Orizon Valorização de Resíduos (ORVR3) Q3 2024 earnings summary

Executive summary

• Achieved robust financial and operational growth in 3Q24, with net revenue up 29% year-over-year to R$249.1 million, EBITDA up 70% to R$132.3 million, and net income reaching R$41.3 million, reversing prior losses.

• Expanded through acquisition of multiple landfills and thermal power plants, and established strategic partnerships for biogas and biomethane production.

• Benefited from regulatory advances, including Article 6.4, the Fuel of the Future Law, and Supreme Court decisions, unlocking new carbon credit and biomethane opportunities.

• Strengthened position in carbon credits, biomethane, and waste-to-energy through new agreements, acquisitions, and long-term contracts.

• Net operating revenues for the nine months ended September 30, 2024, reached R$673.3 million, with consolidated net income of R$82.6 million.

Financial highlights

• Net revenue rose 29% year-over-year to R$249.1 million in 3Q24; 9M24 net revenue reached R$673.3 million, up 16.5% year-over-year.

• EBITDA increased 70% year-over-year to R$132.3 million, with margin expanding to 53.1%; pro-forma 9M24 EBITDA reached R$380.3 million.

• Gross profit rose to R$315.4 million for 9M24, with gross margin improving from 53.9% to 64.1% year-over-year.

• Carbon credit revenue totaled R$37.4 million from 1,097 thousand tCO₂e commercialized.

• Cash and cash equivalents rose to R$668.6 million as of September 30, 2024.

Outlook and guidance

• Ongoing investments in waste-to-energy and biomethane projects, with new plants expected to begin operations in 2025–2027.

• Recurring carbon credit sales and biogas monetization expected to further boost recurring EBITDA in upcoming quarters.

• Focus on maturing landfill projects, volume and price growth, and continued execution of capex plan, especially for biomethane and WtE projects.

• Regulatory changes, such as the Fuel of the Future Law and Paris Agreement Article 6.4, expected to positively impact carbon and biomethane revenues.

• Long-term energy and biomethane supply contracts secured, supporting future revenue streams.