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Lavoro reported consolidated revenue of R$2,05 billion in the first fiscal quarter of 2025, down 13% compared to the same period in 2024. The reduction was influenced by deflation in input prices in Brazil's agricultural retail sector, although the Crop Care segment showed growth. In dollar terms, revenue fell 24%, totaling US$370,2 million.
In the period, the company recorded a loss of R$267,1 million, compared to R$71 million in the same period in 2024. According to information from the company, the main reason for this increase in losses was the change in deferred tax assets and the increase in financial costs.
Lavoro revised its forecasts for fiscal year 2025, projecting consolidated revenue between R$6,5 billion and R$7,5 billion. The operational difficulties were mainly caused by inventory shortages in the critical months of November and December, impacted by restrictions on inventory financing.
The Crop Care segment performed positively, with a 68% increase in revenue, driven by subsidiaries Union Agro and Perterra. The agricultural retail segment in Brazil, on the other hand, fell by 23%, reflecting the challenges faced by farmers regarding liquidity and input prices.
"While farmer sentiment and profitability projections continued to improve in Brazil, liquidity constraints in the sector, which were already significant, increased considerably towards the end of the year. Bankruptcy events, including that of a large agricultural retailer, triggered a sharp increase in risk aversion among suppliers and financial institutions, leading to a significant tightening of inventory financing conditions for Lavoro and other industry peers," said Ruy Cunha, CEO of Lavoro (pictured above).
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