Marcopolo’s Profit Drops as Domestic Sales Mix and Costs Pressure Margins

Marcopolo S.A. (B3: POMO4), Latin America’s largest bus body manufacturer, reported a net profit of R$243.1 million ($40.5 million) for the first quarter of 2025, a 23.3% drop from the previous year.

The company’s financial report, published April 30, 2025, shows revenue held at R$1.7 billion ($0.3 billion), but a weaker sales mix and higher costs reduced profits. EBITDA reached R$262.0 million ($43.7 million), down nearly 17% year-on-year.

The EBITDA margin fell to 15.4% from 19.0%. Marcopolo pointed to a heavier focus on lower-margin bus models in the domestic market, seasonality, and collective employee vacations as key reasons for the margin squeeze.

The cost of goods sold climbed 14.7% to R$1.29 billion ($0.21 billion), while operational expenses rose 45.2% to R$160.5 million ($26.8 million). International operations and exports offered some relief.

The domestic market contributed R$932.5 million, while exports from Brazil and international operations added R$175.1 million and R$569.8 million, respectively.

Production reached 3,294 units, up 1% from last year. However, domestic output fell 3.4% to 2,748 units as collective vacations and reduced chassis supply limited manufacturing.

Marcopolo Faces Market Share Decline

Marcopolo’s market share in Brazil slipped to 45.5% from 48.2%. The company’s focus on lighter, lower-margin models, especially for government programs like Caminho da Escola, contributed to this decline.

Increased deliveries to this program partially offset the impact on market share. The company’s net financial result improved to R$109.3 million ($18.2 million), mainly due to positive currency hedging and the absence of prior-period exchange rate losses.

Investments totaled R$67.5 million ($11.2 million), down 5.5% from the previous year, reflecting a cautious approach to capital allocation. Marcopolo expects stronger performance in the coming quarters, with a shift toward higher-value intercity coaches and a robust order book for road buses.

The company remains the market leader, with over 400,000 units produced historically and a strong international presence. Analysts forecast a 14% revenue increase, 16% EBITDA growth, and a 12% rise in net profit for 2025.

The first quarter’s results highlight the impact of product mix and operational disruptions on profitability. Marcopolo’s management focuses on adapting to market conditions and protecting margins, aiming for improved performance as the year progresses.

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