EARNINGS RELEASE
2Q23
São Joaquim da Barra, August 10, 2023. Vittia S.A. (VITT3: BZ) ("Vittia" or "Company"), a Brazilian company specialized in biotechnology (biopesticides and inoculants) and special plant nutrition with solutions for several agricultural crops, announces its results for the second quarter of 2023 ("2Q23").
2Q23 Highlights
Gross revenue from the biological segment reached R$ 11.7 million in 2Q23 (-29.7% vs. 2Q22) and R$ 65.6 million in 1H23 (+22.0% vs. 1H22), with the biological defensives line recording R$ 9.2 million in 2Q23 (-13.7% vs. 2Q22) and R$ 55.1 million in 1H23 (+25.8% vs. 1H22)
Net revenue amounted to R$ 72.8 million in 2Q23 (-53.6% vs. 2Q22) and R$ 221.4 million in 1H23 (-29.3% vs. 1H22)
Adjusted EBITDA was negative by R$ 18.6 million in 2Q23. In the first half, it totaled R$ 6.8 million (-83.8% vs. 1H22)
Net income was negative by R$ 14.6 million in 2Q23 and R$ 2.0 million in 1H23
Capex totaled R$ 15.7 million in 2Q23 (-22.5% vs. 2Q22) and
R$ 26.9 million in 1H23 (-23.7% vs. 1H22)
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, with a focus on superior productivity and financial performance under the ESG matrix.
Message from Management
The second quarter of 2023 presented an unfavorable scenario for the sale of inputs, but we believe that the fundamentals for the sector continue to be positive for the year and that demand will resume in the second half, especially for innovative and sustainable technologies that can contribute to increase in productivity in a more challenging scenario for the producer. In this way, we followed our planning for the year, with a focus on strengthening our commercial relationships with rural producers, resellers and cooperatives, improving our production and logistics processes, and refining our financial discipline and internal controls.
From an accounting and financial point of view, in the quarter, the Company recorded net revenue of R$ 72.8 million (-53.6% vs. 2Q22), adjusted EBITDA of R$ (18.6) million (compared to R$ 15.7 million in 2Q22) and net income of R$ (14.6) million (compared to R$ 5.3 million in 2Q22). The second quarter presented a confluence of factors that inhibited the sale of inputs, affecting all segments of the chain, among which we can highlight:
- challenges for the sale of the 2022/2023 summer crop, with a record crop in terms of volume, the producer faced difficulties in marketing, with an unfavorable price scenario; (ii) marketing delays that led to delays in planning the next crop; (iii) the drop in commodity prices, both in international quotations and the price paid for the product in the Brazil countryside, where soy, the main Brazilian commodity, operated at a negative premium against the Chicago Stock Exchange. This price scenario impacted both the sales of the 2022/2023 harvest, as well as the anticipated sales of the 2023/2024 harvest, an important lever for the start of purchases of inputs; and (iv) given that the downward trend persisted throughout the first half of the year, the producer saw that the postponement of purchases was beneficial to its acquisition cost.
In this adverse scenario in relation to demand, we had a reduction in gross revenue of 13.7% in the biological pesticides line, which is the smallest reduction among all Vittia lines, reinforcing that this line is one of our focus of investments and commercial effort. Our biologicals segment, which includes, in addition to biological pesticides, inoculants (biological fertilizers), decreased by 33.2% in net revenue, representing 12.5% of the total for 2Q23 (+3.8 p.p. vs. 2Q22). However, throughout 2Q23, the Company continued to observe a growing adoption of sustainable practices by farmers, which, together with the quest to reduce costs and increase crop productivity, continued to increase interest in and experimentation with our biological technologies. This scenario values Vittia's strategy and strengthens our confidence in our actions to disseminate our products and services, always anchored in a medium and long-term vision.
Despite the challenges observed in the short term, it is important to point out that Brazilian agriculture, and also the market for agricultural inputs, observes a favorable scenario for the 2023/2024 harvest, because even with a reduction in the expected profitability in nominal terms, the producer still has prospects of good earnings. The expectation is that the planted area will increase and that maintaining a normalized climate scenario will result in another record Brazilian harvest.
We therefore remain confident in the expansion of our business and continue to strengthen our commercial network, increasing our investments in R&DI, in our industrial structure and in our human capital.
