Agrogalaxy's 3Q24 loss increases almost 18-fold

Agrogalaxy (AGXY3), which is undergoing judicial recovery, finally released its figures for the third quarter of 2024 (3Q24) after postponing the announcement due to an internal restructuring process. The results show a significant increase in the adjusted net loss, reflecting the impacts of the company's judicial recovery.

See the details and context behind these figures.

Significant Increase in Agrogalaxy's Net Loss

In 3Q24, Agrogalaxy's adjusted net loss increased almost 18-fold, reaching R$1.6 billion. This amount is a direct reflection of the difficulties faced by the company during the period, which include expenses related to the request for judicial recovery and the adjustment of internal operations.

According to the company, the last few months have been marked by intense restructuring, which directly influenced operating costs and expenses. Despite this, Agrogalaxy reinforced that the postponement in the disclosure of results was exclusively motivated by the internal reorganization process.

Results Still Falling

Net revenue (-48.6%) was impacted by the drop in business volume, especially in the inputs (-43.8%) and grains (-54.4%) segments. Strategies to prioritize margins led to the reduction of fertilizers, while pesticides gained a share in the input mix.

EBITDA was pressured by the effects of the judicial recovery, including contractual fines and inventory adjustments. Without these effects, adjusted EBITDA would have been negative by R$247.7 million.

The company ended the quarter with a net debt of R$1.7 billion, slightly reduced (-2.5%) compared to September 2023.

Impact of Judicial Recovery on Results

The judicial recovery, announced shortly before the closing of 3Q24, played a central role in Agrogalaxy's negative result. This process aims to reorganize the company's finances and ensure the continuity of its operations. However, it also brings additional expenses and impacts on access to credit and market confidence.

In the inputs sector, fierce competition and global economic challenges also contributed to the decline in financial results.

Prospects for the Future of Agrogalaxy

Although the 3Q24 figures present a challenging scenario, the company stated that the restructuring is part of a plan to ensure long-term sustainability. Among the measures announced are the optimization of processes and the review of contracts, seeking greater operational efficiency.

However, the success of this process will depend on Agrogalaxy's ability to attract new investments and regain market confidence. Continuing to supply inputs and technical support to the agricultural sector will also be crucial to maintaining its relevance in the market.

AgroGalaxy Aims to Expand Sales

AgroGalaxy took a crucial step towards its restructuring plan. The company announced the resumption of the receivables anticipation program, carried out through the Terra Magna Credit Rights Investment Fund (FIDC).

The receivables anticipation program was reactivated at a strategic time for Agrogalaxy, which is facing financial challenges due to the filing for bankruptcy protection in September 2024. With the Terra Magna FIDC, the company expects to obtain greater liquidity, which is essential to sustain its operations and meet the growing demand of the agricultural sector.

The anticipation of receivables allows Agrogalaxy to convert installment sales into immediate capital, improving cash flow and guaranteeing resources for short-term investments.

Is it Worth Investing in Agrogalaxy in 2025?

It is not the right time to invest in Agrogalaxy shares. The 3Q24 figures highlight the complexity of the company's current situation. The increase in the adjusted loss reflects the direct impact of bankruptcy protection and the challenges faced by the sector as a whole.

However, the company appears focused on implementing strategic changes to overcome the crisis and resume growth in the future.