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 and growth in Integrated Logistics.

• Net income for 2Q24 was R$64 million, a 59% increase year-over-year, with net margin rising to 13.4%.

• Distributed R$80.4 million in interim dividends and interest on equity for 1H24, representing 80% payout and a 4.8% yield.

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

• Released integrated report, enhancing transparency and sustainability focus.

Financial highlights

• Consolidated net revenue reached R$473 million in 2Q24, up 29% year-over-year, the highest in five years.

• EBITDA for 2Q24 was R$85.2 million, up 59% year-over-year; EBITDA margin rose to 18.0%.

• Net profit for 2Q24 was R$64 million, up 59% year-over-year; net margin improved to 13.4%.

• Free cash flow in Q2 2024 was R$28.3 million, impacted by higher working capital needs.

• CAPEX in Q2 2024 totaled R$12.1 million (2.6% of net revenue), focused on logistics equipment and IT.

Outlook and guidance

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

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

• Ongoing investments in yard capacity and new contracts in chemicals and home appliances logistics.

• Management expects continued positive impact from improved economic conditions and vehicle financing.

• Exports face challenges from Chinese OEM competition and weak Latin American markets.