Cielo (CIEL3) has a 112% jump in recurring income in the 2nd quarter, to R$383 million; company announces BRL 224 million in JCP

The machine company Cielo (CIEL3) released results this Tuesday (2) with consolidated net income of R$ 635.3 million in the second quarter of 2022 (2Q22), an increase of 252% compared to the same period in 2021. The number reflected good operating results and the extra revenue from the sale of the North American unit MerchantE, which had a positive non-recurring impact of R$282 million on this balance sheet line. The company highlighted this profit as the company’s highest since the fourth quarter of 2018.

Recurring net income reached R$ 383.4 million, registering a growth of 112.5% ​​over the result reported a year earlier, in 2Q21.

According to the company, the result benefited from the growth of captured volume, recovery of revenue yield, continuous control of expenses, expansion of the prepayment of receivables business and Cateno’s record performance.

Consolidated earnings before interest, taxes, depreciation and amortization (Ebitda), in turn, reached BRL 1.18 billion, up 103.7% year-on-year, also reflecting the sale of MerchantE .

Isolated extraordinary effects, recurring Ebitda reached R$ 914.7 million, registering an increase of 57.5% over 2Q21 and 28.6% over 1Q22, with an Ebitda margin (Ebitda over net revenue) of 36% in 2Q22, against 20 .7% in 2Q21 and 25.8% in 1Q22.

Net operating revenue, in turn, dropped 9.7% to R$2.54 billion, reflecting the loss of revenue from the sale of e-Solutions. Excluding the former subsidiary, revenue grew by 33.7%.

The numbers surpassed the projections in terms of profit and Ebitda. The Refinitiv consensus with market analysts projected an increase in profit of 58% on an annual basis, to R$ 285 million, while the expectation was for an Ebitda of R$ 891 million in the quarter, up 53% compared to 2Q21. As for revenue, a more modest increase of 1% was expected, to R$2.843 billion.

The total volume of payments processed by the company was BRL 221 billion, up 33.8% over the same period in 2021 and up 11.4% over the previous quarter.

In addition to the sale of MerchantE, two other extraordinary events were highlighted by the company in the quarter.

The first was the impairment of software, with a review of the useful life of software currently in use in customer relationships, with a view to restructuring the service model that is in progress and involves, among other changes, the implementation of new systems.

The second was the closing of physical stores, with the restructuring of channels, with the closure of stores and kiosks, which generated a provision of R$ 5.5 million in other operating expenses at Cielo Brasil.

The company also highlighted that the term products, solutions that allow Cielo’s customers to anticipate their flows of receivables, arising from cash and installment credit transactions, totaled R$ 29 billion in anticipated volume, a growth of 58.1% compared to 2Q21. Among the term products, we highlight the expansion of the receivables acquisition line, which reached 9.8% penetration, against 8.1% in 2Q21.

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Cielo’s share practically doubled in value in 2022 until this Tuesday (up 95%), when it closed at R$4.42, while the Ibovespa accumulated a drop of 1.4%.


Cielo also informed that its Board of Directors approved, ad referendum of the Annual Shareholders’ Meeting to be held for the approval of the results of fiscal year 2022, the declaration of interest on equity (“JCP”), in the total amount of R$224.209 million referring to the 2nd quarter of 2022, subject to income tax, as applicable in each case.

JCP will be distributed and paid to shareholders in proportion to their interest in the Company’s capital stock, and shares held in treasury will not be entitled to JCP. The final value per share of JCP is R$ 0.08321961183.

Such JCP, net of income tax, will be paid to shareholders on September 23, 2022, based on the shareholding position of August 10, 2022, with the Company’s shares being traded ex interest on equity as of September 11 from 2022 inclusive.

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