Taurus Armas (TASA4) Q3 2024 earnings summary

Executive summary

• Net operating revenue for 3Q24 was R$360.7 million, down 17.9% year-over-year, and R$1,217.4 million for 9M24, down 10.7% from 9M23, reflecting lower sales volumes and inventory adjustments in the US market.

• Gross profit in 3Q24 was R$127.9 million (gross margin 35.5%), and R$417.6 million in 9M24 (gross margin 34.3%), outperforming North American peers despite a 22.3% drop in gross profit year-over-year.

• Adjusted EBITDA for 3Q24 was R$38.4 million (margin 10.7%), and R$161.1 million for 9M24 (margin 13.2%), both down year-over-year.

• Net income in 3Q24 was R$26.1 million, stable year-over-year and reversing the previous quarter's loss; 9M24 net income was R$36.1 million, down 67.3% from 9M23.

Financial highlights

• Cost of goods sold in 3Q24 was R$232.8 million, down 15.3% year-over-year; 9M24 COGS was R$799.8 million, down 5.9%.

• Operating expenses in 3Q24 were R$97.0 million, down 6.2% year-over-year; 9M24 operating expenses were R$287.4 million, down 10.9%.

• Net bank debt at 3Q24 was R$457.1 million, up 40.8% from year-end 2023, mainly due to currency devaluation; leverage at 2.28x net debt/EBITDA.

• Capex in 9M24 was R$83.8 million, 73.5% financed by FINEP, focused on machinery and innovation.

Outlook and guidance

• Management expects market conditions to remain stable for the rest of 2024, with gradual recovery in Brazil and slight demand increase in the US due to seasonal factors and anticipated pro-growth policies.

• The company is launching new products in 2025 and expanding internationally, including joint ventures in India and Saudi Arabia and new tenders in the Philippines.