Unifique Telecomunicações (FIQE3) Q2 2024 earnings summary

Executive summary

• Q2 2024 was marked by operational challenges, notably severe floods in Rio Grande do Sul, which disrupted services for up to 35,000 customers and required significant recovery efforts, demonstrating operational resilience.

• Despite disruptions, net income rose 37.5% year-over-year to BRL 41.1 million, with adjusted EBITDA up 17.8% to BRL 122.0 million and robust revenue growth.

• Strategic investments in 5G, workforce expansion, and integration of acquisitions improved service quality and customer satisfaction.

• Dividends of BRL 30 million and interest on equity of BRL 25 million were paid in June 2024.

• Broadband accesses grew 10.4% year-over-year to over 761,000, with churn improving to 1.55%.

Financial highlights

• Gross operational revenue rose 17.2% year-over-year to BRL 315.5 million; net operational revenue increased 18.3% to BRL 255.1 million.

• EBITDA reached BRL 122 million, up 17.8% year-over-year; EBITDA margin was 47.9%.

• Net profit was BRL 41.1 million, a 37.5% increase compared to Q2 2023; net margin improved to 16.1%.

• Churn rate improved to 1.55% in Q2, with June at 1.49%.

• Cash and equivalents at quarter-end were BRL 539.7 million.

Outlook and guidance

• Confident outlook for Q3 2024, expecting improved organic growth and continued recovery post-tragedy.

• Authorization received for 700 MHz spectrum in 565 cities, with 18 months to build out mobile infrastructure and accelerate 5G rollout.

• Internal goal of 3,500 net adds per month and 10,500 per quarter for organic growth.

• Management highlights ongoing integration of acquisitions and focus on operational synergies.

• Corporate rating affirmed at "brAA-" with stable outlook by S&P Global.