Construtora Tenda (TEND3) Q3 2024 earnings summary

Executive summary

• Achieved record consolidated launches of R$2,150.1 million (up 87.1% vs 4Q23), net pre-sales of R$1,554.6 million (up 52.5% vs 2Q24), and record net revenue of R$912.1 million in 3Q24, up 13.7% year-over-year.

• Net income reached R$76.2 million (8.4% margin) consolidated, with Tenda segment posting a record R$92.1 million net income.

• Operational efficiency and cost control led to recognized cost savings above BRL 4 million in the quarter.

• Approved a new Clawback Policy and compensation practices to align management and shareholder interests.

• Alea segment continues to show margin improvement and is expected to reach profitability in 2025, with cash generation in 2026.

Financial highlights

• Adjusted gross profit reached R$293.6 million, up 55.6% year-over-year; adjusted gross margin improved to 32.2%.

• Record net revenue and net income in the Tenda segment, with recurring net income at R$75.3 million and ROIC/ROCE above 26%.

• Operating cash generation for Tenda in 3Q24 was R$51.7 million; would have been R$82.1 million excluding CEF rule change.

• Margin REF for Alea reached 21%, and gross margin for new sales stabilized at 35%.

• Corporate net debt/equity closed at 5.5%; average cost of debt at 11.57% per year.

Outlook and guidance

• 2024 guidance for Tenda revised: net pre-sales R$4.1–4.4 billion, adjusted gross margin 31–32%, adjusted EBITDA R$500–550 million.

• Alea guidance maintained: net pre-sales R$400–500 million, adjusted gross margin 9–11%, profitability expected in 2025.

• Strong cash generation expected in Q4 due to Pode Entrar inflows and swap contract gains.

• Conservative approach in guidance, with potential to exceed upper limits.

• Management expects continued revenue and margin growth in 2025, supported by government housing programs and operational efficiency.