Atento S.A.

Atento did not give a single consolidated revenue or EPS figure in the prepared remarks, but management said Q3 revenue increased 1.3% sequentially on a constant-currency basis and was down 0.4% year over year on a constant-currency basis. EBITDA margin was 11.1% in Q3, up 3.3 percentage points from Q2’s 7.8%, while operating cash flow was positive $8 million and free cash flow was pressured by $46 million of finance expenses, including $20 million on bonds and $22.5 million on hedge payments. Q3 cash was $66 million versus $103 million at the end of Q2, and net leverage was 6.1x EBITDA. For the year, management guided to EBITDA margin of 10.5% to 11%; for Q4, they guided to 14% to 15% EBITDA margin and about $40 million of free cash flow, with cash expected to return to roughly $90 million to $100 million by year-end.

Carlos López-Abadía framed 2022 as a tougher year than expected but said the first-half actions are starting to show through. He emphasized a five-part transformation focused on sales capability, operational efficiency, cost structure, inflation pass-through, and security, and said the company is seeing better margins, stronger sales, and improved service quality. His tone was constructive but cautious: he repeatedly noted macro uncertainty, especially in Brazil, while stressing that Atento is better positioned for 2023 because of the work already done.

Sergio Passos focused on the bridge from Q2 to Q3: revenue was up 1.3% sequentially on a constant-currency basis, EBITDA margin rose from 7.8% to 11.1%, and operating cash flow was $8 million. He said free cash flow was hit by August finance payments, including $20 million of bond costs and $22.5 million of hedge payments, which helped explain the drop in cash to $66 million from $103 million in Q2. He also noted the company ended the quarter with $165 million of negative equity, largely driven by non-cash FX and hedge marks, and said the debt facilities were renewed, while management continues to evaluate refinancing and capital-structure alternatives.

Analysts pressed on the lowered full-year guidance, the implied need for a strong Q4 margin, and how liquidity and liability management would work with limited secured-debt capacity. Management said visibility was good with about a month and a half left in the quarter, and Sergio said Q4 EBITDA margin should be in the 14% to 15% range, with free cash flow around $40 million and cash back near $90 million to $100 million. On liability management, Carlos said the company is reviewing proposals from existing investors and international banks, including receivables-backed structures. On pricing, management said the market is highly competitive but Atento is focusing on less price-sensitive segments and using lower-cost offerings where needed, exiting deals that cannot meet target margins.