Good morning, ladies and gentlemen. Welcome to the Eternit teleconference for the discussion of the results related to the third quarter of 2025. This conference is being recorded, and the replay can be accessed on the ri.eternit.com.br website. The presentation is also available for download. We would like to inform every participant that after the presentation, we are going to start the Q&A session. Further instructions will be provided at the start of the Q&A. Before we continue, I would like to stress that the prospective declarations are based on beliefs and assumptions of high management of Eternit and what is available to the company right now. These declarations can involve risks and uncertainties, seeing as they are talking about future events, therefore depend on situations that can or maybe will not occur.
Investors, analysts, and journalists should be aware that various factors related to the macroeconomic environment, the construction sector, and other elements could cause actual results to differ materially from those expressed in such forward-looking statements. Today with us, we have Rodrigo Inácio, CEO, Carisa Portela Cristal, CFO and DRI, and Saulo Martini, Controller and Investor Relations Manager. I would like to go over to Mr. Rodrigo Inácio. He is going to start the presentation. Please, Mr. Rodrigo, go ahead.
Good morning, everyone. It is a pleasure to have you with us once again to share Eternit's third quarter 2025 results. More than just presenting numbers, this is a moment for us to reinforce our vision and our commitment to the construction industry. Eternit's purpose is to be a diversified provider of products and solutions for construction, operating in an integrated and sustainable way throughout the entire value chain.
Our vision is clear: to maintain leadership in roofing solutions while expanding our presence in other segments. With that, we would like to emphasize our long-term view within the broader construction ecosystem, particularly industrialized construction. To follow this trend, we have expanded our portfolio to include solutions for industrialized building, such as polished and pigmented cement boards and flooring panels, reaffirming Eternit's role as a strategic partner in the transformation of Brazil's construction industry. Our challenge is to help the sector unlock the full potential of industrialization, so that the sector can fully benefit from the proven gains in scale and sustainability that it brings. This ambition reflects not only our strategic positioning, but also the confidence and trust we have in the strength of the brand, the technical expertise of our teams, and our ability to innovate in a constantly evolving market.
Throughout this presentation, we are going to show how this vision has becoming materialized in our operations, our financial indicators, and the strategic initiatives that support our positioning. Next slide, please. Here, I would like to share with all of you some of the awards and industry participation that we have had in this period. After all, the vision that has been a part of Eternit's DNA for over 85 years is not only reflected in financial performance but also market recognition. The awards and acknowledgments we have received are what makes us truly proud. They symbolize our daily commitment to quality, innovation, and above anything else, the trust that the market places in our brand. One of the highlights was the Vitória Trophy 2025, organized by the Sinprocim and Sinaprocim trade associations, one of the most respected recognitions in the construction materials industry.
Here, we would like to share with you the awards and participations that we have had in this period. After all, the vision that has been a part of Eternit's DNA for over 85 years is not only reflected in financial performance, but also market recognition. The awards that we have received throughout this period are something that really makes us proud. It symbolizes a daily commitment to quality, innovation, and the trust that the market holds of our brand. The awards organized by Sinaprocim and Sinprocim trade associations are a highlight in the market, and they highlight companies that are elevated in sustainability, innovation, and performance. This year, Eternit was doubly awarded in two categories for the Vitória Trophy 2025, in the retail segment with fiber cement roofing and on the construction segment with the cement boards.
The results were determined by the Quorum Brasil survey, which evaluated brands across 10 key attributes in each product category, covering the entire construction material supply chain. Eternit achieved the highest overall score in both categories. The awards were presented by Mr. Roberto Petrini and Mr. Daniel De Luccas, representatives from Sinaprocim and Sinprocim, as shown in the photo on the left side of the slide. Beyond these recognitions and awards, the company also strengthens its presence at major industry events, reinforcing our commitment towards innovation, relationship building, and brand development with our partners and clients. Among the most important trade shows, we participated on the 26th Construsul Fair held in Porto Alegre, the second-largest construction and architecture business fair in Brazil. Most recently, the first edition of Construlev Expo in São Paulo, the first event that was entirely dedicated to light, industrialized, and sustainable construction systems.
Now, let's move on to the results for the quarter on the next slide. On this slide, I'll briefly go over some of the main highlights, and afterwards, Carisa is going to walk you through the operational and financial results in more detail. We recorded a net income of BRL 19 million in the third quarter, driven mainly by the industrialized construction business and recognition of tax credits. EBITDA totaled BRL 35 million, impacted mainly by the lower gross margins in the chrysotile segment and showing a slight decrease compared to the same quarter of 2024. Talking about gross profit, we reached BRL 74.8 million, down 15% year-over-year. This was mainly impacted by a lower chrysotile price influenced by the mix of fibers that were sold, destination markets, and foreign exchange effects.
