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$1,145.9 million in Q2 2024 (+24.8% YoY), with a margin of 73.8%.

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

• Investments totaled R$1,023.6 million in Q2 2024 (+10.8%) and R$1,828.6 million in H1 2024 (+19.1%), focused on road expansion and maintenance.

• Strong operational and financial results were supported by new toll collections, efficiency gains, and digital transformation.

Financial highlights

• Adjusted gross revenue was R$1,732.7 million in Q2 2024 (+18.5% YoY) and R$3,428.2 million in H1 2024 (+23.5% YoY).

• Toll revenue reached R$1,575.7 million in Q2 2024 (+23.5%) and R$3,125.2 million in H1 2024 (+31.3%).

• Adjusted cash costs rose 5.2% in Q2 2024 and 4.5% in H1 2024; cash cost/adjusted net revenue improved to 27.5% in H1 2024.

• Net revenue for H1 2024 was R$4,540.4 million (+25.6% YoY).

• Basic earnings per share for H1 2024 was R$0.72 (vs. R$0.33 in H1 2023).

Outlook and guidance

• Free-flow toll collection to begin at EcoNoroeste in H2 2024, with further rollout by 2030.

• Traffic growth expected to moderate to 4%-5% in H2 2024.

• Ongoing digital transformation and operational efficiency initiatives to optimize costs and productivity.

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

• Selective approach to new projects, focusing on synergies, technology, and manageable CapEx.