Analysis of the financial impact on the decline in Romi shares
This Wednesday (17), the financial market reacted with a 6.5% drop in Romi shares (ROMI3), which were traded at R$10.98 per share in the early hours of the afternoon. This negative movement occurs in the context of the release of the company's financial results for the first quarter of 2024, which showed a significant reduction in profits and operating margins.
Detailed assessment of Romi's financial results
Net and Adjusted Income
- Romi's net profit totaled R$17.981 million in the first quarter of 2024, representing a sharp drop of 50.2% compared to the same period of the previous year. Adjusted profit was even more impacted, showing a reduction of 69.5%, reaching R$9.2 million.
Ebitda and Margin Analysis
Ebitda and Operating Margin
- Ebitda (earnings before interest, taxes, depreciation and amortization) reached R$27.3 million, a reduction of 47% compared to the first quarter of 2023. The adjusted Ebitda margin fell to 8.7%, significantly below the 17 .5% previously recorded.
Impact of Billing Volume
- Romi's gross margin was 29.1%, decreasing 4 percentage points compared to the first quarter of 2023. This decrease was mainly attributed to the reduction in the Castings and Machined Products Unit's revenue volume, which also negatively impacted the adjusted operating margin .
Operating revenue performance and order backlog
Net operating revenue
- Net operating revenue was R$208.5 million, a drop of 19.5% compared to the same period of the previous year. This decline is mainly associated with the reduction in revenue from castings and machined parts, especially in the energy and agricultural segments.
Order Backlog and Entry of New Orders
- Romi's order backlog, at the end of the first quarter of 2024, reached R$595.3 million, an increase when compared to the same period of the previous year and the previous quarter. This growth is a positive indication, especially for the B+W Machinery Unit, which recorded a significant increase in order intake.
Concluding
The sharp drop in Romi's profits and margins reflects operational and market challenges, which directly impacted the performance of the company's shares in the capital market. While the order book shows signs of recovery, the reduction in operating income and pressured margins raise questions about the company's future strategies for recovery and growth.
Do you believe that Romi will be able to reverse these challenges in the short to medium term? What strategies do you consider essential for Romi to improve its financial performance and market value? Share your opinions and insights in the comments below.
