Boa Safra Sementes (SOJA3) Q2 2024 earnings summary

Executive summary

• Raised R$300 million via follow-on in April 2024 to fund expansion, including two new distribution centers in Mato Grosso and a new administrative office in Brasília, reinforcing market leadership despite a challenging year with delayed orders due to climate impacts.

• Achieved strong growth in sales volume and revenue diversification, with gross revenue from non-soybean seeds up 117% year-over-year to R$39.9 million in 2Q24, and expanded portfolio to include five new crops beyond soybeans.

• LTM net operating revenue rose 9% year-over-year to R$1,985 million, with adjusted net profit up 45.6% to R$245 million and adjusted EBITDA up 14.8% to R$256 million.

• Maintained #1 market position in Brazil with 8.5% market share and an order backlog of R$1.168 billion in 2Q24, up 13.6% sequentially.

• Focused on three strategic pillars: increasing sales, adding value through seed treatment, and diversifying revenue with new crops.

Financial highlights

• Net operating revenue for LTM 2Q24 was R$1,985 million, up 9% year-over-year; adjusted EBITDA was R$256 million (margin 12.9%), up 14.8%; adjusted net profit was R$245 million, up 45.6%.

• LTM gross profit reached R$305 million, up 17.6% year-over-year; 2Q24 gross profit was R$31.5 million, down 39.4% year-over-year due to seasonality.

• 2Q24 net operating revenue was R$88 million, down 34.9% year-over-year, reflecting seasonality and delayed order cycles.

• Cash and equivalents plus marketable securities reached R$832 million, up 196.6% year-over-year; net debt reduced to R$122 million, with net debt/EBITDA LTM adjusted at 0.48x.

• Order backlog reached R$1.168 billion in 2Q24, up 13.6% sequentially.

Outlook and guidance

• Medium- to long-term strategy (2024-2026) focuses on growth via new distribution centers, crop diversification, and high-tech seed investments.

• CAPEX for 2024 set at R$140 million, mainly for new distribution centers and infrastructure.

• Backlog and order cycle delays expected to normalize as planting season approaches; second half of 2024 should reflect pent-up demand.

• Anticipates better margins for 2025 due to increased yields and lower costs for growers.

• Plans for continued strong growth through 2026, supported by M&A and capacity expansion.