SANTOS BRASIL PARTICIPAÇÕES S.A. 2Q22 EARNINGS |
RELEASE |
2Q22 | EARNINGS RELEASE
São Paulo, August 10, 2022 - The quarterly financial information (ITR) and standardized financial statements (DFP) are presented in accordance with the accounting practices adopted in Brazil, in compliance with the provisions of Brazilian Corporations Law, International Financial Reporting Standards (IFRS) and the standards issued by the Accounting Pronouncements Committee (CPC).
2Q22 | 2Q21 | (%) | 1H22 | 1H21 | (%) | |
Port Terminals - quay operations (containers) | 339,159 | 337,183 | 0.6% | 644,750 | 658,324 | -2.1% |
Port Terminals - warehousing (containers) | 34,407 | 41,638 | -17.4% | 66,339 | 83,570 | -20.6% |
SBLog - warehousing (containers) | 19,379 | 16,582 | 16.9% | 36,950 | 30,794 | 20.0% |
TEV (vehicles) | 85,053 | 54,741 | 55.4% | 139,378 | 110,255 | 26.4% |
Net Revenue (R$ MM) | 500.9 | 379.5 | 32.0% | 941.1 | 694.1 | 35.6% |
EBITDA (R$ MM) | 213.1 | 147.7 | 44.3% | 392.1 | 253.8 | 54.5% |
% EBITDA Margin | 42,5% | 38,9% | 3,6 p.p. | 41,7% | 36,6% | 5,1 p.p. |
Net Income (Loss) (R$ MM) | 102.4 | 60.5 | 69.3% | 196.6 | 91.3 | 115.3% |
Net Debt (R$ MM) | -679.4 | -688.2 | ||||
Net Debt/Proforma EBITDA LTM¹ | -1.24x | -2.67x |
¹ EBITDA in last 12 months, excluding effects from IFRS-16.
HIGHLIGHTS | 2Q22
- Santos Brasil's container port terminals registered throughput of 339,159 units in 2Q22, a slight growth of 0.6% YoY, but a sound performance considering 2Q21 hard comparison basis, when container throughput hit a record, and the Shanghai lockdown impact, which curb volumes transported on the China-Brazil route, with the major impact on container throughput occurring in May and June, mainly at Tecon Santos.
- Tecon Santos container throughput grew by 1.5% YoY in 2Q22 and, despite the 25.4% YoY decrease in container imports, already expected due to the aforementioned reasons, the operational performance was boosted by 8.5% YoY growth in exports and 28.5% increase in cabotage volumes.
- Tecon Imbituba maintained its upward trend observed since early 2022, with an increase of 9.6% YoY in container throughput, essentially cabotage. Imbituba General Cargo Terminal (TCG Imbituba) registered a decline of 65.8% YoY in general cargo volume, reflecting lower pulp shipments, also explained by the one-time effect of an extra ship with steel products in 2Q21.
- Tecon Vila do Conde remained pressured by the shortage of empty containers for cargoes exports in the Port of Vila do Conde's hinterland, with container throughput down 12.8% YoY in 2Q22.
- Consolidated Net Revenue increased 32.0% YoY in 2Q22, despite the worse mix of imports, to R$ 500.9 million, mainly driven by higher average ticket in all business units, especially Tecon Santos, reflecting contractual renegotiations with clients.
- EBITDA was R$ 213.1 million (+44.3% YoY) in 2Q22, with EBITDA margin of 42.5%, a new record for the Company. On a recurring basis, EBITDA was R$ 213.0 million. Net Income amounted to R$ 102.4 million and net margin reached 20.4%. Santos Brasil's margins continue to grow despite inflationary pressure on operating costs and expenses.
- R$ 83.6 million were invested in 2Q22, in continuity to expansion, modernization and improvement projects at the business units. The beginning of the second phase of Tecon Santos expansion project and the development and expansion of Itaqui liquid bulk terminals, with the brownfield units expected to start operating in 4Q22, were 2Q22 investment highlights
- We are pleased to invite everyone to access theSustainability Report, released in 2Q22. Santos Brasil committed to the future of society through its ESG agenda and has been closely monitoring social and environmental externalities, establishing close relations with all stakeholders.
