STBP: 3Q21 Earnings Release

EARNINGS RELEASE

3Q21

SANTOS BRASIL REPORTS EBITDA OF R$ 152 MILLION, WITH MARGIN OF 38.3%

São Paulo, November 9, 2021 - The quarterly financial information (ITR) and standardized financial statements (DFP) are presented in accordance with the accounting practices adopted in Brazil, in compliance with the provisions of the Brazilian Corporations Law, International Financial Reporting Standards (IFRS) and the standards issued by the Accounting Pronouncements Committee (CPC).

OPERATIONAL AND FINANCIAL PERFORMANCE (summary table)

R$ million, except when specified	3Q21	3Q20	(%)	9M21	9M20	(%)
Port Terminals - quay operations (no. of containers)	321,448	254,211	26.4%	979,772	776,257	26.2%
Port Terminals - warehousing (no. of containers)	41,145	26,750	53.8%	124,715	89,305	39.7%
SBLog - warehousing (no. of containers)	19,282	10,144	90.1%	50,076	32,473	54.2%
Vehicle Terminal (no. of vehicles)	42,169	38,701	9.0%	152,447	101,020	50.9%
Net Revenue	396.6	220.3	80.0%	1,090.6	668.9	63.0%
EBITDA	152.0	49.7	205.8%	405.8	130.4	211.2%
% EBITDA margin	38.3%	22.6%	15.8 p,p,	37.2%	19.5%	17.7 p,p,
Net Income / Loss	66.6	-5.4	1,333.3%	157.9	-28.0	-663.9%
Net Debt	-717.5	-655.0
Net Debt/Proforma EBITDA LTM	-2.04x	-7.04x

¹ EBITDA of the last 12 months, ex-IFRS 16.

3Q21 HIGHLIGHTS

• Santos Brasil's three port terminals registered container throughput of 321,448 units in 3Q21 (+26.4% YoY), despite the challenges in global supply and logistics chains.
• Logistics bottlenecks in containerized cargo supply and transportation, intensified by resilient demand in most global markets, led to shocks in the supply of ships and containers used to distribute goods, which weighed on potential volume in the quarter. Moreover, given the strong increase in maritime trade on premium routes (China, USA, and Europe), ships were redirected to those markets at the expense of secondary routes, such as South America.
• Despite the weaker-than-expected peak season, due to the above factors, Tecon Santos registered container throughput growth of 30.7% YoY, outpacing throughput growth at the Port of Santos1 (13.5% YoY), led by growth in full import containers (+69.1% YoY).
• At Tecon Vila do Conde, container throughput grew 11.1% YoY on strong growth in cabotage cargo (+30.3% YoY) and good performance of long-haul volumes (+3.4% YoY). At Tecon Imbituba, container throughput fell 13.0% YoY, reflecting lower cabotage volumes.
• Regarding the three liquid bulk port terminals in Itaqui, Maranhão state, following the signing of contracts in August, the Company has already submitted the Basic Installation Plan to the port authority (EMAP) for analysis and is contracting basic engineering and concept services, which are required for obtaining permits and for registering with the National Petroleum Agency (ANP), the regulator for fuel handling and storage. The Company continues to execute its strategy for starting operations at its 2 brownfield terminals in 2022, accelerating the existing business plan.
• Net Revenue in the quarter was R$ 396.6 million (+80.0% YoY), supported by volume growth and better mix in all operating units, as well as higher average ticket, especially at Tecon Santos, due to contractual renegotiations with shipowners. In relation to 3Q19, a comparison base free of Covid-19 impacts, Net Revenue advanced by 58.5%.
• EBITDA came to R$ 152.0 million (+205.8% YoY), with EBITDA margin of 38.3%. Compared to 3Q19, a period with no Covid-19 impacts, EBITDA grew 156.3%. Excluding nonrecurring items, 3Q21 EBITDA was R$ 155.6 million, with EBITDA margin of 39.2%.
• The Company recorded Net Income of R$ 66.6 million in 3Q21, reversing the net loss of R$ 5.5 million in 3Q20. In 9M21, Net Income was R$ 157.9 million, representing a substantial turnaround from the net loss in 9M20.

1 Considering only container volumes.

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EARNINGS RELEASE

3Q21

• In 3Q21, CAPEX came to R$ 88.1 million, of which R$ 42.4 million was allocated to lease fees for the bulk liquid terminals in Itaqui, whose auctions were held in April and contracts signed in August, and R$ 37.3 million to capacity expansion and modernization projects at Tecon Santos.
• The Company maintains its 2021 guidance for quay volumes (1.3 - 1.4 million containers), EBITDA (R$ 530 - R$ 580 million) and CAPEX (R$ 250 - R$ 300 million).

