Boa Safra Sementes (SOJA3) Q2 2024 earnings summary

Executive summary

• Achieved 9% year-over-year growth in net operating revenue LTM 2Q24, reaching R$1,985 million, with adjusted net profit up 45.6% and strong revenue diversification from new crops beyond soybeans.

• Raised R$300 million via follow-on in April 2024 to fund expansion, including two new distribution centers and a new administrative office.

• Maintained #1 market position in Brazil with 8.5% market share and an order backlog of R$1.1 billion in 2Q24.

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

• Expanded portfolio to include five new crops, driving revenue diversification and market share gains.

Financial highlights

• Net operating revenue LTM 2Q24 was R$1,985 million, up 9% year-over-year, with gross profit up 17.6% to R$305 million and adjusted EBITDA up 14.8% to R$256 million.

• Adjusted net profit for LTM 2Q24 was R$245 million, up 45.6% year-over-year, with a net margin of 12.7%.

• Cash and equivalents rose to R$832 million in 2Q24, up 196.7% from 2Q23, while net debt decreased 64.6% to R$123 million.

• 2Q24 net operating revenue was R$88 million, down 34.9% from 2Q23 due to seasonality and delayed order cycles.

• Net debt/Adjusted EBITDA LTM improved to 0.48 in 2Q24 from 1.55 in 2Q23.

Outlook and guidance

• Management highlights a challenging agribusiness environment but expects stronger sales and profitability in the second half of 2024 as the main planting season begins.

• 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, capacity expansion, and innovation.