Eucatex (EUCA4) Q3 2024 earnings summary

Executive summary

• Net revenue for 3Q24 ranged from R$684.7 million to R$774.4 million, with year-over-year changes between an 11.6% decrease and a 13.1% increase; 9M24 net revenue reached R$2,104.2 million, up 4.5% year-over-year.

• Recurring net income for 3Q24 was R$51.2 million, down 28.6% year-over-year; 9M24 recurring net income was R$140.1 million, down 19.1% year-over-year.

• EBITDA margin in 3Q24 ranged from 16.1% to 19.5%, both down year-over-year; 9M24 EBITDA margin was 16.9%, down from 20.2% in 9M23.

• Investments in 9M24 totaled R$232.3 million, mainly allocated to forestry and industrial expansion.

• Net debt at 3Q24 was R$550.9 million, down 6.1% to 7.5% year-over-year; net debt/EBITDA ratio was 1.0x.

Financial highlights

• Gross margin in 3Q24 ranged from 18.3% to 32.0%, with some sources noting a decline due to higher costs.

• Recurring EBITDA margin in 3Q24 was 16.1% to 19.5%, down year-over-year.

• Net margin in 3Q24 was 5.7%, down 3.1 p.p. year-over-year.

• Operating cash flow for 9M24 was R$348.2 million, up from R$259.8 million in 9M23.

• SG&A as a percentage of net revenue was 18.3% in 3Q24, up from 17.9% in 3Q23.

Outlook and guidance

• Forecasted investments for 2024 are R$268 million, focused on forestry, industrial expansion, and productivity improvements.

• Management expects continued growth in construction and export segments, supported by government housing programs and new product launches.