TRIUNFO PARTICIPAÇÕES E INVESTIMENTOS S.A. Earnings Release - 4Q21
São Paulo, March 24, 2022 - TPI - Triunfo Participações e Investimentos S.A., one of the main Brazilian companies in the infrastructure sector, operating in the toll road, airport and energy concessions segments, announces its results for the fourth quarter of 2021. In this earnings release, the financial information is consolidated in Triunfo's stake in each business, while the operational information reflects the entire business. The result for the period, compared to book values, does not change as a result of the method of consolidation. Net revenue data disclosed herein excludes construction revenue (adjusted net revenue)1except otherwise specified. Results are compared to the same period of the previous year, except when mentioned.
Highlights
- Toll road segment: adjusted net revenues at R$ 204.7 million, in 4Q21 and R$ 6844.5million in 2021;
- Energy segment: net income at R$ 8.7 million in 4Q21 and R$ 35.3 million in 2021;
- Adjusted EBITDA amounted to R$ 93.4 million in 4Q21 and R$ 438.2 million in 2021;
- Recognition the discount referring to renegotiations of debts of the Company, Concer and Br Vias;
- Termination of Triunfo Econorte Concession Agreement;
- Covid-19Impacts.
B3: TPIS3 | Information | 12/31/2021 | ||
Share price: R$ 2.11 | |||
Conference call on the earnings release in Portuguese with simultaneous | Total Shares: 176,000,000 | ||
translation in English: | Outstanding Shares 75,756,600 | ||
Free Float: 43.04% | |||
Friday, March 25, 2022 | For more information - IR Department | ||
10:00 am (Brasília) | 09:00 am (ET) | |||
Phone Numbers: | Replay: | Roberto Carvalho | |
+55 11 4090 1621 (Brazil) | +55 11 3193 1012 | Ricardo Medeiros | |
+1 844 204 8942 (USA) | Code (Portuguese): 4318226# | Phone: +55 11 2169 3999 | |
+1 412 717 9627 (Other) | Code (English): 6644067# | ||
Code: Triunfo | ri.triunfo.com | ri@triunfo.com | ||
1Adjusted data was calculated by excluding revenue from construction of concession assets from total net revenue.
Message from the Management
2021 was a period of recovery for Brazilian economy. This process, supported by various economic incentives and supported by the successful vaccination campaign in the country, contributed to the robust growth of the national economy last year.
In a scenario of economic normalization, we were able to issue in 2021 the 5th issue of simple debentures in the amount of R$ 26.0 million maturing in 2 years, in addition to the 2nd issue of simple debentures of subsidiary BR Vias in the amount of R$ 89 million maturing in 8 years. Moreover, we have resumed bilateral negotiations to revalidate the effects of Out-of-Court Recovery (RE) with the creditors involved, and especially dissident creditors, that had been suspended in 2019 through a court decision. Thus, the effects of the financial agreements included in 2021 were recognized in the income statement, as a result of the settlements in the amount of R$ 93.8 million of debts of the Parent Company, Concer and Br Vias, which resulted in a negative goodwill of R$ 106.3 million.
Besides the more favorable economic scenario as compared to 2020, the Company remained committed to the continuous improvement of its governance and the enhancement of corporate management, which reinforce good market practices to the point of ensuring the sustainable growth of the business. In this sense, we implemented our risk management policy to reinforce that integrity and risk analysis in decision making are standards upheld by everyone at Triunfo Participações e Investimentos.
This focus on the company's risk management contributed to important advances in the highway segment, such as the judicial authorization for concessionaire Triunfo Transbrasiliana to start the duplication works of lots 01 and 03 of highway BR-153/SP concomitant to the economic and financial rebalancing of the toll tariff to R$7.70.
At Concer, the period initially agreed under the concession agreement would expire in February 2021. However, due to economic and financial imbalances and contractual breaches under the responsibility of the granting authority, especially those resulting from losses arising from Covid-19 pandemic and the default of the National Land Transportation Agency within the scope of the 12th Amendment to the concession agreement, Concer obtained, in February 2021, preliminary decisions that initially extended the concession term by 717 days as from February 28, 2021.
Additionally, on the same date, the preliminary injunction was granted recognizing the right to economic and financial rebalancing of the concession agreement due to losses occurred up to August 2020 resulting from Covid-19 pandemic. Concer remains discussing in court the additional rebalancing of both the 12th Amendment and Covid-19 losses after August 2020.
Triunfo Concebra, on the other hand, was qualified by means of a presidential decree, for the purpose of re-auctioning in November 2021. As a subsequent event, in February 2022, an amendment to the concession agreement was executed, which was still subject to the resolutive condition. In March 2022, the execution guarantee was filed with ANTT, thus implementing the resolutive condition of the amendment, which becomes fully valid. After the signing of the amendment several steps remain for the effective re-auctioning so that Triunfo Concebra will continue operating the road stretches up to the process completion, pursuant to the terms and conditions provided for in the amendment.
