Mills Locação, Serviços e Logística (MILS3) Q2 2024 earnings summary

Executive summary

• Achieved record net revenue of R$370.1 million in 2Q24, up 9.6% year-over-year, driven by 14.1% rental revenue growth and strategic portfolio diversification, including the JM Empilhadeiras acquisition.

• Reinforced leadership in equipment rental in Brazil, expanded cross-selling opportunities, and maintained operational resilience despite climate challenges in Rio Grande do Sul.

• Implemented capital optimization measures: issued R$400 million in debentures, completed share buybacks, and approved R$50 million in dividends and JCP.

• Recognized for ESG initiatives, publishing a new sustainability report, SBTi commitment, and multiple workplace and sector awards.

• Cancelled 5 million treasury shares and launched the 5th share buyback plan, representing 1.90% of capital.

Financial highlights

• Net revenue reached R$370.1 million, up 9.6% year-over-year; rental net revenue was R$345.1 million, up 14.1%.

• Adjusted EBITDA was R$181 million, up 7.7% year-over-year, with a margin of 49%.

• Net income was R$71 million, up 11% year-over-year, with a net margin of 19.2%.

• Cash net income totaled R$107.3 million, with a net cash margin of 29%.

• Investments totaled R$464.2 million in 2Q24, primarily in rental assets.

Outlook and guidance

• Positive outlook for 2H24, expecting delayed infrastructure projects to commence, sector diversification, and continued growth in heavy assets, elevation platforms, and formwork/shoring.

• JM Empilhadeiras acquisition expected to increase cash flow predictability, reduce cyclicality, and triple the sales pipeline within 60 days.

• CapEx for 2024 remains focused on rental segment growth in both heavy and light assets.