We would like to highlight our sales in industrialized construction business which reached 8.7 thousand tons in sales, a 28.6% increase over the same period last year. The best quarterly results in our historical sales. Now I'll go over to Carisa. She'll talk about the results in more detail.
Thank you, Rodrigo, and good morning, everyone. I'll start my presentation on slide six. As usual, before going into the numbers, I'll briefly go over the performance of the construction sector and the current economic context affecting consumer purchasing power and household financing capacity in Brazil. Looking at the graph, we can see that the INCC, which is the National Construction Cost Index, showed a modest increase of 0.21%, while the construction materials industry's revenue was declined, leading Abramat to revise its 2025 growth projection, which was for 2025, 2.8%, and now the new forecast is 1.8%.
Inflation continues to decelerate with IPCA projected at 4.55%, while the U.S. dollar has been strengthened, and for us, since we have a strong export, has negative impacts. Household debt has reached a new record. Almost 79% of Brazilian families are reporting debt, and delinquency rates hit 30%. Unfortunately, the highest level in the historical series. In summary, factors such as high interest rates, rising household debt, a challenging external environment continued to limit demand for construction materials, keeping the industry's recovery at a moderate pace. That, of course, is reflected in Eternit's results, which we will now review in more detail. Going on to slide seven. Here I will show you the sales volume and gross margin performances across our business segments. I will start talking about the industrialized construction segment. Here I would have an additional comment.
Until the previous quarter, we used to refer to the segment as construction systems. However, given the scope of this business in the construction sector and Eternit's plans to expand and diversify this line, we have rebranded it as industrialized construction. We believe that with this name, it is going to better represent our ambition in this segment. As expected, our industrialized construction business, shown in the center chart of this slide, showed an increase of almost 29% in sales volume, driven mainly by cement boards and panels. In this line, we have superior margins because we have customized products that are going to add to innovation and bring specific technical quality for each project.
Now, in fiber cement roofing, shown on the left chart, we saw an increase of 1.5% in gross profit of the segment and also a 0.4 percentage points gain in margin despite a 3% decline in volume. This reflects a slower pace of consumption from final customers, particularly among end consumers, given the financial situation in Brazilian households that I mentioned previously. In the chrysotile segment on the right chart of the slide, we had a significant increase of 5.8% in export of chrysotile fiber, reaching 53.3 thousand tons. The increase of volume is based by two main factors. One was a record level of production. This was the best quarter in the past decade for the company. Due to our new logistics strategy, this has allowed us to reduce the shipment lead times and also improved vessel availability. These are factors that have driven the chrysotile sales.
Going to slide number eight now. On the left chart of the slide, we show net revenue of the company, which reached BRL 319 million in the third quarter of 2025. This represents a 3.8% increase compared to the same period last year. In the domestic market, revenue totaled BRL 208 million, reflecting solid sales of fiber cement roofing and industrialized construction products, as I had mentioned before. In the external market, revenue reached approximately BRL 111 million, which while reflecting higher sales volumes from chrysotile, also shows the impact of lower margins in the quarter. To explain this margin variation of chrysotile business, in the center chart, we have a breakdown of gross profit. This shows that the volume increased due to the best shipment levels over the last three years. There was an unfavorable effect impact due to the appreciation of the real against the dollar.
And finally, price variation driven by the product fiber mix sold during the period. On the right side chart, we show the gross profit. We have an increase of 3% versus the second quarter of 2025, but was down 15% compared to the third quarter of 2024. Moving on to slide nine, we have the financial performance highlighting expenses with sales, which totaled BRL 32 million in the period, which is a 2% increase compared to the same period, so third quarter of 2024, mainly due to higher marketing investments that were made, which still grew below the inflation rate for the period. On the right-hand chart, you can see that on the third quarter of 2025, the company reinstated bonus and profit-sharing provisions. This concentrated those expenses within the one quarter. Another point worth mentioning is the organizational restructuring costs.
In line with our operational efficiency pillar, management has been resizing the workforce. An initiative that initially generates additional severance expenses but is expected to optimize costs in the medium term for the company. When we look at admin expenses, excluding bonuses, profit sharing provisions, restructuring costs, which totaled BRL 23.4 million, the variation was only 0.4%.
