Simpar profits R$122 million in 1Q24, an increase of 36%; profit was 4 times higher without ICMS effect

Simpar (SIMH3), a holding company that encompasses companies such as JSL (JSLG3), Vamos (VAMO3) and Movida (MOVI3) released its balance sheet for the first quarter of 2024. The net profit reported by the company was R$122 million, with growth of 36% compared to what was observed in the same period in 2023.

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The comparison would have been even better disregarding the ICMS subsidy effects that occurred in the first quarter of last year. In practice, as explained by Denys Ferrez, CFO of the group, in an exclusive interview with InfoMoney profit was 4 times higher than last year. Disregarding tax effects, growth would have been 298%, in line with the expansion movement observed by the group. “The foundations are built”, highlights the executive, referring to the companies that make up the group.

“The evolution of results reflects the commitment to extracting the transformation potential of our companies, with a focus on creating value and increasing the return of the eight subsidiaries”, highlights the company in the statement that released the balance sheet.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was R$ 2.4 billion, with growth of 21.4% in the annual comparison and 14.8% more than seen in the fourth quarter of 2023. In the metric monitored by the company, the added adjusted EBITDA – which considers the residual accounting cost of the Sale of Fixed Assets, aiming to be closer to the real value of cash generation – was R$4 billion. The margin grew to 33.1% in the quarterly comparison (3.6 pp increase) but fell 1.1 pp in the annual comparison.

Net revenue was R$9.14 billion, an increase of 22.9% compared to the first quarter of last year. “Revenue growth has been Simpar’s keynote”, comments the CFO. The result reflects the adjustment movement observed after a more challenging 2023 for Vamos, which saw declines related to its dealership front. “The market understood that Vamos’ main business is rentals,” says Ferrez. JSL, in turn, continues to present good numbers, being marked by consistency even in an activity that deals with operational complexity.

One of the most used metrics in the sector, the annualized productive Return on Invested Capital (ROIC) reflects Simpar’s moment with greater accuracy, considering the maturation time required for the majority of investments made by the group. The indicator was 12.4%, according to Simpar, when disregarding the capital used in operations that did not impact revenue generation, exceeding the cost of third-party capital by 2.8 pp.

Net capital expenditure (capex) presented in 1Q24 was R$2.9 billion. The amount was mainly used to purchase assets considered “highly liquid” for long-term contracts.

Leverage in traditional terms was 3.5 times net debt over EBITDA. In this case, there was a drop from the 3.8 times present in 4Q23. However, the nature of the business, which envisages allocation to assets with a strong secondary market, benefits from the consideration of cash release from residual balance. In this case, the leverage applied would be 2.1 times. The base metric for emissions has been leverage considering the added EBITDA, at 2.3 times. The use of values ​​other than the traditional ones also considers the maturation time of the investments made.

Keeping an eye on new acquisitions

The executive comments that making acquisitions is something that is present in the group’s routine, especially for JSL. The company is seen as the largest buyer in the logistics sector and targets companies with good structure, small size and generally low or no leverage. In the dynamics of acquisitions, operations are maintained, as well as the existing structure of the acquired company, which receives support but little intervention from Simpar.

Ferrez commented on the growth of Automob, one of the group’s companies that is “just starting”, according to the executive. The company showed 20% growth in gross revenue, considering the increase in sales volume of new and pre-owned cars. In addition, among the unlisted companies, CS Infra is experiencing a period of expanding innovation packages to modernize terminals for operation at the beginning of 2025.

Regarding possible impacts on the operation due to the tragedy caused by the floods in Rio Grande do Sul, the executive considers that it is still too early to estimate how the storms affected financially. “In any case, we are working to ensure that the situation is normalized as quickly as possible, prioritizing people’s safety,” Simpar said in a note sent to InfoMoney.