SLC’s profit up 141% in Q1 2021 over 2020, due to higher prices, record soybean harvest
RIO DE JANEIRO, BRAZIL – SLC Agrícola reported a 140.9% increase in net income in the first quarter compared to the same period last year, to R$376.8 million, with an increase in the value of soybean assets amid higher prices for agricultural commodities.
“The variation is explained primarily by higher prices and higher yields than the previous harvest, i.e., expectations of better margins for the 2020/21 crop versus the 2019/20 crop,” SLC said in a statement.
The company, one of the largest producers of grains and oilseeds in Brazil, said it closed another harvest with record productivity in the 2020/21 soybean crop, for the fourth consecutive year.
Soybean yield was 3,970 kilos per hectare (kg/ha), versus 3,906 kg/ha in 2019/20, 5.7% higher than initially projected and 12.7% higher than the national average.
“Despite the delay in planting due to later rainfall, the quick adjustments in agricultural planning and the speed of planting the company achieved made it possible to reach this new productivity record,” it stated.
The cash generation measured by adjusted EBITDA totaled R$272.5 million, up 49.1% in relation to the same period last year. EBITDA growth was due to the gross result from soybean and cottonseed compared among quarters, commented SLC.
Net revenue grew 30.8% in the quarter, with earnings from cotton lint, a product with higher added value, up 23% from last year.
SLC also said that all crops posted a unit price increase compared to the same quarter last year.
Future Crop
“The excellent levels of international prices for all our crops, cotton, soybeans and corn, along with the maintenance of the devaluation of the Brazilian Real against the US dollar enabled a good increase in hedged prices so far,” said the company.
According to the company, for the next harvest (2021/22), it has purchased the entire phosphate fertilizer and potassium chloride supply, and in terms of pesticides, it has bought a good part of the demand estimated for the new harvest.
“Considering the conjuncture of costs and prices in dollars so far, and also the current exchange rate level, we expect this good profitability level to be maintained also for 2021/22,” it added.
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