Release Date: March 21, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Verde AgriTech Ltd (VNPKF, Financial) has assembled a strong and experienced leadership team, including a new Chief Revenue Officer and Chief Marketing Officer, which is expected to drive growth.
- The company has achieved 60% of the previous year's sales within the first 79 days of the current year, indicating a strong start and potential for significant growth in 2025.
- There is a positive outlook for corn production in Brazil, driven by ethanol production, which could benefit Verde AgriTech Ltd (VNPKF) as a supplier of agricultural inputs.
- The company has successfully renegotiated its debt, extending payment terms and reducing short-term financial pressure, which should improve cash flow management.
- Verde AgriTech Ltd (VNPKF) has reduced production costs per ton by optimizing plant operations and renegotiating supplier contracts, which should enhance profitability as volumes increase.
Negative Points
- The company experienced a 43% reduction in revenue in 2024 compared to 2023, highlighting significant financial challenges.
- Verde AgriTech Ltd (VNPKF) reported a net loss of CAD 12.6 million in 2024, doubling the loss from the previous year, indicating worsening financial performance.
- The agricultural sector in Brazil has been severely impacted by high insolvency rates, affecting Verde AgriTech Ltd (VNPKF)'s ability to collect receivables and increasing credit risk.
- The company faces challenges from fluctuating exchange rates and high interest rates in Brazil, which have negatively impacted financial results.
- There is uncertainty regarding the future of potash prices and geopolitical factors that could affect the agricultural input market, posing risks to Verde AgriTech Ltd (VNPKF)'s business model.
Q & A Highlights
Q: Can you talk about the pipeline and order book and compare it to other years? Seems like the order book is ahead of schedule. Please provide more details.
A: The CEO mentioned that they have already achieved 60% of last year's total sales within the first 79 days of 2025. The team is optimistic about exponential growth, and the current order book is looking strong, indicating a promising year ahead.
Q: Are there any news regarding enhanced rock weathering (ERW)?
A: The CEO stated that they are working on a dedicated press release about ERW. They have been collaborating with scientists and are optimistic about the progress, although the market for ERW has changed significantly, requiring more field validation.
Q: What about OB Rare Earths? Will it be introduced on ASX as previously announced?
A: OB Rare Earths shares should have been issued already, but administrative issues have delayed the process. The company plans to hold a webinar to update shareholders on the progress and developments.
Q: You state that in 2025, after only 79 days, Verde Agritech already has orders and delivered products representing 60% of all products delivered in 2024. Did this happen all of a sudden, or was there a notable acceleration that had already begun at the end of 2024?
A: The CEO explained that this growth did not happen suddenly but is the result of consistent improvement and preparation throughout the previous year. The economic environment in Brazil is also stabilizing, contributing to this positive trend.
Q: Is the LCA audit complete? Is there anything positive you can share with regard to commitments from corporate producers committed to reducing the carbon footprint of their supply chains?
A: The CEO confirmed that the LCA audit is complete and plans to issue a press release to highlight the low carbon footprint of their product. This will be informative for both investors and the corporate agriculture market.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.