Financial performance

MRS net revenue increased R$ 1,164.7 million, a result 26.3% higher than the achieved in 2021. The good result was driven mainly by the transported volume of 104.2 Mt in the iron ore segment, which represents 58.5% of the Company’s total volume, and by the increase in the consolidated tariff. Expense costs increased R$ 608.6 million compared to 2021, mainly due to the increase in transported volume; inflationary pressure, especially in diesel costs; and growth in asset maintenance costs.

EBITDA

In 2022, MRS recorded 15.4% growth in EBITDA, compared to the previous period, reaching R$ 2,844.9 million, with 50.9% EBITDA Margin. The number represents a 4.8 p.p. drop compared to 2021.

Net income

MRS net income was R$ 874.2 million in 2022, growing 25% as compared to the previous period, equivalent to R$ 174.6 million. This change reflects the volume transported combined with the consolidated tariff increase, partially offset by the recognition of tax credits in 2021.

Indebtedness

MRS ended 2022 with a balance of R$ 4,406 million in gross debt, an increase of R$ 101.6 million compared to 2021. The change was mainly due to the funding of the amount of R$ 600 million with BNDES, partially offset by amortizations of the 1st series of the 7th issue of debentures, the entirety of the 8th issue of debentures and the loan with Bank of Tokyo, which reduced the company’s cash at R$ 969.8 million.

Net debt balance reached R$ 3,539.1 million, versus R$ 2,467.8 million in 2021. The increase was driven by changes in amortization of financing and new funding, in addition to the flow of investments.

The financial leverage ratio (net debt/EBITDA) was 1.2x on December 31, 2022, versus 1.0x on the same date in 2021.

*Detailed information can be found at 2022 Financial Results Report
**More restrictive condition assumed with creditors.

Amortization schedule

MRS average debt term as of December 2022 was 5.1 years, representing a lengthening of the Company’s debt profile compared to the same period of the previous year, which was 4.67 years.

Rating

Statement of cash flow

MRS cash generation in 2022 was negative by R$ 969.7 million. The cash balance ended the year at R$ 866.9 million. In 2021, this figure was R$ 1,836.6 million. The change mainly reflected the financing activity due to the lower volume of funding.

Investor Relations

MRS values transparency in communication with its stakeholders and, for this purpose, develops various actions to consolidate the relationship with its investors, especially investors in the Fixed Income market, financial institutions and development banks. Among the main initiatives, the following stand out: presence in different dissemination channels, with emphasis on LinkedIn; website specially dedicated to Investor Relations, in a modern environment, with organized content and optionally in English, in addition to a responsive design, which allows for easier and more intuitive navigation. In addition, meetings are held with investors and the mailing list is reviewed on an annual basis;