SAO PAULO – Vibra Energia, formerly BR Distribuidora, (BRDT3) held last Wednesday (1) its investor day, presenting more details about its trajectory, projects completed since the IPO in 2017, and he also commented on future business expansion projects.
The main message of the presentation, according to Itaú BBA, was that the company will remain in distribution, with an energy transition “asset-light“, with a focus on logistical efficiency to generate economies of scale.
On the other hand, the bank writes, Vibra made it clear that it will not enter into the production of fossil fuels and traditional biofuels, nor into the generation and distribution of electricity on a large scale. The company will also leave out of its scope the infrastructure for transporting and distributing natural gas.
For the long term, the company has focused its efforts on retail and convenience stores, aviation, and partnerships, according to analysts.
Itaú BBA has a recommendation of performer (above the market average) for the company’s shares and target price of R$34.
This Thursday (2), BRDT3 shares were down 3.1% on the Brazilian Stock Exchange, around 2:35 pm (Eastern time), traded at R$ 25.93.
Bradesco BBI also says it liked the company’s message: “The energy transition is at a point of no return and we like the company’s sense of urgency on the matter.”
In a report, the bank highlights that Vibra made it clear that its energy platform wants to focus on the distribution of biomethane, on self-generation in its distribution chain, as well as on vehicle recharge solutions. Relationship programs, convenience stores and a more gradual transition to green hydrogen and electronic fuels are also on the list.
“The analysis of the scenario for 2030 shows the importance of the immediate transition of Vibra, in order to avoid the stagnation of earnings before interest, taxes, depreciation and amortization (Ebitda) in the next ten years”, write the analysts.
Another important point, according to Bradesco BBI, lies in the fact that, even in a scenario of rapid transition, management expects its Operating Cash Flow (OCF) to increase by 180% by 2030. “This shows that the choices made by administration over the transition are light on assets, and do not necessarily imply lower dividends”.
Bradesco BBI has a recommendation performer for the company’s shares and target price of R$36.
The main point presented by Vibra, according to analysts, falls on the company’s energy transition proposal.
In a report, Credit Suisse recalls that the company recently announced a joint venture in the ethanol segment with Copersucar and an investment fund to invest in the real estate market.
According to analysts, BRDT has shown an “interesting” agility in capturing opportunities while touching the turnaround in a “very efficient way”.
• Vibra Energia: joint venture and FII make the company more competitive and allow for value creation, according to analysts
Looking ahead, the Credit Suisse team says that Vibra should look for a way to extract value both from the main fronts (ethanol, derivatives, electricity) and from natural gas, biomethane, energy distribution and electric car recharge. The path to hydrogen and biofuels is also in the company’s plans.
“We really like the strategic rationale of a business that should be asset-light and scalable. It should also have an interesting resilience with respect to commodity price fluctuations and allow the choice of which energy matrix to rely on,” analysts write.
Credit Suisse assesses that traditional distribution should still grow for many years to come and that, in addition to diluting the importance of the energy transition, it guarantees a robust cash flow for the “new business” investment and for remunerating shareholders.
Although the company has not released a guidance, Credit Suisse expects the company’s earnings before interest, taxes, depreciation and amortization (Ebitda) to grow between 20% and 30% in the period 2021 to 2030, not including cost cuts.
Credit Suisse has a recommendation performer for company shares and target price of R$39.
New avenues of growth
The analysis house Levante claims that Vibra made clear the avenues it will pave from now on and even left well defined the segments it will not operate: mostly activities that involve intensive capital such as refining, electricity generation and infrastructure. transport.
“The company has been making moves since last year towards an operation in commercialization, complete distribution in the energy segment in a broader way, encompassing new fuels and energy sources (ethanol, biogas, LNG, for example)”, highlights the team .
Now, analysts write, the company is preparing to expand its scope of action by entering new markets focused on the cleaner energy segment.
Morgan Stanley assesses that Vibra is “uniquely” positioned in the fuel distribution sector in Brazil, in relation to its peers, leveraging its size and turnaround to benefit from emerging themes in the world of energy transition.
“Since its IPO, Vibra has constantly evolved and improved margins. With the recovery of existing operations now nearing completion, the new CEO will focus on the next stage of the company’s (r) evolution, addressing strategic positioning and energy transition,” the analysts write.
For the American bank, the initiatives that have been implemented at Vibra since 2017 are bearing fruit, and the company seems well positioned to surf the recovery of fuel consumption in Brazil with a high margin.
Morgan Stanley also says it believes the company’s stock will continue to provide an “attractive” shareholder compensation proposal. The bank has a recommendation overweight (above the market average) for BRDT3 shares and target price of R$36.
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