with you guys during a conversation we have. Five main takeaways, right? Our strategy is focused on sustainable growth and strengthening our competitiveness.

We want to balance risk return to maximize the value and guarantee the resilience of our long-term asset portfolio. We are always going to maximize the value of integration, capturing synergies in all of our supply chain, which is one of our main differentials at CBA. That is what made us who we are over these 70 years. That is also going to take us to the next 70 years. This integration in our supply chain is one of the biggest differentials. We are really well positioned to capture market opportunities and take advantage of more favorable fundamentals. Not only because of the differentials mentioned here, but this portfolio of growth projects for the future as well, that will bring even more solidity and resilience to our business. Flexibility in CapEx allocation is really important.

We’re going to adapt the execution of the CapEx as well, considering our cash generation. There’s a pretty stable standard, but it could change if the market’s different. If the market’s more optimistic, we can maybe invest a little more of this as well. Financial management as well. We went through volatility in the last few years ever since the IPO. Even before IPO, we were used to this as well. With financial management, it’s more sustainable. We always search for reduction in costs. That’s what’s going to allow us to go through this market phase in a less turbulent manner than most of our competitors probably will face up ahead. When we look at all these points, it’s a differentiated asset. We can see there’s a lot more to do still, but these are clear differentials.

We can benefit from what’s coming up ahead, right? This was a different presentation. We spoke a little more about this strategy. Now we’re open, of course, to Q&A and a more interactive conversation as well. Great. We also have some questions here at the queue. Our first question comes from Rafael Barcelos at BBI. Rafael, please, you may hop in. Bom dia a todos. Good morning, everyone. Thanks for taking my questions. Congrats to the company and all the IR team for this event that was organized. It’s always very important and great to hear from you guys, especially on the strategic aspects of the business. Now, Luciano, I’m just going to focus on the strategy part here of the presentation, especially on your last slide with the takeaways up ahead. Maybe I want to hear a little more from you. Flexibilidade de.

On the flexibility of the CapEx and on both sides, right? In the scenario where Indonesia accelerates capacity, which is, I was also at the LME week, and that was one of the topics that we really discussed. I really consider it’s a difficulty, right, to set a scenario. If you look at this negative scenario, we have more capacity and price environments. It’s a little more restrained or tight. What type of flexibility would you imagine? Does the company have a pipeline of strategic projects? Understanding a little bit of what type of flexibility on this side and what would be the minimum level of CapEx up ahead. On the positive sides, what types of investments make sense to you if one of those macro trends you mentioned.

In the beginning of the presentation really becomes concrete or gains more traction, what type of investment makes sense to the company? Thank you very much, Rafael. Flexibility here is always related to expansion and modernization projects, right? Sustaining, of course, you obviously have flexibility. Whenever you work on reducing sustaining a little bit, you automatically increase the risk of your operation. We do not want that. What we consider to be as expected investments of sustaining, which is about BRL 500 million this year, is going to be a little bit more due to what took place in alumina. I think it could be considered a minimum level, right? If we do below this, then it is because we are searching or facing more risks that we maybe do not want due to market issues, right? That is not what we are expecting, Rafael.

In the expansion and modernization projects, one of these about BRL 300 million per year, this is one of the cases where we have flexibility and we can work. For more or for less. Of course, when you already have a project that’s under execution, reducing CapEx can be a little more difficult. You have a horizon of just a few months with some of these projects under execution before you can actually perform the investments. For the projects that have still not been approved or those that are still in the horizon, I’d say this is still integral, right? We’re always going to be considering this level of flexibility, about BRL 300 million, which is what we can work on. From one side to the other, right?

If we consider your question, even in Indonesia, I’d say it’s not only at CapEx that we’re going to work on, right? If we have a lower price scenario, we’ve already experienced this in 2023. Of course, you have all of the cost aspects and some work to be done also in other projects that come up ahead, right? That reduce our costs or improve competitiveness. Accelerating these projects whenever the market’s pretty stable as it is now or in a more optimistic scenario in the market, that would be really important to increase our resilience and our costs. Up ahead, if we have a market that’s more optimistic with better prices, then we would have some restrictions. Maybe the project, for example, which would depend on us having.

