In This Article:
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Revenue: Dropped by 7% to BRL 2.8 billion.
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Gross Margin: Dropped by 0.3 percentage points.
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Adjusted EBITDA: Reached BRL 338 million with a margin of 12.2%.
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Net Income: BRL 50 million for the quarter.
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Operating Cash Flow: Total of BRL 762 million for the first nine months of 2024, a growth of 97% compared to the same period in 2023.
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Indebtedness: BRL 2.3 billion, corresponding to 1.81 times adjusted EBITDA for the last 12 months.
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Cash Position: BRL 2.6 billion.
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Revenue by Region: 43% Latin America, 41% North America, 12% Europe, 3% Asia, Africa, and Oceania.
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Revenue by Segment: 87% from structural components and manufacturing contracts, 5% from energy and decarbonization, 8% from distribution segment.
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Energy and Decarbonization Segment: 2% increase in the domestic market, 54% reduction in the foreign market.
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Distribution Unit Sales in Brazil: Represented 14% of revenues, an increase of 7%.
Release Date: November 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Tupy SA (BSP:TUPY3) improved its gross margin through favorable exchange rates and efficiency gains, saving BRL140 million this quarter.
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The company is capturing synergies from acquired assets, aiming for structural margin increases by 2026.
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Revenues in the replacement and aftermarket segments reached their highest historical level in Q3 2024.
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Tupy SA is expanding into new markets and launching new products, with a 120% increase in product launch rate.
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The company is investing in new business initiatives such as battery recycling and biofuel engines, which are expected to contribute to future growth.
Negative Points
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Tupy SA experienced a 7% drop in revenues compared to the previous period, impacted by reduced volumes in foreign markets.
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The company faced significant reductions in some industries, with up to 30% decreases in certain sectors.
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High interest rates and a young fleet have reduced demand for vehicle renewals, impacting Tupy SA's clients.
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The foreign market saw a 54% reduction in the energy and decarbonization segment, particularly in engine sales for agriculture.
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Logistical challenges and increased financial expenses negatively impacted the company's margins and net income.
Q & A Highlights
Q: Can you elaborate on the efficiency gains mentioned, specifically the BRL40 million impact, and provide details on the battery recycling program's long-term revenue expectations? A: The BRL40 million efficiency gains are from reallocating products to lower-cost plants, reducing duplicate activities, and creating service centers. This excludes foreign exchange effects. The battery recycling program aims to recover valuable minerals like lithium, cobalt, and nickel efficiently. We have filed for three patents and are starting a pilot plant. Long-term, regulations will require recycled materials in new batteries, and our recovery rates are high, making the process economically viable.