Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Eletromidia SA (BSP:ELMD3, Financial) reported a 36% year-on-year increase in revenue, totaling BRL908 million year to date.
- The company's EBITDA increased by 51% year on year, reaching BRL272 million, indicating strong operational performance.
- Eletromidia SA secured a 20-year concession for 100% of the bus shelters and street clocks in Rio de Janeiro, which is expected to enhance long-term growth.
- The acquisition of 4 Yousee aims to strengthen Eletromidia's SaaS solutions and expand its data and metrics capabilities.
- The company has shown significant growth in digital assets, with a 125% increase in the number of screens, enhancing its market presence.
Negative Points
- The Rio de Janeiro concession requires a significant upfront payment of BRL440 million in 2024, which will increase the company's leverage in the short term.
- The benefits from the Rio de Janeiro project will not be realized until 2027, posing a challenge for short-term financial performance.
- Despite strong revenue growth, the company faces increased leverage, with net debt expected to double due to the concession payment.
- The integration and synergy realization from the Globo acquisition are uncertain and dependent on antitrust approval.
- The company's expansion strategy involves significant capital expenditure, which may impact cash flow and financial flexibility in the near term.
Q & A Highlights
Q: Can you discuss your expectations around the deal with Globo and its impact on the out-of-home industry?
A: Alexandre Guerrero, CEO: The details of the deal were published, and we are awaiting approval from the antitrust authority in Brazil. We expect the process to finalize in the first half of next year. Eletromidia will continue to operate independently, and we anticipate synergies in the future. This partnership with Globo, a major media company, presents an opportunity for growth and development in the advertising market.
Q: What drove the increase in revenue through panels, and what are your expectations for leverage in the coming years?
A: Alexandre Guerrero, CEO: The increase in revenue per panel is due to the maturation of new investments and tapping into new markets. We expect the average revenue per panel to align with historical margins in future quarters. Regarding leverage, the Rio de Janeiro concession payment will double our net debt, impacting leverage levels mainly from 2027 onwards.
Q: How do you see the future of Eletromidia with Globo's involvement?
A: Alexandre Guerrero, CEO: We are excited about the collaboration with Globo, which has a deep understanding of the media industry. This partnership will help us develop our business further. We will continue to focus on our core thesis and deliver strong results to our shareholders.
Q: What are the main challenges and opportunities with the Rio de Janeiro street furniture concession?
A: Alexandre Guerrero, CEO: The main challenge is the short-term impact on leverage due to the concession fee. However, this project is crucial for our long-term strategy and will contribute positively from 2027. It represents a significant opportunity to enhance our commercial strategy.
Q: Can you elaborate on the acquisition of 4 Yousee and its significance for Eletromidia?
A: Alexandre Guerrero, CEO: The acquisition of 4 Yousee strengthens our SaaS solutions and expands our capabilities in data and metrics. It allows us to manage digital content and advertising campaigns more effectively, positioning us as a technology provider in the industry.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
