Log CP Sees 80% Profit Surge in 2024, E-commerce Drives Growth

Log Commercial Properties (LOGG3), a major player in developing, leasing, and managing logistics warehouses, reported a significant financial upturn in 2024, largely fueled by the e-commerce sector.

According to CEO Sérgio Fischer, the company achieved a net profit of R$100 million in the fourth quarter, marking a 36.6% increase from the same period in 2023. Over the year, Log’s net profit climbed by 76.6% to R$344.4 million ($57.4 million).

The e-commerce industry has been pivotal for Log’s growth. “E-commerce has been the primary space demand for Log again, one of the main drivers,” Fischer stated in a Reuters interview.

He noted that companies like Mercado Livre and Shopee, from the Sea Group, have been significant clients. This suggests that Log enters 2025 with continued momentum.

Despite macroeconomic challenges like monetary tightening and anticipated higher domestic inflation, Fischer emphasized that e-commerce demand remains robust.

“Interest rates might increase, potentially affecting inflation and consumption. However, e-commerce continues to grow beyond GDP and consumption rates. He explained that this growth is due to companies’ strategies to localize operations, which helps sustain demand.”

In terms of financial performance, Log’s net revenue for the quarter ending December rose by 17.5%. The company maintained a stable gross margin of 97.6%.

The company’s EBITDA was R$142.6 million ($23.8 million), more than double that of the previous year. It achieved an impressive EBITDA margin of 255%, up from 133.3%.

The focus on high-quality, Class A warehouses has also contributed to these results. “We see clients migrating to these properties as part of macroeconomic risk management,” Fischer noted. He highlighted that the total cost of operation is what matters to clients, not just rental costs.

Log’s Strategic Vision for 2025

Looking ahead, Log aims to maintain its share buyback program in 2025. The goal is to elevate its stock price to a fair value of R$43 per share, compared to the closing price of R$18.82 on the announcement day.

This strategy, however, depends on various factors including the pace of asset recycling. In 2024, Log sold 413,000 square meters of Gross Leasable Area (GLA) for R$1.5 billion ($0.25 billion), part of an asset recycling plan to fund future expansions.

The company plans to deliver an additional 500,000 square meters of GLA in 2025 with an investment close to R$1 billion ($0.17 billion). Log’s guidance for 2025 projects a net profit between R$350 million ($58.3 million) and R$450 million ($75 million).

The company is committed to distributing 50% of the year’s net profit as dividends. This could potentially yield up to 25% for shareholders, based on the highest profit forecast.

This performance and strategic direction demonstrate Log‘s resilience and strategic foresight in navigating economic fluctuations while capitalizing on the e-commerce boom, showing a clear path to sustained growth and shareholder value in a challenging economic landscape.

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