Localiza disclosed this Tuesday (9) net income of BRL 671.4 million for the third quarter, more than double the amount a year earlier, with strong demand boost and fiscal gain due to the change in vehicle depreciation to rent.
The largest vehicle rental company in Brazil had an operating result measured by earnings before interest, taxes, depreciation and amortization (Ebitda) of R$ 1.19 billion from July to September, an 83% increase over a year earlier.
Analysts, on average, expected Localiza to present net income of BRL 448 million and Ebitda of BRL 883 million, according to data from Refinitiv.
Despite the average daily rental of vehicles having soared almost 38% year-on-year, to R$92, the rate of use of vehicles in the company’s fleet rose from 75.9% to 81.3%.
The performance was similar to that of Unidas, with whom Localiza is seeking a merger that is being analyzed by Cade. Last week, Unidas, the second-largest in the sector in the country, reported a 29% increase in the average car rental rate, to R$80, and profit more than twice as high as in the third quarter of last year.
“Even in a context of rising rental prices, which is especially necessary due to the increase in the value of new cars and maintenance costs, we noticed a gradual and consistent increase in volumes – already higher than in the first quarter of this year, with a rate of fleet utilization back to historic levels,” stated Localiza.
In the period, Localiza concluded a technical report from an institution qualified by the Federal Revenue Service, which reduced the useful life of some vehicles in the rental division, from up to 60 to 24 months. As a result, tax credits were recognized, “with an impact on the quarter’s Ebitda of R$320.3 million”.
Localiza stated that the application of the revised useful life for the other cars in the fleet will depend on new reports.
The company ended September with a fleet of 273,200 cars, down about 2% from the end of 2020. The company’s vehicle sales plunged 52% in the quarter from a year earlier, to 21,620 units, while the average price sales rose 34.5%, to R$ 60.5 thousand, said the company.
(By Alberto Alerigi Jr.)
Reference: CNN Brasil
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