Good morning. Welcome to ROMI's conference call, where we will discuss the results for the first quarter of 2025. Before proceeding, I should clarify that this conference call is exclusively for investors and investment professionals. Any statements that may be made during this conference call regarding the company's business outlook, projections, and operating and financial goals are merely forecasts based on the management's expectations regarding the future of the company. These expectations are highly dependent on market conditions, the general economic performance of the country, the sector, and the international markets, and are therefore subject to change. Please note that this conference call is being recorded and held in Portuguese with simultaneous translation into English, accompanied by the slides available in the result center of our investor relations website at www.romi.com/investors. During the presentation, all participants will be connected as listeners only. We will then begin the Q&A session.
To ask a question, type it along with your name and the name of the company you represent in the Q&A tool of the Zoom app. For questions via audio, further instructions will be provided later. With us today are Mr. Luiz Cassiano Rosolen, CEO, and Mr. Fabio Taiar, CFO and Investor Relations Officer. Initially, the executives will present the results of the first quarter of 2025 and will then be available to answer your questions. I will now turn the floor over to Mr. Luiz Cassiano.
Good morning, ladies and gentlemen. Thank you very much for attending ROMI's Q1 2025 earnings conference call. We started the year on a positive note. In the first quarter of 2025, we have had a significant growth in order entry in the ROMI Machines and BW Machines business units, reflecting our customers' trust in our solutions and our commitment to their success.
In ROMI Machines, order entry grew 31.2% compared to the same period last year, with growth in both the domestic and foreign markets. We also recorded significant growth in operated margin, reaching 17.5%. In BW, our operation in Germany, we had a significant performance. Order entry almost doubled compared to Q1 2024, amounting to BRL 134 million, which increased our order backlog to BRL 430 million. This result demonstrates the effectiveness of our strategy of delivering customized, highly complex technological solutions for the most demanding markets. In Rough and Machined Cast Iron Parts, despite the challenges still present in this quarter, we observed the first signs of recovery in the agricultural segment and expect a gradual normalization of productivity over the coming quarters. I would also like to highlight the continued performance of our machine rental solutions and our fintech products.
Together, they have driven our business expansion despite fluctuations, in addition to reinforcing our role as a close partner to our customers. In the quarter, rental revenue grew 27.9%, now representing approximately 25% of the revenue of the ROMI Machines unit. We closed the quarter with a 41.4% growth in consolidated order entry and 31% in net revenue. A direct reflection of our ability to adapt and innovate, even in the still changing macroeconomic scenario, still challenging. We continue investing heavily in technology, connectivity, AI, new generations of machines, and most importantly, the development of our team. We enter 2025 prepared and confident that our competitive advantage will continue to generate value and sustainable results. I will now hand it over to Fabio, who will provide more details on the financial results for the quarter. Thank you very much.
Thank you, Cassiano. Firstly, good morning to all. Thank you for joining us in our conference call. Well, I will begin with the quarter highlights. Order entry amounted to BRL 422.4 million, focusing on ROMI Machines and the BW German subsidiary, which represents over the first quarter of 2024 an expressive growth of 41.4% in volumes of new entry. I would also highlight the operating revenue, which reached BRL 273 million, a 31% growth, and mostly coming from the ROMI Machines and BW Machines units. Adjusted EBITDA this quarter reached roughly BRL 18 million, which represents a 6.7% margin. We would also point out the order backlog. We finished the first quarter of 2025 with a very robust order backlog, 37.4% over March 2024 results, and also higher than December 2024. We are quite positive with these results, looking forward to the next quarters of 2025.
In terms of order entry, beginning with ROMI Machines, the order entry also had an expressive increase over the first quarter of 2024, with a 31.2% growth. We have growth in the domestic sales and also a gradual recovery in the foreign sales volumes exports, mainly with a recovery in the market in Argentina, which deteriorated over the past years. The net operating revenue of this business unit also grew above 18% in this first quarter, and together with the gross margin, it provided us an expansion in our operating margins, reaching 17.5%, 3.8 percentage points, higher compared to the first quarter in 2024. For a first quarter, this is a representative margin. As regards BW, we had a first quarter in 2025 with excellent projects in order entry, excellent projects that we've concluded.
We doubled our order entry levels in the 1 Q 2024, and therefore, by the end of March, had a BW order backlog of BRL 430 million above March 2024. Meaning this was formed already for 2025, a complete order entry and order backlog for 2025 and also 2026 for the BW order backlog. In terms of the profit distribution, we made a notice, a notification in JCP. We are going to pay out almost BRL 17 million. I would also point out the major plastics fair in the industry in Brazil called Plástico Brasil, which was held in the first week of March. It was a very positive fair for ROMI and for all the other participants. We had the opportunity to launch new machines, mainly in blowers and injection . We had expressive results, positive results in relation to the fair Plástico Brasil.
