Q2 2026 Fertilizantes Heringer SA Earnings Call
Speaker #1: Let me mention that any forward-looking statements are based on the beliefs and assumptions of the company's management.
Speaker #2: As well as on information currently available to the company.
Speaker #1: Forward-looking statements may involve risks and uncertainties.
Speaker #2: As they refer to future events and therefore depend on circumstances which may or may not occur. Investors, analysts, and journalists should bear in mind that events related to the macroeconomic environment, the industry, and other factors may cause actual results to differ materially from those expressed in such forward-looking statements.
Speaker #2: Now, I would like to give the floor to Mr. Maida, who will begin the presentation. Mr. Maida, please go ahead.
Speaker #1: Good morning.
Speaker #2: We'll start with the quarterly results for Q2 2026.
Speaker #1: As regards quarterly deliveries, in Q2 2026, total volume delivered was 103,000 metric pounds, down 62.4% from 274,000 metric pounds recorded in Q2 2025.
Speaker #2: This reflects mainly the lower amount of units or plants in operation compared to the same period, all crops showed a volume retraction in the year-to-year comparison as for mixed soybean and coffee increased their participation in the deliveries, while sugar cane and other products reduced their representation.
Speaker #2: Now, moving to cumulative deliveries, in the first 6 months of 2026, total volume delivered was 305,000 metric tons, up 51.5% reduction compared to the first half of 2025, and just like seen in the quarter, volume reduction is related to a lower number of plants in operation.
Speaker #2: In the delivery mix, coffee accounts for 32% of the total volume sold in the half-year, while corn accounted for 31%. Sugar cane and other crops reduced their share compared to the same period last year.
Speaker #1: As for the mix of products delivery, we can see volumes decreased both for conventional fertilizers and for premium products. In the second quarter, conventional and premium recorded 80% and 23,000 tons.
Speaker #1: In the half-year, delivered 240,000 tons, for conventional products and 93,000 products. The relative share of both products remained practically stable compared to the previous year, with a predominance of conventional products.
Speaker #2: And now moving to the financial performance.
Speaker #1: Net revenue totaled 316.5 million BRLs in Q2, and 841.8 million in the half-year. Primarily due to the lower sales volume, compared to the same period last year.
Speaker #1: Gross profit was positive at 16.7 million compared to a gross loss of 19.2 million in Q2 2025.
Speaker #2: In the half-year, gross profit was positive at 20.4 million compared to 27.2 million positive in the first half of 2025.
Speaker #1: EBITDA remained negative at 3.4 million BRLs, and negative by 7.5 million in the half-year.
Speaker #2: Although there is an improvement, the company still posted a negative operating margin in the periods reported.
Speaker #1: Net income was a net loss of 37.2 million, and negative by 22.6.
Speaker #2: A negative at 22.6 million.
Speaker #1: And this was impacted mainly by the financial result, especially given the lower the weaker appreciation of the Brazilian bureau against the U.S. dollar in the period.
Speaker #2: Now let's look specifically at the financial results.
Speaker #1: The main difference compared to the comparative periods is related to the exchange rate variation in 2025. The BRL appreciated compared to the U.S. dollars.
Speaker #2: In 2026, this effect was had a less significant positive exchange rate impact on foreign currency liabilities. So net income was lower.
Speaker #1: Now speaking about cash flow.
Speaker #2: In the first half of 2026, Asia ended the period with cash and cash equivalents totaling 89.7 million.
Speaker #1: The main items contributing to this were reduction in inventories accounts receivable partially offset by trade receivables.
Speaker #2: And early purchases by customers.
Speaker #1: Net investments totaled 5.7 million for construction work to upgrade facilities and other investments in maintenance.
