Eucatex (EUCA4) Q2 2024 earnings summary

Market and industry conditions

• Construction materials industry grew 3% in 2023, with a 3% forecast for 2024, after prior declines.

• Domestic wood panel market grew 12.9% year-over-year in 2Q24; exports surged 73.0%.

• Real estate paint market posted a 2.1% drop in 2023 and a 6.7% decline in 1H24.

• Wood flooring market experienced a 23.7% drop in 2023 and a 3.4% decline in 1H24.

• Construction materials sector revenue grew 3.0% YTD through June 2024.

Financial highlights

• Net revenue reached R$688.8 million in 2Q24, up 5.8% year-over-year; 1H24 net revenue was R$1,329.8 million, stable year-over-year.

• Recurring EBITDA in 2Q24 was R$142.5 million, up 10.3% year-over-year; margin improved to 20.7%.

• Recurring net income for 2Q24 was R$67.0 million, a decrease from R$124.9 million in 2Q23.

• Gross margin in 2Q24 was 32.4%, slightly down from 32.8% in 2Q23.

• Net margin in 2Q24 was 9.7%, up 0.2 p.p. year-over-year.

Segment performance

• Construction segment net revenue was R$269.0 million in 2Q24, up 6.9% year-over-year.

• Industry and resale segment net revenue was R$254.4 million in 2Q24, up 5.1% year-over-year.

• Export segment net revenue was R$142.4 million in 2Q24, down 3.6% year-over-year.

• Construction accounted for 39–40% of revenue, industry and resale 37%, and exports 22% in 2Q24.

• Export segment revenue rose 10.3% in 2Q24, benefiting from higher sales volume, pricing, and FX gains.