Minerva (BEEF3) Q3 2024 earnings summary

Executive summary

• Achieved record net revenue of R$8.5 billion and record EBITDA of R$813 million in 3Q24, up 20% year-over-year, with net income of R$94.1 million; exports accounted for 60% of revenue.

• Completed acquisition of 13 Marfrig plants and 1 distribution center in Brazil, Argentina, and Chile, expanding to 46 industrial units across 7 countries and increasing daily slaughter capacity.

• Free cash flow was R$667.3 million in 3Q24 and R$1.6 billion in LTM3Q24, with a robust cash position of R$16.8 billion and net leverage at 2.6x.

• Advanced ESG agenda, including 100% monitoring of direct supplier farms in Uruguay, ISO 14001 certification for Barretos unit, and expansion of Zero Carbon Impact product line.

• Integration of new assets is underway, focusing on operational efficiency, risk management, and synergy capture.

Financial highlights

• Gross revenue in 3Q24 was R$9.0 billion, up 20% year-over-year and 11% sequentially; LTM gross revenue was R$31.4 billion, up 7%.

• Net revenue in 3Q24 reached R$8.5 billion, up 20% year-over-year and 11% sequentially; LTM net revenue was R$29.5 billion, up 7%.

• EBITDA in 3Q24 was R$813 million, up 14% year-over-year and 9% sequentially, with a margin of 9.6%; LTM EBITDA was R$2.8 billion (margin 9.5%).

• Net income in 3Q24 was R$94.1 million; LTM net income was R$23.2 million.

• Free cash flow in 3Q24 was R$667.3 million; LTM free cash flow was R$1.6 billion.

Outlook and guidance

• Management remains optimistic about the coming quarters, citing favorable global supply-demand dynamics, strong positioning in South America, and ongoing integration of new assets.

• Integration of Marfrig assets expected to drive efficiency and synergies in coming quarters, with full integration targeted within four to five quarters.

• Anticipates continued strong export performance, especially to China and the USA, as global supply remains tight.

• Domestic market expected to remain positive, supported by year-end seasonality and brand strength.

• Efficiency programs and mapped opportunities in operations, engineering, supply chain, logistics, tax, and finance to maximize profitability.