Unipar Carbocloro (UNIP6) Q2 2024 earnings summary

Executive summary

• Adjusted EBITDA reached R$146 million in 2Q24, up 59% from 1Q24 but down 64% year-over-year, with net income of R$89 million, maintaining 17 consecutive quarters of positive results.

• Net revenue in 2Q24 was R$1.3 billion, 8% higher sequentially but 5% lower year-over-year; adjusted net revenue was R$1.2 billion.

• Business model remained resilient amid global chemical sector downturn, high imports in Brazil, and macroeconomic headwinds in Argentina.

• Electrolysis utilization rate averaged 82% in 2Q24, above industry average.

• Strategic focus on operational excellence, digital transformation, and ESG progress, with ongoing investments in new capacity and modernization.

Financial highlights

• Adjusted EBITDA margin was 13% in 2Q24, down from 20% in 1Q24 and 30% in 2Q23.

• Net debt stood at R$471 million with leverage at 0.70x and average debt maturity of 3.4 years.

• Cash and equivalents were R$2,027 million as of June 2024.

• 17 consecutive quarters of positive net income since 2Q20.

• Share prices declined 24–29% in 1H24, with market cap down 29% to R$5.5 billion.

Outlook and guidance

• Strategic projects in Camaçari and Cubatão expected to increase capacity and profitability from 2025, with Camaçari completion by 2H24 and Cubatão modernization by 2025.

• Ongoing modernization of Cubatão plant with first disbursement from a 12-year ECA-backed loan in June 2024.

• Focus remains on safety, operational efficiency, and sustainable growth while preserving cash generation.

• Gradual margin recovery expected in Q3, supported by a diversified sales mix and strengthening chlorinated market in Brazil.

• Global and Brazilian GDP growth expected at 2.1% for 2024; Argentina's GDP projected to contract 3.5% with inflation at 140%.