Lavoro Restricted (NASDAQ:LVRO) Q2 2024 Earnings Convention Name January 24, 2024 5:00 PM ET
Firm Individuals
Tigran Karapetian – Head of Investor Relations
Ruy Cunha – Chief Govt Officer
Julian Garrido – Chief Monetary Officer
Gustavo Modenesi – Chief Technique Officer
Convention Name Individuals
Bobby Burleson – Canaccord
Vincent Anderson – Stifel
Brian Wright – ROTH Capital Companions
Ben Theurer – Barclays
Operator
Greetings, and welcome to the Lavoro’s Fiscal First Quarter 2024 Earnings Name. Presently, all contributors are in a listen-only mode. A matter-and-answer session will comply with the formal presentation. [Operator Instructions] As a reminder, this convention is being recorded.
It’s now my pleasure to introduce your host, Tigran Karapetian, Investor Relations for Lavaro. Thanks. You might start.
Tigran Karapetian
Thanks for becoming a member of us at this time on Lavaro’s fiscal 2024 first quarter earnings convention name or outcomes ended September 2023. On at this time’s name are, our Chief Govt Officer, Ruy Cunha; and Chief Monetary Officer, Julian Garrido. The corporate has offered a supplemental earnings presentation on its Investor Relations web site at ir.lavoroagro.com. That could be useful in your evaluation of the quarterly efficiency.
Earlier than we start, please do not forget that throughout the course of this name, administration might make forward-looking statements throughout the that means of the Non-public Securities Litigation Reform Act of 1995, together with statements relating to our future outcomes and operations and monetary place, {industry} and enterprise traits, enterprise technique and market progress, amongst others. These statements are based mostly on administration’s present expectations and beliefs and contain dangers and uncertainties that might materially differ from precise occasions or these described in these forward-looking statements.
Please confer with the corporate’s registration assertion on Kind F1 filed with the SEC on March 23, 2023, or our report on Kind 20F for the interval ended June 30, 2023, filed with the SEC at this time. And our experiences filed with the SEC time to time for detailed dialogue of the dangers that might trigger precise outcomes to vary materially from these expressed or implied in any forward-looking statements made at this time.
Please be aware, on at this time’s name, administration will confer with sure non-IFRS monetary measures, together with adjusted EBITDA, adjusted EBITDA margin, amongst others. Whereas the corporate believes that these non-IFRS monetary measures will present helpful data for buyers. The presentation of this data is just not meant to be thought-about in isolation or as an alternative to the monetary data introduced in accordance with IFRS. Please confer with at this time’s launch for a reconciliation of non-IFRS monetary measures to probably the most comparable measures ready in accordance with the IFRS.
I might wish to now flip the decision over to Ruy Cunha, CEO.
Ruy Cunha
Thanks, Tigran. I am going to start by touching upon the general enterprise panorama and the broader financial context, after which Julian will delve into our monetary highlights. After which I’ll return for some concluding remarks.
So, on our final quarter for our first quarter 2024 resulted in September, Lavoro delivered revenues of $483 million, up 11% year-over-year, and up 3% in present native phrases. Adjusted EBITDA was $11 million, declining 75% over the earlier yr quarter. Our income grew within the quarter despite the extreme industry-wide deflationary pressures felt throughout main product classes, a robust quantity progress led to market share beneficial properties, in addition to forex tailwinds and progress in grains revenues greater than offset the 40% to 50% common worth declines in crop safety and fertilizer in Brazil. These deflationary pressures had been a headwind to our profitability, particularly to ag retail in Brazil segments, the place gross margins contracted by 10.7% in comparison with earlier yr to succeed in 8.7%. It translated to Lavoro’s adjusted EBITDA margins compressed to 2.3%.
Now let me take a second to replace you in the marketplace atmosphere. Since our final replace, we noticed an emergence of a disruptive El Nino phenomenon in Brazil. Extreme drought circumstances in lots of producing states, together with Mato Grosso have brought on delays in planting of the soybean crops and created challenges for the subsequent crop as nicely. We now anticipate these to adversely affect the second corn crop with diminished planted acers, in addition to seeing a portion of farmers go for medium-tech corn seeds over high-tech options, in addition to curtail funding in specialty inputs corresponding to organic options. We anticipate this affect to our second and third quarter outcomes, each in Brazil ag retail section, in addition to crop care segments.
Subsequent, let me offer you some temporary updates on our distribution margins restoration. In our final earnings name we briefly defined on the impact that ag enter costs variations have on our distribution margins. As a reminder, we defined that as a markup enterprise, we’re comparatively agnostic to absolute worth ranges of inputs over time, as long as they continue to be comparatively steady. When costs are in an uptrend or downward pattern, our distribution margins are briefly impacted, given the three to 4 months stock days inflicting the delay between COGS and common gross sales worth adjusting. I confer with this as non permanent given the truth that this pattern ultimately dissipates. Naturally, stock turnover causes the stock COGS to catch as much as gross sales worth and distribution margins reverts to normalize — to their regular common.
