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Localiza Rent A Car SA (LZRFY) Q3 2024 Earnings Call Highlights: Robust Revenue Growth and ...

GuruFocus News
4 min read

In This Article:

  • Consolidated Net Revenue: BRL9.7 billion, a growth of 32.3% year-over-year.

  • Car Rental Net Revenue: BRL2.4 billion, increasing 18.7% year-over-year.

  • Fleet Rental Net Revenue: BRL2.1 billion, a growth of 23.9% year-over-year.

  • Seminovos Net Revenue: BRL5.1 billion, a growth of 43.7% year-over-year.

  • EBITDA: BRL3.3 billion, an increase of 24.1% year-over-year.

  • Net Income: BRL812 million, a growth of 22.2% year-over-year.

  • EBIT Margin: Consolidated margin at 44.1%, Car Rentals at 44.8%, Fleet Rental at 45.3%.

  • Free Cash Flow: BRL3 billion generated in 9M '24 before interest.

  • Net Debt: BRL29.5 billion at the end of the quarter.

  • Rental Locations: 705 total, with 611 in Brazil, 19 in Mexico, and 75 in other South American countries.

  • Fleet Size: 638,283 cars, an increase of 7.3% in Fleet Rental and 3% in Car Rental year-over-year.

  • Average Daily Rate (Car Rental): BRL142, an increase of 19% year-over-year.

  • Average Daily Rate (Fleet Rental): BRL95.9, an increase of 13.8% year-over-year.

  • Seminovos Sales Volume: 73,816 cars sold in the quarter.

Release Date: November 12, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Localiza Rent A Car SA (LZRFY) reported strong net revenue growth in the Car Rental division, totaling BRL2.4 billion, an increase of 18.7% year-over-year.

  • The Fleet Rental division also saw a significant rise in net revenue, reaching BRL2.1 billion, a growth of 23.9% year-over-year.

  • Seminovos, the used car sales division, achieved a net revenue of BRL5.1 billion, marking a 43.7% increase compared to the previous year.

  • Consolidated net revenue grew by 32.3% to BRL9.7 billion, with EBITDA advancing 24.1% to BRL3.3 billion.

  • The company maintained a strong profit of BRL812 million, reflecting a 22.2% year-over-year growth, supported by increased EBITDA and effective cost management.

Negative Points

  • The Fleet Rental division experienced a slight reduction in fleet utilization rate by 0.5 percentage points compared to the previous year due to higher decommissioning of cars.

  • Seminovos margins are expected to gradually converge to low single digits, indicating potential pressure on profitability in the used car sales segment.

  • The company faces challenges with the high mileage of decommissioned cars, which could impact the average price of cars sold.

  • There is a need for continued price adjustments to maintain ROIC spread amidst rising interest rates, which could affect demand elasticity.

  • The company is dealing with the impact of increased preparation costs due to a higher volume of prepared cars, including severe used vehicles.

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