[Company Representative] (Fertilizantes Heringer): 40,000 tonnes for conventional products and 93,000 products. The relative share of both products remained practically stable compared to the previous year, with a predominance of conventional products. Now moving to the financial performance. Net revenue totaled BRL 316.5 million in Q2 and BRL 841.8 million in the H1. Primarily due to the lower sales volume compared to the same periods last year. Gross profit was positive at BRL 16.7 million compared to a gross loss of BRL 19.2 million in Q2 2025. In a H1, gross profit was positive at BRL 20.4 million compared to BRL 27.2 million positive in the H1 of 2025. EBITDA remained negative at BRL 3.4 million and negative by BRL 7.5 million in the H1. Although there is an improvement, the company still posted a negative operating margin in the periods reported. Net income was a net loss of BRL 37.2 million and negative at BRL 22.6 million.
Speaker #1: Items for conventional products: 93,000 products. The relative share of both products remains practically stable compared to the previous year, with a predominance of conventional products.
Speaker #2: Now moving to the next slide.
Speaker #1: About price performance of our raw materials, regarding the main inputs used in the fertilizers industry, we can see different behaviors along the quarter.
Speaker #1: And now, moving to the financial performance: net revenue totaled R$316.5 million in Q2, and R$841.8 million in the half-year, primarily due to the lower sales volume compared to the same period last year.
Speaker #2: You reassured the price reduction during Q2, which brought prices back to historical average levels.
Speaker #1: While the prices for MAP and potassium chloride remained high under pressure compared to the beginning of last year.
Speaker #2: This scenario continued to be influenced by geopolitical tensions mainly the wars involving the Strait of Hormuz and some restrictions in global supply chains.
Speaker #1: Gross profit was positive at $16.7 million, compared to a gross loss of $19.2 million in Q2'25. In the half-year, gross profit was positive at $20.4 million, compared to $27.2 million positive in the first half of '25.
Speaker #1: Here talking about domestic grain production, according to Conop's 10th survey for the 2025-2026 crop year, planted areas expected to exceed 83 million hectares.
Speaker #1: EBITDA remained negative at R$3.4 million, and negative by R$7.5 million in the half-year. Although there is an improvement, the company still posted a negative operating margin in the periods reported.
Speaker #2: Total production of grain is estimated at 360.1 million tons, or 2.2% higher than what was recorded in the previous crop year.
Speaker #1: Net income was a net loss of 37.2 million, and negative by 22.6. A negative at 22.6 million. And this was impacted mainly by the financial result, especially given the lower the weaker appreciation of the Brazilian Bureau against the U.S.
Speaker #1: And the estimate of fertilizers consumption considers a reduction of 1.9 million tons, according to Conop's survey.
Speaker #2: The numbers show a continuity of the expansion of Brazilian agriculture, according to projections currently disclosed by Conop.
[Company Representative] (Fertilizantes Heringer): This was impacted mainly by the financial results, especially given the weaker appreciation of the Brazilian real against the US dollar in the period. Now let's look specifically at the financial results. The main difference compared to the comparative periods is related to the exchange rate variation. In 2025, the BRL appreciated compared to the US dollar. In 2026, this effect had a less significant positive exchange rate impact on foreign currency liabilities, so net income was lower. Now speaking about cash flow. In the H1 2026, Heringer ended the period with cash and cash equivalents totaling BRL 89.7 million. The main items contributing to this were reduction in inventories, accounts receivable, partially offset by trade receivables and early purchases by customers. Net investments totaled BRL 5.7 million for construction work to upgrade facilities and other investments in maintenance.
Speaker #1: dollar in the period. Now let's look specifically at the financial results. The main difference compared to the comparative periods is related to exchange rate variation.
Speaker #1: The reduction in the volume of fertilizers consumption.
Speaker #2: Well, then I think that to conclude, Q2 and first half of 2026 were marked by lower volumes compared to the comparative periods in 2025, reflecting the lower operational base of the company in volumes reduction directly impacted net income net revenue for the period.
Speaker #1: In 2025, the BRL appreciated compared to the U.S. dollar. In 2026, this effect had a less significant positive exchange rate impact on foreign currency liabilities.
Speaker #1: Some although some operational metrics improved the company, reported negative EBITDA and net income, both for the quarter and the first six months of the year, with this I would like to end the presentation.
