Eternit (ETER3) Q3 2024 earnings summary

Executive summary

• Concluded a six-year judicial recovery process in August 2024, marking a major milestone in operational turnaround and financial restructuring.

• Achieved record net revenue of R$332 million in 3Q24, up 14% year-over-year and 20% sequentially.

• Recurring EBITDA for 3Q24 was R$34.5 million (margin 10%), up 121% quarter-over-quarter but down 7% year-over-year.

• Net income for 3Q24 was R$18.6 million, down 12% year-over-year but up 59% quarter-over-quarter.

• Board approved R$3.2 million in interest on equity for 3Q24, to be paid in March 2025.

Financial highlights

• Net revenue for 3Q24: R$332 million (+14% YoY, +20% QoQ); 9M24: R$875 million (+3% YoY).

• Gross profit for 3Q24: R$85 million (+9% YoY, +48% QoQ); gross margin 26% (down 1 p.p. YoY, up 5 p.p. QoQ).

• Recurring EBITDA margin for 3Q24: 10% (down 3 p.p. YoY, up 4 p.p. QoQ); 8% in 9M24.

• Net income for 3Q24: R$18.6 million (down 12% YoY, up 59% QoQ); net margin 6%.

• Net debt at 3Q24: R$106 million; net debt/recurring EBITDA ratio at 1.18x.

Outlook and guidance

• Construction materials sector expected to grow 4.5% in 2024, with positive GDP outlook but inflation and interest rates as challenges.

• Company expects continued operational improvements and benefits from recent investments and capacity expansions.

• Monitoring regulatory changes in the mineral segment, especially the five-year phase-out of chrysotile mining in Goiás.