Movida shrank its fleet through Brazil's rate shock and returned to a R$305M profit

Through 2023 Brazil's car-rental sector was caught between the Selic rate and the used-car market. Movida's interest expenses ballooned on high gross debt while its rental fleet lost value at a record pace — depreciation had reached R$10,200 per car a year in its daily-rental arm. In the first quarter of 2023 net profit collapsed 91.9 percent to R$21 million, and analysts at XP were modelling an outright quarterly loss; by the fourth quarter the company posted one, R$104.5 million, ending 2023 with an adjusted net loss of R$245.6 million.

Chief executive Gustavo Moscatelli's recovery plan, set in motion during 2023, ran against the industry's growth instinct. Movida cut its fleet — a net reduction of 11,000 cars in the first quarter of 2023 alone — pushed used-car sales to shrink net debt and supplier financing by R$736 million in a single quarter, to R$12.3 billion, and kept repricing rental contracts upward while rivals discounted.

The 2024 numbers closed the argument. Adjusted net income reached R$305.1 million, a reversal of the 2023 loss; EBITDA rose 33.5 percent to R$4.7 billion on revenue of R$10.342 billion, up 30.4 percent. In the fourth quarter the average daily rate was up 20 percent at R$151 without losing volume, and return on invested capital reached 12.3 percent — 3.5 points above the company's average cost of debt.

FY2024 adjusted net income of R$305.1M against a R$245.6M loss in 2023; EBITDA rose 33.5 percent to R$4.7B and revenue 30.4 percent to R$10.34B.

Cutting the fleet shrank exactly the balance sheet that higher rates were taxing, converting cars into cash that reduced net debt by R$736 million in one quarter.

Repricing recovered the margin on price rather than volume: daily rates rose 20 percent while utilization held, avoiding a discount war.

Used-car operations, the epicenter of the devaluation losses, were turned into an efficiency engine whose proceeds funded the deleveraging.

When rates reprice a leveraged asset business, shrink the earning asset early and let price carry the margin: selling down the fleet that debt bought saved Movida faster than growth could.

Moscatelli called 2024 'a year of capturing a great deal of operational efficiency' with profit above the company's own expectations, and the fourth-quarter ROIC stood among the highest in Movida's history. The recovery re-established the spread between returns and funding costs that a rate-shocked balance sheet had erased, and the fleet-shrink-and-reprice playbook became the sector's template for surviving a high-rate cycle in Brazilian car rental.