3Q21 EARNINGS CONFERENCE CALL

November 10, 2021 (in Portuguese, with simultaneous translation into English) 10:00 a.m. (Brasília) | 8:00 a.m. (EST) | 1:00 p.m. (London)

Dial-in details

Phone: Brazil: [phone] and [phone] | International: [phone] and [phone]

Webcast:ri.santosbrasil.com.br/en

Replay: [phone] | Password: 1276956# (Portuguese) e 1846528# (English)

INVESTOR RELATIONS TEAM

Daniel Pedreira Dorea

CFO & IRO

Juliano Navarro

Investor Relations Executive Manager

Vinicius Bioni

Investor Relations Coordinator

Marjorie Samaha

Investor Relations Senior Analyst

IR e-mail:[e-mail]

Disclaimer

We make statements on future events that are subject to risks and uncertainties. Such forward-looking statements are based on the Management's beliefs and assumptions and on information currently available to the Company. Forward-looking statements include information on our current plans. beliefs or expectations as well as those of the Board of Directors and Executive Officers.

The reservations regarding forward-looking statements and information also include information on possible or presumed operating results. as well as any statements preceded or followed by or which include words such as "believe". "may". "will". "continue". "expect". "intend". "plan". "estimate" or similar expressions.

Forward-looking statements are not guaranteeing of performance. They involve risks. uncertainties and assumptions because they refer to future events. therefore. depending on circumstances that may or may not occur. Future results and creation of value for shareholders may differ materially from those expressed or suggested by said forward-looking statements. Many of the factors that shall determine such results and values are beyond the capacity of control or prediction of Santos Brasil.

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EARNINGS RELEASE

3Q21

OPERATIONAL INDICATORS

Consolidated information

UNITS	3Q21	3Q20	(%)	9M21	9M20	(%)
PORT TERMINALS
Quay operations (containers)	321,448	254,211	26.4%	979,772	776,257	26.2%
Full containers	251,871	185,389	35.9%	757,540	577,660	31.1%
Empty containers	69,577	68,822	1.1%	222,232	198,597	11.9%
Warehousing operations (no, of containers)	41,145	26,750	53.8%	124,715	89,305	39.7%
Quay operations - general cargo (ton)	71,794	84,802	-15.3%	251,919	182,613	38.0%
LOGISTICS
Warehousing operations	19,282	10,144		50,076	32,473
90.1%	54.2%
VEHICLE TERMINAL
Vehicle handled	42,169	38,701	9.0%	152,447	101,020	50.9%
Exports	38,065	36,726	3.6%	135,087	87,573	54.3%
Imports	4,104	1,975	107.8%	17,360	13,447	29.1%

Port terminals

UNITS	3Q21	3Q20	(%)	9M21	9M20	(%)
PORT TERMINALS
Tecon Santos	280,851	214,857	30.7%	862,057	668,998	28.9%
Full containers	229,209	162,656	40.9%	690,609	514,304	34.3%
Empty containers	51,642	52,201	-1.1%	171,448	154,694	10.8%
General cargo (ton)	0	0	-	0	0	-
Tecon Imbituba	11,319	13,005	-13.0%	32,356	34,005	-4.8%
Full containers	6,959	7,417	-6.2%	20,882	20,298	2.9%
Empty containers	4,360	5,588	-22.0%	11,474	13,707	-16.3%
General Cargo (ton)¹	71,794	84,802	-15.3%	251,866	182,586	37.9%
Tecon Vila do Conde	29,278	26,349	11.1%	85,359	73,254	16.5%
Full containers	15,703	15,316	2.5%	46,049	43,058	6.9%
Empty containers	13,575	11,033	23.0%	39,310	30,196	30.2%
General cargo (ton)	-	-	-	54	27	100.0%

¹ Imbituba General Cargo Terminal (TCG Imbituba).

Port Terminals

Consolidated: throughput of 321,448 containers in 3Q21 (+26.4% YoY), record for a third quarter since 2012, led by 44.2% growth in long-haul volume, which accounted for 80.7% of total throughput in the quarter (vs. 70.8% in 3Q20). Long-haul performance reflects the sound import container volume (+45.0% YoY), driven by the recovery in industrial activity and strong demand for consumer goods in Brazil and the world, as well as resilience of Brazilian exports (+14.0% YoY). Other maritime transport segments also delivered positive results, with cabotage volumes up 14.1% and transshipment volumes advancing 24.0% YoY. The better container mix contributed to better results in quay and warehousing operations, with full containers accounting for 78.4% of consolidated throughput in 3Q21 (vs. 72.9% in 3Q20).

