Auga Group (AUG1L) Q2 2024 earnings summary

Executive summary

• Revenue for H1 2024 was €34.67m, down 7% year-over-year, with unaudited results showing a decline due to lower sales and commodity prices.

• Gross profit rose 92% to €3.45m and EBITDA increased 80% to €6.43m, reflecting improved operational efficiency despite lower sales.

• Net loss narrowed to €6.87m from €9.14m in H1 2023, with net profit margin improving from -25% to -20%.

• Operating costs decreased by 16% year-over-year, driven by efficiency and cost reduction programs.

• EBITDA guidance for 2024 was revised downward, mainly due to underperformance in the crop growing segment.

Financial highlights

• Operating costs fell by 16% compared to H1 2023, mainly from reduced marketing and salary expenses.

• Cash and cash equivalents at period end were €1.1m, with total assets of €228.2m and equity of €55.2m.

• Net cash from operating activities was €4.4m, while net cash used in investing and financing activities was €2.0m and €4.8m, respectively.

• Total sales revenue in the dairy segment grew 7% year-over-year, with milk yields up 7% and cost per ton down 16%.

• Mushroom segment prices rose 8%, offsetting inflation and salary increases.

Outlook and guidance

• EBITDA guidance for 2024 was cut by 51%, primarily due to lower yields, higher production costs, and reduced subsidies in crop growing.

• Dairy, mushroom, and FMCG segment EBITDA guidance remains unchanged and on track.

• Crop segment outlook remains uncertain until full harvest results are available after Q3.

• Biomethane market expected to recover, with positive gross margin anticipated in Q4.

• The Group expects to receive a similar amount of agricultural subsidies in 2024 as in 2023.