Release Date: February 26, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Global Dominion Access SA (XMAD:DOM) achieved a significant milestone by reaching a 13.1% EBITDA margin over sales, marking the first time the company has reached this level.
• The company has made substantial progress in its strategic plan, focusing on sustainability, simplification, and recurrence, with 73% of its turnover now related to services.
• Sustainable services have shown strong organic growth of 7% in business figures and a 30% increase in contribution margin compared to 2023.
• The creation of Global Dominion Environment GDE aims to accelerate growth in sustainable industrial transition, targeting nearly 500 million in turnover and more than 50 million in EBITDA by 2025.
• The company has successfully divested low-margin activities, such as the sale of multi-technical services in Spain, to focus on more profitable and strategic areas.

Negative Points

• The net comparable result decreased by 12% compared to the previous fiscal year, primarily due to higher financial expenses and increased corporate tax.
• The company experienced delays in project execution, particularly in Angola and the Dominican Republic, due to geopolitical issues and budget constraints.
• Financial expenses have increased due to higher levels of indebtedness and rising interest rates, impacting overall profitability.
• The postponement of the Cerritos wind farm commissioning in Mexico was due to government decisions, causing delays in expected revenue generation.
• Net financial debt increased by 107 million compared to 2023, attributed to inorganic payment flows and structural investments, indicating a temporary rise in debt levels.

Q & A Highlights

• Warning! GuruFocus has detected 5 Warning Signs with XMAD:DOM.

Q: Can you provide more details on the objectives for Dominion Sustainable Environment and how they compare to 2024? A: Patricia, Director of Corporate Development, explained that while they have set targets for 2025, they have not yet provided comparative data with 2024 as it is not part of their reporting technique. However, they will share this information as they implement their plans.

Q: What is the status of the projects in the Dominican Republic regarding potential divestitures? A: Patricia mentioned that they have reached the final stage of the competitive sale process in the Dominican Republic, having received binding offers. They plan to finalize the process in the first half of the year.

Q: Why was the commissioning of the Cerritos wind farm postponed, and have measures been taken to prevent similar issues in other projects? A: The delay was due to a unique situation in Mexico involving government decisions. The CEO assured that this was an isolated incident and that they have managed the situation to avoid significant negative impacts.

Q: With the strategic plan aiming for 9% growth in free cash flow, can the company achieve 92 million in 2025 with the sale of the Dominican Republic wind farm? A: The CFO clarified that while the sale will reduce financial expenses, it is not considered operational cash flow. Therefore, they do not expect to reach 92 million in 2025 solely from operational cash flow.

Q: Are there plans for share repurchases given the current low share price? A: Mika, a company representative, stated that they are considering both share repurchases and investments in growth areas like sustainable environment and circular economy, depending on potential M&A opportunities.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.