We also highlight the termination of Triunfo Econorte concession agreement in November 2021, a concessionaire that during its 24 years of operation maintained an uninterrupted operational, physical and logistical structure to offer a quality service to its users. In this sense, we highlight the judicial approval of the agreement between Triunfo Econorte and DER/PR, occurring in November 2021, aiming at replacing the intersection work at km 17+800m of BR-153/PR Highway through the continuity of the pre-hospital and mechanical emergency care services, for a period of 12 months.
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In the airport segment, Viracopos airport continues on its post-pandemic recovery path, with 49.8% growth in the number of passengers and 39.0% in the volume of cargo transported in the period of 2021 as compared to 2020, respectively.
Thus, we emphasize that we remained resilient in 2021 and we believe that the reprofiling of the Company's debt, confirmation of its rights and addressing the search for its indemnities will contribute to the Company's performance in the coming years.
Finally, I would like to thank once again all the stakeholders for your trust.
Carlo Alberto Bottarelli - CEO
Proforma Performance
The financial information in this section is presented proportionally to Triunfo's stake in each business, unless otherwise stated. It is worth noting that the net result for the period does not change as a result of the consolidation method.
Triunfo Econorte's concession period for operating Lot 01 of the Paraná Integration Ring ended on November 27, 2021. Thus, for better comparability, the pro forma result considers the concessionaire's indicators only up to November of 2020 and 2021.
Main Figures (in R$ thousand) | 4Q21 | 4Q20 | 4Q20 Pro | ||
Forma | |||||
Adjusted Net Revenue | 235,805 | 245,377 | -3.9% | 221,879 | 6.3% |
Toll Roads | 204,670 | 214,538 | -4.6% | 191,040 | 7.1% |
Energy | 31,135 | 30,839 | 1.0% | 30,839 | 1.0% |
Adjusted EBITDA* | 93,422 | 116,194 | -19.6% | 100,718 | -7.2% |
Toll Roads | 89,961 | 112,247 | -19.9% | 96,771 | -7.0% |
Energy | 13,458 | 12,169 | 10.6% | 12,169 | 10.6% |
Holding and Other | (9,997) | (8,222) | 21.6% | (8,222) | 21.6% |
Financial Result | (53,477) | 67,629 | n/c | 68,346 | n/c |
Toll Roads | (63,041) | 17,150 | n/c | 17,867 | n/c |
Energy | 81 | 0 | n/c | 0 | n/c |
Holding and Other | 9,483 | 50,479 | -81.2% | 50,479 | -81.2% |
Net Income (Loss) | (24,216) | 256,099 | -109.5% | 52,923 | n/c |
Toll Roads | (43,157) | 159,009 | n/c | (44,167) | -2.3% |
Energy | 8,733 | 7,960 | 9.7% | 7,960 | 9.7% |
Holding and Other | 10,210 | 89,130 | -88.5% | 89,130 | -88.5% |
Adjusted EBITDA Margin | 39.6% | 47.4% | -7.7pp | 45.4% | -0.1pp |
Toll Roads | 44.0% | 52.3% | -8.4pp | 50.7% | -0.1pp |
Energy | 43.2% | 39.5% | 3.8pp | 39.5% | 0.1pp |
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Main Figures (in R$ thousand) | 2021 | 2020 | 2020 Pro | ||
Forma | |||||
Adjusted Net Revenue | 967,223 | 935,074 | 3.4% | 911,576 | 6.1% |
Toll Roads | 844,498 | 816,318 | 3.5% | 792,820 | 6.5% |
Energy | 122,725 | 118,756 | 3.3% | 118,756 | 3.3% |
Adjusted EBITDA* | 438,204 | 423,033 | 3.6% | 407,557 | 7.5% |
Toll Roads | 412,040 | 394,345 | 4.5% | 378,869 | 8.8% |
Energy | 54,065 | 50,201 | 7.7% | 50,201 | 7.7% |
Holding and Other | (27,901) | (21,513) | 29.7% | (21,513) | 29.7% |
Financial Result | (74,409) | (18,157) | n/c | (17,440) | n/c |
Toll Roads | (107,240) | (60,587) | 77.0% | (59,870) | 79.1% |
Energy | 132 | 71 | 85.9% | 71 | 85.9% |
Holding and Other | 32,699 | 42,359 | -22.8% | 42,359 | -22.8% |
Net Income (Loss) | 10,552 | 189,352 | -94.4% | 181,699 | -94.2% |
Toll Roads | (37,336) | 91,811 | n/c | 84,158 | n/c |
Energy | 35,267 | 32,841 | 7.4% | 32,841 | 7.4% |
Holding and Other | 12,621 | 64,700 | -80.5% | 64,700 | -80.5% |
Adjusted EBITDA Margin | 45.3% | 45.2% | 0.0pp | 44.7% | 0.6pp |
Toll Roads | 48.8% | 48.3% | 2.3pp | 47.8% | 1.0pp |
Energy | 44.1% | 42.3% | -2.8pp | 42.3% | 1.8pp |
*Adjusted EBITDA excluding construction margin, non-recurring revenues (expenses) and provision for maintenance, and is calculated based on the consolidated Income Statement as per Triunfo's share in each business (Proportional Consolidation Income Statement).
