Petz Cobasi Has the Cash. It Is Not Paying It Out Yet
BRAZIL · COMPANIES
Key Facts
- —The cash Petz Cobasi ended June with a net cash position of 286.1 million reais, up 80.5 percent on the previous quarter.
- —The conversion Cash conversion from earnings rose from about 10 percent in 2024 to roughly 80 percent over the last twelve months.
- —The question Whether that means larger dividends. Management says not yet.
- —The answer The chief financial officer says the company is looking for investments returning more than a shareholder would get.
- —The quarter Net revenue 1.7 billion reais, up 7.9 percent. Adjusted net income 70.3 million, up 8.4 percent.
- —The company Petz and Cobasi completed their merger on 2 January 2026 and trade as AUAU3.
Brazil’s merged pet retailer has turned into a cash machine eight months after the deal closed. It is not handing the cash back yet.
Petz Cobasi ended June with a net cash position of 286.1 million reais, up more than 80 percent on the previous quarter. The market is asking whether dividends follow.
The Quarter
Gross revenue reached 2.108 billion reais in the second quarter, up 7.8 percent. Net revenue was 1.7 billion, up 7.9 percent.
Adjusted earnings before interest, tax, depreciation and amortisation came to 186.7 million reais, up 11 percent, at a margin of 10.6 percent.
Adjusted net income was 70.3 million reais, up 8.4 percent. Unadjusted net income was 100.4 million, up 43.5 percent.
Paulo Nassar, the group president, said that with internal inflation running near 1 to 2 percent and no price adjustments from the industry, the result represents real growth.
This was the first set of fully combined results after the merger.
Why the Cash Question Arose
The company converted about 10 percent of its earnings into free cash flow across 2024. Over the twelve months to June that figure was around 80 percent.
That is the shift that put dividends on the agenda, alongside a net cash position that grew more than 80 percent in a single quarter.
Rafael Siqueira Rodrigues, chief financial and investor relations officer, said the company is looking transparently for ways to invest at a rate of return higher than what the investor would get.
He also said the group keeps hammering the mantra that it wants to be the best merger case, and that it is very confident.
That is a reinvestment answer, not a distribution answer.
What Analysts Think
Itau BBA rates the shares outperform with a target of 4.70 reais for the end of 2027, against a reference price of 3.56 reais, implying about 32 percent upside.
It estimates free cash flow near 370 million reais in 2026 and 350 million in 2027.
On payouts the bank wrote that the company should define cash priorities in the second half, and that it favours greater returns to shareholders.
It attributed the improvement to above-inflation revenue growth from e-commerce expansion and private-label products.
The Merger Underneath
Petz and Cobasi completed their merger on 2 January 2026. The shares began trading as AUAU3 on 5 January.
The legal entity is Uniao Pet Participacoes. Petz shareholders received 320.8 million reais in cash, or 0.7109 reais a share, plus one share of the combined company for each Petz share.
The transaction included a capital increase of 1.69 billion reais.
Sergio Zimmerman chairs the board.
More: Brazil news in English, every day from The Rio Times.
Frequently Asked Questions
How much cash does Petz Cobasi hold?
A net cash position of 286.1 million reais at the end of June, up 80.5 percent on the previous quarter.
Is the company raising its dividend?
Not so far. The chief financial officer says it is looking for investments returning more than a distribution would give shareholders.
What did the quarter show?
Net revenue of 1.7 billion reais, up 7.9 percent, and adjusted net income of 70.3 million, up 8.4 percent.
When did the merger complete?
On 2 January 2026. The combined company began trading as AUAU3 on 5 January.
Sources: Petz Cobasi second-quarter results, Seu Dinheiro, InfoMoney, Money Times, XP Investimentos, ADVFN.
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