Fertilizantes Heringer S.A. (FHER3) Earnings Call Transcript & Summary

Welcome to Fertilizantes Heringer conference call to discuss second quarter 2025 earnings results. With us today is Mr. Fausto Pereira Goveia, CFO and IRO. We would like to inform you that this event is being recorded. [Operator Instructions] Before proceeding, let me mention that any forward-looking statements are based on the company's business prospects, projections and -- well, regarding the company's business prospects, projections and operating financial goals are based on the beliefs and assumptions of the company's management. Forward-looking statements are not a guarantee of performance. They involve risks, uncertainties and assumptions as they refer to future events, and therefore, depend on circumstances that may or may not occur. Investors should understand that general economic conditions, industry conditions and other operating factors may affect the company's future performance and may lead to results that differ materially from those expressed in such forward-looking statements. I would like to give the floor to Mr. Goveia, who will begin the presentation. Mr. Goveia, please go ahead.

Well, thank you very much. Good morning, everyone. We will now begin the presentation of the earnings for the second quarter 2025. We will start talking about volumes where we show our performance in the second quarter comparing with the second quarter of 2024. In Q2 '25 compared to Q2 '24, we performed almost 23% below the comparison with Q2 '24. In total, we had 274,000 tonnes. We highlight the increased volumes of soybean. In corn, there was a slight increase -- a 4% increase in coffee being the main crop below expected when compared to 2024. We had a recession due to reduced access to credit to this year given local exposure and interest rates. Moving to the half yearly comparison, we ended the first half compared to the first half of 2024. In this comparison, we had 162,000 tonnes of below the first half of 2024. Soybean and corn were the strongest crops with higher volumes, coffee quite stable, sugarcane stable and other products posting a slight decrease. But still, we ended the first half with minus 22.4% in the yearly comparison, first half '25 compared to first half '24. In terms of product mix, we can see that for conventional products, we maintain the same assumption, focusing on premium products with a greater market share, our target is to achieve high prices for fertilizers, focusing on premium credits and we had the credit that was quite tight and an impact on conventional products with a slowdown in deliveries. Let's talk about our income statement comparing to 2024. Volume compared to 2024, we had 22%, almost 23% reduction in line with the first half. Revenue had price increases mainly due to the international market. Material prices -- raw material prices in the international market through 2025 comparing our gross result in the second quarter of 2025. We had gross result of BRL 19 million negative in the first half, BRL 27 million positive. For general and administrative expenses and other line items before EBITDA, we had 6% increase mainly due to a provision for bad debt that was made in the second quarter. And our EBITDA was negative BRL 76 million in the first half, BRL 72 million. Our first EBITDA for -- well, this was the EBITDA for Q2 and first half, both showing signs of recovery. The breakdown of the financial result. [ For EBITDA], we see impact in the first line item for foreign exchange variation. Foreign exchange was [ BRL 620 ] in December of 2024. The first 6 months of 2025 at 515. So we had an impact of about 12% in the end of the first half. In all, we had financial expenses of BRL 97 million positive below EBITDA, first half BRL 273 million positive. Thus having a net income for the second half of 2025 of BRL 28 million negative for the first half ended with BRL 30 million positive. Now breakdown of our cash flow. For the breakdown of the cash flow, we highlight the cash at the end of the period. We ended with BRL 350 million positive. I would like to highlight that we had cash equivalents that were positive -- positive in the lines that impact our cash flow. So we had positive results from income tax and social contribution of BRL 156.1 million, noncash revenues of BRL 274 million, increase of BRL 62.1 million in asset accounts, rise in -- of BRL 428 million in liability account mainly composed of advances from customers. Net investment amounting to BRL 35 million composed of works to adjust the units and other investments. This is the presentation about our earnings, and we are now available for questions.

We will now begin the Q&A session for investors and analysts only. [Operator Instructions] There are no questions. The Fertilizantes Heringer conference call is closed. Thank you very much, and have a good day. [Statements in English on this transcript were spoken by an interpreter present on the live call.]