Eucatex (EUCA4) Q2 2024 earnings summary

Market and industry conditions

• Construction materials industry grew 3% in 2023 and 1H24, with a 3% forecast for 2024, following prior declines.

• Domestic wood panel sales rose 11–12.9% year-over-year in 2Q24/1H24; exports up 57.6–73%.

• Real estate paint market dropped 2.1% in 2023 but expanded 2.1% in 1H24.

• Wood flooring market fell 23.7% in 2023 and 3.4% in 1H24.

Financial highlights

• Net revenue reached R$688.8 million in 2Q24, up 5.8% year-over-year; 1H24 net revenue was R$1,329.8 million, stable year-over-year.

• Recurring EBITDA margin was 18.1–20.7% in 2Q24, up from 17.0% in 2Q23.

• Recurring net income for 2Q24 was R$67.0 million, up 8.2% year-over-year, but 1H24 net income fell 14.5%.

• Gross margin in 2Q24 was 32.4%, slightly down from 32.8% in 2Q23.

Segment performance

• Construction segment net revenue was R$269.0 million in 2Q24, up 6.9% year-over-year, led by doors, panels, and flooring.

• Industry and resale segment net revenue was R$254.4 million in 2Q24, up 5.1% year-over-year, driven by higher value-added products.

• Export segment net revenue was R$142.4 million in 2Q24, with growth of 10.3% year-over-year, supported by higher volumes and favorable exchange rates.

• Construction accounted for 39% of revenue, industry and resale 37%, and exports 22% in 2Q24.