Terra Santa Propriedades Agrícolas (LAND3) Q2 2024 earnings summary

Executive summary

• Net revenue for 2Q24 was R$17.8 million, a 28.5% decrease year-over-year, mainly due to a 32% drop in the fixed soybean price for the 2023/24 crop cycle.

• The company reported a net loss of R$694 thousand in 2Q24, compared to a net profit of R$5.4 million in 2Q23.

• EBITDA for 2Q24 was R$6.5 million, down 59.8% from 2Q23, with EBITDA margin dropping 28.3 percentage points to 36.4%.

• In April 2024, R$67.7 million was received from the SLC lease contract, used for debt amortization, dividend payments, and operational commitments.

Financial highlights

• Gross profit for 2Q24 was R$16.6 million, a 29.9% decrease year-over-year, with gross margin at 93.2%.

• Operating expenses rose 28.5% to R$10.9 million in 2Q24, driven by higher G&A and provisions for civil contingencies.

• Financial result was a net expense of R$6.5 million in 2Q24, up 27.9% year-over-year, mainly due to negative FX and derivatives results.

• For 1H24, net revenue was R$34.1 million (down 31.6%), net profit R$5.7 million (down 57.9%), and EBITDA R$19.6 million (down 37.4%) compared to 1H23.

Outlook and guidance

• For the 2024/25 crop, 80% of expected lease revenue is hedged against FX volatility via NDF contracts, with no direct price fixing yet.

• The company continues to monitor market conditions for future price fixing and hedging strategies.