The reduction of the bottleneck there in the paste room and also in the alumina, which purifies the gurney. These two need to come before. If I do this without having both products, I am going to have to either buy paste from the market or alumina. We are going to have greater costs, right? We could accelerate that, but that depends on the scenario. What would be normal is we would have this first for the paste room and then after, return on room one. This is kind of like our expectation. That is going to be the first move that we can accelerate all three projects. These are projects that are really ready to be executed, right? Because they were already under execution in 2023. We had to stop. A lot of them were already stocked up in the factory.

It was really just a matter of timing to put this all into operation. We have the recycling projects as well and capacity projects for the production lines. This is pretty much modular. It could be accelerated at any moment. There are smaller investments if you have a rotational oven for the production of recycled material to be. That is one of our projects in the pipeline in the future that can be accelerated, as well as others that are similar where you can add capacity through the processing of recycled material. What we can see and what is in our hands today is this, right? That is what we can develop as well. Eventually, we could work with new projects or technologies that would accelerate this potential even more. Today, we still work with this that is on our pipeline. Okay, perfect, Luciano.

As a second question here, although we’d still be focusing on the strategic aspects that we understand are the main topics, I want to ask about bauxite, right? How do you see CBA positioned strategically? We’ve seen in the last few years that there were some disruptions in the bauxite market. We want to understand your vision also on the home dome project and get a little more of your input on this aspect of the company. In bauxite, we have a system that was conceived and imagined to supply the alumina factory, which are the two factories in Minas Gerais, in Poços de Caldas and in Miraí, and the second one, mine in Pahuao. These are mines that have resources for long-term, minimum 20 years, but we believe it’s a lot more than this.

These are certified here in the site as 20 years. In our view, we believe it could be more than this. We are really comfortable in regards to this and for the future of CBA. In the aluminum site, these three mines guarantee long-term, and you would continue with this competitive advantage. Of course, the bauxite arrives, and maybe transportation is not that cheap, but it is competitive, as you can all see on the slide we showed you of the cash cost. Alumina is always positioned in the first quartile or very close to this, possibly in the second quartile. We have pretty good competitiveness, and that remains for the long term. Home dome is an additional aspect. It is going to be a project that we are going to do to sell in the international market, right?

We have these three mines that are sufficient. Home dome also has challenges. For projects like this, the logistical challenge is natural. We talked about this a lot in the market. What happened in the last year about the stability that took place in Guinea, what’s going on there is kind of what already happened in Indonesia. In Indonesia a few years ago, they prohibited the exports of nickel, exports in bauxite. Their objective was always to encourage more investments in refineries or phases ahead so that the royalty in the country would be greater, not only exporting the low-added value product, but you could export products with more added value. What Guinea is trying to do is kind of similar. There were some interruptions of mines in Guinea, and that generated a concern in the market.

The market today is really depending on Guinea. They left from being an irrelevant player 15 years ago and became the biggest player with 70%-80% of the trans-oceanic market bauxite coming from Guinea. It is a big risk for industry, not only for bauxite, but for the aluminum industry as a whole. If you do not have bauxite coming from there, then you are going to impact the rest of the industry. Other players in the industry also started noticing this search for alternatives, right? Home dome is a product that is ready to be developed. You have a natural increase in interest for this project. Of course, we are going to search for partnerships. Ever since IPO, we have been announcing this, and we have been working on this, right? So far, nothing new.

I’d say that there’s a big interest in this project and its commitment. If we do this, we want to make CBA invest more in this system that we have, as you’ve just seen in the presentation, and possible partners really being responsible for these investments in bauxite. Of course, we would have participation that we could maybe take advantage of this project in the future. Great. Thank you so much, Luciano and Amabile. Now, the next one is from Edgar Souza at Itaú BBA. Please, Edgar. Bom dia, Luciano. Hey, good morning, Luciano. Good morning, Amabile. Thanks for the questions. Congrats on the results. We see all of this becoming concrete with the improvement in the aluminum. I have two questions here. First, about the CapEx aspects here with a follow-up on the Barcelos question. My point is the following, right?

