Tegma Gestão Logística (TGMA3) Q2 2024 earnings summary

Executive summary

• Net revenue grew 29% year-over-year in Q2 2024, driven by both Automotive and Integrated Logistics divisions, with the highest level in five years.

• Net income for Q2 2024 was BRL 64 million, up 59% year-over-year, with net margin rising to 13.4%.

• EBITDA in Q2 2024 was BRL 85.2 million, up 46.8% year-over-year, with margin expanding to 18.0%.

• Distributed BRL 80.4 million in dividends and JCP for H1 2024, representing 80% of net profit and a 4.8% yield.

• Investments in yard expansions and sustainability initiatives highlighted, including joint ventures to handle increased imported and electric vehicle volumes.

Financial highlights

• Q2 2024 net revenue reached BRL 473 million, up 29% year-over-year.

• EBITDA margin expanded by 2.2 percentage points to 18.0%, driven by operational efficiency.

• Net profit for Q2 2024 was BRL 64 million, a 59% increase year-over-year, with net margin up 2.6 percentage points.

• Free cash flow in Q2 2024 was BRL 28 million, reflecting operational performance and higher working capital needs.

• CAPEX in Q2 2024 totaled BRL 12 million, focused on logistics equipment, fleet renewal, and IT investments.

Outlook and guidance

• Domestic vehicle sales in Brazil are forecast to grow 10.9% to 14.7% in 2024, with strong demand expected in 2H24.

• Management expects continued positive impact from improved economic conditions, lower unemployment, and better credit conditions.

• Ongoing investments in yard capacity and new contracts in chemicals and home appliances logistics.

• Dividend policy remains above the minimum 50% payout, with flexibility to adjust based on capital allocation needs.

• Exports face challenges from Chinese OEM competition and weak Latin American markets; higher import taxes on electric vehicles may reduce future import volumes.