Ambipar, a Brazilian environmental services company, has reported impressive financial results for the third quarter of 2024.
The company’s net profit reached R$ 44.5 million ($7.8 million), marking a 27.9% increase compared to the same period in 2023. This growth reflects Ambipar’s successful expansion strategy and operational efficiency.
The company’s net revenue hit a record high of R$ 2.1 billion ($368.4 million), representing a remarkable 79.5% year-over-year growth.
Even after adjusting for asset sales, which accounted for R$ 639.5 million ($112.2 million), the adjusted revenue still showed a solid 25.4% increase from the previous year.
Ambipar’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) also set a new record at R$ 515.3 million ($90.4 million).
This figure represents a 37% increase compared to the third quarter of 2023, demonstrating the company’s ability to improve its operational efficiency.
Ambipar’s Growth-Driving Divisions
The company’s Environment division, which specializes in waste management and valuation, has been a key driver of growth. Ambipar completed several projects that boosted revenue in this segment.
The average waste ticket price increased by 15.9% in the first nine months of the year, contributing to the division’s strong performance. Partnerships with other companies, such as Heineken, have also played a role in Ambipar’s success.
These collaborations have allowed the company to expand its client base and increase its service offerings, further driving revenue growth.
Ambipar’s Response division, which handles chemical and pollutant emergencies, has also contributed significantly to the company’s performance.
The division completed several crisis management operations, including ongoing support for American authorities in incident management.
In Brazil, the company provided asset protection services against fires and drought to its clients. The company‘s CFO, João Arruda, emphasized that the diversified revenue sources provide confidence in the sustainability of these results.
He also highlighted that non-recurring effects, such as new agreements to renew the company’s fleet as part of an asset demobilization plan, contributed to the strong numbers.
Ambipar’s Financial Performance
Ambipar’s capital expenditure (CAPEX) reached its lowest level relative to revenue, representing 6.3% of net revenue in the third quarter.
This reduction in capital intensity suggests improved cash generation and healthy organic growth, which bodes well for the company’s future performance.
The company has also made progress in reducing its leverage, with the net debt to adjusted EBITDA ratio decreasing to 2.62x. This improvement addresses one of the main concerns analysts had about Ambipar’s financial health.
The company aims to further reduce this ratio to 2.5x by the end of 2026. Ambipar’s stock has seen a remarkable 857.85% increase in value on the Brazilian stock exchange in 2024.
The CFO believes there is still room for growth, as the company’s shares trade at a significant discount compared to global peers.
He anticipates continued positive performance in the coming quarters, driven by the company’s focus on sustainable organic growth. The emphasis on cash generation and deleveraging remains central to this outlook.
The market has attributed much of Ambipar‘s stock performance to CEO Tércio Borlenghi Junior, who increased his stake in the company to approximately 73.135% of total voting capital in July 2024.
This move has been interpreted as a sign of the CEO’s commitment to the company’s long-term success. Investment firm Trustee has also increased its stake in Ambipar, now holding 11.89% of the company’s social capital.
The CFO welcomes new names on the board of directors but emphasizes that the trustee is a market investor like any other. The trustee acquired shares through purchases on the stock exchange.
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