I was actually waiting on an update, maybe. Of the schedule that was shared at the CBA day last year. If you could maybe mention this differently, we could understand how you’re expecting. This CapEx modulation up ahead, right? If we look at maintenance and refurbishing this year, you’re operating above BRL 500 million. You even talked about this, Luciano. It is above BRL 350-400 million as you had been operating in the last few years. I wanted to understand, these BRL 500 million, by what I understood, seem to be the new level of maintenance, sustaining CapEx you should operate with. The first point is, what led to this increase, these levels versus what you guys had before? Considering that you do not want to increase your total CapEx, what from the investments that were already.

Decided to take place are maybe being dragged along up ahead. What are you already modulating to accommodate a maintenance CapEx that is a little bit higher? That is my first question, right? The second point is, I want to get into costs a bit more. I think the slide you guys showed is really great about the competitiveness at CBA versus the rest of the industry. When you look at this in 2023 and 2025, which were the years you had operational problems, we can see CBA’s competitiveness versus the average in the industry kind of drops, closes off a lot. You had 25%-30% less cost, and you are going to maybe go closer to a level that is like 10%. Looking ahead, what is this cost trajectory like, right? Is there an expectation for 2026 of an additional improvement?

Is there something that can be done? Obviously, maybe in the fourth quarter, you won’t have the effects of the shutdowns. I just wanted to understand what’s going on in the cost front, right? If you have an objective or a target for cost reduction or something like that. Thanks, guys. Okay, thank you, Edgar. When we talk about CapEx here, you’re right. First, this year, we had the impact of operational instability of alumina, and that generated more sustaining expenses. We actually took advantage of the fact that we had to stop temporarily in some of the pot line to also refurbish them that were kind of at the end of their useful life, right? You have some expenses that are really related to this. Naturally, you would have inflation. This is not only impacting us, but everyone. That’s natural.

Getting back to your question on projects for future growth, we did not consider this schedule because there is not going to be big changes compared to what we had seen last year. Also, because it depends on flexibility and how the market is going to look up ahead. If we have a more optimistic scenario, let’s say that is more favorable, it is natural that we would search for acceleration. If you see a more restricted scenario, then we could maybe have an additional postponement, right? In the very short term, considering the adequacy of the investments this year, basically, we are looking at the schedule there and just postponing it over time for a few months. I would say the most short-term project for the PACE rooms, which continued the portfolio with a few months set back, right? And even.

Performing this postponing in the PACE rooms, we have been taking advantage of some shutdowns for maintenance. I’ve already been able to do part of this project in this shutdown, so we’re still optimizing this a little bit so that when it takes place, you’ll have a lower impact in the operation. That is pretty much it without big news. Basically, there’s nothing too new we would like to add here. We are just going to be working on this pipeline in the best way possible according to our cash generation. About costs, right? You mentioned 2023 and 2025, we had higher costs due to operational problems. I want to be careful when we compare with the global cost curve. We have two factors. First, the currency. Then the loss of value of the real or vice versa.

Not as what happened recently with the loss of value in the dollar towards all other currencies. When the real has this mismatch, you’ll have an improvement, right? What we see is there was a loss in value, and that brought us more competitive advantage. Of course, with the dollar, it’s maybe a little weaker, and the real is a little stronger. Of course, you have this movement that’s a lot more related to the dollar. Maybe we don’t have the same competitiveness amidst our other competitors. Most of the operations in the world, they’ll buy alumina, they’ll buy electric power in the market. The volatility of the power crisis around the world and the volatility of aluminum price also impacted our competitiveness, right? When we compare with the rest of the world, this also happened.

