Rumo S A : Earnings Releases 4Q22

EARNINGS RELEASE 4Q22

Curitiba, February 15th, 2023 - RUMO S.A. (B3: RAIL3) ("Rumo") announces its results for the fourth quarter of 2022 (4Q22). The results are presented on a consolidated basis, in accordance with Brazilian and international accounting rules (IFRS). The comparisons made in this report consider 4Q22 and 4Q21, except when otherwise indicated.

Rumo 4Q22 and 2022 Highlights

• Rumo's transported volume reached 17.9 billion RTK in 4Q22 and 74.9 billion RTK in 2022, up 13% and 17%, respectively.
• Positive competitiveness environment was reflected in market share gains for grains exported from Mato do Grosso and Port of Santos in 2022, 44.7% and 60.7%, respectively.
• Adjusted EBITDA totaled R$ 905 million in 4Q22 and R$ 4,534 million in 2022, up >100% and 38%, respectively.
• The divestment on the 80% stake in Elevações Portuárias S.A. ("EPSA") was concluded for R$ 1,400 million, in addition to R$ 150 million in dividends.
• Net income totaled R$ 243 million in 4Q22 and R$ 514 million in 2022, driven by improved operating results and capital gains from EPSA divestment.
• Financial leverage decreased to 2.0x net debt/adjusted EBITDA vs. 2.8x in the previous year.
• Capex totaled R$ 740 million in 4Q22 and R$ 2,718 million in 2022.
• Greater energy efficiency, with lower relative fuel consumption of 1% in 4Q22 and 6% in 2022.

	4Q22		4Q21		Chg.%		Summary of financial information
				(Amounts in BRL mln)
17,943	15,883		13.0% Total transported volume (millions RTK)

2022 2021 Chg.%

74,944 64,028 17.0%

1,307	2,897	-54.9%	Total volume loaded (TU '000)	10,794	12,493	-13.6%
1,211	1,561	-22.4%	Logistics solution volume	5,456	5,526	-1.3%
2,220	1,512	46.8%	Net revenue	9,842	7,440	32.3%
(1,635)	(1,371)	19.2%	Cost of goods sold	(6,695)	(5,352)	25.1%
585	141	>100%	Gross profit	3,146	2,088	50.7%
26.4%	9.3%	17.1 p.p	Gross margin (%)	32.0%	28.1%	3.9 p.p
(152)	(144)	5.6%	Sales, general and administrative expenses	(499)	(512)	-2.5%
442	(60)	>100%	Other op. revenues (expenses)	349	(69)	>100%
14	1	>100%	Equity pickup	40	13	>100%
889	(62)	>100%	Operational profit	3,036	1,520	99.7%
485	481	0.8%	Depreciation and amortization	1,967	1,831	7.4%
1,374	419	>100%	EBITDA	5,003	3,350	49.3%
61.9%	27.7%	34.2 p.p	EBITDA margin (%)	50.8%	45.0%	5.8 p.p
(469)	-	>100%	Non-recurring adjustments1	(469)	(53)	>100%
905	419	>100%	Adjusted EBITDA	4,534	3,297	37.5%
40.8%	27.7%	13.1 p.p	Adjusted EBITDA margin (%)	46.1%	44.3%	1.8 p.p
243	(384)	>100%	Net profit (loss)	514	156	>100%
10.9%	-25.4%	36.3 p.p	Net margin (%)	5.2%	2.2%	3.0 p.p
740	701	5.6%	Capex	2,718	3,453	-21.3%

Note 1: For better comparison, the result was adjusted by non-recurring effects, namely: i) R$ 955 million | capital gains from EPSA divestment; ii) R$437 million | non-recurring events, mainly the conclusion of arbitration controversy with Farovia acquisition; iii) R$49 million | adjustment for better results comparison, consolidation of EPSA's November and December results; and; iv) R$53 million | reconciliation of accounts due to Paulista Network renewal in 2021.

Earnings Conference Call

February 16, 2023	Investor Relations
E-mail: [e-mail]
Portuguese* - 2:00 p.m. (Brasília time)
		Website: ri.rumolog.com
*With simultaneous translation to English
Phone (BR): + 55 (11) 4090 - 1621
[phone] - 8565
Password: RUMO

Público

Earnings Release

4Q22

Letter from CEO

2022 stood out in Rumo's history, as we operate with excellence and delivered the best operational result with 74.9 billion RTK and R$ 4.5 billion adjusted EBITDA. Additionally, we hit the record of the Company's capacity utilization, reaching the level of 7 billion RTK in July; we operated 20.5 million tons in cargo at Rondonópolis terminal and unloaded 514 thousand railcars at the Port of Santos.

