Dexxos Participações (DEXP3) Q3 2024 earnings summary

Executive summary

• Net revenue in 3Q24 reached R$494.1 million, up 12.6% sequentially and 20.1% year-over-year, driven by strong performance in the chemical segment and higher sales volumes in both main business lines.

• Adjusted EBITDA for 3Q24 was R$61.0 million, up 9.2% from 2Q24, with a margin of 12.3%. Adjusted net income was R$38.5 million, up 27.6% sequentially, reflecting improved operational efficiency and margin expansion, but down year-over-year due to steel segment pressure.

• Cash position exceeded total debt by R$47.0 million at quarter-end, reflecting a robust capital structure and disciplined financial management.

• Completed full incorporation of Apolo and GPC Química subsidiaries and launched a share buyback program for 4.1 million shares.

• Strategic investments included the launch of a new specialty chemicals unit and ongoing innovation projects in both segments.

Financial highlights

• Gross profit in 3Q24 was R$91.7 million, up 10.1% sequentially and 20.1% year-over-year; gross margin was 18.6%.

• 9M24 net revenue was R$1,321.0 million, stable year-over-year; 9M24 adjusted EBITDA was R$194.6 million, down 16.5% from 9M23, mainly due to weaker steel segment results.

• 3Q24 adjusted EBITDA margin was 12.3%, and adjusted net margin was 7.8%.

• Net cash position improved 69% year-over-year to R$47.0 million.

• 9M24 adjusted net profit was R$109.0 million, down 13.7% year-over-year.

Outlook and guidance

• Management continues to focus on portfolio diversification, operational efficiency, and disciplined capital allocation, with investments in new chemical specialties and innovation in both segments.

• Strategic investments in new production capacity and technology are expected to support future growth, especially in the chemical segment.

• Ongoing share conversion process pending due to lack of quorum.