EARNINGS RELEASE
4Q22 and 2022
(Earnings Release / 4Q22 and 2022)
São Joaquim da Barra, March 16, 2023. Vittia Fertilizantes e Biológicos S.A. (VITT3: BZ) ("Vittia" or "Company"), a Brazilian company specialized in biotechnology (biopesticides and inoculants) and special plant nutrition with solutions for several crops, announces its results for the fourth quarter of 2022 ("4Q22") and fiscal year ended December 31, 2022 ("2022").
4Q22 and 2022 Highlights
Gross revenue from the biological segment reached R$ 71.9 million in 4Q22 (+25.4% vs. 4Q21) and R$ 225.5 million in 2022 (+36.1% vs. 2021), with the biopesticides line recording R$ 52.8 million in 4Q22 (+34.0% vs. 4Q21) and R$ 151.2 million in 2022 (+41.8% vs. 2021).
Net revenue totaled R$ 230.2 million in 4Q22 (-15.1% vs. 4Q21) and
R$ 851.2 million in 2022 (+9.3% vs. 2021).
Adjusted EBITDA totaled R$ 59.9 million in 4Q22 (-0.3% vs. 4Q21) and R$ 217.9 million in 2022 (+23.8% vs. 2021).
Net income totaled R$ 49.3 million in 4Q22 (+15.2% vs. 4Q21) and R$ 147.5 million in 2022 (+36.9% vs. 2021).
Capex of R$ 11.5 million in 4Q22 (-10.2% vs. 4Q21) and
R$ 61.3 million in 2022 (+17.6% vs. 2021)
Our Business
We operate in four product divisions, which are our reportable segments: Foliar Fertilizers and Industrial Products; Micronutrient Fertilizers; Soil Conditioners and Organomineral Fertilizers; and Biological Products. These divisions have centralized management under the same corporate division, including the Board of Directors and Advisory Committees, Executive Board, Control and Operating Systems, and Technology and People, among others. We have specialized and capable teams to provide high-quality and unique products to continuously meet market demand and are focused on superior productivity and financial performance under the ESG matrix.
2
Message from Management
Over 2022, we continued focusing on strengthening our commercial relationship with rural producers, resellers, and cooperatives, enhancing our production and logistics processes, and fine-tuning our financial discipline and internal controls, thus sustainably increasing our results.
From an accounting and financial perspective, we recorded growth across all our key balance sheet lines. Compared to the same quarter of the previous year, the Company's net revenue reached R$230.2 million (-15.1% vs. 4Q21), adjusted EBITDA was R$59.9 million (-0.3% vs. 4Q21), and net income totaled R$49.3 million (+15.2% vs. 4Q21). The fourth quarter of the year showed greater conservatism on the part of the producer in relation to investments in inputs due to the Brazilian electoral process and also because the period of climatic instability in some regions that had a prolonged dry period right after the planting of the summer crop. Even considering a more adverse scenario in relation to demand, we still had a gross revenue growth of 34.0% in the biological pesticides line, one of our focus of investments and commercial effort. Our biologicals segment, which includes, in addition to biological pesticides, inoculants (biological fertilizers), grew 24.5% in net revenue, representing 27.3% of the total for 4Q22 (+8.7 p.p. vs. 4Q21). Thus, due to the performance in the biologics segment, despite the drop in consolidated revenues, the Company was able to deliver adjusted EBITDA practically stable in relation to the same period of the previous year and growth in net income.
In 2022, Vittia grew in all lines, closing the year with net revenue of R$851.2 million (+9.3% vs. 2021), adjusted EBITDA of R$217.9 million (+ 23.8% vs. 2021) and net income of R$147.5 million (+36.9% vs. 2021).
Over 2022, the company observed the increasing adoption of sustainable practices by farmers which, in line with certain turmoil in the traditional agricultural input market, increased the experimentation and use of biological products, both those already existing and consolidated in the portfolio and new products, such as Meli-X Turbo, launched in 1Q22. This scenario, which values Vittia's investment strategy in innovation and R&DI, strengthens the dissemination of our products and services and aligns our actions with a vision based on the medium and long terms.
