Prosegur Cash SA (XMAD:CASH) Q3 2024 Earnings Call Highlights: Navigating Currency Challenges ...

GuruFocus.com11-02

Revenue Growth: Increased by 1.7% in EUR terms, reaching EUR 1,523 million. EBITA Margin: 11.8% for the first nine months, with a quarter-on-quarter improvement of 70 basis points in Q3. Net Profit: ...

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Europe increased by 9.1% to EUR 492 million; Asia Pacific decreased by 6.1% to EUR 99 million.Earnings Per Share: Improved by 4.5% to 4.32.For the complete transcript of the earnings call, please refer to the full earnings call transcript.Prosegur Cash SA  reported a 1.7% increase in sales in EUR terms, with organic growth reaching 2.2% when excluding inorganic operations.Net profit increased by 4.1% due to lower","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":["earning"],"viewcount":null,"language":"en","relate_stocks":{"CASH":"米塔金融","PGCSF":"Prosegur Cia De Securidad SA"},"translate_title":"Prosegur Cash SA(XMAD：CASH)2024年第三季度收益看涨期权亮点：应对货币挑战...","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"CASH":1,"PGCSF":0.9},"content_text":"Revenue Growth: Increased by 1.7% in EUR terms, reaching EUR 1,523 million.\nEBITA Margin: 11.8% for the first nine months, with a quarter-on-quarter improvement of 70 basis points in Q3.\nNet Profit: Increased by 4.1%, totaling EUR 66 million.\nFree Cash Flow: EUR 63 million generated in Q3, bringing the year-to-date figure to EUR 92 million.\nNet Financial Debt: Reduced by EUR 28 million to EUR 898 million.\nTransformation Products Penetration: Increased to 32.1% of total sales, with a growth rate of 12.7% in EUR terms.\nSales by Region: Latin America decreased by 1% to EUR 932 million; Europe increased by 9.1% to EUR 492 million; Asia Pacific decreased by 6.1% to EUR 99 million.\nEarnings Per Share: Improved by 4.5% to 4.32.\n\n\nWarning! GuruFocus has detected 7 Warning Sign with XMAD:CASH.\n\nRelease Date: October 31, 2024\nFor the complete transcript of the earnings call, please refer to the full earnings call transcript.\n Positive Points \n\nProsegur Cash SA (XMAD:CASH) reported a 1.7% increase in sales in EUR terms, with organic growth reaching 2.2% when excluding inorganic operations.\nThe company achieved a free cash flow generation of EUR 63 million in Q3, bringing the year-to-date figure to EUR 92 million, indicating strong cash flow performance.\nNet profit increased by 4.1% due to lower financial costs and a reduced tax rate, despite challenges in EBITA.\nTransformation products have increased their penetration to 32.1% of total sales, showing a 12.7% growth on a like-for-like basis.\nProsegur Cash SA (XMAD:CASH) has reduced its net financial debt by EUR 28 million, showing a positive trend in leverage ratio improvement.\n\n Negative Points \n\nCurrency devaluation, particularly in Argentina, continues to negatively impact financial results, affecting EBITA and sales growth.\nThe EBITA margin decreased compared to the previous year, primarily due to currency effects and restructuring costs in Australia.\nSales in Latin America, which represent 61% of total sales, decreased by 1% due to significant currency impacts.\nThe Asia Pacific region saw a 6.1% decrease in revenues, driven by the deconsolidation of Australian operations.\nDespite improvements, the total net debt to EBITA ratio remains at 2.9 times, still affected by previous year's challenges.\n\n Q & A Highlights \nQ: What should we expect for Q4 given the current situation in Argentina and the Peso, and are there any serious consequences from the Cooperation Agreement announced yesterday? A: We expect a significant improvement in Q4 compared to last year, with consensus estimates slightly below EUR 2 billion in sales and EUR 250 million in EBITA. We believe we can exceed these estimates under a normalized FX scenario. The Cooperation Agreement is a formality with no significant underlying changes. Regarding leverage, we expect to be within our 2.5 times internal threshold by year-end, with further improvements in 2025. (Javier Hergueta, CFO)\nQ: Is the positive cash flow generation in Q3 due to seasonality, and can we expect this trend to continue in Q1 and Q2 next year? A: The positive cash flow in Q3 is due to strong discipline in collections, payments, and CapEx prioritization. We expect Q4 to maintain this trend. While seasonality will still affect Q1 and Q2, stabilization in Latin America should reduce working capital consumption, supporting positive cash flow generation. (Javier Hergueta, CFO)\nQ: What are the trends in organic revenue growth, and are there any changes in underlying volume trends? A: The minimal deterioration in organic growth is due to a tougher comparable base. Excluding Argentina, we see mid to high single-digit organic growth, balanced between price and volume. This trend is consistent across regions, with strong growth in Europe and Asia Pacific. (Javier Hergueta, CFO)\nQ: Can you provide insights into profitability trends, particularly in Argentina and the impact of new initiatives? A: Excluding Argentina, the rest of the business shows improving profitability. The impact from forex openings and Australian restructuring will dilute by year-end, with no major openings expected in 2025. We anticipate gradual improvement in EBITA margins, bridging the gap to previous levels. (Javier Hergueta, CFO)\nQ: Does the guidance for 2024 include any appreciation of the Peso in Q4? A: We don't have a crystal ball, but market consensus suggests the Peso will maintain a roughly 2% monthly devaluation, which aligns with government announcements. This is the reference we are using for our guidance. (Javier Hergueta, CFO)\nFor the complete transcript of the earnings call, please refer to the full earnings call transcript.This article first appeared on \nGuruFocus.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2480832445"}