Eternit (ether3) Records Net Gain of R$ 1.2 Million in Q2 2023

Introduction:

Eternit (ether3), a company currently undergoing a judicial reorganization, has announced its financial results for the second quarter of 2023. It recorded a net gain of R$ 1.2 million on its balance sheet during this period, depicting a significant decline of 97.2% compared to the same quarter of the previous year when the figure stood at R$ 40.3 million. Despite the decrease, the company’s financial performance presents insights into the construction materials industry and the macroeconomic scenario.

Net Income and Ebitda

In terms of net income, Eternit reported BRL 259.5 million between April and June, signifying an 11.1% drop in comparison to the same period in 2022. On the other hand, Ebitda (earnings before interest, taxes, depreciation, and amortization) adjusted, decreased by 79.6% to R$ 1.5 million in the second quarter of 2022.

Factors Influencing Net Income:

Eternit attributes the variation in net income to the sharp slowdown experienced in the construction materials industry during the period, primarily due to the macroeconomic scenario. This slowdown resulted in lower sales volumes, which in turn generated a lower dilution of fixed costs. Additionally, operational stops also impacted the company’s net income.

Expenses Analysis

Cost of Products and Goods Sold:

Eternit’s cost of products and goods sold increased by 4% on an annual basis, amounting to R$ 193 million. The increase in this expenditure can be attributed to higher costs associated with the manufacturing and distribution of the company’s products.

Selling Expenses:

Selling expenses, however, witnessed an 11.1% decrease year-on-year, totaling R$ 259.5 million. This reduction can be attributed to the overall decline in the market, which affected the company’s sales volumes.

General and Administrative Expenses:

General and administrative expenses, in contrast, increased by 12%, reaching R$ 31 million. This rise can be attributed to the incorporation of the Confibra operation, which expanded the scope of Eternit’s activities and consequently increased expenses in this area.

Financial Results

Negative Financial Result:

Eternit registered a negative financial result of R$ 2.09 million, in contrast to a positive balance of R$ 4.1 million between April and June 2022. This decrease can be attributed to a reduction in the availability of cash in financial investments, caused by the acquisition of Coinfibra.

Net Debt:

As of June, the company reported a net debt of R$ 76.2 million, reflecting its financial position at the end of the second quarter of 2023.

Conclusion

Despite the significant decline in net gain, Eternit’s financial performance in the second quarter of 2023 provides valuable insights into the construction materials industry and the macroeconomic scenario. The company’s net income and Ebitda reflect the impact of the overall slowdown in the industry, resulting in lower sales volumes and increased expenses.

As Eternit continues its journey through judicial reorganization, monitoring its financial performance and adapting to market trends will play a significant role in the company’s recovery. The incorporation of operations such as Confibra highlights its efforts to expand its activities and meet the changing demands of the market.

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