EcoRodovias Infraestrutura e Logística (ECOR3) Q2 2024 earnings summary

Executive summary

• Consolidated traffic rose 18.1% in Q2 2024 and 22.9% in H1 2024, driven by new toll collections at EcoRioMinas and EcoNoroeste, with comparable traffic up 7.7% in Q2 2024.

• Adjusted EBITDA reached R$1.1459 billion in Q2 2024 (+24.8%) and R$2.2347 billion in H1 2024 (+29.7%), with margins of 73.8% and 72.7% respectively.

• Net income for Q2 2024 was R$272.5 million (+120.3%) and R$510.1 million in H1 2024 (+115.5%).

• Investments totaled R$1.0236 billion in Q2 2024 (+10.8%) and R$1.8286 billion in H1 2024 (+19.1%), focused on expansion and maintenance.

• Net revenue for H1 2024 reached R$4.54 billion, up from R$3.61 billion year-over-year, driven by higher toll and construction revenues.

Financial highlights

• Adjusted gross revenue was R$1.7 billion in Q2 2024 (+18.5%) and R$3.4 billion in H1 2024 (+23.5%).

• Toll revenue was R$1.5757 billion in Q2 2024 (+23.5%) and R$3.1252 billion in H1 2024 (+31.3%).

• Gross profit for H1 2024 was R$1.89 billion, up from R$1.40 billion year-over-year.

• Financial expenses rose to R$1.04 billion, offset by financial income of R$226 million.

• Basic and diluted earnings per share for H1 2024 were R$0.72, compared to R$0.33 in the prior year.

Outlook and guidance

• Expectation of continued margin improvement through cost discipline, operational leverage, and innovation.

• Traffic growth for H2 2024 projected at 4%-5%, with commercial vehicles as the main driver.

• EcoNoroeste will begin free-flow toll collection in H2 2024, with gradual rollout across the network by 2030.

• Leverage expected to peak between 2027-2028 at 4-4.5x net debt/EBITDA as CapEx ramps up.

• Management continues to monitor legal and regulatory matters, including the BR-101/ES/BA rebidding and Ecoporto Santos port lease extension.