Alumina is a big example last year due to the rupture in the bauxite chains in Australia, India, China, and Guinea. Alumina reached $800 per ton. Whoever bought it at that time worsened their cost curve temporarily. Right now, it is at a really low level, below $400 or even closer to $300. That also places these producers that buy alumina in a more favorable position. It really depends on the dynamic for these markets. As I mentioned, our costs are more stable than the average in the industry. From time to time, we can have worsening or improvement in our competitive advantage. Heading back to CBA and your point, we have many different initiatives, and that is pretty much recurring, right? We have an ambition also of having, at least in the current market conditions.

As things are, we would be able to place our average cost in the aluminum cost at about 9 to 10 million tons. Maybe that is one of the objectives, or maybe we are closer to 11. Maybe that is because of what took place this year. With the currency above BRL 5 or BRL 5.50, we are going to guarantee more competitiveness in the long term. This is our work, continuing our efforts in-house to improve our competitiveness and our efficiencies. Work better with all of the costs in each phase, so that we can really reduce our costs up ahead and work at this level that would be a little bit below $1,800 per ton. Just to add on here, the improvement for 2026 is going to go back to levels in 2024, which we consider to be normalized. This improvement comes from alumina, right?

We’ve seen this basically with the recovery of the cash costs in alumina and liquid aluminum. In the next quarter, this is also coming along. We have space for this up until the first quarter of 2026, where it should get back to the level that was normalized in 2024. The other inputs are keeping up with greater stability. Of course, energy has seasonality from one quarter to another. The perspective for 2026 will be unopposed. Energy is very similar to what we’ve seen in 2024, and even what we saw this year. Reduction is basically from alumina, and then to stick around at this level of BRL 10,000 per ton. E também. Deixar de reconhecer. Also, we need to remember that these moments of operational stability we had in 2023 and 2025 are also moments of major lessons learned, right?

The pot line rooms are big examples. The operation standards today are a lot better than what they were two years ago. The fact that we had this problem also brought a lot of lessons learned and a new way to operate this asset that brought in major gains. We have an expectation that the same thing will happen with alumina now with the instability we had this year. That is pretty much it. Even though we have this gradually from time to time, gains here and there, and we had this expense here that in an isolated manner could be small, when you add them up, there is a relevant impact in costs. Perfeito. Obrigado. Okay, perfect. Thank you. Obrigada. A próxima pergunta. The next question comes from Guilherme Nips at XP. Bom dia, Luciano. Amabile, tudo bem com você?

Good morning, Luciano and Amabile. Can you all hear me well? Bom dia. Yes. I have two questions here on my side. You talked about the reduction of alumina costs due to the shutdown and the refinery maintenance. If you could provide more details on the evolution and if you’re already expecting normalization in the operations, and if you could quantify this. I remember last quarter you brought in an increase of about BRL 150 million in costs and about BRL 50-100 million in CapEx. If you could mention a little more details, that would help us a lot. Our last question also comes from this cash generation aspect. We have seen this as a very positive cash generation in the quarter, but part of this comes from the stocks, which is also something you guys were already guiding.

At the current level, we would already see something a little more normalized. Or if there is something. Or if there is still some fat, let’s say, or some leeway, right, for this cash and working capital performance, right? Primeiro. Then first alumina, then after the cash generation and working capital. Thank you. Interessante que a gente está melhor do que a gente imaginava, tá? We’re doing better than what we would imagine, right? We had provided news in the last earnings call, and the perspective at the time was that till the end of the year, we would have things back to normal. This perspective is still the same. Why was it better than expected? Can you remember. Não? We had over 50 tons of aluminum in the hydrolysis, and 16 had those crustings we mentioned, where alumina kind of stuck onto the tank wall.

In our view at that moment, we would have to perform the physical removal of these. For all 16 tanks. This is some work. Those are complex. It is physically complex. They are big tanks, real bad access. That took a lot longer than what we imagined. That was a bit of the surprising element we saw in the earnings in the last quarter, mainly because of the challenges we had to perform the recovery of these tanks, which is why we had this perspective that till the end of the year, we would solve that. What happened ever since was that we were able to work on improving processes, and we had some bypasses as well to chemically clean a lot of these. I did not have to go into the pot line and perform the physical removal. We were able to just.

