The company reported growth in revenue and a reduction in leverage in its balance sheet released on Thursday, 9 December.
Simpar (SIMH3), the holding company that includes companies such as JSL (JSLG3), Vamos (VAMO3) and Movida (MOVI3), released its balance sheet for the first quarter of 2024. The net profit reported by the company was R$ 122 million, an increase of 36% compared to the same period in 2023.
The comparison would have been even better if we had disregarded the effects of the ICMS subsidy that took place in the first quarter of last year. In practice, as Denys Ferrez, the group's CFO, explained in an exclusive interview with InfoMoney profit was 4 times higher than last year. Disregarding tax effects, growth would have been 298%, in line with the expansion movement observed by the group. "The foundations are in place," said the executive, referring to the companies that make up the group.
"The evolution of our results reflects our commitment to extracting the transformation potential of our companies, with a focus on creating value and increasing the return of our eight subsidiaries," the company said in the statement announcing the balance sheet.
Adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) stood at R$ 2.4 billion, up 21.4% year-on-year and 14.8% more than in the fourth quarter of 2023. In the metric monitored by the company, the added adjusted EBITDA - which takes into account the accounting cost of the residual from the sale of fixed assets, in order to be closer to the real value of cash generation - stood at R$ 4 billion. The margin grew to 33.1% in the quarterly comparison (3.6 p.p. up) but fell by 1.1 p.p. in the annual comparison.
Net revenue stood at R$ 9.14 billion, up 22.9% on the first quarter of last year. "Revenue growth has been Simpar's keynote," says the CFO. The result reflects the observed adjustment movement after a more challenging 2023 for Vamos, which saw declines related to its dealership front. "The market has understood that Vamos' main business is leasing," says Ferrez. JSL, for its part, continues to show good numbers, marked by consistency even in an activity that deals with complexity.
One of the most widely used metrics in the sector, the productive annualized Return on Invested Capital (ROIC) more accurately reflects Simpar's momentum, considering the maturity time required for most of the investments made by the group. The indicator stood at 12.4%, according to Simpar, when disregarding the capital employed in operations that had no impact on revenue generation, surpassing the cost of third-party capital by 2.8 p.p..
Net capital expenditure (capex) in 1Q24 amounted to R$ 2.9 billion. This amount was mostly directed towards the purchase of assets considered "highly liquid" for long-term contracts.
Leverage in traditional terms stood at 3.5 times net debt to EBITDA. This was down from 3.8 times in 4Q23. However, the nature of the business, which aims to allocate to assets with a strong secondary market, benefits from considering the release of cash from residual balances. In this case, leverage would be 2.1 times. The base metric for issues has been leverage considering added EBITDA, at 2.3 times. The use of values other than the traditional ones also takes into account the maturity of the investments made.
With an eye on new acquisitions
The executive comments that making acquisitions is part of the group's routine, especially for JSL. The company is seen as the largest buyer in the logistics sector and targets companies with a good structure, small size and generally low or no leverage. In the dynamics of acquisitions, operations are maintained, as is the existing structure of the acquired company, which receives support but little intervention from Simpar.
Ferrez commented on the growth of Automob, one of the group's companies that is "just getting started", according to the executive. The company posted growth of 20% in gross revenue, considering the increase in sales volume of new and used cars. In addition, among the companies not listed, CS Infra is currently expanding its innovation packages to modernize terminals for operation in early 2025.
Regarding the possible impact on the operation of the tragedy caused by the floods in Rio Grande do Sul, the executive believes that it is too early to estimate how the storms have affected the financial situation. "In any case, we are working to get the situation back to normal as soon as possible, prioritizing people's safety," Simpar said in a statement sent to the press. InfoMoney.
Link to the article: Simpar profits R$ 122 million in 1Q24, up from 36%; profit was 4 times higher without ICMS effect (infomoney.com.br)