Companhia Melhoramentos de São Paulo (MSPA3) Q2 2023 earnings summary

Executive summary

• Q2 2023 revenue rose 20% YoY to R$48.6m; net income was R$7.0m versus a R$14.7m loss in Q2 2022, reflecting operating improvements and higher profitability.

• H1 revenue increased 2% YoY to R$98.3m, while net loss narrowed to R$1.2m from R$16.4m.

Financial highlights

• Q2 consolidated net revenue was R$48.639m, up 20% YoY and down 2% QoQ; H1 revenue was R$98.256m, up 2% YoY.

• Q2 net income was R$6.969m versus a R$14.716m loss YoY; H1 net loss was R$1.225m versus R$16.410m in H1 2022.

• Q2 EBITDA was R$24.501m; adjusted EBITDA, excluding R$9.944m in non-recurring movements without cash impact, was R$14.557m, up 1,706% YoY.

• H1 EBITDA was R$30.054m; adjusted EBITDA, excluding non-recurring movements, was R$20.110m, up 254% YoY.

• Q2 gross profit increased 12% QoQ and 41% YoY; operating expenses net of operating income were R$1.2m, down 93% YoY.

Outlook and guidance

• Institutional publishing customers postponed most purchases planned for Q2; management expected the deferred revenue to materialize during 2023 through increased public-sector and retail sales.

• Publishing plans included strengthening service to public entities and retail, with releases aligned to current themes; retail demand remained relatively stable but declining.

• A land-return matter involving 29.76% of a property was expected to be concluded in Q4 2023 under an amendment signed on August 3.