Verde Announces Q4 and FY 2024 Results

Core Insights - Verde AgriTech Ltd reported significant financial challenges in FY 2024, with a 43% decrease in revenue to CAD 21.6 million and a net loss of CAD 12.6 million, compared to a net loss of CAD 6.0 million in FY 2023 [13][21][22] - The Brazilian agricultural sector faced severe liquidity issues, leading to increased insolvencies among farmers and suppliers, which impacted Verde's sales and operational strategies [2][9][12] - The company successfully renegotiated its debts, covering over 99.8% of its outstanding obligations, which is expected to strengthen its financial position moving forward [4][5][6] Financial Performance - In FY 2024, Verde's sales volume decreased by 25% to 319,000 tons, with average revenue per ton falling by 23% [13][20] - EBITDA before non-cash events was -CAD 2.5 million in FY 2024, compared to CAD 2.0 million in FY 2023, indicating a significant decline in operational profitability [13][21] - The average cost of debt for the company was 16.2% per annum, reflecting the high-interest environment in Brazil [11] Market Conditions - The Brazilian agricultural market is experiencing a "perfect storm" of economic and climatic challenges, leading to a historic number of insolvencies [2] - High interest rates, projected to rise to 15.00% by the end of 2025, have restricted farmers' access to credit, further complicating their financial situations [10] - Despite these challenges, there is optimism for H2 2025 due to improved commodity prices and better climatic conditions [3] Debt Restructuring - Verde renegotiated loans with its two largest creditors, resulting in a repayment term extension to 120 months and a suspension of principal payments for 18 months, generating projected cash savings of R$115 million [4] - An agreement with creditors representing over 92% of total debt is expected to lead to a 75% reduction in outstanding balances for non-adherent creditors [5] - The restructuring plan is pending court approval, but the company is confident in its imminent recognition [7] Environmental Impact - Verde's products have the potential to capture up to 231,376 tons of CO2 and prevent 66,405 tons of CO2 emissions since production began in 2018 [56] - The company emphasizes its commitment to sustainable agriculture and carbon capture through its innovative fertilizer solutions [45]