We have reaffirmed the railway's role as the most competitive logistics solution to serve Brazil's agribusiness, with our market share advancing in the state of Mato Grosso and at the ports of Santos, Paranaguá and São Francisco do Sul. Moreover, our fertilizer operations started up at Central Network in Rio Verde (Goiás), and sugar operations in Iturama (Minas Gerais). These investments boosted Rumo's competitive advantages in the regions. As a result, Rumo more than doubled the size of the Central Network, reaching +9 billion RTK in 2022, and improving our capacity to originate cargo.

The year will stand out in Rumo's history since we have begun expansion in the state of Mato Grosso, a transformational project for Rumo and the Brazilian infrastructure. We advanced the project's licensing process and engineering plan works kicked off in November. We expect to start up operations at the Campo Verde terminal in 2026 and further move forward with rail heading for Lucas do Rio Verde.

Regarding capital allocation, we sold our 80% stake in T-16 and T-19 terminals at the port of Santos to a relevant partner, which will continue serving our customers, with excellence and investing in operations' growth. This capital recycling, coupled with the operational improvement in 2022, have accelerated the pace of our financial deleverage, with a net debt do EBITDA ratio of 2x at the end of the year. Rumo's balance sheet is prepared for its investment cycle, with a prudent and responsible financial leverage and liquidity level.

The improvements in capacity expansion, infrastructure and operations modernization are closely connected with our care towards railway and occupational safety. In 2022, accident severity plunged by 25%, and we also reached the lowest downtime compared to other railways, ranking us among the US best Class-One railways. We managed to reduce by 20% the occurrence of occupational accidents, consolidating Rumo as one of the world's top 5 railways as far as personal safety is concerned.

During 2022, we have sustainably grown, reiterating our commitment to positively impact society and the environment. We acknowledge the ESG agenda as the unique solution for our business continuity, driving us to demonstrate how environmental, social, and governance issues add value to our projects and operations. Rumo Institute supports volunteering and Private Social Investment projects, earmarking + R$ 4.3 million to initiatives that generate a positive impact on society that can be consulted in our first Social Report. All these efforts allowed us to again join B3 Sustainability Index (ISE), a key benchmark tool in the country that recognizes good corporate sustainability practices.

We reiterate our commitment to the Global Compact and the Sustainable Development goals. We also highlight the performance of our 10 commitments and our goals, with the all-time lowest accident indicator, enhanced energy efficiency in railway transportation, also mitigation of climate change-related impacts.

We are proud of our achievements so far; with a constructive view on the new year, our organization is focused on continue advancing. We thank all our employees, partners, and investors who contributed to our achievements in 2022.

João Alberto Abreu

CEO

Público

Earnings Release

4Q22

1. 4Q22 Executive Summary

In 4Q22, Rumo's transported volume reached 17.9 billion RTK, up 13% from 4Q21. In 2022, Rumo transported a record volume of 74.9 billion RTK, a 17% growth. This result reflected a more productive market dynamics, with crop growth and Rumo's greater competitiveness, anchored by higher capacity, especially in the North Operation. The transportation of agricultural products was the key driver of growth, highlighting higher corn and soymeal volumes. Fuel transportation also recorded a year-on-yearincrease.

13.0%	17.0%

17.9									74.9	24.4%
15.5%
15.9						64.0
								58.9
	13.8
	11.9										47.3
				2.1%								-8.0%
							17.8%								13.4%
														13.4 12.3
				3.1	3.2
							0.8	1.0								3.3	3.8
Consolidated	North		South	Container		Consolidated	North		South	Container
			4Q21		4Q22								2021		2022

The year 2022 significantly contributed to Rumo advancing its market share at the Port of Santos, with a 1.5 p.p. gain compared to 2021. Specifically, in 4Q22, market share slowed down, as corn exports returned to normal levels after a crop shortfall in the previous period.

77.1%

7.3

4.8

0.8

4Q21

-14.6 p.p.

+47.4%

+19.6%

62.6%

10.8

5.5

1.2

4Q22

59.2%

39.2

19.8

3.5

2021

+1.5 p.p.

+29.2%

+32.4%

60.7%

50.6

23.7

7.0

2022

Central Network		North Network		Market		Central Network		North Network		Market

Source: Cargonave and Rumo System.

In 2022, Rumo recorded a market share gain of 1.6 p.p. in the state of Mato Grosso. In 4Q22, the market share of grains exported by Mato Grosso shrank 12.7 p.p, versus 4Q21, reflecting corn exports' normal levels after a crop shortfall in the previous period.

Público

Earnings Release

4Q22

57.9%
				-12.7 p.p.	45.2%
			+56.1%
	8.6		13.4
			+21.7%
5.0
	6.0
4Q21					4Q22
				Rumo		Market

Source: Cargonave, Comex Stat and Rumo System.

44.7%

43.1+1.6 p.p.