This represents a real cost reduction when inflation is considered. For the third quarter of 2025, they totaled BRL 23.3 million in the third quarter of 2024. On a nine-month basis, excluding restructuring costs, they remained in line with the inflation of the period. On the left-hand chart, this is the net profit of the company, which is BRL 19 million, a 1.9 increase compared to the same quarter in 2024. As mentioned earlier, this was in fact driven by stronger results in the industrialized construction segment, sales, and improvement in fiber cement margins.
We also recognized that we had PIS/COFINS tax credits totaling BRL 17.6 million, of which BRL 9 million approximately were booked under other income, and BRL 8 million is reflected in monetary adjustments, which positively impacted the financial results of the company. Looking at the chart on the right, the financial results showed a revenue of BRL 490,000 in the third quarter of 2025 compared to a financial expense of BRL 5.5 million in the third quarter of 2024.
This variation is truly coming from the recognition of the financial income, which was BRL 9.4 million in the quarter, mainly from monetary adjustments on the PIS/COFINS tax credits I just mentioned. Financial expenses totaled BRL 5.1 million, of which BRL 1 million corresponds to debt service and adjustments on concursal debt, and BRL 1.6 million referred to PIS/COFINS charges on JCP interest on equity received from the subsidiary SAMA during the quarter.
It's also worth highlighting that SAMA declared JCP distributions for the third quarter totaling BRL 16 million. Going to slide 11, here we show the increase in the company's working capital, which results from our efforts to extend the financial cycle. This can be seen in the higher accounts payable balance, reflecting the financial management of payment terms with suppliers. There was an increase in the payment term extension of approximately 20%. The increase in accounts receivable mainly reflects the higher sales concentration of chrysotile that we had at the end of the quarter, the end of the period. Now, going towards the end of my presentation on slide 12, I show Eternit's net debt, which totaled BRL 144 million as of September 30th, remaining in line with the previous quarter.
The higher export volume allowed us to increase ACE and ACC credit facilities, which have a competitive cost below 8.5% per year, and is a very important natural hedge, enabling the company to maintain a more comfortable cash position while mitigating foreign exchange exposure. The company's average cost of debt remains very competitive at around 10.9% per year or a real cost of approximately 6.7% considering inflation for the first nine months of the year.
Additionally, Eternit has been strengthening its cash management policy, seeking to maximize liquidity and ensure greater resilience against potential macroeconomic volatility. We ended the quarter with a leverage ratio of 1.85x net debt versus EBITDA, and as I always emphasize, none of our debts have financial covenants. I now go back to Rodrigo for his closing remarks.
Thank you, Carisa. I will conclude the presentation on slide 13, which highlights Eternit's strategic pillars.
In the previous quarter, we presented our four main pillars, and this time I would like to focus on two of them specifically, the operational financial efficiency pillar and the innovation pillar, with a special focus on industrialized construction. Starting with efficiency, we remain fully committed to maintaining financial health, and we are taking an important step by relocating our headquarters to Hortolândia. This transition will take place over the coming quarters, and this decision reflects our pursuit of greater synergy between corporate and production areas, as well as cost optimization. This move marks a new chapter for the company, which is one focused on integration and the strengthening of strategic management. The company has also advanced in its organizational restructuring process with the incorporation of Tégula, aimed at simplifying our corporate structure and strengthening administrative integration.
This initiative is a part of a broader effort toward modernizing governance and optimizing processes, promoting greater efficiency, synergy between teams, and strategic alignment across operations. Turning to the innovation pillar, I would like to highlight our participation in the Construlev Expo, which took place last week. We had three days filled with connection, learning, and a lot of inspiration about the future of light and sustainable construction in Brazil. Eternit showcased a portfolio that reflects our innovation journey and also our ongoing commitment to offer smarter, more efficient, and sustainable solutions. We presented several new products, but more than that, we reaffirmed our role as strategic partner in transforming the Brazilian construction industry, contributing to a lighter, more modern, and more responsible future. To wrap up, I would like to thank everyone for your interest in joining us for our third quarter results call.
That is going to finish our third quarter, and now I will hand it over to Saulo, which will start the Q&A session.
Thank you so much, Rodrigo. Now we are going to start the Q&A session. Please identify yourselves and submit all your questions at once, then wait for the company's response. A quick reminder, to ask a question, simply type it into the call's chat box. An investor is asking, actually, it is a comment. "I would like to initially congratulate all of the responsible people for the results, as well as ask if the company has any publishable position about exploring rare earth in its mining plants, and if now the company is going to focus on construction systems and if there is any news for the next couple of months that could broaden the results." I will direct this to Rodrigo.
