WEG S.A. (B3(NM): WEGE3, OTC: WEGZY), one of the world’s largest manufacturers of electric-electronic equipment, announced today its results for the third quarter of 2018 (3Q18). The following financial and operating data are presented on a consolidated basis, except when otherwise indicated, in thousands of Brazilian Reais (R$) according to accounting practices adopted in Brazil, including Brazilian Corporate Law and in convergence with IFRS international norms. Except when otherwise indicated, growth rates and other comparisons are made to the same period of the previous year.
Net Operating Revenues were R$ 3,237.3 million in 3Q18, 32.9% higher than 3Q17 and 5.9% higher than 2Q18. Adjusted for the effects of the consolidation of acquisitions of WEG Transformers USA (WTU) and TGM, net revenues would show a 29.3% increase vs. 3Q17 and 6.6% increase vs. 2Q18.
EBITDA reached R$ 489.0 million, 25.9% higher than 3Q17 and 5.0% higher than 2Q18, while EBITDA margin was 15.1%, 0.9 p.p. lower than 3Q17 and 0.1 p.p. lower than 2Q18.
Return on Invested Capital (ROIC) reached 17.2% in 3Q18, up 0.6 p.p. from 3Q17 and up 0.3 p.p. from 2Q18.
Revenue growth keeps pace in the third quarter in Brazil and abroad. In Brazil the highlight was the revenue from new businesses, such as solar power plants and the recent acquisition of TGM, a steam turbine company. In the external markets, growth remains consistent in short-cycle equipment sales and we have already seen new opportunities in projects that require long-cycle equipment, mainly for oil & gas, pulp & paper and mining segments.
ROIC expansion was highlighted again this quarter confirm the strategy to invest in new business with attractive returns. Volatility over operating margins, especially in GTD in Brazil and abroad, was more than offset by efficient capital allocation and scale gains.