Minerva (BEEF3) Q2 2024 earnings summary

Executive summary

• Net revenue in 2Q24 reached R$7.7 billion, up 5.4% year-over-year and 6.7% sequentially, with EBITDA of R$744.6 million and a margin of 9.7%.

• Gross revenue was R$8.2 billion in 2Q24, with exports accounting for 61% of the total.

• Free cash flow totaled R$404.1 million in 2Q24 and R$1.5 billion over the last 12 months, with an annualized FCF yield of 40%.

• Net income was R$95.4 million in 2Q24, a 21% decrease year-over-year, but a turnaround from a loss in 1Q24.

• Management remains confident about the second half of 2024, emphasizing operational excellence, geographic diversification, and a strong ESG agenda.

Financial highlights

• LTM gross revenue totaled R$29.9 billion, with net revenue at R$28.1 billion and exports representing 63%.

• EBITDA in LTM2Q24 was R$2.7 billion, with a margin of 9.6%.

• Net profit for LTM2Q24 was R$70.1 million, down 80% year-over-year.

• Operating cash flow in 2Q24 was R$766 million.

• Free cash flow for LTM2Q24 reached R$1,496.7 million, with a free cash flow yield of 40%.

Outlook and guidance

• Optimistic outlook for 2H24, expecting continued strong margins and profitability, especially with favorable FX and cattle cycles in South America.

• Regulatory approval for Marfrig asset acquisitions expected between October and December 2024.

• Focus remains on optimizing capital structure, deleveraging, and free cash flow generation.