Localiza: Depreciation Rises, Profits Rise — and the Market Is Listening
The Depreciation Conundrum
Localiza’s second-quarter 2026 results once again put the spotlight on its depreciation trajectory. The company reported “the depreciation, indeed, it increased in nominal terms... When we look at the trend of the depreciation, the trend is continuing as it was.” — Rodrigo Tavares, CEO · 2026-08-07 Management is carefully balancing the need to reflect a more competitive automotive market with the discipline of pricing and depreciation assumptions. Despite the upward drift, net income surged 30.6% year-over-year to BRL 1 billion, showing that the company is successfully embedding these costs into its tariffs. The life cycle of the fleet is being optimized, with the average age down to 8.2 months from 10.8 a year ago, and the company is now looking to stabilize the Seminovos sales pace at around 90,000 vehicles per quarter.
Growth Resurgence and Fleet Dynamics
The strong growth story is not just about depreciation. Net revenue rose 24.5% to BRL 12.3 billion, with Car Rental revenue up 11.2% and Fleet Rental returning to growth. The company added a net 28,000 vehicles in the quarter, a figure that fleet rejuvenation and peak-season preparation. As CFO Nora Lanari put it, “we will prioritize price over volumes to maintain the consistent trajectory of ROIC spread restoration.” — Nora Lanari, CFO · 2026-08-07 This balance is evident in the 6.1 percentage point ROIC spread, which sits within the company’s target range even as depreciation rises. The focus on retail sales within Seminovos is also a key lever, with investments in store expansion, rebranding, and marketing temporarily pressuring margins but expected to pay off in the second half.
Tax Reform and the Road Ahead
One of the more novel discussions this quarter was the impact of Brazil’s tax reform. Rodrigo Tavares framed it as a net positive for the company’s core business:
He also noted a potential cash-flow benefit from the life cycle of PIS/Cofins credits. This is a forward-looking theme that will likely become more prominent as 2033 approaches. Meanwhile, the company remains committed to its ROIC spread recovery, with management signaling that a return to stronger growth could come in 2027 if conditions persist. The consistent narrative across recent calls—waiting for Seminovos margins to inflect before easing depreciation—remains unchanged: “We still have to see solid results from Seminovos or upward trend in Seminovos margin before we have any discussion about changing the level of depreciation.” — Rodrigo Tavares Goncalves de Sousa, Unknown · 2026-02-27 In short, Localiza is threading a narrow needle—rising depreciation, disciplined pricing, and a growth appetite that finally seems within reach.When you look at B2B, which is closely 70% of our business, the impact of the tax reform is somewhat positive in both the affordability and also the relative competitiveness.