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The largest agricultural group in the country, Los Grobo, will deploy a business plan that will be based mainly on expanding the geographical coverage of its activities and the maturation of current operations with the aim of increasing billing by consolidating the presence of the brand and penetration of market.
At least that is how it emerges from the latest report that one of the largest agricultural groups in Argentina has just sent to the National Securities Commission (CNV) to report on the financial results it obtained in the first half of 2022.
"Better management of the producer portfolio, territory management, digitization through the Mauá Platform for self-management of producers and monitoring of business indicators by the branches will allow increasing the number of clients and participation in current clients," he says. the writing where profits are also reported somewhat greater than $318 million between last January and June.
In this context, the objectives and perspectives that the holding company, whose share capital is divided into 76% for the Victoria Capital Partners fund and another 24% between Gustavo and Matilde Grobocopatel, set for next year are focused on continuing to develop and expand the main business units in a profitable and sustainable way.
In the area of agro-inputs, it will focus on continuing to grow in sales based on a greater share of purchases from existing clients and the development of new clients in areas where it already operates, as well as in new regions.
Additionally, its executives work to strengthen relationships with existing suppliers and search for new suppliers that can accompany the projected growth. Similarly, it will continue to explore the own-brand seed business (Grobo 1923 corn and Grobo Limay wheat) and organic products.
Los Grobo expands: diversification and new businesses
Regarding the grain area, a commercialization of 2,070,000 tons is estimated, projecting a growth of branches in new geographical areas, also a greater development of existing branches and finally a decrease in the origination of own production to 420,000 tons.
For Los Grobo, geographic diversification is a determining factor when measuring and mitigating the risks of the agricultural business, with a presence in six provinces such as Buenos Aires, Córdoba, Entre Ríos, La Pampa, Santa Fe and Santiago del Estero.
The business plan is complemented by other actions aimed at streamlining financial, tax and logistical aspects to improve the commercial performance of the holding company which, in the area of grain storage, closed the year with a volume of 2,200,016 tons stored, 9 % above the previous year.
"This collected volume represents a milestone for the company, being the first time in its history that it is reached," says the company's report, which also maintains that the volatility of agricultural products led to margins per ton higher than the projected ones.
For example, in the production area, it was consolidated in the order of 256,000 hectares in association with third parties, while the development of coarse grain crops such as corn and soybeans went through periods of water stress during January, affecting the yield expectations of early corn, but not soybeans, although the frosts at the end of March did affect late corn yields in the final stages of development.
Notwithstanding this, the increase in the price of grains caused the decrease in yields to be compensated, yielding an economic result in line with what was budgeted, says the report.
New landing
As of last February, Los Grobo created a new area called Innovation and Technical Development, which is focused on providing support and assistance to production partners, technical service to customers, technical and productive training for its sales force with the objective to support business growth.
Likewise, it will be in charge of the strategy related to self-pollinated seeds and the development of own brands, as well as actions related to sustainability in production, working together with the associated areas.
From the company they assure that their offer of services has its axis in the operations centers "that satisfy all the needs of the agricultural producer for the concretion of its productive process in each of its stages".
In this sense, they detail their traditional business platform that range from grain marketing, storage and logistics solutions to the provision of agro-inputs and technical advice for agricultural production.
"We offer the largest value-added service proposal in the sector: associated plantings, advice and financial support, wheat businesses for the production of flour, selected seeds, precision agriculture," adds the document that also details the results financial results for the first semester such as the operating result (EBITDA), which amounted to US$38.4 million, which represents an increase of 18% compared to the previous year, which was US$32.6 million.
In this sense, the increase is due to several factors such as the volume of grain stockpiled, which was 2.2 million tons and represented an increase of 10% compared to the previous year, with a projection of reaching 2.5 million for the campaign 22/23.
With regard to the hectares planted, they amounted to 260,000, 17% more than the previous year, which reached 223,000, and with a forecast of maintaining the current level of hectares for the next campaign.
Los Grobo: three new towns
In the case of the volume sold of inputs (fertilizers, seeds and agrochemicals) it increased by 13% compared to the previous year and has a growth projection of 20%.
With regard to the hectares planted, they amounted to 260,000, 17% more than the previous year, which reached 223,000, and with a forecast of maintaining the current level of hectares for the next campaign.
As for branches, three new ones were opened in the towns of Laboulaye; Mayor Alvear and Bolivar, and it is expected to open another three in the year 22/23 until reaching 38.
In addition, the group added three storage plants in Tandil, Areco and Lobería, which increases storage capacity by approximately 10%, reaching more than 320,000 tons.
"All this helped the results of the year to increase strongly compared to the previous year," details the Los Grobo report sent to the CNV.
Likewise, during the year the credit rating improved from BBB+ to A- and the Fortuna award was obtained for the best company in the agro-production sector for financial performance for the year 21/22.
financial x-ray
During the first quarter, the company's gross profit was $7,947 million, 7% higher than the previous year and was generated as a result of the long-term sustainable growth and development plan executed by its management; of operational synergies between the different activities and the generation of economies of scale throughout the entire value chain.
This financial result arises from the financing structure of the company, with financial debt in dollars and at a longer term.
In this sense, the report clarifies that the company's businesses "are strongly exposed to the dollar, so a devaluation of the exchange rate improves the company's operating margin."
Similarly, it underlines that the year ended with a positive result of $999 million thousand before Income Tax, and a positive net result of $318 million.
The scenario in which the group moved during that exercise was presented in a context of low commodity prices and forecasts that marked a transition towards a Niña year, which indicated a greater probability of having precipitations below normal.
Given this context, Los Grobo focused on well-diversified plantings in both fine-grained acreage, as well as sunflower, corn and soybeans, seeking to balance the portfolio by diversifying price and production risks.
The production covered an area of 256,000 hectares, in association with clients, landowners, service providers, among others, consolidating a 43% share of the total area, with a model that aims to generate synergies between businesses as well as with actors from the productive sector.
During the development of fine-grain crops, areas such as NOA, Córdoba and Santa Fe were affected by frost events and very prolonged periods of water deficit that affected production, but not in the rest of the areas with winter crops.
Regarding the development of coarse grain crops, water deficit events occurred during December and January, and early frosts around the end of March, generating impacts on production in the different regions, mitigated in some way by geographic diversification. .
However, the appreciation of commodities due to situations in the international context caused these yield losses to be compensated by higher prices, achieving the expected results at the beginning of the campaign.
The turnover of the total campaign grew by 43% compared to the previous year and the sales mix was modified due to the large increase in fertilizer prices: 45% agrochemicals, 36% fertilizers, 16% Seeds and 2% others. products. → iprofesional.com
Automatic translation from spanish.