Now, turning to conjectural indicators, the data that was available in late 2024 indicate the GDP, which is the darkest blue column, and also the gross fixed capital formation in lighter blue, always compared to the previous half with growth levels. By looking at this indicator in a more stratified manner, the transformation industry has presented growth compared to the gross fixed capital formation. This is something we also see on a daily basis in the domestic market. On the next slide, we see that the average installed capacity utilization over the past years has grown, and in 2025, the first two months at least, we have also reached the best possible levels, reaching 59% in February 2025. So at a high level in the industry, customers have a significant volume of orders. They're operating in an accelerated fashion, production fashion.
Maybe what we still cannot see, as shown in the chart below, has to do with trust. Since late 2022, trust levels ranged around 48 and 52 points, which is, well, maybe something in between a positive outlook or a neutral outlook, indicating that the current moment for the industry is still favorable. However, the macro environment with the political economic scenarios are not bringing as much trust to the plans to the midterm among customers. In terms of business units, we have, of course, our Rough a nd Machined Cast Iron Parts. In ROMI Machines, we have a wide range of offerings. Our machines are used in different industries, in different sectors in the industry. In machines and equipment, we have a wide range of types of machines and equipment that our customers have been using.
Our customers have been using our machines for different purposes in their manufacturing process, and this is something, well, that also drives performance in other sectors in the industry, in packaging, mainly in plastics and processing and blowers. We have had good results. Automotive maybe is more sluggish, but still, it is representative in our revenues. Anyhow, we have been looking at the main consumer markets, and we are looking at machines and equipment, well, that are used for different purposes and services that are provided by customers by players in different segments of the industry. As a conclusion, we believe that in fact, different sectors have a steady demand and still need machines. We are aware that BW is more concentrated in certain manufacturing sectors. In the first quarter in 2025, we have delivered machines mainly to the engine manufacturers and also to the construction and mining sector.
Machines and equipment, cast and machines, machined and equipment, well, we have Rough and Machined Cast Iron Parts. Similarly, for automotive and agricultural machinery, as Cassiano mentioned, is picking up, is recovering in the first quarter. The outlook is that this should continue. This trend should continue. Mostly for Rough and Machined Cast Iron Parts, we should see a growth in production volumes over the next quarters, mainly driven by the agricultural segment. As per net sales per business unit in consolidated revenues, here we have the growth levels of the operating revenues of BW in the first quarter was expressive. In reals, it almost doubled, 94.8% with expressive representation. ROMI Machines, despite the growth, is actually spread out because of the BW growth as well as Rough and Machined Cast Iron Parts.
Despite the growth, it is not as representative as a significant growth of the BW revenues in the first quarter of 2025 over the first quarter of 2024. As for the sales distribution, Brazil is still very representative in total revenues. Mainly the first percentage of the first quarter in 2024. We see a higher representation of Asia because of the deliveries of BW Machines, mainly to customers in China. Asia, therefore, grew from 12% to 14%. On the other hand, we had the inverse happening in the U.S.A. BW has delivered, well, as an important package of technology solutions in the first quarter of 2024 back to a U.S. customer. Therefore, this explains the decline of the U.S.A. share in the consolidated revenue. Latin America remains at the same levels in revenues.
But as mentioned, there's a recovery in the volume of new orders in Latin America, mainly from Argentina. Our guys remained stable in the first quarter of 2024. Looking at the order entry, the first quarter for ROMI Machines was quite strong with new businesses, a 31% growth over the first quarter in 2024. Here we have grown in the domestic sales and also with foreign sales, both driving growth therefore, and both in domestic and foreign sales, therefore, resulted in this higher order entry level, which is also higher than the first quarter of 2024. BW Machines, as mentioned, increase in order entry levels, which is significant. In the first quarter of 2025, we have orders for 2026, and in terms of growth, it's double the volume of entry orders of 2024.
First quarter, which is also reflected in the growth of the BW order backlog for the 2025 and 2026 deliveries. In Rough and Machined Cast Iron Parts, we have a slower growth, especially because of the agricultural segment. We have these three business units results reaching BRL 422.4 million new order entries in the first quarter of this year, representing growth that is over 41% over last year's quarter, 1Q 20 24. With a significant order entry level, our order backlog also had an expressive growth in relation to March, 37.4%, and December 2024, 25.5% growth, which gives us a positive outlook on the fact that we will be able to maintain these results over 37%. It's above BRL 300 million. A backlog, a significant volume for this business unit. BW, BRL 430 million, roughly. These are orders for 2025 and 2026. In 2025, we are going to focus on execution.