Consolidated Results - Overview
Adjusted net revenue recorded a 6.3% increase in 4Q21 when compared to 4Q20 proforma, reflecting the 48.1% increase in Triunfo Transbrasiliana's tariff, since the Federal Regional Court of the 1st Region granted Transbrasiliana's Appeal, which authorized the start of the duplication works of lots 01 and 03 of BR-153/SP Highway and the rebalancing of the toll tariff, which is now being charged in the amount of R$ 7.70 per axle. In 2021 a 6.1% increase was seen compared to the same period proforma of the previous year, reflecting the same effect explained above and the 7.1% increase in the traffic of equivalent vehicles versus 2020. This effect was partially offset by the impact experienced since the third quarter of 2020 in subsidiary Triunfo Concebra, due to a decision issued under Arbitration Procedure No. 24595/PFF of the International Court of Arbitration of the International Chamber of Commerce (CCI), which authorized ANTT to apply 37.32% reduction in the toll tariff.
In 4Q21, adjusted EBITDA fell 7.2% compared to 4Q20 proforma due to higher expenses with legal fees at subsidiary Triunfo Transbrasiliana and subsidiary Concer, and higher expenses with consulting and advisory services for new business prospecting at the Company.
In 2021, adjusted EBITDA showed a 7.5% increase compared to the same period proforma of the previous year proforma, reflecting the increase in traffic of equivalent vehicles and the adjustment of Triunfo Transbrasiliana's toll tariff.
These effects were partially offset by the 37.32% reduction in Triunfo Concebra's toll tariff, as previously mentioned.
In financial result, R$ 121.8 million reduction in 4Q21 as compared to the same period of the previous year. This is mainly due to higher financial expenses, mainly at subsidiary Triunfo Concebra, given IPCA increase in 2021 (10.06%) versus 2020 (4.52%) in the debt agreement. In addition, due to the 37.32% tariff reduction, the concessionaire is only making the minimum payment of the debt service with BNDES, thus increasing the debt balance. These effects were partially offset by the recognition of gains from debt settlement agreements at the holding and its subsidiaries Concer and BR Vias. Year-to-date, the worsening in the financial result as compared to 2020 is due to the same reasons explained above.
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As a result of the effects explained above, the Company recorded R$ 24.2 million net loss in 4Q21, and R$ 10.6 million net income in 2021.
Covid-19 Impacts
On March 11, 2020, the World Health Organization (WHO) has declared a pandemic caused by the new coronavirus. On March 20, 2020 the State of Public Calamity was recognized by the National Congress and measures to contain the disease in Brazil were adopted by state and municipal authorities aimed at reducing the movement of people and crowds, such as the recommendation for social isolation and the closing of commercial establishments.
The Company started the implementation of a contingency plan to protect the health of its professionals and family members, service providers, users and society in general, as follows:
- Putting professionals from risk groups on leave;
- Home isolation of professionals with flu symptoms or suspected infection;
- Intensification of hygiene and disinfection measures in workplaces with reinforcement in the supply of alcohol gel in offices, customer service centers and mainly in toll plazas;
- Dissemination of educational and informative campaigns, under the guidance of the health authorities;
- Adoption of teleworking regime ("work from home") for all eligible professionals;
- Adoption of work shifts and use of protective masks for professionals not on leave or not included in teleworking regime;
- Suspension of non-essential travel;
- Provision of tools and encouragement for holding meetings through videoconference.
Concession agreements feature assured economic and financial rebalancing in the event of fortuitous events or force majeure, such as the case of COVID-19 pandemic. Thus, the revenue loss and consequent changes in cash flow during the crisis period are expected to be offset pursuant to the provisions of each agreement through the analysis and definition together with the Granting Authority, which can include tariff increase, investment reduction, extension of the concession term, among others. The right to rebalance was corroborated by Opinion No. 261/2020 of AGU - Office of the General Counsel for the Federal Government.
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TPI - Triunfo Participações e Investimentos SA published this content on 24 March 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 March 2022 21:54:22 UTC.
