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

Executive summary

• Achieved key milestones including the acquisition of JM Empilhadeiras, expanding the portfolio, cross-selling opportunities, and reinforcing leadership in equipment rental in Brazil.

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

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

• Maintained operational resilience despite climate challenges in Rio Grande do Sul, with limited financial impact.

• Cancelled 5 million treasury shares and launched the 5th share buyback plan, representing 1.90% of capital.

Financial highlights

• Gross revenue reached R$406.3 million, up 9.6% year-over-year; net revenue at R$370.1 million, up 9.5%.

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

• Net income totaled R$71.0 million, with a margin of 19.2%, up 10.7% year-over-year.

• 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.

• Strategic focus on sector diversification, mobilizing new lease agreements, increasing long-term contract exposure, and cost efficiency.

• CapEx for 2024 remains unchanged, focused on rental segment growth in both heavy and light assets.

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