Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Aeris Industria E Comercio de Equipamentos para Geracao de Energia SA (BSP:AERI3, Financial) reported an 8.8% increase in gross margin due to improved operational efficiency.
- The company achieved a significant 66% increase in EBITDA compared to the first quarter, with a margin of 16.7%.
- There was a 25% reduction in financial expenses, contributing to better financial management.
- Aeris ended the quarter with a strong cash balance of BRL 977.2 million, sufficient to cover short-term obligations.
- The company is preparing for international market expansion, particularly in the US, which is expected to significantly grow in the coming years.
Negative Points
- Revenue fell by 18% compared to the first quarter of 2024, and there was a 36.3% drop year-to-date compared to the first half of 2023.
- The average megawatt of wind turbines decreased from 4.9% to 4.7% due to the end of a contract with Siemens Gamesa.
- There is a noted reduction in new projects in the domestic wind sector, impacting revenue negatively.
- The company reported a loss of BRL 3.1 million for the quarter.
- Aeris faces challenges in the wind industry, with a reduction in the Brazilian market and delayed growth in the US and European markets.
Q & A Highlights
Q: What are the expectations for Aeris in the international market, especially in the United States?
A: Alexandre Negrao, CEO: We expect to gain traction in the international market starting next year. The US market is anticipated to double or triple in size in the coming years, leading to a shortage of blades. We believe that by 2025, we will start selling to the US, with growth continuing into 2026 and 2027.
Q: What is the impact of the recently announced MP1212 on Aeris?
A: Alexandre Negrao, CEO: The publication aligns with our expectations, indicating a market of 2 to 2.5 gigawatts over the next five years. Although the Brazilian market may be smaller in 2024 and 2025, it is expected to grow, showing good prospects for the future.
Q: Given the recent repurchase of debentures, should we expect more repurchases soon?
A: Alexandre Negrao, CEO: We are focused on deleveraging to enable future growth. We will continue to repurchase whenever opportunities arise, as solid cash generation supports this strategy.
Q: How is Aeris preparing for greater exposure to the international market, and how might this affect service revenue?
A: Alexandre Negrao, CEO: We are improving operational efficiency to access the international market more effectively. We anticipate that 50% of our revenue will come from international markets in the future. Service revenue is also increasing, contributing to improved EBITDA margins.
Q: How has Aeris managed to reduce the cost of direct materials?
A: Jose Azevedo, CFO: We initiated projects 18 months ago involving zero-based budgeting and operational process improvements. These efforts are now yielding benefits, reducing the need for working capital and enhancing efficiency.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
