ETERNIT S.A. Earnings Release
3Q22
Release de Resultados
Contents | |
Main Indicators ................................................................................................................................................ | |
Economy and Market ....................................................................................................................................... | |
Operating Performance ..................................................................................................................................... | |
Consolidated Financial Performance .................................................................................................................. | 9 |
Capital Markets............................................................................................................................................... | 16 |
Events Subsequent to the Reporting Period ..................................................................................................... | 16 |
Appendices..................................................................................................................................................... | 18 |
3Q22 | 2 |
Earnings Release
São Paulo, November 8, 2022 - Eternit S.A. - under Court-Supervised Reorganization (B3: ETER3, "Eternit" or "Company") announces today the results for the third quarter of 2022 (3Q22). Except where stated otherwise, the operational and financial information of the Company is presented on a consolidated basis in thousands of Brazilian reais, in accordance with the Brazilian accounting standards, especially Federal Law 6,404/76 and guidelines issued by the Accounting Pronouncements Committee ("CPC") and approved by the Securities and Exchange Commission of Brazil ("CVM"), which should be read together with the financial statements and notes for the quarter ended September 30, 2022. All comparisons in this earnings release are with the 3rd quarter of 2021, except where stated otherwise.
Highlights
3Q22
After the acquisition of Confibra, Eternit reports Net Income of
R$41 million in 3Q22 and R$124 million in the year.
MARKET CAP (09/30/2022)
R$791 million
CLOSING SHARE PRICE (09/30/2022) R$12.80
NUMBER OF SHARES (09/39/2022) 61,776,575
FREE FLOAT
98.45%
INVESTOR RELATIONS ri@eternit.com.br
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3Q22/2Q22 PERFORMANCE
Net revenue of R$323 million (+11%).
Gross Profit of R$ 100 million, and Gross Margin of 31%.
Recurring EBITDA of R$57 million, with EBITDA Margin of 18%.
Recurring Net Income of R$43 million (+4%).
Acquisition of Confibra concluded and start of consolidation of results on August 1, 2022.
3Q22 | 3 |
Earnings Release
Message from Management
The Eternit Group delivered excellent performance in 3Q22 despite the challenging scenario in the construction materials sector. Net revenue amounted to R$323 million in the quarter, up 11% from 2Q22. Net Income totaled R$41 million in 3Q22, a performance similar to in 2Q22, and R$124 million in the year.
Recurring EBITDA amounted to R$ 57 million in 3Q22, repeating the performance of the previous quarter. On the other hand, Recurring EBITDA margin stood at 18% in 3Q22 and 19% in 9M22, comparable to the best performance registered between 2012 and 2020.
In the fiber-cement segment, Eternit took control of Confibra's operations in August 2022 and launched several actions to capture synergies with the Group's operations. The Company's performance in the quarter was marked by the recovery in the sales volume of roofing tiles, which grew 3% from the second quarter, on the same industrial basis, and 16% if Confibra's sales were included.
The acquisition of Confibra will increase Eternit's capacity to produce fiber-cement roofing panels by around 20% and is in line with its strategy of growth and industry consolidation, strengthening the Company's position in the state of São Paulo, where Confibra has a strong presence.
The Company concluded expansion works at the Goiânia unit and continued expansion work at the Rio de Janeiro unit, which should be concluded in November 2022. The expansion projects at the Goiânia and Rio de Janeiro units will jointly add 7,000 tons per month to production capacity.
The project related to the new fiber-cement roofing panels unit in Caucaia/CE continues. The contract for the installation of infrastructure (construction, electric and hydraulic) was signed this quarter and orders for the acquisition of equipment have been placed with a longer delivery period. The operational startup of the unit is slated for September 2023.
Continuing the program for the development of solar roofing tile technology, this quarter the Company rolled out the first pilot project of F-140fiber-cement photovoltaic roofing tiles. The project was installed in a cattle confinement shed in the state of Mato Grosso do Sul. The Company launched four new models of concrete photovoltaic tiles at the Intersolar South America fair held in São Paulo.