46.8+25.2%58.1

20,0	+29.9%	26,0
2021					2022
		Rumo		Market

Although volume in the state of Goiás has increased 45%, Rumo reduced 2.2 p.p. market share in 2022, especially due to limited capacity to fully supply the market. In addition, the east region of Mato Grosso has been prioritized. In the quarter, due to the same reasons mentioned above, the market share stood at 18.9%.

46.5%	-27.6 p.p.
			18.9%
			+151.5%		3.5
	1.4
			+2.1%
0.6
		0.7
4Q21		4Q22

Rumo Market

Source: Cargonave, Comex Stat and Rumo System.

27.7%			-2,2 p.p.	25.6%
		+56.8%
			16.2
10.3
+44.6%
2.9						4.1
2021						2022
				Rumo		Market

South Operation gained 1.3 p.p. market share in grains transported to the ports of Paranaguá (PR) and São Francisco do Sul (SC) in 4Q22 and 1.6 p.p. in 2022. Greater corn availability in the states of Paraná (PR) and Mato Grosso do Sul (MS), regions where Rumo is competitive, drove higher transported volume of 32% in 4Q22 and 9% in 2022, despite the soybean crop failure that adversely affected volumes in the state of Rio Grande do Sul.

35.9%	+1.3 p.p.	37.2%

			+27.4%	5.2
	4.1
		+32.1%
1.5		1.9
4Q21					4Q22
				Rumo		Market

Source: Cargonave and Rumo System.

29.5%	31.1%
+1.6 p.p.

		+3.2%	25.2
	24.4
	+9.0%	7.8
7.2
2021						2022
				Rumo		Market

Público

Earnings Release

4Q22

Net revenue totaled R$ 2,220 million in 4Q22 and R$ 9,842 million in 2022, advancing 47% and 32%, respectively, fueled by higher transported volume and yield that increased 39% in 4Q22 and 17% in 2022. In 2022, improved revenue was seen across all the Company's operations, surging 39% in the North Operation, 7% in the South Operation, and 39% in the Containers Operation.

Adjusted EBITDA, which excludes non-recurring effects came to R$ 905 million in 4Q22 and R$ 4,534 million in 2022, up >100% and 38%, respectively. Adjusted EBITDA margin ended the quarter at 40.8%, advancing 13.1

1. and 46.1% in 2022, 1.8 p.p. higher than in 2021. The energy efficiency gain of 6% in 2022 and lower pass through fee charged by MRS, which decreased in the end of May, partially mitigated the 42% fuel price increase, which coupled with higher transported volume, lifted variable cost by 45%. Fixed costs, and general and administrative expenses surged 12%, due to inflation adjustments and other operating expenses, with an emphasis on increased spending on security and facilities.

Rumo posted a net income of R$ 243 million in 4Q22 and R$ 514 million in 2022. The conclusion of EPSA divestment and operational improvement drove such growth. Comprehensive net debt decreased to R$ 9.1 billion, enhancing the Company's financial deleverage, and the Adjusted EBITDA to Net Debt ratio ended the year at 2.0x, compared to 2.8x in the previous year.

Regarding the soybean market, in 2022, according to specialized consultancies´ projections, Brazil's harvest is 129 million tons, of which, 78 million were exported. A record harvest is expected in 2023 of 156 million tons, 21% higher than the previous year, while the export market should also record a remarkable growth of 22%, with 95 million tons. The states of Mato Grosso and Goiás are expected to produce 45 million and 18 million tons, respectively, of which nearly 27 million and 11 million tons should be exported. In the South region, the states of Paraná and Rio Grande do Sul should return both production and exports to previous years' levels, reaching 22 and 16 million tons produced, and 13 and 8 million tons exported, respectively. Added to the state of Mato Grosso do Sul's growth, nearly 20 million tons are expected to be produced and 13 million tons to be exported more than in 2022.

Moreover, according to consultancies, Brazil produced 118 million tons of corn in 2022, of which 45 million were exported. In 2023, early estimates indicate production of 128 million tons, nearly 8% higher than in the previous year. Exports should reach 48 million tons, up 8% from the previous crop. The state of Mato Grosso should produce 46 million tons, while 28 million can be exported. The state of Goiás should produce 18 million tons and 4 million tons should be exported.

							+52.3%		+8.1%
			+20.5%						128
								118
-6.7%			156
138
	129	+22.0%
	-10.3%
					78
					95	+116.0%		+7.9%
	87
		78
								45	48
							21	42		46
37		42		45		32		26
25	26	27	16		28
20/21		21/22		22/23e		20/21	20/21	21/22	21/22	22/23e
20/21		21/22		22/23e				22/23e
Prod		Prod		Prod		Prod		Prod		Prod
	MT Production	Other states´production		MT Exports	Other states´exports

Source: MI Rumo /AG Rural / Veeries / Cargonave / Comex Stat / IMEA | Note: (e) - estimate

Público