Grupo Vamos (VAMO3) Q2 2024 earnings summary

Executive summary

• Adjusted EBITDA rose 31.6% year-over-year to R$875.7 million in Q2 2024, with adjusted net profit up 92.8% to R$205.5 million, driven by the rental segment and operational gains.

• Non-recurring impacts included R$19.3 million in climate-related losses and R$78.6 million in bad debt provisions, mainly from agribusiness transport.

• Maintained leadership in truck and machinery rental and sales, leveraging scale and customized services to drive growth.

• Rental segment delivered strong, consistent results, offsetting weaker dealership performance, especially in agribusiness.

• Launched Sempre Novo, a second-cycle rental product for used assets, with initial contracts showing a 21% IRR.

Financial highlights

• Net revenue increased 28.2% year-over-year to R$1.88 billion in Q2 2024, with H1 net revenue exceeding R$3.6 billion.

• Adjusted EBIT rose 29.9% to R$680.0 million; adjusted EBITDA increased 31.6% to R$875.7 million.

• Asset sales net revenue grew up to 51.7% year-over-year to R$219.7 million, with gross margin at 33.0%.

• Inventories of machinery and vehicles reached R$596.5 million, reflecting higher asset returns and repossessions.

• Net debt stood at R$10.7 billion, up 19.1% year-over-year; leverage at 3.39x net debt/EBITDA.

Outlook and guidance

• Expectation of continued strong demand and CapEx deployment between R$1.2–1.3 billion per quarter, with focus on reducing inventories and improving working capital.

• Backlog of deployed rental contracts reached R$14.1 billion, indicating strong future revenue visibility.

• The company aims for a gradual reduction in working capital and de-leveraging in H2 2024.