Hello. Good morning. Thank you, Francisco.
Thank you for your question. Thank you for your words, and also thank you for the opportunity of talking about these two topics. We have been dealing with rare earth. The Minaçu area where we have the Cana Brava mine site. There are regions where we are exploring rare earths. In the area where SAMA is exploring currently for chrysotile, we are working on this topic. We have actually sent some samples over to China, but we still haven't had a response. It's unlikely that there will be one, but we're looking for alternatives, and if there is an economic possibility in the future, we will communicate everyone.
Talking about the construction systems, like Carisa had mentioned during her presentation. We're now changing this concept for industrialized construction because we understood that this is a pillar of growth for the company, and the entire team at Eternit has been making an effort so that we can develop solutions for this ecosystem of civil construction, which we understand is the future of construction. This is the sector that has been growing the most, and where we're able to actually add technology or leverage technology with our internal resources at the company as well. I think that's it.
Thank you, Rodrigo. We have another question.
I would like to ask if the company will be able to finish the mine and a possible modulation of the effects of ADI 6200 for three or three years, or in the best-case scenario of five years."
This is about the mine of asbestos. The mineral reserve that we have in the Cana Brava mine site, we don't know the total. The total is unknown. What we know today of what we've already identified with the current volumes that we are producing or extracting today, we would have the capability of having 20 more years of mining operations. If you increase mining in a short period of time, you have to invest highly in terms of resources, and it's not feasible economically.
The company has been working with this in mind, which is established by the new law of Goiás, so the five years, and this is the same normal that we have been working with over the last couple of years, so the same average of volume. We don't have an intention of increasing the volume at the moment. Our intention is to maintain the level of extraction that we've been getting over the last couple of years.
Thank you, Rodrigo, for your answer. We have another question here related to the industrialized construction sector. The investor is recognizing the growth that was important in this sector of 28.6%, and the question is: "What are the plans and company expectations for this segment over the next couple of years?" I will also redirect this to Rodrigo.
Firstly, the company doesn't have a specific expectation in terms of results.
But what we can say is that industrialized systems in the general context of economy has been growing at a much more elevated rate than traditional construction. And we've been developing over the last couple of years, new products using the current assets that we have for this focus to be able to support this market in a tailor-made way for us to truly personalize our service for each market niche. Industrialized construction is quite wide. So you can have steel frame, wood frame, you can have modular systems. And we have an entire product range solution that can go from flooring to walls, and now we're developing products for ceilings and roofing. So the company has been redirecting all of its tech and human resource to be able to develop products for this solution.
We understand that this is a path of no return from the market itself, and we have great possibility of growing with this new path. So I would say this is the future of the company, and this goes beyond its main product, which is the steel, the concrete, and the roofing.
Thank you, Rodrigo. Another question. "Does Eternit have a plan of paying dividends that is different, considering the possible taxing of dividends with the new law that is being considered currently?" So I'll go over to Carisa with this question.
Hello, good morning. Well, the company has been following the entire movement of this law proposal, but so far there's no definition. So the company intends to maintain the same practice and policy of dividends, which is a minimum of 25% of the net profit of the exercise.
So until we have a definition of the law, we don't have any different plans in terms of paying dividends. In case there's anything that makes sense, the company will revisit the topic. However, if there's any change, we're going to tell the market as soon as possible.
Thank you, Carisa. Continuing here, we have another question. "The investment on the acquiring of production factories, are they worth it? Do you have the expected returns? I would like you to say something about that." So I'll go over to Rodrigo with this one.
Thank you, Lincoln, for the question. Throughout the last four or five years, we've had a lot of investment, and we've investing consistently within the company. From the modernizing of equipment on the sites that we already own, as well as a green field that we built in Ceará. That site was opened in March last year.
We invested almost BRL 190 million on that site, and today it operates at full capacity. This is the site that we have with the biggest production capability. So today we have around six- by- two shift. We work Monday to Monday. The other investments were important for the modernization process of the company, because other than the increase in capacity, they help us reduce costs. It's a process that is improving the production process, and it's more aligned with the quality of the market. So I would say that our investments have been very assertive with the focus on reducing costs and increasing capability wherever we understood that there was a scenario and possibility for market expansion.
Thank you so much, Rodrigo. Another question from an investor related to changing or moving the headquarter. He's asking us to comment, what does the company expect from this change?
I will go over to Carisa with this one.