Recirculate the liquid with the temperature. That would allow us to perform the chemical removal, right? We had 16 pot lines, and we imagined we would have to work on this removal. In practical terms, these 16 actually became 5 because the 11, we were able to perform the cleaning in a chemical manner, right? That takes about a week and a half. It is a lot easier or quicker. At the end of the day, we had 5. Three were in a process to generate more low completion. We are at the final phases. The cleaning of the tanks is ready, but the optimization is going to be stabilized till the end of the year. The first quarter of next year is probably where we are actually going to have a full impact of this, operating at full capacity.

You would already be able to see this gradual benefit in the results this year. We spoke back then, as you mentioned, when it is above BRL 200 million. A bit was in cost and EBITDA. The rest was in CapEx. You can see the capacity of the market is gradual. We had another purchase of alumina adding up to about BRL 50 million, which is the same as the purchase we performed in the second quarter. The other BRL 50 million are pretty much divided half-half. That was considering the purchase in the month of September. You have a real big impact for the third quarter that is maybe lower than BRL 100 million. That means that you already have BRL 25 million. Then, of course, something a bit more from a residual, marginal residual results, right? That is gradual.

You have this constant drop in the impact where you still have a bit of an impact in the fourth quarter. That is a lot lower. Next year, we will already be able to operate at full capacity. Maybe I can also talk about the following, right? I just want to say that there is still room to reduce this. Now in the fourth quarter, especially considering the stock climb, as you mentioned. We have already performed something in the third quarter, but we also have some reductions to be done in the fourth quarter. There is still room to reduce our working capital. What I wanted to say as a point of concern or to be careful about is at the beginning of next year is really the moment for us to reestablish our stocks. Not only what dropped this year, but there is a seasonality.

That always happens. Where we produce more and increase our stocks in the first half to sell that in the second half. This year, that’s what happened and last year as well. If you look at our numbers historically, you’ll see the standard. This year is a little bit higher than normal because of the operationality. In some items, we had a bit more stock. Alumina is one of these. Metabolumina led to a higher stock. If you look up ahead, we should see a recovery in some of these stocks, or maybe a contraction of the stock to be sold. In the second semester, we’ll take any other reduction in these stocks. This is a move that we’ll always have. Perfeito, super claro. Perfect, very clear. And congratulations on the performance and strategic detailing. Thank you.

Our next question comes from Pedro Melo from Citibank. Hey, good morning, guys. Can you all hear me? Yes, we can hear you. Primeiro. First, I want to congratulate you on this event and for the sequential improvement in your results. First, I want to follow up on the fourth quarter when it comes to cost. Could you give us an outlook on costs, considering other costs you may have that are considered important as well? Also look at the typical seasonality and the recovery of the liquid aluminum production in Q4. Understand the margins and how we can consider the evolution of the margins in the fourth quarter. Then I want to explore the sales mix strategy that you guys have, more towards the ingots. We know that this is something that really helped a lot with the vol. Demanda está. We wanted to understand how.

You’re observing this strategy for the next quarters and especially for the next year. If considering this sales mix, you create some penalties for this, and if this should lead to some impact in margins, especially for next year, where we expect a bit of an EBITDA normalization. Those are the two points I would like to get some more color on in the fourth quarter and explore a bit of a sales mix for ingots. What do you want to talk about the costs? About the costs, as I mentioned, we saw in this quarter that there was a drop in the alumina. There is space for a gradual drop up until 2026. The other lines, the main inputs that are anode paste and energy, are still something similar to what we’ve seen in the third quarter.

