T4F Entretenimento S.A. (SHOW3) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to the results presentation for the first quarter of 2024 of Time for Fun. The year begins with a promising outlook with reasonable demand due to the lockdown experienced during the COVID-19 pandemic. For comparative analysis of the period, it's important to remember as previous communicated that the first quarter of 2023, we hosted the last edition of the Lollapalooza festival promoted by Time for Fun. During this quarter, we hosted the concept of the Singer Laura Pausini in São Paulo, which was highly successful, along with 78 sessions of the musical, The Lion King, which is running through July of this year. At the end of the April and beginning of May, we have 2 concerts of the singer, Jessie J, one in São Paulo and another one in Rio de Janeiro. Also, during this quarter, we opened sales for the Turá Festival in Porto Alegre and the Turá Festival in São Paulo, and we confirmed the first edition of the Turá Festival in Recife, continuing the geographical expansion of the brand, replicating the excellence of the festivals held by Time for Fun. Turá with future prominent names of the Brazilian music this year, such as Chitãozinho Xororó, Alcione, Djavan, Fresno inviting Pablo Vitar, Lulu Santos, Ney Matogrosso, among other talents. As a result, we ended up the quarter with 80 events hosted, totaling BRL 34.6 million in net revenue, an 86% reduction comparing to the same period last year. EBITDA reached breakeven being lower by BRL 27.2 million compared to 2023. [ Host ] normalizes for the absence of the Lollapalooza Festival in 2024, EBITDA growth by BRL 5 million compared to the previous year, driven by sponsorship results from the Teatro Opera in Argentina and 14% reduction in our SG&A. Net financial income was BRL 10.3 million higher compared to the previous year due to the significant reduction in our debt. Looking for the future, we remain optimist and caution about the opportunities that arise. We work tireless and strengthen our purpose of bringing people together through exciting experience to celebrate life. Now we will take you a closer attention to the company's financial performance. This quarter, we hosted 8 events where we sold more than 52,000 tickets compared to 354,000 tickets sold in 9 events hosted in the first quarter of 2023, as you can see in Slide #5. This represents a reduction of 11% in events hosted and an 80% decrease in the number of tickets sold. These 8 events comprised by the concerts by singer, Laura Pausini, and the musical, The Lion King. While the first quarter of last year, we had 2 festivals, 4 side shows participating in the Lollapalooza, 6 shows by the band Paramore and a show by the band The Black Crowes in addition to the musical, Anastasia, which is part of our family and theater division. In the first quarter of 2024, the net revenue totaled BRL 34.6 million, an 86% decrease compared to the same quarter of the previous year, mainly due to the absence of Lollapalooza Festival, which had a very strong sponsorship and box office position. Moving to Slide #6. We see a gross profit negative for BRL 800,000 this quarter, which represented a reduction of 102% compared to the same period in 2023. This reduction is mainly due to the lower number of events in the period. Also, on this slide, we see a 14% reduction in SG&A in the first quarter of 2024, resulting from considerable decrease in our general and administrative expenses, following the company's strategy of working by projects. The total SG&A in the first quarter was for BRL 10 million, a decrease of BRL 1.6 million compared to 2023. Moving on to the Slide #7. We see that EBITDA for the first quarter of 2024 reached the breakeven. On Slide #8, we demonstrate a positive financial result of BRL 500,000 as the sum of currency monetary, the hyperinflation variation resulted in 0. The positive results from currency and monetary variation was offset by a negative result from hyperinflation variation, which has no impact on the company's cash and its record in the Equity Group. Turning to Slide #9, we had the net profit. In the first quarter of 2024, we recorded a net loss of BRL 3.3 million compared to a net profit of BRL 13.9 million in the same period last year. Regarding the company's cash, as demonstrated in the Slide #10 of the presentation, we end up the quarter with a net cash of BRL 39.5 million compared to BRL 93.2 million in the fourth quarter of 2023. The company's cash EBITDA was impacted by the payments of artist's fee and costs related to the shows of the singer, Taylor Swift. As I mentioned earlier, we continue to strengthen our purpose and work to deliver events at the highest level of excellence. The musical, The Lion King will continue its run until July of this year, and we have confirmed the Primavera Sound Festival and the festival Turá in addition to the concerts by the band, City and Colour and The Hives. We want to thank you once again for your continued support and trust in us. We are committed to overcome the challenge and building an even more promising future for Time for Fun and all its stakeholders.