M. Dias Branco, one of Brazil's foremost food manufacturers, recently announced its financial results for the fourth quarter of 2024, alongside significant updates concerning its dividend policy. The company's net income for the quarter reached R$ 176.5 million, marking a dramatic decline of 48.4% compared to the same period last year when it reported R$ 341.9 million.
This downturn is reflected across the board, with the company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) also taking a hit, totaling R$ 355.3 million, down 19.7% from R$ 442.4 million year-over-year. Margins tightened as well, with the EBITDA margin falling to 14.3% from 16% the previous year, signaling increased pressure on profitability.
On the revenue front, M. Dias Branco's net revenue suffered a 10.2% drop, recording R$ 2.489 billion compared to R$ 2.771 billion during Q4 2023. The company attributed this decline largely to reduced sales volume, which fell by 10%, with the average price remaining stable. Revenue from its staple products, including biscuits, pasta, and margarine, decreased by 11.7%, totaling R$ 1.917 billion, illustrating the tough market environment it faced.
For the entirety of 2024, the overall financial health of M. Dias Branco showed signs of strain, with net income recorded at R$ 646 million, down 27.3% from R$ 888.7 million the previous year. The annual EBITDA fell to R$ 1.198 billion—a 16.4% decrease compared to R$ 1.434 billion reported for 2023. Correspondingly, the margin fell to 12.4% from 13.2% the previous year.
Further details highlighted the company’s reduction of net revenue for 2024 by 10.9%, amounting to R$ 9.663 billion compared to R$ 10.840 billion the year before. The dip was attributed to not only the lower volume sold, which stood at 1.755 million tons, but also the decline of 9.8% in the average price per product, which dropped to R$ 5.5 per kilo.
"A queda da receita líquida reflete a redução dos volumes, impactada tanto pela implantação do sistema SAP no 1º trimestre do ano, quanto pela retração observada no 3º trimestre, decorrente dos reajustes de preços implementados em julho de 2024," M. Dias Branco stated, shedding light on operational challenges faced during the year.
Despite these setbacks, M. Dias Branco remains resilient, having maintained or even increased market share in various segments. Specifically, the company reported gains in its biscuit market share, increasing from 31.8% to 32%. The market share for pasta, on the other hand, decreased marginally, from 28.9% to 28.8%. The firm continues to lead nationally across multiple product lines, including cookies and granolas.
Looking forward, M. Dias Branco is implementing changes to its dividend distribution policy. Effective April 2025, the company will transition from paying quarterly dividends to monthly distributions. This new policy stipulates monthly payments of R$ 0.03 per share, amounting to R$ 0.09 per quarter, reflecting the firm’s commitment to returning value to its shareholders.
For the upcoming dividend, M. Dias Branco announced R$ 93.9 million will be distributed on April 1, 2025, breaking down to R$ 0.28 per share. The payout will occur after the approval from the General Assembly deliberation concerning the financial statements for the year.
On investments, M. Dias Branco committed R$ 304.4 million during the past year, which is 17% less than their 2023 investments, focusing largely on machinery and equipment upgrades to bolster productivity.
Overall, M. Dias Branco appeared to navigate through challenging market conditions with strategic adaptations. The Q4 results and updated dividend plan position the company for potential future recovery as it works to streamline operations and respond to consumer dynamics more effectively.