AgroGalaxy: reduce fertilizers, increase specialties and bio-inputs

AgroGalaxy released its balance sheet for the first quarter of 2024. It revealed a business strategy focused on specialties and bio-inputs. These segments represented 11,5% and 3% of the sales mix, respectively. The change resulted in an increase of 3,3 percentage points in the participation of specialties compared to the same period of the previous year. At the same time, the company recorded a significant drop in the share of fertilizers, which fell from 29% to 25%.

The company faced significant challenges, with a 48% reduction in input stocks and a 43% drop in net revenue, which totaled R$1,6 billion. The decline in revenue from inputs (56%) and grains (25%) was accentuated by the decrease in technological investment by rural producers, the reduction in the prices of pesticides and fertilizers, and the decrease in the area planted with corn. Furthermore, grain revenue suffered a negative impact due to the drop in soybean prices and lower productivity, influenced by unfavorable weather conditions.

Adjusted EBITDA also showed negative numbers: a loss of R$95 million and an adjusted margin of minus 6%. The reduction in revenue and the resulting lower adjusted gross profit were identified as the main factors behind this drop.

Market perspectives

In a market panorama still affected by the effects of 2023, Axel Labort (in the photo), CEO of AgroGalaxy, highlights the need for continuous adaptation to the new economic scenario. “Brazilian farmers face increasingly tight margins and the search for greater efficiency has become imperative,” he explains. The reduction in investments for the 2024 harvest highlights caution and the need to adjust business strategies in light of current economic conditions.

Despite the adversities, AgroGalaxy has been implementing actions since 2023 that have resulted in significant savings and an increase of more than 60% in the volume of barter orders. “In recovering the resale spirit, we made significant adjustments to our market access strategy on the distribution platform,” says Labourt.