Thursday, November 14, 2024

Sendas Distribuidora SA (ASAI) Q3 2024 Earnings Call Highlights: Strong Revenue Growth and …

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  • Revenue: Over 20 billion reais, an increase of 1.714 billion compared to Q3 last year.

  • Same-Store Sales Growth: Advanced by 2.7%.

  • EBITDA Pre-IFRS: Over 1 billion reais, with a margin of 7.3%.

  • Net Income: Grew 10% in the pre-IFRS vision.

  • Store Openings: 21 new stores in the last 12 months, adding 8% to total sales area.

  • Gross Profit: Increased from 1.1 billion in 2019 to over 3 billion reais in Q3 2024.

  • Leverage Ratio: Reduced to 3.52 times EBITDA, aiming for below 3.2 times by year-end.

  • Cash Generation: Operational cash generation of 7.7 billion reais.

  • Debt Reduction: Net debt reduced by 218 million reais in the quarter.

  • Customer Traffic: Over 40 million people visiting stores monthly.

Release Date: November 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

  • Sendas Distribuidora SA (NYSE:ASAI) reported a significant reduction in net debt by 218 million, marking a positive trend in deleveraging.

  • The company achieved a revenue milestone, surpassing 20 billion reais, with a 9.3% growth in total store base.

  • Sendas Distribuidora SA (NYSE:ASAI) opened 21 new stores in the last 12 months, expanding its sales area by 8%.

  • The company maintained stable gross margins despite various economic challenges, demonstrating strong operational efficiency.

  • Sendas Distribuidora SA (NYSE:ASAI) has a strong cash generation capability, funding 90% of its investments through its own cash flow.

  • The company faces challenges with higher interest rates impacting its financial strategy and investment plans.

  • Same-store sales growth was only 2.7%, affected by lower performance in the reseller segment due to price sensitivity.

  • The B2B segment, particularly resellers, showed vulnerability to market dynamics, impacting overall sales performance.

  • There is a need for further maturity and optimization in newly converted stores, which currently face higher lease costs.

  • The macroeconomic environment, including inflation and interest rate fluctuations, poses ongoing risks to financial stability.

Q: How is Sendas Distribuidora SA viewing the evolution of food inflation and its impact on consumer behavior? A: Belmiro De Figueiredo Gomes, CEO, noted that there is an inflationary trend, particularly visible in some categories. The company expects higher food inflation in the fourth quarter compared to the third. This inflation scenario, coupled with consumer demand pressures, is being closely monitored.

Q: What are the company’s plans for store expansion in 2025, and how does it plan to manage potential macroeconomic challenges? A: Belmiro De Figueiredo Gomes, CEO, stated that the company has already hired five or six projects for 2025, with a focus on maintaining cash generation and managing leverage. The company is prepared to review plans if necessary, considering the macroeconomic environment.

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