Release Date: November 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Ambipar Participacoes e Empreendimentos SA (BSP:AMBP3, Financial) achieved an all-time high net revenue of 2.1 billion, representing a 79% growth compared to the third quarter of 2023.
- The company reported a quarterly all-time high EBITDA of 515.3 million, marking a 37% increase from the previous quarter.
- Fitch upgraded the company's outlook from neutral to positive, reflecting confidence in its strategic direction.
- Ambipar successfully reduced its gross debt by 214 million and net debt by 385 million, demonstrating effective financial management.
- The company expanded its EBITDA margin by 50 basis points in the first nine months of 2024, indicating improved operational efficiency.
Negative Points
- The company's leverage ratio increased from 2.2 times in the second quarter to 2.6 times in the third quarter of 2024.
- Despite revenue growth, the response division's margin was affected by a mix of revenue sources, leading to variability in profitability.
- The CapEx as a percentage of adjusted net revenue was still relatively high at 9.3%, although it showed improvement from previous levels.
- There was a drop in margins in certain regions, particularly where revenue intensity was lower, impacting overall profitability.
- The company faces challenges in maintaining consistent margins across different geographic regions due to varying market conditions.
Q & A Highlights
Q: What's the expectation for annual increments for leases after the sale of these assets?
A: Good morning Arthur. This is Joao, the CFO. We announced a partnership for the sale of assets with the Argene Group, intending to sell 2,100 pieces of equipment. Our leasing costs should increase by about 27 million, but part of our current leasing costs will be substituted by this contract.
Q: What do you expect when it comes to reducing expenses and optimizing tax scenarios for the companies in the group?
A: Good morning, this is Pedro. We have significant opportunities for efficiency projects initiated in mid-2023. We will provide more detailed disclosures at the right moment, but these efforts are connected to our guidance for incremental margins and growth through cross-selling and expense optimization.
Q: What caused the significant improvement in the EBITA margin in North America, and how much impact will the sales leaseback operations have in the next quarters?
A: Good morning, Andrea. This is Pedro. We've invested in North America to enhance contracts and integration, leading to improved margins. The field services recognized this quarter contributed to stronger numbers. Joao added that the sale and lease of assets will result in debt amortization of about 130 million, with most sales volume already booked in the third quarter.
Q: What's the growth perspective for the fourth quarter of 2024 and 2025?
A: Good morning Mark. We don't provide quarterly guidance, but we see significant potential for market share growth. We are growing alongside the market, and there's ample space to gain market share, as we currently hold single-digit shares in the markets we operate in.
Q: With a drop in CapEx net revenue to 9%, what's the expected level of CapEx intensity in the next three years?
A: Andrea, this is Joao. We've reduced CapEx intensity to 9% this quarter, and this number doesn't yet reflect the sales and asset leases. We expect CapEx intensity to be even lower in the future, aligning with a more asset-light model.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
