Alupar Investimento (ALUP11) Q2 2024 earnings summary

Executive summary

• Net revenues reached R$953.7 million in 2Q24, up 22.2% year-over-year, driven by strong transmission segment growth and higher concession asset remuneration.

• Consolidated net income rose 6.7% to R$237.1 million compared to 2Q23, with adjusted EBITDA margin improving to 90.0%.

• Interim dividends of R$57.1 million (R$0.18 per Unit) were approved for 2Q24, to be paid within 60 days.

• Investments totaled R$119.3 million in 2Q24, mainly in transmission projects under implementation in Brazil and Latin America.

• Sustainability initiatives were highlighted in the 2023 report, reinforcing ESG commitments and transparency.

Financial highlights

• Transmission segment net revenues (IFRS) increased 28.9% year-over-year to R$775.0 million, with EBITDA up 31.2% to R$697.4 million.

• Generation segment net revenues were stable at R$179.8 million, but EBITDA declined 11.1% to R$108.3 million, and net income turned negative at R$(1.7) million due to higher costs and FX impacts.

• Net debt decreased 4.2% year-over-year to R$8,676.4 million, with net debt/EBITDA at 3.3x.

• Dividend payout increased 82% year-over-year, reaching BRL 0.21 per unit.

• Regulatory net revenues saw a reduction of BRL 70 million due to a non-recurrent credit in the previous year.

Outlook and guidance

• Ongoing expansion with new transmission projects in Brazil, Chile, Peru, and Colombia, with total investments of US$289.7 million planned by 2027.

• RAP for the 2024/25 cycle increased 10.3% to R$3,932 million, reflecting asset and country diversification.

• Focus on value creation through new energy commercialization brand and solutions for medium-voltage customers.

• Participation in upcoming transmission auctions in Brazil is under evaluation, depending on project returns.

• Management expects continued strong cash flow and moderate leverage, supported by predictable revenues from regulated assets.