Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Randon SA Implementos E Participacoes (BSP:RAPT3, Financial) received recognition as the best in Latin America in capital goods, small caps, which boosts investor confidence.
- The company reported growth in the auto parts segment, driven by the restart of truck production in Brazil.
- Randon SA Implementos E Participacoes is expanding its portfolio and geographies, capturing synergies, and increasing capacity with new model plants.
- The acquisition of Cure Facioni is expected to enhance earnings abroad, particularly in the resilient aftermarket sector.
- The company is investing in modernizing operations with automation and innovation, which is expected to improve productivity and operational efficiency.
Negative Points
- Inflation in Argentina and the closure of the Fanacif plant in Uruguay negatively impacted the company's consolidated performance.
- The EBITDA margin dropped due to inflation effects in Argentina and nonrecurring expenses related to restructuring.
- There was a decline in net profit compared to the previous quarter, attributed to deferred taxes and restructuring costs.
- The export market, particularly for semitrailers in the US, experienced a slowdown, affecting revenue.
- The company faced challenges due to floods in Rio Grande do Sul, impacting both financial performance and logistics.
Q & A Highlights
Q: How are the operations in Hercules in the USA, and what is the demand and investment outlook for the plant?
A: The semi-trailer market in the US had a weak first semester, especially for containers. However, there are signs of recovery with increased price quotations. We have an order for 3,000 semi-trailers to be produced by the end of the year. Investments are being made in manufacturing productivity and safety, with new production cells being implemented. We are also developing new products, including hybrid and fully aluminum platforms, to expand our portfolio. Exports from Brazil are being reallocated to focus on domestic demand. The Castertech Mogi plant is ramping up production, with expectations to reach breakeven by the end of the year. (Sergio Lisbao Carvalho, CEO)
Q: What are the expectations for the Suspensys plant in Mogi Guacu, and what is the anticipated return on investment?
A: The Suspensys plant will produce front axles, with production beginning in Q1 2025. We expect to reach normal revenue levels by Q2 2025. The return on investment is expected to align with Randon Corp's average performance. The plant will contribute positively to our operations by the end of the year. (Sergio Lisbao Carvalho, CEO)
Q: What are the expectations for the US market in 2025-2026, and are there plans for further expansion or acquisitions in the US?
A: There is a consensus that the US market for heavy trucks will experience a pre-buy due to EPA 2027 regulations. We are in negotiations with OEMs and exploring opportunities for a greenfield or acquisition to establish manufacturing in the US, Canada, or Mexico. This is crucial for sustainability and to meet US content requirements. We have several studies and opportunities in our pipeline. (Sergio Lisbao Carvalho, CEO)
Q: Can you comment on the income tax rate and the backlog of orders for implements?
A: The higher income tax rate this quarter was due to restructuring costs, new taxation laws, and long-term projections. We expect the rate to normalize in future quarters. Regarding the backlog, we have a healthy backlog of four to five months, especially for industrial cargo and agro-business products. The backlog varies across different segments. (Paulo Prignolato, CFO; Sergio Lisbao Carvalho, CEO)
Q: How has the demand for agricultural equipment affected revenue, and what is the outlook for logistics costs following the floods?
A: The agricultural machinery segment is having a challenging year, but we remain optimistic about transportation demand due to upcoming harvests. Logistics costs have normalized locally, but international freight prices are under pressure due to global dynamics. We expect this to stabilize with increased availability of containers and ships. (Sergio Lisbao Carvalho, CEO; Esteban Angeletti, Director of Investor Relations and Corporate Finance)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
