Simpar (SIMH3), the holding company that controls Vamos (VAMO3), JSL (JSLG3) as well as other non-listed companies in the mobility, sanitation, concessions and financial services sectors, reported results for the fourth quarter of 2022 (4Q22) that consolidated the good figures previously released by its listed companies, in Itaú BBA's view.
Among the highlights announced by the company, Itaú BBA analysts highlighted the holding company's cost of debt, which fell from 18.6% in the third quarter to 15.8%. This was possible thanks to the company's strategy of bringing forward the payment of more expensive debts and replacing them with cheaper ones.
With market analysts highlighting the same positive points for the company, the shares rose 9.02%, to R$ 8.22, on Wednesday (8) on B3.
In fourth quarter, the company reported net profit of R$ 288.2 million, down 21.4% compared to the same period in 2021. Despite a lower net profit, earnings before interest, taxes, depreciation and amortization (Ebitda) advanced 39.5% between the fourth quarter of 2021 and 2022 to R$ 1.8 billion. Last year, the holding company achieved a record R$ 7 billion in EBITDA, up 67.2% year-on-year.
Eleven points out that there was growth in Ebitda at all its main subsidiaries, with Automob standing out, with acquisitions and an increase in the average ticket (around 9% in the year), which increased the scale of its operations and increased its share of the group's Ebitda from 1.5% to 5.0%. Vamos (+84% year-on-year) captured heated demand and showed significant progress in the deployment of assets to clients, with an increase in prices.
"A positive highlight, in our view, was that despite inflation and interest rates putting considerable pressure on margins and especially the company's profit, in 4Q22 Simpar already showed a reduction in financial expenses compared to the previous quarter," say the analysts.
Net revenue in 4Q22 reached R$ 7.4 billion, an increase of 79% compared to the same period last year. In 2022, net revenue was R$ 24.4 billion, an increase of 75.8% compared to 2021.
"The company showed significant growth in revenue from organic growth and the acquisitions made in 2022, which strengthened Simpar's position in the segments in which it operates and demonstrated discipline in the
capital allocation. In addition, its operating subsidiaries' contracts with inflation pass-through clauses ensured better pricing for Simpar," Eleven points out.
Thus, the figures indicate a significant cash generation capacity which, together with the net capex (investment) of R$ 13.5 billion for the year, should generate growth in 2023. In addition, it should be borne in mind that, due to the implementation times of the assets of around 90 days, part of the investments of the last six months have not yet contributed to the generation of revenue and results for this quarter, but that they incorporate the company's debt.
"Overall, we see a positive result for Simpar, which even with the interest and inflation scenario managed to deliver good numbers for the year. In addition, with the high holding discount presented by the company of 41% (in our view, conservative) compared to the sum of the parts, it shows a very attractive valuation. We believe that the paper is very sensitive to interest rates and with the incipient comments about possible cuts in the SELIC rate due to the economic slowdown, we reinforce our buy recommendation," points out Eleven.
In the same vein, BBA has also reinforced its buy recommendation for the stock, with an eye on the group's different areas of growth.
Bradesco BBI also reinforces that Simpar is constantly showing its ability to generate high returns on Capex and aggressive growth. At the same time, the company continues to keep cash available to take advantage of opportunities that may arise and to support its subsidiaries.
The recommendation for the stock is also equivalent to Buy, with a target price of R$ 22. "Our recommendation is based on: 1) a resilient business model and strong management execution; 2) balance sheet flexibility that allows the group to execute an accelerated inorganic growth strategy and/or accelerate organic growth in certain operations, such as Vamos, Movida and JSL; 3) the shares are trading at an undeserved holding level discount of 37% (fair discount of 15%) and 4) a potential IPO of Automob and CS Infra in the coming years could unlock value," they assess.
Link to the news: https://www.infomoney.com.br/mercados/simpar-simh3-os-pontos-positivos-do-resultado-da-holding-que-fazem-a-acao-disparar-cerca-de-8/