Q2 2024 Companhia de Saneamento de Minas Gerais COPASA MG Earnings Call Transcript
Key Points
- Net revenue for the second quarter of 2024 reached BRL1.7 billion, marking a 10.7% increase compared to the same period in 2023.
- Adjusted EBITDA grew by 12.1% to BRL726 million, with a margin increase to 41.4%, 1 percentage point higher than the previous year.
- The company invested BRL901 million in the first half of 2024, a 33.2% increase from the same period in 2023, indicating strong commitment to infrastructure development.
- COPASA's leverage remains manageable with a net debt to EBITDA ratio of 1.6, providing room for future investments.
- The company has successfully renegotiated contracts with municipalities, transitioning from discretionary to contractual regulation, which is expected to positively impact operational efficiency and revenue stability.
- The financial result for the second quarter of 2024 was negative at BRL119 million, primarily due to unfavorable exchange rate variations.
- Gross debt increased to BRL5.1 billion, with a significant portion (14%) being short-term debt, which could pose liquidity risks.
- Non-manageable costs rose by 20.3% in the second quarter, driven by increased electricity costs and other external factors.
- The company does not currently hedge its foreign currency debt, which could expose it to exchange rate fluctuations.
- There is an increase in third-party service costs by 17.6%, which, despite being offset by labor cost savings, indicates a reliance on outsourcing that may affect cost control.
Good morning, ladies and gentlemen. Welcome to COPASA's earnings conference call for the second quarter of 2024. This conference call is being recorded, and the replay can be accessed on the company's website, ri.copasa.com.br. The presentation is also available for download on the platform.
Please be advised that our participants will be in listen-only mode during the presentation. And later, we'll begin the question-and-answer session when further instructions will be given. This presentation is being recorded and translated simultaneously. Translation is available by clicking on the interpretation button. (Operator Instructions)
Before proceeding, I would like to take this opportunity to enforce that forward-looking statements are based on the beliefs and assumptions of COPASA's management and the information currently available to the company. Such statements may involve risks and uncertainties as they refer to future events and therefore, depend on circumstances that may or may not occur.
Investors, analysts and journalists should take into account that events related to
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