Mills Locação, Serviços e Logística (MILS3) Q3 2024 earnings summary

Executive summary

• Achieved record net revenue of R$419.5 million in 3Q24, up 21% year-over-year, with net income of R$70.8 million and a margin of 16.9%.

• Adjusted EBITDA reached R$199.0 million, margin at 47.4%, and net income rose 6.1% year-over-year.

• Strategic investments in fleet expansion totaled R$173 million in 3Q24, with 92.9% allocated to rental assets.

• Maintained leadership in the rental market, recognized as the largest access equipment rental company in Latin America and ranked 22nd globally.

• Operations were impacted by severe flooding in Rio Grande do Sul, but insurance covered equipment losses and management expects no long-term impact.

Financial highlights

• Net revenue reached an all-time high of R$419.5 million in 3Q24, up 21% year-over-year.

• Adjusted EBITDA was R$199 million, with a consolidated margin of 47.4%, up 11% year-over-year.

• Net income was R$70.8 million, a 6% increase compared to 3Q23.

• Operating cash flow reached R$204.6 million, up 9.4% year-over-year and 131% sequentially.

• Free cash flow was negative R$5.2 million in 3Q24 due to high investment volume.

Outlook and guidance

• Optimism for margin recovery in the fourth quarter as utilization rates ramp up and price pressures stabilize.

• Continued focus on sustainable growth, leveraging strong cash generation, balanced product portfolio, and M&A opportunities.

• Enhanced cash flow predictability and new cross-selling opportunities through portfolio diversification.

• No significant changes expected in leverage, with net debt/EBITDA to remain around 1.2x barring major M&A.

• Management remains confident in long-term growth and profitability, despite temporary disruptions from natural disasters.