Energy has seasonality in the fourth quarter. Anode pace has also been pretty stable. Where we see space to drop is also a reflex in the recovery of alumina. Maybe closer to normalization, which is a fixed and variable cost. It is quite marginal, right, what we have to recover. That is still the first quarter of 2026, as I have already mentioned, right? These are the main lines. In line with what Luciano also discussed in the presentation, we are always looking at improving costs. That is really what is in our hands, optimizing costs. We always want to dollarize a bit more. What Luciano mentioned also is a bit of a contract, and that is going to also optimize the costs in alumina. Then we could maybe get back to the level to mention about BRL 10,000.

When we consider the flexibility of producing different products. A gente pode mudar isso. We could change this. Para o mercado se apresentar para a gente. Then, what happened in this third quarter? And what happened? We had an impact of maybe. And maybe we had an impact. As I mentioned. On the sale of the pellets and the demand. Pelo tarugo. For pellets. That made us search for other markets, right? Of course, experts of pellets have heard about selling pellets in the internal market, but also other products. If we understand this, ingots were offering better profitability in exports due to what I mentioned. With the buyers anticipating this in regards to Subalmarine. That happened now. From now on, what we feel in the market is that the pellets market is still good. I would say that. The fourth quarter.

Just to detail, December is not a good month. They are normally not very good for sales. You have a lot of holiday periods, etc. With just this quick disclaimer, all the rest, the pellets sales have driven pretty well, even better than what we imagined initially. That is something, of course, that we always need to consider because it provides us a more cautious view. For the past year, we have had this view, right, due to interest rates in Brazil. They had been growing ever since last year. We had this more cautious view about how the interest rate could maybe impact the market or two, and even the impact in sales, etc. In practical terms, we had this demand for pellets. I would still say it is a marginal impact, not that relevant. In the trucks market, that also depends a lot on.

They, of course, depend on income to fund themselves. In the other markets, this has not led to such an impact, right? I would say we are getting back to that sales normality that we have always had in the last quarters. For the premiums, there is an observation also, right? The market at this moment, especially in Latin America and Europe, is a lot more competitive due to those things I mentioned in the presentation. There are a lot of producers that are not being able to sell because tariffs are still being implemented. Eventually, you could have an impact in premiums. They are still marginal. If you look at Rotterdam, it is a pretty good reference, but it dropped a lot, maybe due to what exists in Europe, etc. Now it is closer to $200 per ton if you look at the reference in Bloomberg.

I’d say $200 is a normalized level. It could be greater. It’s already been $300 in a more optimistic moment, but it could be smaller, right? Since it’s a pretty good premium, we can see the same behavior as well in pellets, etc. Eventually, you can have more competition, some marginal impact in premiums, but nothing very relevant, right? Like $20-$30 of premium, but nothing that really concerns us, right? This is the dynamic. Of course, one important point is if you have two factors, right? Like an American consumer eventually will have to buy, right? Because they haven’t bought in big volume so far, because they were either using stock or because they bought a lot of scraps. That generated a big strong flow of scraps going to the U.S. That’s a natural factor.

Where you have an end in stocks, or American consumers get back to buying. The second would be if the U.S. signs off some kind of a negotiation with another country. If they have an agreement with Canada, India, or others, that is going to be very favorable, right? These countries that perform the negotiations will definitely sell a lot more volumes, because we would be one of the very few countries in the world that would have this. They would kind of dry out the other markets, right? That would open up the possibility for other markets to have less of an offering. You would have this impact in the premium. That is why it is very dynamic, right? At this moment, premiums are kind of pressured, maybe. If the situation in the U.S. normalizes the next year, we could.

Get back to a more normalized situation, as we discussed in the beginning of this year. That’s great, guys. Thank you so much. Thank you very much, guys. To the benefit of our time, we’ve already gone over time, and we’re going to wrap up with our presentation here today. Our IR department is always available. If you have any questions that are not answered, me and the IR team will be available. I want to thank you all for your participation. Luciano, you have the final word. Thank you all. That’s it, guys. Thank you so much for participating. I want to thank you all for your feedback as well about the format and how we did things. I think that was important to give a global view on the company.

We are available and very optimistic also with what we can deliver on behalf of CBA and what is coming ahead for the company. Thank you very much, guys.

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