Verde Announces Q4 and FY 2024 Results
(All figures are in Canadian dollars, unless stated otherwise. Average exchange rate in FY 2024: C$1.00 = R$3.93)
SINGAPORE, March 20, 2025 (GLOBE NEWSWIRE) -- Verde AgriTech Ltd (TSX: "NPK") ("Verde" or the "Company") announces its financial results for the full year ended December 31, 2024 ("FY 2024") and the fourth quarter 2024 ("Q4 2024"), as audited by RSM SG Assurance LLP ("RSM").
"Looking back, 2023/24 will undoubtedly be remembered as one of the most challenging periods for Brazilian agriculture in this century. A historic number of farmers and input suppliers faced insolvency, overwhelmed by an unprecedented combination of economic and climatic challenges. The effects of this crisis have already spilled into the first half of 2025, continuing to present significant obstacles for the sector. Navigating through this 'perfect storm' required exceptional resilience, and those who persevered have demonstrated remarkable strength and adaptability," stated Cristiano Veloso, Founder and CEO of Verde Agritech.
"For H2 2025 deliveries, we are seeing strong market optimism driven not only by favorable geopolitical factors but also by improved commodity prices, better climatic conditions, and a recovering global supply chain. Verde is strategically positioned to capitalize on the resurgence of Brazil's agricultural profitability, which is bolstered by these favorable dynamics. Our order books for the second half of the year reflect significant growth to date, marking a notable improvement compared to 2024," Mr. Veloso added.
As previously announced on October 2, 20241, the Company successfully renegotiated its loans with its two largest creditors, covering 73% of its total outstanding debt. This deal, which extends the repayment term to 120 months and suspends principal payments for 18 months, is projected to generate R$115 million in cash savings over the next 24 months. Interest payments will also be suspended during this period, with a significantly reduced interest rate to follow. The agreement has proven to be a critical step in strengthening Verde's financial position.
Further progress was reported on November 11, 20242 when Verde secured an agreement with creditors representing over 92% of the company's total debt, leading to improved financial terms for the company. Non-adherent creditors will face a 75% reduction in their outstanding balance, with the remaining debt subject to a much lower interest rate of 0.82% per year. The agreement, which is pending court approval, is expected to result in the cancellation of R$8.5 million in debt.
Additionally, Verde successfully renegotiated additional loans. This comprehensive effort means that more than 99.8% of the Company's outstanding debts have now been renegotiated, significantly reducing its short-term obligations for 2025 to R$1.5 million.
"It has been over four months since we entered the final stage of the renegotiation process, and we are now awaiting the homologation of the agreement by the court. We remain confident that the approval is imminent, and its recognition will be finalized soon. This will be a significant milestone for the Company," stated Cristiano Veloso, Founder and CEO of Verde Agritech.
Fourth Quarter and Full Year 2024 Highlights
Operational and Financial Highlights
Verde's sales volume amounted to 319,000 tons; a 25% reduction compared to 2023. Additionally, revenue had a 43% decrease compared to the previous year, with $21.6 million in FY 2024. In 2025, after only 79 days, Verde already has orders and delivered products representing over 60% of all products delivered in 2024.
Cash held by the Company decreased by $3.5 million, from $6.9 million in FY 2023 to $3.4 million in FY 2024. Additionally, the Company has $6.9 million in short-term receivables. The total Cash and short-term receivables were $10.3 million in FY 2024.
EBITDA before non-cash events was -$2.5 million in FY 2024, compared to $2.0 million in FY 2023.
The Company reported a net loss of -$12.6 million in FY 2024, compared to a net loss of -$6.0 million in FY 2023.
Sales and General Administrative Expenses decreased by $1.6 million, from $11.7 million in 2023 to $10.1 million.
Other Highlights
The Product sold in FY 2024 has the potential to capture up to 25,429 tons of carbon dioxide ("CO2") from the atmosphere via Enhanced Rock Weathering ("ERW").3 The potential net amount of carbon captured is estimated at 16,255 tons of CO2. In addition to the carbon removal potential, Verde's FY 2024 sales avoided the emissions of 9,116 tons of CO2e, by substituting potassium chloride ("KCl") fertilizers.4
Combining the potential carbon removal and carbon emissions avoided by the use our Product since the start of production in 2018, Verde's total impact stands at 297,782 tons of CO2.5
16,776 tons of chloride have been prevented from being applied into soils FY 2024, by farmers who used the Product in lieu of KCl fertilizers.6 A total of 155,935 tons of chloride has been prevented from being applied into soil by Verde's customers since the Company started production.7
2024 Year in Review
Agricultural Market
In 2024, many agricultural businesses have been confronted with severe liquidity challenges, prompting an increasing number to seek insolvency protection as part of efforts to restructure their debts. The scarcity of accessible credit has not only hindered investments but also disrupted the broader agribusiness ecosystem, impacting suppliers and financial institutions alike. This crisis stems from the high commodity prices at the beginning of 2022, which led farmers to expect that both commodity and input prices would remain elevated. However, while input costs stayed high for longer, commodity prices began to drop. As a result, farmers who purchased fertilizers at elevated prices, expecting high commodity prices, were left struggling with mismatched financial conditions. Consequently, 2024 continues to be marked by significant financial strain, as businesses work to manage the debt burdens accumulated in recent years.