2Q22 | EARNINGS RELEASE
MESSAGE FROM MANAGEMENT
In the first half of 2022, Santos Brasil continued to grow its businesses and results, with successive improvements in operational and financial indicators. The Company's competitive advantages, i.e. operational excellence and financial responsibility, enabled us to confidently navigate periods of low visibility and persistent effects, such as the global supply chain bottlenecks and China's Covid-19 restrictive policy, whose lockdown affected Chinese ports' cargo flow, specially at the Port of Shanghai.
In 1H22, the Company registered container throughput of 644,750 units (down 2.1% YoY) in its port terminals. The slight volume drop was mainly due to lower imports, impacted by logistics constraints in seaborne freight transportation, by the Chinese lockdown and by the atypical 1H21 strong comparison base, distorted by the later-than-usual 2020 seasonality, the year most affected by Covid pandemic. Despite lower imports, exports proved more resilient, given the nature of the cargo, combined with strong growth in cabotage and transshipment volumes, which leveraged operational results in 1H22. Note that the downward trend in container throughput observed in 1Q22 was reversed, with 2Q22 volumes up year-on-year, despite lower cargo volumes shipped from the Port of Shanghai, especially in June. We expect higher volumes in 2H22, mainly imported containerized cargoes at the Port of Santos, chiefly driven by 3Q22 peak season.
Net Revenue amounted to R$ 941.1 million in 1H22, an increase of 35.6% YoY, corresponding to more than 60% of FY2021 Net Revenue. EBITDA was R$ 392.1 million in 1H22 (+54.5% YoY), with EBITDA margin of 41.7%, the best quarterly result since 2012. Net Income came to R$ 196.6 million in 1H22, with 2Q22 Net Income also being a record since 2012, with net margin of 20.9%. Santos Brasil ended 1H22 with a cash and equivalents position of R$ 1.0 billion, to be allocated in the expansion of its businesses and to remunerate its shareholders' capital. We reiterate that the Company is diligently prospecting investment opportunities, mainly via M&A, focusing on port assets in segments with sustainable and consistent growth, such as solid and liquid bulk, besides container, as well as logistic assets integrated with the port system, seeking to leverage and/or protect its competitive advantages.
Alongside the inorganic growth strategy, the Company continues to invest in the expansion of its business units, mainly the expansion of Tecon Santos, where R$ 80.9 million were invested in 1H22. After the conclusion of the new quay section in November
2021, to increase the terminal's capacity to 2.4 million TEUs, the Company began dredging operations in the new berth and invested in bollards, fenders and accessories, requirements for the homologation of the project, which should be operational in the coming months. The second phase of Tecon Santos expansion project has already started, with the acquisition of two new ship-to-shore cranes, expected to be delivered in 4Q23, and will be intensified in 2H22 with the acquisition of new vehicles, e.g. terminal tractors, equipment and civil works that will increase the terminal's container warehousing capacity. The second phase of the project is expected to be concluded by early 2024, when Tecon Santos' capacity will reach 2.6 million TEUs, reinforcing our position as the main player to provide container capacity at the Port of Santos, increasing efficiency and productivity, and adapting to meet the potential demand of the Port and enhancing customer experience.
In addition, we invested R$ 21.8 million in the development of Port of Itaqui liquid bulk terminals in 1H22, with the brownfield terminals (IQI03 and IQI11) expected to start operating in 2H22, after environmental and ANP (Petroleum National Agency) licenses are granted, with the greenfield project expected to come online in 2026. The start of Itaqui liquid terminal will represent an important milestone to Santos Brasil, and the first step in the strategy to expand its portfolio of port assets.
In addition to the financial and operational highlights, Santos Brasil continued to make progress in its ESG initiatives. In June, we published our 14thSustainability Report, in which we share our goals, challenges, achievements and results. We reinforce our commitment to continue evolving in actions related to our ESG agenda, and structuring goals and purpose aligned with UN Sustainable Development Goals (SDG) and with the Global Pact, to which we have been signatories since 2013.
Enjoy the reading!
