Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- JSL SA (BSP:JSLG3, Financial) achieved organic growth of 18% compared to the third quarter of 2023, demonstrating strong performance.
- The company reported a net profit of BRL73 million, marking a 25% increase from the previous year.
- EBITDA margin improved by 1.2 percentage points compared to the previous quarter, indicating enhanced operational efficiency.
- JSL SA secured BRL4.5 billion in new contracts for the year, showcasing its ability to win significant business.
- The company was awarded Best Company of the Year in the logistics sector by EXAME Magazine, highlighting its industry leadership.
Negative Points
- Despite growth, JSL SA experienced a decrease in margins, which could impact profitability if not managed carefully.
- The restructuring of IC is still contributing negatively to the top line, indicating ongoing challenges in this segment.
- The company faces tight margins in grain transportation, which has led to a strategic reduction in volumes.
- Asset sales have been underperforming, with a slower-than-expected pace of sales impacting financial performance.
- High interest rates in Brazil pose a challenge for leverage and potential M&A activities, requiring careful financial management.
Q & A Highlights
Q: Can you provide more details on the benefits from the maturity of contracts and the restructuring of IC?
A: Ramon Alcaraz, CEO, explained that the largest project, the Cerrado project, is progressing well and should show benefits in the fourth quarter. The restructuring of IC is ongoing, with expectations for positive results starting in the fourth quarter and into next year. Guilherme Sampaio, CFO, added that the reduction in grain transportation volumes was a strategic decision to focus on more profitable operations.
Q: Do the new projects help JSL expand its return on invested capital, and what should we expect for CapEx in 2025?
A: Ramon Alcaraz, CEO, noted that recent projects have higher EBITDA margins due to improved efficiency. Guilherme Sampaio, CFO, mentioned that CapEx requirements for new projects are lower, and the 2025 CapEx is expected to be similar to 2024, with no major changes anticipated.
Q: How do you view asset sales and international expansion, particularly in Ghana?
A: Ramon Alcaraz, CEO, stated that asset sales are improving, and the Ghana operation is performing well with potential for growth. The company is also exploring opportunities in Mexico, aligning with their strategy to expand internationally with guaranteed contracts.
Q: What is your outlook on the impact of higher interest rates on the market and JSL's leverage strategy?
A: Guilherme Sampaio, CFO, emphasized that JSL adjusts project pricing to align with interest rates and focuses on operational efficiency to absorb interest rate fluctuations. The company aims to reduce leverage through strong cash generation, viewing higher interest rates as an opportunity to strengthen competitive positioning.
Q: What are JSL's plans for growth in the transportation of brand-new vehicles?
A: Ramon Alcaraz, CEO, expressed interest in growing this segment, particularly through Trans Moreno, which specializes in new vehicle transportation. The company is well-positioned in the automotive supply chain and sees opportunities with new market entrants like Chinese automakers.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
