Exame - 11/08/2022
Company expects leverage to halve and unlock profit potential; operation was postponed due to the purchase of Witt O’Briens.
Ambipar’s third-quarter balance sheet (AMBP3) may have been the last before the listing of the Response division, which responds to environmental emergencies, on the New York Stock Exchange (NYSE). This, at least, is the expectation of the company’s management.
“It still depends on the bureaucracy of the American market. But it has everything for the listing to occur later this year. Then it would enter the balance sheet for the fourth quarter”, said Thiago Silva, CFO of Ambipar, in an interview with Exame Invest.
The operation has been planned since the middle of the year, when Ambipar approved the merger of Response with HPX, a special purpose company (SPAC), which provides for the listing on the NYSE and the capitalization of at least US$ $168 million. The division will continue as a subsidiary of the group, which will continue to own 71.8% of its capital.
According to Ambipar’s projections, the conclusion of the deal will cause Ambipar’s leverage level to drop by half, giving new fuel to inorganic growth and alleviating the financial pressure on the balance sheet.
In the result for the third quarter, released last night, the company once again suffered from the increase in the cost of net debt, which ended the period at R$ 3 billion, double the same period last year. As a result of the increase in debt and the high Selic rate, Ambipar reported a financial loss of BRL 158.3 million, 270% higher than in the third quarter of 2021.
Net income, pressured by financial expenses, fell 24% to R$ 33.2 million — even with a positive Ebitda of R$ 272.6 million, 69.1% higher in the annual comparison. The Ebitda margin was 27.8%. With the lowest level of indebtedness, the expectation is that there will be more left for the last line of the balance sheet.
The initial forecast was that the entire listing process would already be completed. But the choice was to further fatten the Response operation before the debut in the American market.
“With the purchase of Witt O’Brien, we had to stretch the schedule a little to get the numbers into the reference form of the American stock exchange. But we’re on a strong note. We’ve already gone through the second round of requirements [for listing in New York],” Silva said.
The purchase of Witt O’Brien, agreed in September and completed in October, practically doubles the size of Response in terms of revenue. In 2021, the company, a global leader in the crisis management sector, had revenue of BRL 1.034 billion, while Response ended the last quarter with accumulated revenue of BRL 1.3 billion in twelve months.
“Growing with small acquisitions has put us in a position to look at larger acquisitions, as was the case with Witt O’Brien. It is a very complementary company in our portfolio of services in the North American market. We made many acquisitions of companies that operate in emergency care and O’Brien, which is very strong in management, always outsourced the care itself”, explained Silva.