Despite the good financial results presented in the period, it is important to point out that Brazilian agriculture, and in particular the market for agricultural inputs, experienced significant challenges throughout the year. The armed conflict between Russia and Ukraine, which remains without a definitive outcome, had a significant impact on the agricultural inputs segment. The possibility of a shortage of basic fertilizers (NPK), which greatly impacts the segment of soil conditioners and organominerals, generated strong price volatility and a mismatch between supply and demand in different periods of the year. If initially the industry sought to guarantee the maximum possible supply in the international market, while producers worked to reduce their use in crops, with the fading of this scarcity perspective, we had a strong influx of fertilizers in Brazil, impacting cost and price structures and the timing of the sale of these products.
Furthermore, we had a crop failure in the country's Southern region, caused by La Niña, which directly impacted the productivity of traditional crops, notably soybeans. But given the region's low share in Vittia's total sales, the lower sale in the region did not significantly impact the Company's consolidated results. The election scenario in Brazil was another challenging event for farmers' purchase decisions for the 2022/2023 crop year. The uncertainties regarding the policies to be implemented by the new government, and how they impact agribusiness, resulted in more conservative actions in terms of purchase decisions at the beginning of 4Q22.
However, despite these remaining challenges, the Company has a favorable view of the current crop. With appropriate weather conditions, soybean planting beginning at an accelerated pace, and agricultural prices in international markets remaining at good levels, we have a perspective of closing the summer harvest with good profitability for rural producers.
At the beginning of 2023, Vittia acquired Agro21, a company that provides precision agriculture services focused on the release of macrobiological agents through drones, strengthening its position in the segment and starting to offer farmers application services, generating a greater perception of value for customers.
We remain confident in the expansion of our business and continue to strengthen our commercial network, increasing our investments in R&D, industrial structure, and human capital.
3
Economic and Financial Performance | ||||||
In thousands of R$ | 4Q22 | 4Q21 | Chg. (%) | 2022 | 2021 | Chg. (%) |
Net revenue | 230,183 | 271,278 | (15.1%) | 851,191 | 778,915 | 9.3% |
Cost of goods sold | (139,320) | (176,631) | (21.1%) | (524,720) | (494,712) | 6.1% |
Gross profit | 90,863 | 94,647 | (4.0%) | 326,471 | 284,203 | 14.9% |
Gross margin | 39.5% | 34.9% | 4.6 p.p. | 38.4% | 36.5% | 1.9 p.p. |
Operating Expenses | (43,560) | (44,274) | (1.6%) | (145,203) | (141,364) | 2.7% |
Operating profit (loss) | 47,303 | 50,373 | (6.1%) | 181,268 | 142,839 | 26.9% |
Adjusted EBITDA | 59,910 | 60,072 | (0.3%) | 271,896 | 176,069 | 23.8% |
Adjusted EBITDA margin | 26.0% | 22.1% | 3.9 p.p. | 25.6% | 22.6% | 3.0 p.p. |
Net financial result | (2,004) | (3,383) | (40.8%) | (10,787) | (10,486) | 2.9% |
Income tax and social contribution | 3,965 | (4,236) | N/A | (22,996) | (24,614) | (6.6%) |
Net result | 49,264 | 42,755 | 15.2% | 147,485 | 107,740 | 36.9% |
Net margin | 21.4% | 15.8% | 5.6 p.p. | 17.3% | 13.8% | 3.5 p.p. |
Investments (fixed and intangible assets) | 11,478 | 12,783 | (10.2%) | 61,315 | 52,132 | 17.6% |
Operating income
Vittia's revenues mainly derive from the following product lines:
Gross revenue by product line
In thousands of R$ | 4Q22 | 4Q21 | Chg. (%) | 2022 | 2021 | Chg. (%) | |
Foliar fertilizers | 123,947 | 113,762 | 9.0% | 411,852 | 333,661 | 23.4% |
Micronutrient fertilizers | 23,534 | 47,265 | (50.2%) | 141,875 | 150,533 | (5.8%) |
Industrial Products and Other | 17,826 | 25,935 | (31.3%) | 70,708 | 75,875 | (6.8%) |
Biopesticides | 52,760 | 39,381 | 34.0% | 151,200 | 106,633 | 41.8% |
Inoculants | 19,098 | 17,919 | 6.6% | 74,338 | 59,085 | 25.8% |
Soil conditioners and organomineral | 18,297 | 55,162 | (66.8%) | 95,108 | 132,214 | (28.1%) |
fertilizers | ||||||
Gross revenue | 255,462 | 299,424 | (14.7%) | 945,081 | 858,001 | 10.1% |
For the purposes of segment reporting, whose operating results are regularly revised by management (reportable segments), the biopesticide and inoculant lines are consolidated under the "Biological products" segment, while the "Industrial products and other" line is consolidated together with the foliar fertilizer line under the "Foliar fertilizer and industrial products" segment. Net revenue totaled R$ 230.2 million in 4Q22 (-15.1% vs. 4Q21), mainly due to decreases in soil conditioners and organomineral fertilizers lines (-67.6% vs. 4Q21) and soil micros (-49.8% vs. 4Q21), and, in 2022, it came to R$ 851.2 million (+9.3% vs. 2021), mainly due to growths in the biological products line (+36.7% vs. 2021) and foliar fertilizers and industrial products (+16.8% vs. 2021).
