the seed company good harvest (GBSA3) recorded net income of 6.19 million reais in the second quarter, down 47% compared to the same period in the previous year, driven by an increase in product costs and administrative expenses, according to the financial statement released this Monday.
The profit before fees, taxesadjusted depreciation and amortization (Ebitda) fell 59.3% in the quarter, to 7.32 million reais, also pressured by costs.
“The increase in cost of goods sold is substantially attributable to the higher volume of grain sales from the past harvest and the mark-to-market variations of commodity and inventory contracts,” the company said in a report.
According to the company, an adjustment in the value of the raw material generated a negative effect of 1.69 million reais in costs in the second quarter of this year, compared to the immediately previous quarter.
On the other hand, Boa Safra’s net revenue jumped 206% year-on-year, to 125.3 million reais, driven by the sale of soybeans and seeds.
In the case of the input, the anticipation of orders placed by resellers and farmers contributed to the positive result in the company’s revenue.
The backlog of orders to be performed for products that will be delivered and invoiced in the second half reached 831.6 million reais in the second quarter, an increase of 52.2% compared to the same period last year.
The increase in price, again the anticipation of negotiations and the volume of orders to be invoiced, contributed to this positive variation.
According to the seasonality of Boa Safra’s business, the second quarter of the year is the period in which the harvest and processing of seeds takes place, with a high need for working capital and greater inventory position.
In the third quarter, the delivery of seeds for planting grains in Brazil begins, starting in September, and with that the recognition of revenues.
Considering the 52% increase in orders reported in the balance sheet, the indication is that the billing may come higher in the next results.
Boa Safra also highlighted that seeds with embedded biotechnology represented 90.8% of total orders in the second quarter, a record for the company.
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