At the end of 3Q22, Eternit's bankruptcy-related debt was approximately R$41 million, of which around R$35 million refers to the loan from Banco da Amazônia to build the polypropylene fiber unit in Manaus.
To conclude the Court-Supervised Reorganization, the Company is awaiting the final outcome of the proceedings at the Superior Court of Justice (STJ) claiming the reestablishment of the payment conditions of labor creditors established in the Court-Supervised Reorganization Plan approved at the general meeting of creditors.
The Eternit Board of Directors Meeting held on November 8, 2022 approved the payment of interest on equity of around R$8.6 million related to the 3Q22 results, in accordance with the Company's Dividend and Interest on Equity Policy.
3Q22 | 4 |
Earnings Release
Key Indicators
Consolidated - R$ thousand | 3Q22 | 3Q21 | Chg. % | 2Q22 | Chg. % | 9M22 | 9M21 | Chg. % |
Gross Sales Revenue | 388,640 | 344,131 | 12,9 | 351,034 | 10,7 | 1.063,964 | 1.033,391 | 3,0 |
Net revenue | 323,048 | 275,978 | 17,1 | 292,086 | 10,6 | 874,827 | 833,580 | 4,9 |
Gross profit | 99,990 | 118,709 | (15,8) | 107,458 | (6,9) | 293,386 | 371,834 | (21,1) |
Gross margin | 31% | 43% | - 12 p.p. | 37% | - 6 p.p. | 34% | 45% | - 11 p.p. |
Net income (loss) for the period | 41,040 | 98,014 | (58,1) | 40,346 | 1,7 | 123,681 | 216,103 | (42,8) |
Net margin | 13% | 36% | - 23 p.p. | 14% | - 1 p.p. | 14% | 26% | - 12 p.p. |
Adjusted Net Income/Loss | 43,260 | 76,698 | (43,6) | 41,470 | 4,3 | 116,566 | 198,030 | (41,1) |
Adjusted Net Margin | 13% | 28% | - 15 p.p. | 14% | - 1 p.p. | 13% | 24% | - 11 p.p. |
EBITDA CVM 527/12 | 53,444 | 116,939 | (54,3) | 56,781 | (5,9) | 174,494 | 288,164 | (39,4) |
EBITDA Margin CVM 527/12 | 17% | 42% | - 25 p.p. | 19% | - 2 p.p. | 20% | 35% | - 15 p.p. |
Adjusted EBITDA | 56,807 | 84,642 | (32,9) | 58,484 | (2,9) | 163,714 | 260,781 | (37,2) |
Adjusted EBITDA Margin | 18% | 31% | - 13 p.p. | 20% | - 2 p.p. | 19% | 31% | - 12 p.p. |
Economy and Market
The year 2022 continues to be affected by the macroeconomic scenario, especially the inflationary pressure caused by the effects of the Ukraine-Russia war, resulting in a scenario of uncertainties that has been worsening with the hike in interest rates and the risk of recession in the U.S. and important economies across Europe.
In Brazil, inflation measured by the IPCA index in the last 12 months reached 7.17% in September - the third consecutive month of deflation - mainly due to the tax cuts on fuel announced by the Federal Government. Market expectations disclosed in the Focus Report[1] of the Brazilian Central Bank predict GDP growth of 2.76% in 2022, with inflation measured by IPCA at 5.60% and the SELIC basic interest rate maintained at 13.75% p.a. at the end of the year.
According to the Brazilian Construction Materials Industry Association (ABRAMAT)[2], revenue from the construction materials sector not adjusted for inflation decreased in September by 0.7% from August and 3.9% from September 2021. As such, accumulated decline in the year was 7.2% from the same period in 2021.
In September, ABRAMAT revised the projected revenue in the construction materials sector, not adjusted for inflation in 2022, from growth of 1% to a decrease of 2.2%, reflecting the weak performance of the industry during the year.
*Projeção ABRAMAT
- FOCUS Report - October 24, 2022
[2]ABRAMAT: www.abramat.org.br- ABRAMAT index - October 11, 2022
3Q22 | 5 |
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Eternit SA published this content on 09 November 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 November 2022 00:30:01 UTC.