Furthermore, economic instability in Brazil further intensified challenges in the agricultural market. High interest rates and fluctuating exchange rates created additional financial strain for farmers, limiting their access to working capital. Amid the record rise in farmer insolvencies, several distributors experienced financial distress, with some seeking credit protection. In response, Verde adopted a cautious approach to farmer financing, prioritizing financial stability over short-term sales growth. The Company chose to limit credit offerings, forgoing potential sales to minimize exposure to default risks, which inevitably had an impact on overall sales performance.
Global market competition
The Brazilian agricultural sector faced significant challenges in 2024, driven by evolving macroeconomic factors. The Selic interest rate, which stood at 12.25% by the end of the year, restricted farmers' access to credit, limiting their ability to invest in productivity-enhancing input. Projections suggest a gradual increase in the Selic rate in 2025, with estimates indicating 15.00% by the end of 2025, followed by a potential decrease to 12.50% by 2026. Annual inflation forecasts for 2025 and 2026 stand at 5.50% and 4.20%, respectively, which may provide some relief as economic conditions stabilize.8
In 2024, Verde's average cost of debt was 16.2% per annum, reflecting the high-interest environment that has become a defining characteristic of the current economic landscape. Brazilian corporations, particularly those in the agricultural sector, faced significant financial constraints and limited access to working capital, which further hampered their ability to invest in productivity and input purchases. Compared to international players, Verde's capacity to offer financing with longer tenors is considerably limited, putting the company at a disadvantage in terms of competitive financing options for its customers. Unlike many of its competitors, Verde does not have the ability to shift a significant portion of its debt to US dollar-denominated liabilities at attractive interest rates, further amplifying the impact of local interest rates on its financial flexibility.
Amid these challenging market conditions, Brazilian farmers faced tight working capital during the critical period for purchasing inputs like fertilizers for the upcoming planting season. In response, many farmers sought suppliers offering the most favorable payment terms and interest rates, opting to defer payments until after the harvest, typically between 9 to 12 months later. While this approach is common in the agricultural sector, it increases the risk of non-payment for suppliers, including fertilizer companies, reflecting the heightened financial pressures within the industry.
Currency exchange rate
Canadian dollar valuated by 6.2% versus Brazilian Real in FY 2024 compared to FY 20239.
Q4 and FY 2024 Results Conference Call
The Company will host a conference call to discuss Q4 and FY 2024 results and provide an update. Subscribe using the link below and receive the conference details by email.
Date:
Friday, March 21, 2025
Time:
09:00 am Eastern Time
Subscription link:
https://bit.ly/Q4andFY_2024_Results
The questions must be submitted in advance through the following link before the conference call: https://bit.ly/Q4_andFY2024_Questions.
The Company's full year and fourth quarter financial statements and related notes for the period ended December 31, 2024 are available to the public on SEDAR at www.sedar.com and the Company's website at www.investor.verde.ag/.
Results of Operations
The following table provides information about three and twelve months ended December 31, 2024 as compared to the three and twelve months ended December 31, 2023. All amounts in CAD $'000.
All amounts in CAD $'000
3 months ended Dec 31, 2024
3 months ended Dec 31, 2023
12 months ended Dec 31, 2024
12 months ended Dec 31, 2023
Tons sold (‘000)
48
104
319
428
Average revenue per ton sold $
60
68
68
89
Average production cost per ton sold $
(21
)
(21
)
(20
)
(23
)
Average gross profit per ton sold $
39
47
48
66
Average gross margin
65
%
68
%
71
%
74
%
Revenue
2,888
7,058
21,597
37,863
Production costs
(986
)
(2,230
)
(6,302
)
(9,689
)
Gross Profit
1,902
4,828
15,295
28,174
Gross Margin
65
%
