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Lavoro (LVRO) - 2024 Q1 - Quarterly Report

Financial Performance - Total revenue for the period ended September 30, 2024, was R$2,052,720, a decrease of 13.2% compared to R$2,365,956 for the same period in 2023[6] - The company reported a loss for the period of R$267,058, compared to a loss of R$70,997 in the same period last year, representing an increase in losses of 276.5%[6] - Operating profit for the period was R$13,715, a recovery from an operating loss of R$27,568 in the same period last year[6] - The company reported a basic and diluted loss per share of R$2.19 for the period ended September 30, 2024, compared to a loss of R$0.59 in the same period of 2023[160] - Revenue from contracts with customers totaled R$2,052,720 for the three months ended September 30, 2024, down from R$2,365,956 in the same period of 2023, primarily due to lower retail sales in Brazil[163] Assets and Liabilities - Total current assets rose to R$7,017,632, an increase of 12.9% from R$6,215,124 as of June 30, 2024[3] - Total liabilities increased to R$7,970,042, up from R$6,989,709 as of June 30, 2024, reflecting a rise of 14.2%[5] - Total assets as of September 30, 2024, amounted to R$9,058,371,000, with Brazil Ag Retail holding R$7,345,163,000[36] - Total liabilities decreased to R$63,191 as of September 30, 2024, from R$77,542 on June 30, 2024, indicating a reduction in financial obligations[137] Cash Flow and Liquidity - Cash equivalents decreased to R$510,862 from R$911,335, a decline of 43.9%[3] - Net cash flows used in operating activities amounted to R$735,772 thousand for the three months ended September 30, 2024, compared to R$590,494 thousand in the same period of 2023, reflecting an increase of approximately 24.6%[10] - The Group's cash equivalents at the end of the period were R$510,862 thousand, a decrease from R$564,312 thousand at the end of September 30, 2023, representing a decline of about 9.5%[10] Trade Receivables and Inventories - Trade receivables increased significantly to R$3,286,144, up 18.6% from R$2,769,757 in the previous quarter[3] - The Group's trade receivables increased to R$467,085 thousand in September 2024 from R$446,075 thousand in September 2023, showing a rise of approximately 4.4%[10] - The Group's inventories decreased significantly from R$643,982 thousand in September 2023 to R$387,419 thousand in September 2024, a reduction of about 39.8%[10] - The company reported a total of R$2,184,810,000 in inventories, which is crucial for meeting future demand[36] Financing and Debt - Total borrowings as of September 30, 2024, were R$1,257,240, a slight increase from R$1,225,570 as of June 30, 2024, reflecting a growth of 2.6%[108] - The average interest rate for debt contracts in Brazilian reais indexed to CDI increased to 16.19% as of September 30, 2024, from 14.52% as of June 30, 2024[109] - The Group's total financial liabilities due within one year as of September 30, 2024, amounted to R$7,262,315 thousand, compared to R$6,308,701 thousand as of June 30, 2024, indicating an increase of about 15.1%[69][70] Risk Management - The Group's liquidity risk management includes maintaining sufficient cash reserves and bank credit facilities to meet obligations without incurring losses[67][68] - The Group's exposure to foreign exchange risk is primarily related to the U.S. dollar, affecting the pricing of agricultural inputs[76][78] - The sensitivity analysis indicates that a 25% increase in the CDI Rate could lead to an expense impact of R$250,061 thousand on profit or loss[75] Corporate Strategy and Development - The company is focusing on expanding its market presence in Latin America, particularly in Colombia and Ecuador[35] - New product development efforts are ongoing, particularly in the Crop Care segment, which includes proprietary products[35] - The Group's strategy includes entering into purchase and sale contracts at similar conditions to manage commodity price exposure effectively[85] Other Financial Metrics - The Group's interest paid on borrowings increased to R$91,764 thousand in September 2024 from R$84,501 thousand in September 2023, reflecting an increase of about 8.5%[10] - The Group's share of profit from an associate showed a loss of R$3,915 thousand in September 2024, compared to a profit of R$967 thousand in September 2023, indicating a significant decline in performance[10] - The total provisions for probable losses from civil, tax, labor, and environmental contingencies amounted to R$15,354 as of September 30, 2024, up from R$14,002 as of June 30, 2024[132]