Alupar Investimento (ALUP11) Q2 2024 earnings summary

Executive summary

• Net revenues for 2Q24 reached R$963.53 million, up 22.2% year-over-year, driven by strong transmission performance and new projects, especially in Latin America.

• Net profit for the quarter was R$2,237 million, a 6.7% increase year-over-year, with adjusted EBITDA margin improving to 90.0%.

• Five new projects were added in the first semester, including four abroad (Chile and Peru) and one in Brazil, with significant Latam expansion and US$165.5 million in CAPEX.

• Sustainability efforts were highlighted with the publication of the fourth sustainability report, focusing on transparency, ESG, and safety.

• Interim dividends of R$57.1 million (R$0.18 per Unit) were approved, to be paid within 60 days.

Financial highlights

• IFRS net revenues reached R$953.7 million in 2Q24, up 22.2% year-over-year; EBITDA at R$785.7 million, up 23.5%, with an EBITDA margin of 82.4%.

• Transmission segment net revenues increased 28.9% year-over-year to R$775.0 million, with EBITDA up 31.2% to R$697.4 million.

• Dividend payout increased 82% year-over-year, reaching R$0.21 per unit.

• Net debt decreased 4.2% year-over-year to R$8,676.4 million, with net debt/EBITDA at 3.3x.

• Market capitalization reached R$10.1 billion as of August 8, 2024.

Outlook and guidance

• Seven new Latam projects are expected to begin operations by 2027, representing US$289.7 million in investments and US$39 million in annual revenue.

• RAP for the 2024/25 cycle increased 10.3% to R$3,932 million, reflecting asset and country diversification.

• Participation in upcoming transmission auctions in Brazil is under evaluation, depending on project returns.

• Ongoing focus on both organic growth and potential M&A opportunities in Latin America, with a policy of diversification.

• Management expects continued strong cash flow and moderate leverage, supported by predictable revenues from regulated assets.