Orizon Valorização de Resíduos (ORVR3) Q2 2024 earnings summary

Executive summary

• Achieved solid results in 2Q24 and 1H24, with double-digit growth in net revenue and EBITDA, reversing prior losses to net income and improving recurring operating margins, driven by strong performance in final waste disposal and expansion in biogas, biomethane, and waste-to-energy projects.

• Operational and financial indicators in the disposal segment were strong, with higher waste volumes and prices at ecoparks supporting growth.

• Investments in major biomethane plants (Paulínia, Jaboatão), waste-to-energy projects, and new acquisitions in the Northeast are progressing on track and on budget.

• Monetization of carbon credits and biomethane is expected to begin in the second half of 2024 and 2025, respectively, with new contracts signed for long-term supply.

• Strengthened capital structure with green bond and debenture issuances, IFC financing, and robust liquidity to support growth.

Financial highlights

• Net revenue grew 10.2% year-over-year to R$424.2 million in 1H24 and 10% to R$215.1 million in 2Q24.

• EBITDA increased 17% year-over-year to R$99.8 million in 2Q24; pro-forma EBITDA reached R$129.0 million, annualized at R$516.1 million.

• Gross margin improved to 56.7% in 2Q24.

• Net income reached R$41.4 million in 1H24, reversing a net loss of R$46.0 million in 1H23.

• CAPEX totaled R$134.1 million in 2Q24, focused on biomethane, waste-to-energy, and ecopark expansions.

Outlook and guidance

• Continued operational strengthening, geographic expansion, and execution of the strategic plan, with new projects expected to deliver significant results from 2025.

• Monetization of 240,000 carbon credits per quarter to begin in Q3 2024, with additional inventory monetization from new Ecoparques.

• Biomethane monetization from Paulínia and Jaboatão plants to start in 2025, expected to add BRL 25 million to EBITDA.

• Waste-to-Energy project to begin operations in 2027.

• Strategic and opportunistic acquisitions to continue, focusing on high-return, low-investment opportunities.