Reuters, Investing.com, UOL, Terra for Gabriel Araujo - 14/11/23
By Writing Team
Posted in November 4, 2023
SÃO PAULO (Reuters) – Brazilian environmental services provider Ambipar (BVMF:AMBP3) will continue to focus on reducing financial leverage and being profitable in 2024, said the company’s vice president of finance to Reuters on Monday, while the company reported higher net debt in the third quarter.
This year marked a new cycle for Ambipar, which has grown through almost 50 acquisitions in recent years but suspended inorganic expansion to deleverage its business.
“We continue with this plan… We will keep focusing on this organic growth, profitability, and naturally, deleveraging of the business,” said Thiago Costa, vice president of finance at Ambipar.
The company reported a net debt of 4.49 billion reais at the end of the third quarter, an increase of 46% from the previous year, while leverage measured by the net debt/Ebitda ratio stood at 2.99 times, above the 2.90 multiple from the previous quarter.
Costa said that the increase was expected due to high interest rates in Brazil, with the current basic rate at 12.25%, even after the central bank started a monetary easing cycle.
Leverage is expected to decrease after Ambipar’s stock offering of 716.90 million reais earlier this month, with the company stating that the funds will be allocated to strengthen the cash position and reduce debt.
The company’s founder, Tercio Borlenghi Jr, invested 560 million reais in the stock offering, and Ambipar stated that the net debt/Ebitda “pro forma” ratio in the third quarter would have been 2.52 times if the November stock offering had been considered in the period.
Costa added that having leverage around 2.5 to 3 times is already “very comfortable” for the company.
Ambipar reported quarterly earnings before interest, taxes, depreciation, and amortization (Ebitda) of 376 million reais in the third quarter, up 38% year on year and a new record for the company, while the Ebitda margin increased by 4 percentage points to 31.8%.
Costa reiterated that new acquisitions were not in sight.
“We took our foot off the accelerator (in acquisitions), and we’ll keep it that way. Acquisitions, only if very specific and small, nothing transformative is on our radar. And this is the new moment, focusing on organic growth and deleveraging.”
