Tegma Gestão Logística (TGMA3) Q2 2024 earnings summary

Executive summary

• Net revenue in 2Q24 reached R$472.8 million, up 29% year-over-year, driven by higher volumes and distances in Automotive Logistics and growth in Integrated Logistics.

• Net income for 2Q24 was R$64 million, a 59.4% increase year-over-year, with net margin rising to 13.4%.

• EBITDA for 2Q24 was R$85.2 million, with an 18.0% margin, up 2.2 p.p. year-over-year, reflecting operational efficiency and productivity gains.

• Board approved distribution of R$80.4 million in interim dividends and JCP for 1H24, representing 80% of net profit and a 4.8% yield.

• Investments in yard expansions and sustainability initiatives highlighted, including R$17 million in Pernambuco and Rio Grande do Sul.

Financial highlights

• Gross profit in 2Q24 was R$96.1 million, up 39.4% year-over-year, with a gross margin of 20.3%.

• Adjusted EBITDA margin in 2Q24 was 18.0%, up 2.2 p.p. year-over-year.

• Free cash flow in 2Q24 was R$28.3 million, supported by operational performance and a reduction in the cash cycle.

• CAPEX in 2Q24 totaled R$12.1 million (2.3% of net revenue), focused on logistics equipment, fleet renewal, and IT investments.

• Net cash position at June 2024 was R$176.8 million, down from R$192.6 million in March, mainly due to dividend payments.

Outlook and guidance

• Domestic vehicle sales in Brazil are forecast to grow 10.9% to 14.7% in 2024, with 2H24 expected to see continued strong demand.

• Management expects continued positive impact from improved economic conditions, vehicle financing, and new contracts in chemicals and home appliances logistics.

• Dividend policy remains above the minimum 50% payout, with focus on operational efficiency and expansion.

• Ongoing investments in yard capacity and new contracts in logistics segments.

• Exports face challenges from weaker Latin American demand and increased competition from Chinese automakers.