4
Net operating income by segment
In thousands of R$ | 4Q22 | 4Q21 | Chg. (%) | 2022 | 2021 | Chg. (%) | ||||||||||||||
Foliar fertilizers and industrial products | 129,774 | 127,482 | 1.8% | 439,174 | 376,087 | 16.8% | ||||||||||||||
Micronutrient fertilizers | 20,898 | 41,668 | (49.8%) | 125,850 | 131,992 | (4.7%) | ||||||||||||||
Biological products | 62,735 | 50,381 | 24.5% | 199,688 | 146,051 | 36.7% | ||||||||||||||
Soil conditioners and organomineral | 16,776 | 51,747 | (67.6%) | 86,479 | 124,785 | (30.7%) | ||||||||||||||
fertilizers | ||||||||||||||||||||
Net revenue | 230,183 | 271,278 | (15.1%) | 851,191 | 778,915 | 9.3% |
Geographic breakdown
Vittia is present throughout Brazil and abroad, with revenue broken down as follows:
Net revenue breakdown (R$ million)
185 | 147 | 138 | 151 | 131 | 149 | 105 | 85 | 97 | 65 | 32 | 26 | 26 | 28 | 25 | 19 | 20 | 28 | 15 | 23 | 6 | 6 | 71 | 52 | |||||
SP | MG | MT | GO | BA | PR | MS | MA | RS | ES | EX | Other | |||||||||||||||||
2022 | 2021 | States | ||||||||||||||||||||||||||
Gross profit and gross margin
In thousands of R$ | 4Q22 | 4Q21 | Chg. (%) | 2022 | 2021 | Chg. (%) | ||||||||||||||
Foliar fertilizers and industrial products | 38,127 | 44,491 | (14.3%) | 148,041 | 132,467 | 11.8% | ||||||||||||||
Gross margin | 29.4% | 34.9% | -5.5 p.p. | 33.7% | 35.2% | -1.5 p.p. | ||||||||||||||
Micronutrient fertilizers | 2,605 | 2,027 | 28.5% | 20,041 | 10,485 | 91.1% | ||||||||||||||
Gross margin | 12.5% | 4.9% | 7.6 p.p. | 15.9% | 7.9% | 8.0 p.p. | ||||||||||||||
Biological products | 49,457 | 39,914 | 23.9% | 155,155 | 115,619 | 34.2% | ||||||||||||||
Gross margin | 78.8% | 79.2% | -0.4 p.p. | 77.7% | 79.2% | -1.5 p.p. | ||||||||||||||
Soil conditioners and organomineral | 672 | 8,216 | (91.8%) | 3,233 | 25,632 | (87.4%) | ||||||||||||||
fertilizers | ||||||||||||||||||||
Gross margin | 4.0% | 15.9% | -11.9 p.p. | 3.7% | 20.5% | -16.8 p.p. | ||||||||||||||
Gross profit | 90,863 | 94,647 | (4.0%) | 326,471 | 284,203 | 14.9% | ||||||||||||||
Gross margin | 39.5% | 34.9% | 4.6 p.p. | 38.4% | 36.5% | 1.9 p.p. |
5
This is an excerpt of the original content. To continue reading it, access the original document here.
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
Vittia Fertilizantes e Biologicos SA published this content on 18 April 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 April 2023 21:27:19 UTC.