Dexxos Participações (DEXP3) Q2 2024 earnings summary

Executive summary

• Net revenue for 1H24 was R$826.8 million, down 9.3% year-over-year, with adjusted net income of R$70.6 million, down 18.4% year-over-year, and adjusted EBITDA of R$133.6 million, down 21.1%, with a margin of 16.2%.

• Gross profit reached R$184.1 million, a 7.1% decrease year-over-year, but gross margin improved by 0.5 p.p. to 22.3%.

• Cash exceeded debt by R$64.2 million at quarter-end, improving by R$104.6 million from 2Q23.

• Dividend distribution of R$48 million related to 2023 was fully paid, with R$36 million paid in May 2024.

• Completed incorporation of Apolo and GPC Química, now holding 100% of both subsidiaries.

Financial highlights

• 2Q24 net revenue was R$438.9 million, down 0.9% year-over-year but up 13.1% sequentially.

• 2Q24 adjusted EBITDA was R$55.9 million, down 26.4% year-over-year; margin at 12.7%.

• 2Q24 adjusted net income was R$30.1 million, down 26.4% year-over-year.

• Gross margin for 1H24 was 22.3%, up 0.5 p.p. year-over-year.

• Adjusted EBITDA margin for 1H24 was 16.2%, down 2.4 p.p. year-over-year.

Outlook and guidance

• Ongoing investments in innovation and specialty chemicals, including R$35 million invested in the Araucária plant.

• Management is studying a potential conversion of preferred shares to common shares.

• Focus on operational efficiency and portfolio diversification in both chemicals and steel segments.