Mo-BRUK Q1 2025 presentation slides: Revenue up 10%, EBITDA margin improves to 45%

Mo-BRUK SA (WSE:MBR), a Polish circular economy leader, reported a 10% year-over-year revenue increase to 59.6 million PLN in Q1 2025, with waste processing volumes up 19.2% to 73.3 thousand tons. EBITDA grew to 24.3 million PLN (45% margin), however, net profit declined slightly to 12.6 million PLN due to increased depreciation and interest expenses; the successful integration of El-Kajo nearly doubled its revenue and improved its EBITDA margin from -4% to 40%. The company anticipates improved net profit margins in upcoming quarters due to expected interest rate cuts and increased energy self-sufficiency.

Analysis

Mo-BRUK SA (WSE:MBR) reported robust Q1 2025 operational performance, marked by a 10% year-over-year revenue increase to 59.6 million PLN, driven by a significant 19.2% rise in waste processing volumes to 73.3 thousand tons. This top-line growth translated into an improved EBITDA of 24.3 million PLN, lifting the EBITDA margin to 45% from 40% in Q1 2024, underscoring enhanced operational efficiency. Despite these gains, net profit saw a slight contraction to 12.6 million PLN from 13.4 million PLN, attributed primarily to increased depreciation expenses and higher interest costs. Segmental performance was led by the RDF segment, which saw revenue surge 30.3% to 24.1 million PLN, while the Incineration segment's revenue remained flat at 22 million PLN, indicating varied contributions across business units. A key highlight is the successful integration and turnaround of the El-Kajo acquisition, which nearly doubled its revenue year-over-year to 7.56 million PLN and achieved a remarkable EBITDA margin improvement from -4% to 40% in Q1 2025, having completed its investment process and reached its target processing capacity. Mo-BRUK's balance sheet strengthened, with total debt reduced to 137.2 million PLN and a conservative net financial debt to EBITDA ratio of 0.7. The company anticipates improved net profit margins going forward, supported by expected declines in interest expenses stemming from potential rate cuts in Poland and ongoing debt repayments, alongside a substantial increase in energy self-sufficiency from 1% to 34% of consumption, which should mitigate cost pressures and support margin expansion.

Key Decisions for Investors

• Investors should acknowledge Mo-BRUK's strong underlying operational momentum, evidenced by revenue, processing volume, and EBITDA margin growth, which currently overshadows the temporary pressure on net profit from non-operational factors.
• The successful financial turnaround and integration of El-Kajo, which now operates at its target capacity, combined with significant advancements in energy self-sufficiency, present tangible drivers for future margin expansion and cost efficiencies.
• It is pertinent to monitor upcoming financial disclosures for the materialization of anticipated benefits from lower interest expenses and the company's progress towards its stated 50% EBITDA margin target in its core business operations.
• Consider the sustained growth performance of the RDF segment and the enhanced operational capabilities contributed by the fully integrated El-Kajo asset as key indicators of Mo-BRUK's strategic execution and its ability to capitalize on favorable trends in the circular economy sector.