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EARNINGS RELEASE

3Q21

Consolidated container mix (%)

Long Haul vs. Cabotage

Handling vs. Transshipment

Tecon Santos: 280,851 containers handled in 3Q21 (+30.7% YoY), the highest volume for a quarter since 2013, with growth outpacing that of the Port of Santos in the same period (+13.5% YoY). As observed in recent quarters, Tecon Santos' positive performance was driven by (i) import volumes (+52.0% YoY), reflecting the ongoing industry and retail restocking, supported by domestic consumption, especially in the automotive, chemical, pharmaceutical and consumer goods segments, and (ii) solid growth in exports (14.1% YoY). In this context, Tecon Santos operated 18 extra calls in 3Q21, of a total of 32 extra calls in the Port of Santos (i.e., 56.3% of extra calls) to reach 40.0% market share in the quarter, up from 34.8% in 3Q20.

In terms of container mix, the terminal handled 229,209 full containers (+40.9% YoY), 77,046 of which were import containers (+73.0% YoY) and 50,695 export containers (+4.9% YoY). Meanwhile, empty containers registered a slight decline of 1.1% YoY.

Throughput: Port of Santos vs. Tecon Santos - '000 containers	Full import container throughput (Tecon Santos) - '000 containers
		13.5%												75.9		80.1	77.0
												65.1				74%			73%
																43%
								44.5
										12%
639	725				30.7%
									-33%
				215		281
	3Q20		3Q21		3Q20	3Q21			3Q20			4Q20		1Q21	2Q21			3Q21
			Port of Santos				Tecon Santos						Full containers (imports)				YoY (%)

Tecon Imbituba: 11,319 containers handled in 3Q21 (-13.0% YoY), reflecting lower cabotage operations at the terminal, represented by ALCT2 service operated by Aliança, which accounted for 98.8% of total throughput in the quarter (vs. 98.9% in 3Q20). The throughput decline occurred in both full (-6.2% YoY) and empty containers (-22.0% YoY). In 3Q21, general cargo throughput at TCG Imbituba amounted to 71,794 tons (-15.3% YoY), represented mainly by pulp and food commodities exports.

Tecon Vila do Conde: 29,278 containers handled (+11.1% YoY), explained by (i) 3.4% YoY increase in long-haul services, driven by 13.9% YoY growth in exports, led by shipments of frozen beef, manganese, and kaolin, and (ii) higher cabotage volumes (+30.3% YoY), accounting for 33.8% of the terminal's container throughput (vs. 28.8% in 3Q20), although with a higher concentration of empty container throughput. In terms of container mix in the quarter, there was a sharp increase in the empty container volume (+23.0% YoY), with an atypical surge in exports, reflecting the repositioning of empty containers for primary routes by shipowners, while full container handling increased 2.5% YoY.

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EARNINGS RELEASE

3Q21

Warehousing: containers stored reached 41,145 units (+53.8% YoY), driven by strong growth in full import container throughput at Tecon Santos. The retention rate at the terminal was 55% (vs. 54% in 2Q21 and 3Q20), while dwell time2 expanded to 10.2 days, from 9.5 days in 3Q20 (10.8 days in 2Q21). Moreover, the "On the Water Clearance for AEOs" regime, which enables the registration of import declarations before the container is unloaded at the port of destination, had an impact of 0.5 day on the dwell time of full import containers stored at Tecon Santos in 3Q21.

Logistics

In 3Q21, SBLog stored 19,282 containers (+90.1% YoY), reflecting higher imports at the Port of Santos, considering the capture of containers from other terminals for storage, mainly at the bonded warehouses (CLIAs). The positive impact from imports at SBLog was driven by bonded warehousing and various other services integrated with clients' supply chains, such as special bonded warehousing, cross-docking, inventory management, distribution, transportation, etc. Compared to 2Q21, containers stored by SBLog increased by 16.3%.

Vehicle Terminal

In 3Q21, TEV handled 42,169 vehicles (+9.0% YoY), with 38,965 units exported (+3.6% YoY), led by light vehicle shipments to Argentina, and 4,104 units imported (+107.8% YoY). In addition to the better mix of imports, heavy vehicles also increased their share in TEV's total volume in 3Q21, to 13.4% (vs. 9.3% in 2Q21 and 9.0% in 3Q20). Imports of agricultural equipment and tractors were the highlight, since generate higher margins.

2 Average dwell time of containers or vehicles stored.

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