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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