32
Economic and Financial Performance
In thousands of R$ | 2Q23 | 2Q22 | Chg. (%) | 1H23 | 1H22 | Chg. (%) | |||
Net revenue | 72,778 | 156,815 | (53.6%) | 221,422 | 313,281 | (29.3%) | |||
Cost of goods sold | (60,895) | (116,405) | (47.7%) | (152,194) | (219,282) | (30.6%) |
Gross profit | 11,883 | 40,410 | (70.6%) | 69,228 | 93,999 | (26.4%) |
Gross margin | 16.3% | 25.8% | -9.5 p.p. | 31.3% | 30.0% | 1.3 p.p. |
Operating expenses | (36,922) | (34,188) | 8.0% | (78,505) | (68,716) | 14.2% |
Operating profit (loss) | (25,039) | 6,222 | N/A | (9,277) | 25,283 | N/A |
Adjusted EBITDA | (18,557) | 15,692 | N/A | 6,802 | 41,926 | (83.8%) |
Adjusted EBITDA margin | (25.5%) | 10.0% | N/A | 3.1% | 13.4% | -10.3 p.p. |
Net financial result | (1,344) | (4,516) | (70.2%) | (2,026) | (6,481) | (68.7%) |
Income tax and social contribution | 11,819 | 3,570 | 231.1% | 9,292 | 2,055 | 352.2% |
Net result | (14,564) | 5,276 | N/A | (2,011) | 20,857 | N/A |
Net margin | (20.0%) | 3.4% | N/A | (0.9%) | 6.7% | N/A |
Investments (fixed and intangible | 15,673 | 20,228 | (22.5%) | 26,890 | 35,234 | (23.7%) |
assets) | ||||||
Operating income
Vittia's revenues mainly derive from the following product lines:
Gross revenue by product line
In thousands of R$ | 2Q23 | 2Q22 | Chg. (%) | 1H23 | 1H22 | Chg. (%) | |||||||
Foliar Fertilizers | 30,441 | 70,017 | (56.5%) | 101,450 | 137,670 | (26.3%) | |||||||
Soil Micronutrients | 32,725 | 51,627 | (36.6%) | 54,958 | 74,073 | (25.8%) | |||||||
Industrial Products and Other | 3,560 | 10,929 | (67.4%) | 9,745 | 28,331 | (65.6%) | |||||||
Biopesticides | 9,162 | 10,620 | (13.7%) | 55,079 | 43,781 | 25.8% | |||||||
Inoculants | 2,572 | 6,079 | (57.7%) | 10,488 | 9,964 | 5.3% | |||||||
Soil Conditioners and Organominerals | 5,641 | 24,881 | 16,954 | 52,147 | |||||||||
(77.3%) | (67.5%) | ||||||||||||
Gross revenue | 84,101 | 174,153 | (51.7%) | 248,674 | 345,966 | (28.1%) |
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. Gross revenue totaled R$ 84.1 million in 2Q23 (-51.7% vs. 2Q22), mainly due to decreases in soil conditioners and organomineral fertilizers lines (-77.3% vs. 2Q22) and foliar fertilizers (-56.5% vs. 2Q22). In 1H23, gross revenue totaled R$ 248.7 million (-28.1% vs. 1H23), mainly due to reductions in industrial and other product lines (-65.6% vs. 1H22) and soil conditioners and organominerals (-67.5% vs. 1H22), balanced, in part, for the growth of the biopesticides (+25.8% vs. 1H22) and the inoculant lines (+5.3% vs. 1H22).
4
Net operating income by segment
In thousands of R$ | 2Q23 | 2Q22 | Chg. (%) | 1H23 | 1H22 | Chg. (%) | |
Foliar fertilizers and industrial products | 29,649 | 74,084 | (60.0%) | 100,100 | 152,008 | (34.1%) | |
Soil micronutrients | 28,822 | 46,136 | (37.5%) | 49,407 | 66,305 | (25.5%) | |
Biological products | 9,077 | 13,598 | (33.2%) | 56,221 | 46,536 | 20.8% | |
Soil conditioners and organominerals | 5,230 | 22,997 | (77.3%) | 15,694 | 48,432 | (67.6%) |
Net revenue | 72,778 | 156,815 | (53.6%) | 221,422 | 313,281 | (29.3%) |
Geographic breakdown
Vittia is present throughout Brazil and abroad, with revenue broken down as follows:
Breakdown of net revenue per region (R$ million)
142 | ||||||||||||||
83 | 75 | 82 | ||||||||||||
59 | ||||||||||||||
39 | ||||||||||||||
15 | 21 | 7 | 8 | 1 | 2 | |||||||||
Southeast | Midwest | Northeast | South | North | EX | |||||||||
1H23 | 1H22 | |||||||||||||
Gross profit and gross margin
In thousands of R$ | 2Q23 | 2Q22 | Chg. (%) | 1H23 | 1H22 | Chg. (%) | |
Foliar fertilizers and industrial products | 5,577 | 26,072 | (78.6%) | 26,543 | 50,115 | (47.0%) | |
Gross margin | 18.8% | 35.2% | -16.4 p.p. | 26.5% | 33.0% | -6.5 p.p. | |
Soil micronutrients | 2,327 | 5,851 | (60.2%) | 4,122 | 8,747 | (52.9%) | |
Gross margin | 8.1% | 12.7% | -4.6 p.p. | 8.3% | 13.2% | -4.9 p.p. | |
Biological products
Gross margin
6,316 | 8,901 | (29.0%) |
69.6% | 65.5% | 4.1 p.p. |
42,950 | 34,959 | 22.9% |
76.4% | 75.1% | 1.3 p.p. |
Soil conditioners and organominerals | (2,337) | (414) | 464.5% | (4,388) | 177 | N/A | ||||||||||||||
Gross margin | (44.7%) | (1.8%) | -42.9 p.p. | (28.0%) | 0.4% | N/A | ||||||||||||||
Gross profit | 11,883 | 40,410 | (70.6%) | 69,228 | 93,999 | (26.4%) | ||||||||||||||
Gross margin | 16.3% | 25.8% | -9.5 p.p. | 31.3% | 30.0% | 1.3 p.p. | ||||||||||||||
5
Attention: 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 10 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 August 2023 22:01:17 UTC.