Kepler Weber S A : has the second-best first quarter of the Compan...

19/05/2023

The Ports and Terminals segment reported a 100% growth in net revenue, of R$31.8 million, over 1Q22

Kepler Weber (KEPL3) ended the first quarter with the second-best result for the period in its entire history, surpassed only by 2022. Between January and March 2023, net revenue reached R$323.1 million, compared to the R$437.6 million reported in 2022.

"The Company shows resilience and preparedness regarding the current agribusiness scenario", states a document disclosed to the market.

Net income for the period totaled R$51.2 million, with a net margin of 15.9%. EBITDA was R$77.4 million, with a margin of 24%. ROIC was 80.3% in the first quarter, "maintaining a comfortable level".

Given the 2022/2023 grain crop expectation, with record projections of 313 million tons, Kepler Weber envisions "consistent demand for storage and post-harvest solutions throughout 2023″. Because of the impact of interest rates on farmers, the Company says it has adopted a strategy that prioritized revenue growth in the Ports and Terminals and Replacement and Services areas, which grew by 100% and 20%, respectively, in 1Q23 over 1Q22.

In the case of Ports and Terminals, with a strategy to exceed last year's sales, revenue totaled R$31.8 million in 1Q23, a growth of 6% over 4Q22, when it totaled R$30 million. According to the analysis, the Company concluded the delivery of "important projects", including a port terminal in Paranaguá (PR).

The document also mentions a sale made in the period, with revenue of R$71.3 million expected for the end of the year, for a port terminal in Bahia. The project includes the operation of grains and fertilizers and "will help in the flow of Arco Norte, positively impacting producers in the Matopiba region".

In 1Q23, Replacement and Services started to consolidate Procer's revenue, which concluded the purchase of 50% plus one share. The segment reported revenue of R$51 million, compared to the R$42.7 million recorded in 1Q22.

Other segments

As of 1Q23, the "Post-harvest" area, which accounts for 70% of the Company's business, will be repositioned. Businesses focused on farmers will be part of the "Farms" business area, while ethanol, wheat mills, rice mills, and coffee industries, for instance, will be part of Agribusiness.

The change foresees greater prominence of "the Company's effort to reduce storage deficit on farms, which accounts for only 14% of Brazil's structures." From January to March, Farms reached R$107.4 million in revenue, down by 12.4% from 1Q22 (excluding agribusinesses). According to the Company, the decrease was due to the "high interest rate, which is the second highest for the period in the last 10 years," it points out.

The Company also mentions other factors that impacted the business area, such as the negative impact of average tickets, "resulting from the cooling of steel prices, scarcity of resources in agribusiness lines such as PCA, and the reduction in the value of commodities, impacting agricultural income for the period". Although it recorded lower sales in the period, Kepler Weber explains that there is seasonality, with a revenue growth trend, "given the record harvest and expectation with the new harvest plan".

According to the Company, new sales were made throughout the first quarter, featuring six projects in the Mato Grosso (MT) region, including the expansion of works. Together, they total R$25.3 million and are expected to impact the Company's revenue in the next few quarters.

Agribusinesses recorded revenue of R$110.1 million in 1Q23, compared to the R$234.5 million reported in 1Q22 (-53%). In the first few months of the year, the Company sold a large-scale project to a cooperative in Mato Grosso, totaling R$43.7 million. Two other cooperatives, one in Rio Grande do Sul (RS) and another in Mato Grosso do Sul (MS), also signed purchases totaling R$27.5 million.

Drought in Paraguay and economic slowdown in South American countries, which account for 80% of the Company's exports, caused the International Business area to report a 39.7% decline in the quarter, with revenue of R$22.8 million in 1Q23, compared to the R$37.8 million recorded in 1Q22. From January to March, sales totaling R$10.3 million were made to Chile and Paraguay and are expected to boost revenue in the second quarter.

"It is worth noting that post-sales actions, the offer of Procer technology, and a closer relationship with customers have been the Company's competitive advantages in the international market," says the notice.

Shares

KEPL3 registered a 16% increase in average daily liquidity, with financial volume moving up from R$14 million in December 2022 to R$16.2 million in March. The Company's shares depreciated by 12% in March compared to December 2022, while the Ibovespa fell by 7% and Small Caps by 10%.