Mills Locação, Serviços e Logística (MILS3) Q2 2024 earnings summary

Executive summary

• Achieved record net revenue of R$370.1 million in 2Q24, up 9.5% year-over-year, driven by a 14.1% increase in net rental revenue and strategic portfolio diversification, including the acquisition of JM Empilhadeiras.

• Reinforced leadership in equipment rental in Brazil, expanded cross-selling opportunities, and maintained operational resilience despite climate challenges in Rio Grande do Sul.

• Issued ninth debentures, completed share buyback programs, and approved dividends and interest on equity totaling R$50 million, strengthening capital structure and shareholder value.

• Recognized for ESG initiatives, including sustainability reporting, SBTi commitment, and multiple workplace and sector awards.

• Cash and cash equivalents increased to R$600.4 million as of June 30, 2024, reflecting strong operating cash flow and new debt issuances.

Financial highlights

• Gross revenue reached R$406.3 million in 2Q24, up 9.6% year-over-year; net revenue at R$370.1 million, up 9.5%; consolidated net revenues for 1H24 were R$723.3 million, up 9%.

• Adjusted EBITDA was R$180.7 million, up 7.7% year-over-year, with a margin of 48.8%.

• Net income rose 10.7% to R$71.0 million in 2Q24, with a 19.2% net margin; net profit for 1H24 was R$138.7 million, up 6%.

• Cash net income totaled R$107.3 million, with a 29.0% margin, up 24.4% year-over-year.

• Capex reached R$464.2 million, with 98% allocated to rental assets.

Outlook and guidance

• Positive outlook for the second half of the year, expecting delayed infrastructure projects to commence and continued growth in heavy assets, elevation platforms, and formwork/shoring.

• JM Empilhadeiras acquisition expected to increase cash flow predictability, reduce cyclicality, and triple the sales pipeline within 60 days of operation.

• Continued investment in rental assets and pursuit of M&A opportunities to accelerate growth.