Log CP announces strategic sales and reinforces leadership in the warehouse market
On the eve of announcing the results for the first quarter of the year, scheduled for this Wednesday, Log CP is not only preparing to reveal its financial numbers, but also celebrating a significant achievement in the logistics market. The company has just carried out its first asset sale of 2024, a move that reiterates its asset recycling strategy and promises to further boost its expansion plan.
First sales and investment expectations
Last Friday, Log CP announced the sale of two warehouses located in Salvador (BA) and Contagem (MG), reaching almost half of the figure raised in the previous year with the sale of 11 warehouses, totaling R$ 509.7 million . These sales are essential for financing the construction of new warehouses, with a planned investment of R$850 million for 2024. André Vitória, CFO of Log CP, shares that sales are essential to support the net growth in gross leasable area (GLA ) from the company. "It is very likely that we will sell an equivalent value in assets", says Vitória, explaining the construction and sale dynamics to support the expansion.
Rising profit margin
The company noticed an increase in the warehouses' gross sales margin, which was 40.9% — an increase compared to the 30% obtained in 2023. This increase is attributed to the reduction in interest rates in the economy, which has heated up the market and higher prices were allowed. This increase in margins demonstrates the effectiveness of Log CP's sales strategy and the strengthening of its market positioning.
Financing and growth strategy
The sale of assets has become the main source of financing for Log CP's expansion plan, which aims to deliver 2 million square meters in logistics warehouses between 2025 and 2028. The expansion plan, estimated at R$3.5 billion , will be largely financed by asset recycling. “We will only advance in our construction and capex as we are successful with the sale of assets”, highlights Vitória. The strategy shows not only financial prudence, but also a commitment to sustainable growth.
Analysts’ challenges and reservations
Goldman Sachs analysts point out that, although the financing model is effective, the company faces the challenge of having to wait up to two years to receive a significant portion of the value from the sale of assets. Furthermore, when selling the warehouses, they are no longer sources of immediate revenue for the company, which can impact cash flow in the short term.
Debt management and the future of stocks
Log CP avoids making new loans and considers that its net debt has reached a stable level. The possibility of a subsequent share offering is currently ruled out due to the discounted market price of the shares. Furthermore, with the treasury reaching almost the limit allowed for share repurchases, the company is looking for strategies for the allocation of these shares, considering whether to place them back on the market or allocate them to executive compensation.
Concluding
Log CP is clearly focused on maintaining its leadership in the logistics market through a sustainable growth strategy, which includes asset recycling and careful management of its finances. Decisions made now, especially regarding treasury shares, will be crucial for the company's future. This is a decisive moment for Log CP and its investors, reflecting not only the corporate scenario, but also the broader economy.
I invite you to leave your comment on this article. What are your expectations for the future of Log CP and how do you evaluate the strategies adopted by the company in the current market context?