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2Q22 | EARNINGS RELEASE
OPERATIONAL INDICATORS
Consolidated information
UNITS | 2Q22 | 2Q21 | (%) | 1H22 | 1H21 | (%) |
PORT TERMINALS | ||||||
Quay operations (containers) | 339,159 | 337,183 | 0.6% | 644,750 | 658,324 | -2.1% |
Full containers | 237,162 | 264,204 | -10.2% | 456,801 | 505,669 | -9.7% |
Empty containers | 101,997 | 72,979 | 39.8% | 187,949 | 152,655 | 23.1% |
Warehousing operations (containers) | 34,407 | 41,638 | -17.4% | 66,339 | 83,570 | -20.6% |
Quay operations - general cargo (t) | 34,676 | 101,525 | -65.8% | 79,197 | 180,072 | -56.0% |
LOGISTICS | ||||||
Warehousing operations (containers) | 19,379 | 16,582 | 16.9% | 36,950 | 30,794 | 20.0% |
VEHICLE TERMINAL | ||||||
Vehicles handled | 85,053 | 54,741 | 55.4% | 139,378 | 110,255 | 26.4% |
Exports | 77,974 | 47,370 | 64.6% | 126,076 | 97,022 | 29.9% |
Imports | 7,079 | 7,371 | -4.0% | 13,302 | 13,233 | 0.5% |
Port Terminals
UNITS | 2Q22 | 2Q21 | (%) | 1H22 | 1H21 | (%) |
PORT TERMINALS | ||||||
Tecon Santos | 300,592 | 296,095 | 1.5% | 569,834 | 581,206 | -2.0% |
Full containers | 215,586 | 240,141 | -10.2% | 414,598 | 461,400 | -10.1% |
Empty containers | 85,006 | 55,954 | 51.9% | 155,236 | 119,806 | 29.6% |
General Cargo (t) | - | - | - | - | - | - |
Tecon Imbituba | 13,323 | 12,154 | 9.6% | 25,186 | 21,037 | 19.7% |
Full containers | 7,116 | 7,905 | -10.0% | 13,906 | 13,923 | -0.1% |
Empty containers | 6,207 | 4,249 | 46.1% | 11,280 | 7,114 | 58.6% |
General Cargo (t)¹ | 34,676 | 101,525 | -65.8% | 77,233 | 180,072 | -57.1% |
Tecon Vila do Conde | 25,244 | 28,934 | -12.8% | 49,730 | 56,081 | -11.3% |
Full containers | 14,460 | 16,158 | -10.5% | 28,297 | 30,346 | -6.8% |
Empty containers | 10,784 | 12,776 | -15.6% | 21,433 | 25,735 | -16.7% |
General Cargo (t) | - | - | - | 1,964 | - | - |
¹ Imbituba General Cargo Terminal (TCG Imbituba).
Port Terminals
Consolidated: throughput of 339,159 containers in 2Q22 (+0.6% YoY), a positive result considering (i) the strong comparison basis of 2Q21, when container throughput was a record high, thanks to the recovery in industrial activity and consumption after the most acute phase of Covid-19 pandemic; and (ii) the impacts of the lockdown in Shanghai, which began in late March 2022 and caused a decline in the utilization rate of container ships departing from the Port of Shanghai and, consequently, in volumes handled by the Company at the Port of Santos, mainly in June. With that said, Long-Haul volume decreased 3.8% YoY in 2Q22, while imports registered a decline of 25.9% YoY, despite 4.0% YoY growth in exports, which have been more resilient. In the quarter, Long-Haul accounted for 80.0% of total throughput at the three container terminals (83.7% in 2Q21). Cabotage operations grew 23.2% YoY in 2Q22, reflecting the positive performance of the three container terminals. Transshipment volume grew 19.1% YoY in 2Q22, considering Long Haul and Cabotage.
In 2Q22, full containers accounted for 69.9% of consolidated throughput (78.4% in 2Q21), reflecting lower volume of full-import containers.
