Sequoia Logística e Transportes (SEQL3) Q2 2024 earnings summary

Executive summary

• Integration with Move3 achieved 77% of mapped synergies, generating over R$80 million in annualized savings by July 2024, with a target of R$104 million.

• Net debt reduced by nearly 48% versus 1Q24, with extended amortization periods and focus on restructuring non-financial creditors and tax debts.

• Completed integration of Sequoia and Move3, creating a leading logistics player with competitive advantages in Brazil.

• Board and executive team strengthened with new members experienced in innovation, operations, and financial management.

• Ongoing negotiations with PGFN to reduce liabilities and extend payment terms between 60 and 120 months.

Financial highlights

• 2Q24 net revenue reached R$243.4 million, up from R$191.3 million in 2Q23, with gross margin improving to 4.9% from -18.1%; EBITDA at -R$16.1 million, a significant improvement from -R$66.0 million in 2Q23.

• 6M24 net revenue was R$519.5 million, up from R$493.4 million in 6M23; gross margin at 4.4% vs. -1.5% year-over-year.

• Adjusted net loss for 2Q24 was R$118.8 million; for 6M24, adjusted net loss was R$240.0 million.

• Annualized cost savings from personnel reductions and distribution center closures exceed R$80 million.

• Net cash and equivalents increased to R$44 million as of June 30, 2024.

Outlook and guidance

• Management expects a return to positive EBITDA and net profit in Q4 2024, driven by synergy realization and seasonal revenue growth.

• Focus on sustainable revenue, profitable operations, and gradual volume resumption, with continued pursuit of operational synergies and cost reductions.

• Growth agenda to be prioritized after completing restructuring of non-financial and tax creditors.