Lavoro Earnings Call Transcripts
Fiscal Year 2025
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Lavoro Brazil implemented an out-of-court restructuring with key suppliers to address severe industry headwinds, introducing a standardized financing model and extending BRL 2.5 billion in payables. Preliminary Q2 revenue fell 27% YoY, and the fiscal 2025 outlook was withdrawn.
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A supplier-focused restructuring plan aims to resolve severe inventory financing constraints in Brazil, with $2.5 billion in payables extended and a new FIDIC structure introduced. Q2 2025 revenue and gross profit declined sharply year-over-year, prompting withdrawal of fiscal 2025 guidance.
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Q1 2025 saw revenue decline but margin and gross profit improvement, with CropCare and LATAM Ag Retail showing growth. Inventory shortages and tighter credit impacted Brazil Ag Retail, prompting store consolidations and cost-saving measures. Full-year guidance was lowered, with no EBITDA growth expected.
Fiscal Year 2024
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Full year revenue grew 6% with strong grains performance, but net loss widened due to margin compression and higher finance costs. FY25 guidance anticipates revenue of R$8.6–9.2 billion and margin-driven EBITDA growth, amid ongoing farmer liquidity constraints and a focus on operational efficiency.
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Strong volume growth and market share gains offset severe input price declines and climate headwinds, with Q3 revenue up 6% but gross margins and Adjusted EBITDA under pressure. FY24 guidance was revised lower due to delayed farmer purchases and credit extensions, with most deferred revenue expected to shift into next year.