Eucatex (EUCA4) Q3 2024 earnings summary

Executive summary

• Net revenue reached R$774.4 million in 3Q24, up 13.1% year-over-year; 9M24 net revenue was R$2,104.2 million, a 4.5% increase over 9M23.

• Recurring EBITDA for 3Q24 was R$151.3 million (+8.0%), margin 19.5%; 9M24 recurring EBITDA was R$425.4 million (+1.8%), margin 20.2%.

• Recurring net income dropped 28.6% to R$51.2 million in 3Q24, mainly due to higher financial and tax expenses; 9M24 recurring net income was R$177.9 million, down 19.1%.

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

• Investments in 9M24 totaled R$232.3 million, focused on forestry and industrial expansion.

Financial highlights

• Gross profit in 3Q24 was R$247.4 million (+7.4% YoY), with a gross margin of 32.0% (down 1.7 p.p. YoY).

• Recurring EBITDA margin was 19.5% in 3Q24 (down 0.9 p.p. YoY); 9M24 margin was 20.2% (down 0.5 p.p. YoY).

• Operating expenses rose 16.1% in 3Q24, mainly due to higher export-related selling expenses.

• Financial expenses increased, impacting net income, with higher interest and tax expenses in 3Q24.

• Cash and equivalents increased 25.8% sequentially to R$286.2 million at 3Q24.

Outlook and guidance

• Forecasted investments for 2024 are R$268 million, focusing on forest expansion, productivity improvements, and industrial growth.

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