Vittia announces 93% drop in net profit

The Brazilian manufacturer of agricultural inputs, Vittia announced to the market that its net profit fell by 93.6% in the first quarter of 2024, to BRL800,000, compared to the same period last year. 

According to the company, this result was influenced by the drop in fertilizer prices and the delay in input purchases by farmers.

Vittia reported that the company's revenue shrank by 18.2% to BRL121.6 million. Meanwhile, EBITDA (earnings before interest, taxes, depreciation, and amortization) dropped 73.1% compared to the first quarter of 2023, reaching BRL6.8 million. 

Brazilian farmers postponed selling their production in anticipation of improved commodity prices.

Additionally, the El Niño weather phenomenon, particularly the reduction of rainfall in the Midwest, adversely affected sales. As a result, farmers delayed purchasing inputs, which remained in the inventories of manufacturers and distributors despite being cheaper than last year.

Among Vittia's main product groups, soil micronutrients and biologicals showed the worst performance, with declines of 33% and 15% in net revenue, respectively. 

In the biologicals segment, the company's second most significant line, revenue stood at BRL40 million. For foliar fertilizers, the input with the highest share of total net revenue, there was a decline of over 10% compared to the first quarter of 2023, down to BRL63 million.

On a positive note, Vittia announced a 21.3% reduction in net debt compared to the same period last year.

"Despite a very challenging first quarter, we believe in a favorable scenario for 2024, with sales growth," said Vittia's CFO, Alexandre Del Nero Frizzo, in a statement. "Our discipline, financial solidity, and cautious view of the market allow us to overcome short-term challenges and provide us with the tranquility to continue executing our long-term strategies and seize potential opportunities," Frizzo said. 

Vittia's management said that most excess inventory in the supply chain has already been eliminated. Additionally, the trade-off ratio is favorable for farmers, and early climate forecasts for the new crop point to a La Niña scenario.

(Editing by Leonardo Gottems, reporter for AgroPages)