Speaker #1: So net income was lower. Now, speaking about cash flow: in the past, Asia ended the period with cash and cash equivalents totaling $89.7 million.
Speaker #2: We can open for questions.
Speaker #1: Thank you, Maede. We will now start the Q&A session and if you want to ask a question, please use the Q&A button. If you want to ask a question, please click on the Q&A button.
Speaker #1: The main items contributing to this were the reduction in inventories and accounts receivable, partially offset by trade receivables and early purchases by customers. Net investments totaled $5.7 million for construction work to upgrade facilities and other investments in maintenance.
Speaker #1: Now, moving to the next slide about the price performance of our raw materials: regarding the main inputs used in the fertilizer industry, we can see different behaviors throughout the quarter.
[Company Representative] (Fertilizantes Heringer): Now moving to the next slide about price performance of our raw materials. Regarding the main inputs used in the fertilizers industry, we can see different behaviors along the quarter. Urea saw the price reduction during Q2, which brought prices back to historical average levels, while the prices for MAP and potassium chloride remained high under pressure compared to the beginning of last year. This scenario continued to be influenced by geopolitical tensions, mainly the wars involving the Strait of Hormuz and some restrictions in global supply chains. Here, talking about domestic grain production. According to Companhia Nacional de Abastecimento - Brazil's National Supply Company's 10th survey for the 2025/26 crop year, the planted area is expected to exceed 83 million hectares. Total production of grain is estimated at 360.1 million tonnes or 2.2% higher than what was recorded in the previous crop year.
Speaker #1: You mentioned the price reduction during Q2, which brought prices back to historical average levels. Meanwhile, prices for MAP and potassium chloride remained high compared to the beginning of last year.
Speaker #1: This scenario continued to be influenced by geopolitical tensions, mainly the wars involving the Strait of Hormuz and some restrictions in global supply chains. Here, talking about domestic grain production: according to Conab’s 10th survey for the 2025-26 crop year, planted areas are expected to exceed 83 million hectares.
Speaker #1: Total production of grain is estimated at 360.1 million tons, or 2.2% higher than what was recorded in the previous crop year. And the estimate of fertilizer consumption considers a reduction of 1.9 million tons, according to Conab's survey.
[Company Representative] (Fertilizantes Heringer): The estimate of fertilizers consumption considers a reduction of 1.9 million tonnes, according to Companhia Nacional de Abastecimento - Brazil's National Supply Company's survey. The numbers show a continuity of the expansion of Brazilian agriculture, according to projections currently disclosed by Companhia Nacional de Abastecimento - Brazil's National Supply Company, the reduction in the volume of fertilizers consumption. Well, I think that to conclude Q2 and H1 of 2026 were marked by lower volumes compared to the comparative periods in 2025, reflecting the low operational base of the company and volumes reduction directly impacted net revenue for the period. Although some operational metrics improved, the company reported a negative EBITDA and a net income both for the quarter and the first six months of the year. With this, I would like to end the presentation. We can open for questions.
Speaker #1: The numbers show a continuity of the expansion of million agriculture, according to projections currently disclosed by Conop. The reduction in the volume of fertilizer consumption.
Speaker #1: More than that, I think that to conclude, Q2 and the first half of 2026 were marked by lower volumes compared to the comparative periods in 2025, reflecting the lower operational base of the company. This reduction in volumes directly impacted net income and net revenue for the period.
Speaker #1: Some operational metrics improved. The company reported negative EBITDA and net income, both for the quarter and the first six months of the year. With this, I would like to end the presentation.
Speaker #1: We can open for questions. Thank you, Maede. We will now start the Q&A session, and if you want to ask a question, please use the Q&A button.
Operator: Thank you, Maíra. We will now start the Q&A session. If you want to ask a question, please use the Q&A button. If you want to ask a question, please click on the Q&A button. If there are no questions, the Fertilizantes Heringer earnings conference call is closed. Thank you very much and have a good day.
Speaker #1: If you want to ask a question, please click on the Q&A button. If there are no questions, the Fertilizantes Heringer earnings conference call is closed.