Thank you. Yes, the company has a plan. We are now getting ready to move the entire headquarter and the corporate area of the company from São Paulo, from the Faria Lima Avenue to one of our units in Hortolândia. This move has some important goals. Firstly, being closer to the business. The company and the new management of the company believes that this is going to bring more synergy and improvement for the company as a whole. Additionally, this is a part of a much higher plan of the company in search for efficiency, so operational efficiency. We have been looking for both financial and operational efficiency, and under that umbrella, the company has been doing some movements. Among them, revisiting the entire corporate structure that we have.
We also created recently an excellence service center, which is a shared service center, where we are optimizing process and standardizing processes so that we can have more scale. This is one of our fronts. Another front that the company has been working on, and you guys have been following in a recurrent way, is the simplification and optimization of the entire societal structure of the company. From the end of 2024, we have been reducing or incorporating some companies in the group, others that are not operational. Some are operational, but if we are able to gather them, we are able to further optimize the structure from the admin side as well as the bureaucratical side, processes, and so on. The company has been making those moves as well.
Along the same lines, in terms of the business, we are moving the headquarter to Hortolândia, and there we will also have a gain and scale, being closer to the business, and additionally to the costs that are involved with being in a building in São Paulo. This is all related to the search in efficiency that is recurrent for the company. From then on, we have a lot of plans that we are going to put in action, and whenever they are close to happening, we will update you. I do not know if Rodrigo has anything to add about that.
Thank you, Carisa. Thank you, Rodrigo. Now going over to the next question. What are the margins of industrialized construction so far? This one is for Rodrigo.
Josias, the margins of the products that are destined for industrialized construction, they have a characteristic in which you have a tailor-made process. You make products according to the dimensions and characteristics, according to each customer's needs. When you are solving some pain points of this market, it is natural for you to be able to capture a better margin. They have a better margin than the roof tile. That is why this is our main attention point. The second thing, other than having these product solutions from this market with better margins, it is also a market where you can identify effective market growth. Because what happens with industrialized construction, just so everyone can have a more global view. Civil construction in Brazil has not been growing at an accelerated rhythm. It has been pretty moderate in terms of growth.
However, industrialized construction has been taking the space that was previously occupied by traditional construction. It has been a two-digit growth, replacing the traditional products and traditional way of building that was related to civil construction. Therefore, it is natural for this market, thinking of an expansion model, for it to have a better margin or to leave a better margin in the chain. That is why. Firstly, for the use of the assets that we have, all of the machines that we have can be used to create different products for this market, this market niche that is being rebuilt and reinvented at this very moment. To give you an example, we just presented on the fair last week, Construlev, polished cement plates, and they do not exist. Polished and pigmented cemented plates. They are going to replace even the paint that goes on the walls.
We have that potential. When you add more value to the product and you are replacing other products in the chain, you add more value on the product that you are making. This is our focus. If you were at the fair, if you had the opportunity of visiting the fair, which was great, very technical, and very guided towards this audience, a very specific audience, you were able to see that Eternit has been bringing a lot of other products that are still being tested. It is not even a pre-launch, but it was a test, and we brought samples, actually. For example, the ecosystem of a wall. Today, we can go into a world which is not producing just the plates, but building walls with them. This could be a future solution that we are still kind of crawling towards this business model.
But over the next couple of months, they can bring us a great surprise, a positive surprise for the company and better using the assets and more profitability for the company as well.
Thank you, Rodrigo. Another question, still related to the industrialized construction segment. What are the competitive advantages for the company in the sector of industrialized construction, and what is the expected degree of competition for the segment? Rodrigo?
I would say that the company has a huge potential in this market because we have a footprint. We have six sites all over Brazil today. We have in Paraná, São Paulo, Rio, Goiás, Bahia, and Ceará. These sites that make roof tiles, they can produce products for construction systems. When you are able to produce locally, you have a competitive advantage in terms of freight and delivery.
This will allow for us to have the possibility of growing in this market in a more accelerated way. Other than that, it is not just about producing the product itself, but how do we go into the ecosystem of the entire residence? How do we go into the ecosystem of building a wall, for example? I would say that this market, we started a study three, four years ago on this market. We created a strategic pillar within the company, and we have a view which is a growth pillar. We still have a lot to get from this business, and there is a lot that we are going to share as well in the results calls going into the product development that we are currently working on.
I would say that we are only scratching the surface of this market, but it is a very promising market for the company and for the sector in general.
Thank you so much, Rodrigo. We are checking if we have any more questions. If we do not have any further questions, I will go back to the operator to finish our video conference for today.
Thank you. The Eternit conference is over. Thank you so much for your participation, and have a great day.