Priner Serviços Industriais (PRNR3) Q2 2024 earnings summary

Executive summary

• 2Q24 net revenue was R$205.3m, down 19.2% YoY and 5.2% QoQ; management described the first-half activity decline as temporary, not structural.

• EBITDA was R$17.7m, with an 8.6% margin, down 47.4% YoY; the quarter ended with a R$2.7m net loss.

• Activity bottomed in May and grew in June and July; management expected H2 recovery, supported by offshore and Infrastructure contract starts.

Financial highlights

• Net revenue was R$205.3m versus R$253.9m in 2Q23; gross profit fell 28.9% to R$39.0m and gross margin was 19.0%, down 2.6 p.p.

• Operating profit was R$6.6m, down 72.9% YoY; EBITDA was R$17.7m versus R$33.6m, with margin declining to 8.6% from 13.2%.

• Net loss was R$2.7m versus net income of R$8.9m in 2Q23; net margin was -1.3% versus 3.5%.

• 1H24 net revenue totaled R$421.7m, down 14.8% YoY; gross profit was R$82.5m, down 21.0%, and EBITDA was R$42.5m, down 36.0%.

Outlook and guidance

• Management expected H2 activity recovery, supported by new offshore and Infrastructure contracts; revenue had turned upward after bottoming in May.

• Expected 3Q24 headcount was ~5,800 versus 4,796 at 2Q24-end; open vacancies rose to 563, up 128.9% QoQ.

• Management did not expect 2023/early-2024 CAPEX intensity to recur in H2 2024 or 2025 after major equipment commissioning ended.

• Acquired businesses’ 2024E net revenue was presented at R$250.8m; the table was identified as an exception, with future guidance subject to board deliberation.