The following is a summary of the Lavoro Limited (LVRO) Q2 2024 Earnings Call Transcript:

Financial Performance:

• Lavoro reported a slight revenue increase in Q2, reaching $618 million.

• A notable success was the 20% growth in Crop Care's revenues and gross profits.

• However, Q2 gross profit and adjusted EBITDA saw decreases of 17% and 48% respectively over the prior year period.

• Gross profit contracted to 16.7% due to a decrease of 17% to $103 million.

• Adjusted EBITDA declined significantly to $40.1 million, down by $37.4 million from the previous year, constricting the EBITDA margin to 6.5%.

• Increased selling, general, and administrative expenses by 300 basis points to 11.3% impacted the bottom line as it led the adjusted net profit to decline by $34.8 million to $2.6 million.

Business Progress:

• Lavoro managed to achieve substantial volume growth in crop protection, fertilizers, and specialty products by 46%, 63%, and 29% respectively.

• Industry transformation is anticipated due to current market landscape according to Lavoro.

• Strategic sales force enhancement with the hiring of over 1,040 RTVs in Brazil contributed to the company's market share gain.

• Lavoro experienced revenue growth in its Brazil Ag Retail and Crop Care segments, with the latter driven by specialty fertilizer product Integra and strategic acquisitions.

• Even in the drought-affected areas, the company remains committed to meeting farmers' needs, and plans to focus its increased R&D expenditure on hiring new experienced sales consultants to promote sales growth in the next financial year.

More details: Lavoro IR

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