Rough and Machined Cast Iron Parts also grew, although at a lower rate, but also indicating a gradual recovery, mainly in the agricultural segment. As regards our profitability, in the first quarter, we observed a reduction in our gross profit, mainly in the BW and Rough and Machined Cast Iron Parts units, as we had an increase in gross margin. Here in BW, we have mainly two factors. Firstly, the technology package that was delivered in the first quarter of 2024 had a gross margin that was far higher when compared to [inaudible]. Secondly, a decline in the sales of parts and services with, of course, we have sales reps on the field delivering the machines that we sold last year. For Rough and Machined Cast Iron Parts , especially because of the downtime at the end of the year, migrating lines, we had a slower recovery than we had imagined.
This unit brings us a fixed product that is significant, together with the lower sales volumes of the first quarter. We had this negative impact on the operating margin of Rough and Machined Cast Iron Parts in the first quarter of this year. As regards the EBIT, with the lower gross margin, despite the sales volume, we had a decline in the EBIT margin of 0.5 percentage points. In relation to the EBITDA, we have maintained the absolute EBITDA volumes. With the sales growth, we had a 2 percentage points loss in this margin. As regards the net income is 10% above, 10% higher. In terms of margin, there was a decline of less than 1 percentage point, reaching, in the first quarter, BRL 10 million in real net income.
In terms of sales per business unit in ROMI Machines, we had growth in gross margin. The first quarter in 2024 was significant already and there is an increase in volume, a higher representation of the rental revenues and the profit of 2025 and the exchange rate as well. Over the period, there was a depreciation of the real, which had a positive impact in foreign sales, export margins. With the expansion of the gross margin, we also had an expansion of the EBITDA margin in the first quarter, meaning 4.6% is a considerable margin for a first quarter. In BW, as mentioned, despite an important evolution in revenue, mainly with a mix of products, we had an important reduction decline in gross margin. This decline in gross margin is smaller when looking at the EBITDA and an expressive growth in revenues.
We were able to dilute operating expenses, but there was a decline in the EBITDA margin over the first quarter of 2024. Finally, in Rough and Machined Cast Iron Parts , we had the stoppages at the end of the year for maintenance, and one production line was transferred, was migrated, and it picked up more slowly than we had planned. This had a significant impact on this quarter's margin, both the gross and the EBITDA margin. Mainly the absolute growth with the revenue growth was smaller. As far as the financial position, we remain solid. We finished the quarter with solid cash and the debt. The first quarter, we normally use more cash for our first quarter. This was a relatively small number. We are positive in relation to the cash generation from our backlog that was closed in March.
Our loans are covered by the cash volumes that we have, and in financial terms, we remain extremely solid. Our share performance compared to the Bovespa Index over the two years, we are quite below the Bovespa Index. We have capital goods. Of course, you have to look at the fluctuation sensitive macroeconomic scenario still. Our shares performed below the Bovespa over the period. We will now conclude the presentation. We would like to thank you all once again for joining us in the conference call, and we will open the Q&A session. Thank you very much.
Ladies and gentlemen, we will now begin the Q&A session. We should remind you that this conference call is exclusively for investors and investment professionals. To ask a question, type it along with your name and the name of the company you represent in the Q&A tool of the Zoom app. For questions via audio, use the raise hand tool to open your microphone, and then identify yourself.
Good morning, Cedric. We have a question from Cedric Mallow. "We commend you on the result. I'd like to learn more about the BW Machines sales for the U.S. and Asia. Can the BW Machines gain more market share in relation to the sector? Thank you."
Thank you, Cedric, for your question. BW manufactures heavy machines, with complete turnkey solutions for major projects. These projects are global: U.S., Asia, China mainly, and Europe also, and Nordic countries. So I would say that this market is more oriented toward this type of solution. BW is known by its solutions for large engines or energy generation systems. The BW's demand last year and in this first quarter is also tied to the global demand for the energy station generators. Most players in this market are BW customers and see BW as an important player for such applications. This is more or less how it works. We have customers in the U.S.A., in Asia, and Europe, and there's a positive demand for deliveries in 2025 and also 2026. We have a solid order backlog.
Well, since there are no further questions, I will turn the floor back to Mr. Luiz Cassiano for the closing remarks. Remember that the IR department at ROMI will be available to entertain questions. Over to you, Mr. Luiz Cassiano Rosolen.
Thank you, Julia. Thank you everyone for attending the first quarter of 2025 ROMI's earnings release. We will be happy to entertain additional questions. We will report the second quarter results on July 15, 2025. Thank you, and I wish you all an excellent day.