Priner Serviços Industriais (PRNR3) Q2 2023 earnings summary

Executive summary

• Q2’23 net revenue was R$253.9M and EBITDA R$33.6M, up 49% and 71% YoY, respectively, on adjusted comparisons excluding Gmaia one-off contracts.

• H1’23 net revenue rose 65% to R$495.2M and EBITDA increased 83% to R$66.4M; new contracts totaled R$805M, more than doubling YoY.

• Growth reflected Industrial Services, Thermal Insulation, acquisitions and a more diversified portfolio; ROIC reached 16.1%, up 6.0 p.p. YoY on an adjusted basis.

Financial highlights

• Q2’23 gross profit was R$54.9M, up 63.9% YoY on an adjusted comparison; gross margin rose to 21.6% from 19.6%.

• Q2’23 net income was R$8.9M, up 67% YoY on an adjusted comparison, with a 3.5% net margin.

• H1’23 net income was R$17.8M versus R$16.2M; Industrial Services and Thermal Insulation revenue was R$388M, up 40% YoY.

• Acquired Tresca, Labteste and Soegeo contributed R$20M of H1 revenue and R$4M of gross profit.

• Q2’23 G&A included R$1.6M in short-term incentive provision and R$0.7M for a Brito & Kerche purchase-price adjustment; excluding these, G&A was 11.1% of revenue.

Outlook and guidance

• Management planned gradual, sustained growth through organic and inorganic opportunities; R$805M of H1 contract wins supported the growth pipeline.

• Priorities included capturing value from high rental costs, completing acquisitions and integrations, and improving processes and workforce capacity.

• Management held net debt/EBITDA at 1.3x and favored equipment rentals over purchases, citing prudence and attractive investment opportunities.