Boa Safra has a record order book. The problem is turning it into cash
Net income fell 44% to R$26m; EBITDA rose 33% and the order book reached R$1.18bn. The stock fell about 6%.
To save you time3
- How much did Boa Safra earn?
- About R$26 million in Q3, 44% less than a year earlier. Revenue fell about 7% to R$1.03 billion.
- If profit fell, why did EBITDA rise?
- Operations improved (adjusted EBITDA of R$121.3 million, 11.8% margin), but nearly R$60 million in financial expenses ate the result.
- What worries the market?
- Slow conversion of the record R$1.18 billion order book. XP estimates cash burn of about R$66 million.
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Boa Safra, the largest listed soybean seed company, has a record order book: and a quarter that shows the cost of waiting.
The numbers
- Net income: about R$26 million, -44%.
- Revenue: R$1.03 billion, about -7%.
- Adjusted EBITDA: R$121.3 million, +33%, 11.8% margin.
- Financial result: about -R$60 million.
- Order book: R$1.18 billion, +37%, a third-quarter record.
What went wrong
Operations improved, but the backlog is turning into sales slowly while interest costs pile up. XP estimates cash burn of about R$66 million. The stock fell close to 6% on the day.
What I would watch
A record backlog shows farmers keep buying quality seed even in a squeeze. The SOJA3 thesis depends on delivery: how much of it becomes revenue in Q4, and at what cost of capital.
