Kepler Weber S A : net profit grows 99.6% in the third qua...

Published by Valor Econômico ­- 31/10/2023

Resumption of projects in the Farms segment favored results. EBITDA reached 64.1%, compared to the second quarter of the year, with a margin of 19.1% (+2.6 p.p.)

São Paulo, October 31, 2023 - Kepler Weber (KEPL3) closed the third quarter with a 99.6% increase in net profit, totaling R$66.6 million compared to the R$33.5 million achieved between April and June of this year. This is the best result for 2023 and the second best in the history of the company, Latin America's leader in post-harvest solutions, second only to 2022, a year considered extraordinary by executives.

"We observed an improvement in the dynamics of agribusiness in Brazil, mainly due to the resumption of projects in the Farms segment, shortly after the announcement of the largest PCA (Program for the Construction and Expansion of Warehouses) in history," says an excerpt from the board's statement to the Market.

During the quarter, the company achieved net revenue of R$405.6 million, 44.2% higher than in the previous cycle, when the company reported revenue of R$281.2 million. "The company showed solid growth," the statement said, with EBITDA of R$88.3 million, 64.1% higher than the second quarter of the year (R$53.8 million), "reflecting our commitment to operational efficiency and careful cost management. In a challenging environment, maintaining a solid EBITDA margin is essential for the company's growth and sustainability".

Kepler Weber's balance sheet highlights the "exemplary" ROIC of 50.6% over the last nine months. "Likewise, the company's cash flow remains at a solid level of R$320.0 million, following the payment of R$132.7 million in dividends (R$77.7 million in mandatory dividends, R$20.4 million in interest on capital, and R$34.6 million in interim dividends) and the acquisition of 50% of Procer (R$50.8 million)," the report points out.

Farms
The segment, which accounts for around 30% of the company's revenue, closed the quarter with a 76.3% increase in turnover when compared to the second quarter of 2023. Kepler Weber points to the "favorable seasonality" and the impact of the PCA, which led to the release of "several orders that had been held back in the first half".

Net revenue from Farms closed at R$145.6 million, 76.3% higher than the R$82.6 million in the previous quarter. To exemplify the upturn, the company reports the "sale of two significant orders to medium-sized producers in the Mato Grosso region, amounting to R$22.5 million, which will represent an increase in revenues in 4Q23". Another four projects, totaling R$55.8 million, will impact revenues in the next two quarterly results.

Agribusiness
The segment recorded net revenue of R$154.2 million in the quarter, 81% higher than reported in the second quarter of the year (R$85.2 million). The segment, which serves agribusinesses, cooperatives, rice farmers and cereal growers, announced the closing of seven projects that will impact the company's revenue until the end of the first half of 2024.

"For the Mato Grosso do Sul region, a total of six projects representing R$93.9 million were sold to the same cooperative, of which five were for expanding storage at existing units in the region and another was for a new unit to expand storage, receiving and shipping capacity," the statement said.

Another project, according to Kepler Weber, will be carried out in Goiás. "This is a new large-scale unit for a cereal grower, with a focus on storage for the 202 harvest of corn," says Kepler Weber.

International Business
Net revenue from International Business rose to R$31.3 million in the quarter, an increase of 25.2% compared to the second quarter of the year (R$25 million). Despite the result, the company points out that the segment's performance in the first three months of the year was affected by the water crisis impacting food production in Paraguay and Uruguay, Kepler Weber's main export destinations.

Even so, the company informed investors of the sale of three projects to Bolivia, Paraguay and Uruguay. The clients are "medium and large producers, representing an approximate amount of R$22.5 million and which will contribute to boosting revenues in 4Q23 and 1Q24".

Ports and Terminals
With net revenue of R$3.2 million in the third quarter, Ports and Terminals accumulated revenue of 221.4% in the nine months of 2023 (R$63 million), compared to the same period last year (R$19 million). As these are large-scale projects, revenue depends on the progress of the projects, and there may be fluctuations between one quarter and the next.

Two projects sold in the third quarter, totaling R$51 million, will generate revenue until the end of the first half of 2024. The investment, made by a corn ethanol plant, includes the installation of conveyors, interconnections, aeration systems and digital monitoring.

Aftermarket and Services
The Aftermarket and Services segment recorded R$71.3 million in net revenue for the quarter. The result is 18% higher than the second quarter of 2023 (R$60.4 million), 24% higher than the third quarter of 2022 (R$57.2 million) and 25.6% higher in the nine-month period (R$182.6 million), compared to the same period last year (R$145.4 million). Since March, Kepler Weber has been consolidating Procer's results in this business area.

In the quarter, the company reported the sale of the first extended warranties and a greater volume of digital services. The new Distribution Centers (DC) in Balsas (MA) and Paragominas (PA), according to the company, contributed to "increasing the customer base, generating a greater volume of business and customer satisfaction".

The company also reports that it has started training and transferring materials to the Sorriso (MT) DC. "Finally, the launch of the New KW Feed Silo, together with the efforts in operational management resulting in delivery times adhering to customer expectations, as well as profitability and working capital management, favored R&S results in this quarter," says the statement.

KEPL3
Kepler Weber shares rose 15% in September compared to December 2022. In the same period, the Ibovespa rose 6% and the Small Caps index 5%.

"Kepler had a 9.0% increase in average daily KEPL3 liquidity, from R$14.0 million in December 2022 to R$15.2 million in financial volume in September 2023," the report points out.