Construtora Tenda (TEND3) Q3 2024 earnings summary

Executive summary

• Achieved record consolidated net revenue of R$912.1 million in 3Q24, up 16% year-over-year and 17.4% sequentially, with historic records in launches (R$2,150.1 million) and net pre-sales (R$1,554.6 million).

• Consolidated net income reached R$76.2 million (8.4% margin), reversing a prior loss; Tenda segment posted a record R$92.1 million net income (11% margin).

• Operational efficiency and cost control led to recognized cost savings above R$4.1 million in the quarter.

• Implementation of a Clawback Policy and new compensation practices to enhance governance and align management with shareholders.

• Alea segment continues to show margin improvement, with expectations of profitability in 2025 and cash generation in 2026.

Financial highlights

• Adjusted gross profit reached R$293.6 million, up 55.6% year-over-year; adjusted gross margin improved to 32.2%.

• Adjusted EBITDA was R$150.8 million (16.5% margin), up 54.1% sequentially.

• Tenda segment adjusted gross margin hit 34.1%, Alea segment at 10.4%.

• Net debt/equity at 45.2%; corporate net debt/equity at 5.5%.

• Operating cash generation for Tenda in 3Q24 was R$51.7 million; would have been R$82.1 million excluding CEF rule change.

Outlook and guidance

• 2024 guidance for Tenda revised upward: net pre-sales R$4.1–4.4 billion, adjusted gross margin 31–32%, adjusted EBITDA R$500–550 million.

• Alea segment guidance maintained: net pre-sales R$400–500 million, adjusted gross margin 9–11%, adjusted EBITDA -R$50 to -R$30 million.

• Management expects continued revenue and margin growth in 2025, supported by government housing programs and operational efficiency.

• Strong cash generation expected in Q4 due to Pode Entrar inflows and swap contract gains.

• Conservative approach in guidance, with potential to exceed upper limits.