Estre Ambiental, Inc. announced earnings results for the full year ended December 31, 2017. Net revenues in 2017 declined 2.0%, from BRL 1,393 million in 2016 to BRL 1,365 million in 2017. Higher sales to commercial and industrial clients and from landfill operations were more than offset by lower sales to the oil and gas segment. Sales to public collections clients were down modestly, with timing delays on certain new contracts deferring those revenues into fiscal year 2018. Net Income in 2017 was a profit of BRL 52 million from a loss of BRL 361 million in 2016. This improvement was attributable in large part to BRL 373 million in deferred tax assets recognized in 2017 in the context of participation in the tax refinancing program offered by the Brazilian Federal Government. Adjusted EBITDA increased to BRL 414 million in 2017 from BRL 386 million in 2016, as lower costs and expenses more than compensated for the decrease in revenues. CAPEX was BRL 144 million against BRL 120 million a year ago. Adjusted EBITDA was BRL 414 million against BRL 386 million a year ago. Adjusted net income for 2017 was a loss of BRL 36 million compared to a loss BRL 153 million in 2016. Adjusted results improved because of higher operating margins and lower tax expenses associated with temporary differences. Net financial debt was BRL 1,370 million against BRL 1,661 million a year ago. Total net debt was BRL 1,934 million against BRL 2,193 million a year ago. Loss before income and social contribution taxes was BRL 309 million against BRL 256 million a year ago. Profit for the year from continuing operations was BRL 44 million against loss of BRL 361 million a year ago. Cash provided by operating activities was BRL 243 million against BRL 213 million a year ago. Acquisition of PP&E was BRL 145 million against BRL 136 million a year ago.

The company seeing the benefit of the new collections contracts coming on line in the first half of 2018, and expect to see a 7-to-8% growth in revenues in the first-half of 2018 when compared with first-half revenues of 2017.

For the second half of 2018 the company believes it will be able to keep the same pace of growth in the ongoing business. However, considering that Sao Paulo contract was recently extended for six months based on new terms that included reductions in both volume and price, the expected growth for the full year of 2018 should be in the low single digit range. The company expects adjusted EBITDA margins to return to the mid 20% range as it absorbs the unfavorable impact of Sao Paulo contract renewal terms as well as the added costs and expenses of operating as a public company.