Companhia Melhoramentos de São Paulo (MSPA3) Q4 2024 earnings summary

Executive summary

• 2024 marked another year of transformation, with consolidated net income of R$3.3 million for the third consecutive year; results included reversals of provisions.

• New packaging factory construction began, with investment above R$40 million, including R$35 million financed by Finep; operations remained on schedule for Q1 2025.

• B Corp certification was achieved across all business units.

Financial highlights

• FY24 net revenue was R$163.1 million, down 7% YoY; adjusted net revenue, including cash-generating timber and land sales, was R$187.5 million, down 10%.

• Q4 net revenue was R$44.7 million, up 9% QoQ and 19% YoY; adjusted net revenue was R$53.8 million, up 27% QoQ and down 3% YoY.

• FY24 net income was R$3.3 million versus R$7.9 million in 2023; Q4 net income was R$17.5 million versus R$0.3 million in Q4 2023.

• FY24 EBITDA was R$55.9 million, down 19% YoY; adjusted EBITDA, excluding non-cash accounting movements, was R$20.6 million, down 58%.

• FY24 gross profit was R$58.4 million versus R$75.0 million in 2023; Q4 gross profit declined 9% YoY as fixed production costs were less diluted.

Outlook and guidance

• The packaging factory was scheduled to start operations in Q1 2025, supporting expansion into sustainable packaging solutions.

• Editorial restructuring is intended to simplify products and processes and position the business as a more agile platform for developing new products.

• Altea continued developing projects around its landbank and pursuing non-core land disposals to optimize the portfolio and generate liquidity.