Global Dominion Access SA (XMAD:DOM) Q2 2024 Earnings Call Highlights: Navigating Challenges ...

GuruFocus News
3 min read

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Release Date: July 23, 2024

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

Positive Points

  • Global Dominion Access SA (XMAD:DOM) reported a 5% organic increase in income, demonstrating positive business momentum.

  • The company achieved a high operating profitability level, with a 14.9% margin on sales.

  • The services segment showed strong performance, contributing 71% to turnover and 62% to the contribution margin.

  • The company is optimistic about the second half of the year, expecting significant portfolio growth in renewable projects.

  • Strategic focus on more profitable activities has resulted in consistent contribution margins above 12% for three consecutive quarters.

Negative Points

  • The company faced challenges in the first half of 2024, with temporary decoupling in operations affecting financial results.

  • There was a significant increase in financial expenses, over EUR6.5 million, due to interest rate hikes and payment commitments.

  • The 360 project segment experienced a slowdown in activity compared to previous quarters.

  • Net debt increased significantly in the first half of the year, raising concerns about financial stability.

  • The company is under pressure to meet its strategic plan targets amidst a more demanding market environment.

Q & A Highlights

Q: What kind of growth is expected in the second half of the year, and how does it relate to the strategic plan for 2024-2026? A: Unidentified Company Representative_2: We expect a significant increase in the project portfolio in the second half, particularly in renewables and projects funded by agencies. We are optimistic about achieving the strategic plan's targets, including a 5% organic growth, despite temporary slowdowns in some projects.

Q: Are the expected divestments planned for the second half of 2024 or 2025, and what is the visibility on net debt by the end of the year? A: Unidentified Company Representative_2: Divestments are expected in the second half of 2024, particularly in the Dominican Republic. We anticipate a significant contribution to operating cash flow, which should improve the net debt situation by year-end.

Q: Can you provide more details on the CapEx for the year and whether the growth CapEx will continue in the second half? A: Unidentified Company Representative_1: The growth CapEx of EUR20 million in the first half is expected to be extrapolated for the entire year. We maintain a disciplined approach to CapEx, focusing on strategic investments.

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