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2Q22 | EARNINGS RELEASE
Consolidated container throughput mix (%)
Long haul vs. Cabotage | Handling vs. Transshipment | ||||||||||||||
21% | 17% | 16% | 19% | 19% | 21% | 20% | |||||||||
30% | 29% | 38% | 32% | 32% | 33% | 33% | 31% | 35% | 36% | 39% | |||||
79% | 83% | 84% | 81% | 81% | 79% | 80% | |||||||||
70% | 71% | 62% | 68% | 68% | 67% | 67% | 69% | 65% | 64% | 61% | |||||
2Q20 | 3Q20 | 4Q20 | 1Q21 | 2Q21 | 3Q21 | 4Q21 | 1Q22 | 2Q22 | 2Q20 | 3Q20 | 4Q20 | 1Q21 | 2Q21 | 3Q21 | 4Q21 | 1Q22 | 2Q22 |
Tecon Santos: throughput of 300,592 containers in 2Q22 (+1.5% YoY), with Long-Haul volume down 2.0% YoY, explained by lower import volume (-25.4% YoY), reflecting 2Q21 hard comparison basis, when the terminal operated 23 extra calls, and by the deceleration in cargo flows from the Port of Shanghai, with the impact in Tecon Santos more concentrated in June, due to the lockdown. However, imports slowdown was partially offset by exports, which grew 8.5% YoY due to their exposure to essential cargoes (e.g., food, frozen meat and sundry chemicals). In 2Q22, Cabotage operations grew 28.2% YoY, maintaining the sound performance observed since early 2022. In the quarter, Tecon Santos' market share increased to 41.7%, versus 40.0% in 2Q21. In terms of container mix, full container volume decreased 10.2% YoY, to 215,586 units, of which 58,405 were imported (-27.1% YoY) and 56,142 exported (+4.9% YoY). Empty containers handled in 2Q22 totaled 85,006 in the quarter, up 51.9% YoY.
Port of Santos vs. Tecon Santos ('000 containers)
-0.6% YoY
731 | 727 | +1.5% YoY | |||||
296 | 301 | ||||||
2Q21 | 2Q22 | 2Q21 | 2Q22 | ||||
Port of Santos | Tecon Santos | ||||||
Full import containers Tecon Santos ('000 containers)
80.1 77.0
74.3% | 73.0% | 66.4 | ||||||||||||
57.5 | 58.4 | |||||||||||||
2.0% | ||||||||||||||
-24.3% | -27.1% | |||||||||||||
2Q21 | 3Q21 | 4Q21 | 1Q22 | 2Q22 | ||||||||||
Full containers (imports) | YoY (%) | |||||||||||||
Tecon Imbituba: throughput of 13,323 containers in 2Q22 (+9.6% YoY), with 9.2% increase YoY in Cabotage operations, represented by ALCT2 service (Aliança), which accounted for 98.6% of the terminal's total throughput in the quarter (vs. 99.0% in 2Q21). The positive operational performance in the quarter was driven by higher empty container throughput (+46.1% YoY), while full container volume decreased 10.0% YoY, reflecting poor performance in rice crop. TCG Imbituba registered general cargo volume of 34,676 tons (-65.8% YoY), the drop reflecting lower volume of pulp exports, but the YoY comparison being affected by one-off throughput of 32,000 tons of steel coils and bars in 2Q21.
Tecon Vila do Conde: throughput of 25,244 containers in 2Q22 (-12.8% YoY), decrease explained by 26.9% drop in Long-Haul volumes, reflecting lower imports (-33.1% YoY) and exports (-20.6% YoY). The endurance of logistics bottlenecks, exacerbated by constraints in road logistics in different ports around the world, continued to affect the availability of empty containers for Brazilian exports, especially for lower value-added cargoes. Despite the decline in Long Haul operations, Cabotage volumes increased 22.8% YoY in 2Q22, accounting for 40.0% of the terminal's total throughput (vs. 28.5% in 2Q21).
Warehousing: Total containers stored at the Company's Port Terminals, represented almost entirely by Tecon Santos, amounted to 34,407 units (-17.4% YoY) in 2Q22, following the 25.4% decline in import volumes at Tecon Santos compared to 2Q21, due to the aforementioned
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Santos-Brasil Participações SA published this content on 11 August 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 August 2022 00:20:02 UTC.
