Tegma Gestão Logística (TGMA3) Q2 2024 earnings summary

Executive summary

• Net revenue in 2Q24 reached R$472.8 million, up 29% year-over-year, with net income for 2Q24 at R$64 million, a 59% increase, and EBITDA margin expanding to 18.0% due to operational efficiency.

• Dividend and JCP distribution of R$80.4 million for 1H24, representing 80% payout and a 4.8% yield, was approved.

• Investments of R$17 million in yard expansions in Pernambuco and Rio Grande do Sul supported increased demand for imported and electric vehicles.

• Released integrated report, highlighting enhanced transparency, sustainability, and governance focus.

• Completed merger of Catlog Logística de Transportes Ltda in May 2024, streamlining operations.

Financial highlights

• Consolidated net revenue reached R$473 million in 2Q24, up 29% year-over-year, with EBITDA at R$85 million, a 59% increase, and net margin improving to 13.4%.

• Free cash flow in Q2 2024 was R$28 million, supported by operational performance and a shorter cash cycle.

• CAPEX in Q2 2024 totaled R$12 million (2.3% of net revenue), focused on logistics equipment and IT investments.

• Cash and cash equivalents at June 2024 were R$282.8 million, with net cash position at R$177 million.

• Basic and diluted earnings per share for 1H24 were R$1.52, up from R$1.12 year-over-year.

Outlook and guidance

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

• Management expects ongoing demand in both automotive and integrated logistics, focusing on operational efficiency, profitability, and cash generation.

• Dividend policy remains above the minimum 50% payout, with flexibility for capital allocation.

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

• Local OEMs optimistic about domestic production despite higher import taxes on electric vehicles.