In This Article:
Release Date: May 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Domestic sales of new vehicles in Brazil increased by 7% year on year, driven by favorable economic conditions.
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The automotive logistics division saw a 14% increase in net revenue, attributed to operational performance and tariff adjustments.
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Integrated logistics division's net revenue grew by 10% year on year, supported by new contracts and increased client turnover.
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The company's net revenue for Q1 2025 increased by 13% year on year, reaching BRL440 million.
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Free cash flow was positive at 92 million barrels, aided by a reduction in accounts receivable and strong operational results.
Negative Points
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Market share in the automotive logistics division contracted by 1.9% year on year to 23.1%.
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Average distance traveled decreased by 3.3% year on year, impacting logistics efficiency.
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The integrated logistics division's EEA margin decreased from 20.1% to 18.3% due to ramp-up costs and increased expenses.
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Despite increased revenue, the joint venture's net income remained stable due to lease contract adjustments.
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The company's shares continue to trade at multiples below their historical average despite robust indicators and results.
Q & A Highlights
Q: Can you elaborate on the market share dynamics and the impact of diesel price fluctuations on freight prices? A: Naldo Tubba, CEO, explained that GM's investment plan in Brazil aims to recover competitiveness, which could lead to a gradual recovery of GM sales and market share. Regarding diesel prices, adjustments are made in May, and contracts include a trigger for price variations, ensuring tariffs reflect diesel price changes.
Q: How do you see the mix of services, particularly vehicle transfers and warehousing, evolving? A: Naldo Tubba, CEO, noted that the mix of services is volatile but adds to revenue. High vehicle inventory at GM increases the relevance of warehousing prices. Tegma offers additional services like yard transportation and storage to meet automakers' needs.
Q: What is Tegma's appetite for M&A activities given the increased net cash position? A: Ramon Perris, CFO, stated that Tegma is actively investing time and energy in M&A activities, reflecting in increased administrative expenses. While no binding negotiations have been successful yet, the company maintains capital discipline and will pursue deals that add value to stakeholders.
Q: What are the expectations for GDL in 2025, considering the drop in margins? A: Ramon Perris, CFO, explained that the margin change is due to rent adjustments for yard land. Despite this, expectations for GDL in 2025 are positive, with good results anticipated from general and bonded warehousing services.