Três Tentos Agroindustrial (TTEN3) Q2 2024 earnings summary

Executive summary

• Net revenue for 2Q24 reached R$2.8 billion, up 58.9% year-over-year, with net income of R$145.6 million, an 89.3% increase, driven by strong performance in Grains and Industry segments and record soybean origination.

• First half 2024 net revenue was R$5.48 billion, up 53.6% year-over-year, supported by geographical expansion and increased market share.

• Expansion continued with four new stores opened and ongoing construction of a corn processing plant in Mato Grosso, on schedule for late 2025.

• Operational guidance for 2024 was revised upward for soybean origination, soybean meal, and biodiesel production.

• ROE and ROIC reached 20.5% and 24.4%, respectively, in 2Q24.

Financial highlights

• Adjusted gross profit for 2Q24 rose 128.6% to R$399.1 million, with a margin of 14.3%.

• Adjusted EBITDA for 2Q24 was R$83.4 million (+90.2% YoY), and for 1H24 R$221.3 million (+46.0% YoY), with margins at 3.0% and 4.0%, respectively.

• Adjusted net income for 1H24 was R$183 million (+20.4% YoY), with an adjusted net margin of 3.3%.

• Net debt at the end of 2Q24 was R$511.2 million, down R$44.4 million from 2023, with net debt/EBITDA (LTM) at 0.55x.

• Cash and cash equivalents increased to R$1.45 billion at June 2024.

Outlook and guidance

• Soybean origination projection for 2024 raised from 2.4 million to 2.85 million tons, with 2.1 million tons for processing.

• Biodiesel production guidance increased from 427,000 m³ to 490,000 m³; soybean meal from 1.425 million to 1.53 million tons.

• Store expansion ahead of 2030 plan, with new stores in Mato Grosso and Rio Grande do Sul and ongoing construction of a corn processing plant.

• Margin recovery in Ag Inputs expected in H2 2024 as delayed purchases normalize.

• Dividend payout policy remains at 10%, with focus on maintaining low leverage and prioritizing growth investments.