TrendsBy Vinicius Figueiredo
Release Date: Thu, Mar 20 (After Market)
HYPE3: Market Perform
YE25 Target Price: BRL 22.0
Hypera’s 4Q24 results were once again impacted by the company’s working capital optimization process. Net revenues decreased by 18% YoY, while EBITDA (excluding others) also saw a significant drop, with a 23 pp YoY decline in margin. On the positive side, there was an improvement in cash flow dynamics driven by better receivables management. Looking ahead, the company mentioned that it is now operating with a receivables term of approximately 70 days for new sales made at the end of 1Q25. This could be seen as a positive sign by investors, indicating the potential success of the WK strategy being implemented. Although the disclosed figures in the quarter are not inspiring per se, it was expected that the shift in working capital strategy would have a considerable impact in the short term. Investors will look for any signs of sell-out in early 2025 to gain more confidence about what the recurring revenues will look like going forward, beyond this adjustment.
- Net revenue decreased by 18% YoY, in line with our estimate, due to the working capital optimization initiatives announced in October.
- Gross margin declined by 10.1 percentage points YoY due to lower operational leverage and a less favorable product mix. EBITDA margin fell short of our estimate by 1.8 pp.
- The cash conversion cycle decreased by 19 days QoQ, mainly driven by improvements in payables and receivables. Additionally, if it were not for the payment of BRL 683 million of IoC during the period, the net debt would have decreased by BRL 116 million QoQ.
Best regards,
Vinicius Figueiredo, CNPI
vinicius.figueiredo@itaubba.com
+55-11-3073-3029
Lucca Generali Marquezini, CNPI
lucca.marquezini@itaubba.com
+55-11-3073-3246
Felipe Amancio, CNPI
felipe.amancio@itaubba.com
+55-11-3073-3476
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