Sequoia Logística e Transportes (SEQL3) Q2 2024 earnings summary

Executive summary

• Integration of Sequoia and Move3 advanced, with 77% of synergy plan executed and over R$80M in annualized savings by July 2024.

• Net debt reduced by 48% versus 1Q24, with extended amortization periods and focus on restructuring non-financial creditors and tax debts.

• Ongoing negotiations with tax authorities and non-financial creditors to further reduce liabilities and extend payment terms.

• Strengthened ESG agenda, emphasizing socio-environmental impact and professional training.

• New board and management team appointed, focusing on innovation, financial restructuring, and operational excellence.

Financial highlights

• Net revenue for 2Q24 was R$243.4M, up 27.2% year-over-year; gross margin improved to 4.9% from -18.1% in 2Q23.

• EBITDA in 2Q24 was -R$16.1M, a 75.5% improvement year-over-year; adjusted EBITDA margin improved by 18.9 p.p.

• 6M24 net revenue was R$519.5M, up from R$493.4M in 6M23; gross margin at 4.4% vs. -1.5% year-over-year.

• Net debt at end of 2Q24 was R$349.7M, a 47.9% reduction from the previous quarter.

• Cash and equivalents increased to R$44M as of June 30, 2024.

Outlook and guidance

• Expectation of improved results in Q4 2024, with potential return to positive EBITDA and net profit, driven by synergy capture and seasonal revenue growth.

• Further cost reductions and administrative optimizations expected from 3Q24 onward.

• Focus on sustainable revenue, profitable operations, and gradual volume resumption.

• Targeting further liability reduction and restructuring with financial and tax creditors.

• Continued pursuit of operational synergies and cost reductions.