Direcional Engenharia (DIRR3) Q2 2024 earnings summary

Executive summary

• Achieved record net income of BRL 146 million in 2Q24, up 40% year-over-year, with a net margin of 17.3%.

• Net sales reached BRL 1.6 billion in 2Q24, up 68% year-over-year, and net revenue hit BRL 844 million, a 39% increase over 2Q23.

• Operating net income (adjusted) was BRL 135 million, up 82% year-over-year, with annualized ROE at 25%.

• Maintained robust cash generation, with BRL 219 million generated in 2Q24 and a net cash position of BRL 153 million.

• Significant land acquisitions with BRL 3 billion in sales potential, mostly via swaps at lower costs.

Financial highlights

• Adjusted gross margin reached 38.1% in 2Q24, up 160 bps year-over-year, among the highest in company history.

• Net margin was 17.3% in 2Q24 and 19.6% in 1H24, with net income for 1H24 at BRL 296 million, up 82% year-over-year.

• Adjusted EBITDA was BRL 207 million in 2Q24, up 54% year-over-year, with a margin of 24.5%.

• Deferred revenue (backlog) grew to BRL 2.3 billion, up 115% year-over-year, with a backlog margin of 43.4%.

• Cash and short-term investments totaled BRL 1.4 billion at quarter-end.

Outlook and guidance

• Management highlights a positive outlook, leveraging strong demand in the construction sector and favorable government programs.

• Focus remains on accelerating sales, operational efficiency, and maintaining a robust capital structure.