So this in a way what happens is a traditional atmosphere when our margins are comparatively steady. What’s uncommon in regards to the final 12 months in Brazil is that, the sheer steepness of the deflationary pattern with crop safety and fertilizer costs declining 40% to 60% year-over-year over a number of quarters is a strain that ag retail {industry} has not skilled since 2014. Whereas our distribution margins for fertilizer and crop safety have certainly been steadily recovering, the tempo of the development to date has been beneath what now we have anticipated. The destocking of extra agrochemical inventories is taking longer than anticipated.
With all that stated, we’re updating our monetary steering to mirror the unanticipated affect of El Nino, in addition to the slower restoration in distribution margins. We at the moment are forecasting adjusted EBITDA to be within the vary of $80 million to $110 million, whereas our steering for income stays unchanged.
With that, let me flip to Julian for some particulars on our financials.
Julian Garrido
Thanks, Ruy. I am going to start by overlaying our consolidated monetary outcomes for the fiscal first quarter 2024, which ended on September 30, 2023, and offering further particulars relating to our revised full yr fiscal 2024 steering.
Let me begin with the primary quarter. Consolidated income grows by 11% to $483 million, as Ruy have talked about. In fixed forex phrases, the income improve was 3%. The inputs income elevated 5%, with quantity progress greater than offsetting worth declines. Grains income elevated 109%, pushed by a larger need by our clients for getting into barter transactions.
Taking a look at income by section, Brazil retail noticed income rising by 15%, reflecting the improved gross sales volumes of crop safety, fertilizers, and specialty product classes, which elevated 54%, 53%, and 33%, respectively. This greater than offset the decline in common gross sales worth that we elaborated on earlier than. Lavoro gained share within the quarter, pushed by good execution from our native business groups. The contribution from not too long ago acquired Referencia within the south of Brazil contributed roughly 2% of the general income progress for the section.
Now speaking in regards to the Latam retail income, it decreased by 1%, 9% in Colombian Peso phrases relative to the prior quarter, touchdown at $66.Three million. The decline was in all probability pushed by the pricing headwinds to fertilizers, in addition to provide shortages of corn seeds from our key provider, which resulted in loss income alternative amounting to only beneath $2 million for the quarter. Actions have already been put in place so as to add new suppliers to mitigate affect for the remainder of the yr.
As well as, our Latam enterprise proceed to undergo from the affect of the [rupture] (ph) of provide of Paraquat, the highest main herbicide in Colombia, from our key provider. The year-over-year headwind from Paraquat amounted to only over $2 million within the quarter and is predicted to proceed impacting the outcomes for the subsequent two quarters. Crop care income decreased by 1% to $35.7 million, tuned by a pointy decline in income for Perterra because of worth declines in agrochemicals. As a reminder, Perterra is the crop care subsidiary that imports off-patent agrochemicals from Asia with Lavoro’s Brasil retail because the buyer.
A further detractor within the quarter was Agrobiologica, which confronted headwinds from delays in farmers’ purchases or choices making, which pushed income out to future quarters. Of setting the yr over the affect of this was the brand new M&A contribution from Cromo Quimica, a producer an adjuvant acquired in This fall, in addition to double-digit progress for Union Agro, our specialty fertilizer manufacturing subsidiary.
Consolidated gross revenue for the quarter decreased by 34% to $59.5 million, gross margin contracted by a 850 foundation factors to 12.3%. The primary driver was the steep worth decline in crop safety and fertilizers in our Brazil agriculture retail section, dictated by Ruy. Latam agriculture retail noticed its gross margin decline by 50 foundation factors to 13.8%, as we had talked about, pushed by the compression in crop safety distribution margin, in addition to a unfavourable product class combined shift, this excessive margin seed distribution was tempered by beforehand talked about product scarcity.
Crop care gross margin [indiscernible] by 3.3% to 43.3%, pushed by a decrease margin at Perterra, as we talked about, because of agrochemical worth declines, and unfavourable product combine shift at Union Agro, whereas larger margin soil fertilizer product face time shift from delayed farm determination making. These results had been partially offset by the monetary contribution from the newly acquired Cromo Quimica, which boosts gross margins greater than Crop Care common as we anticipated. Adjusted EBITDA in Q1 was $11.1 million down, $32.9 million from the prior quarter. Whereas Adjusted EBITDA margin contracted 7.9% to 2.3%, mainly pushed by the affect of gross margin compression [indiscernible].
Now SG&A to gross sales ratio stay fixed at 11.9% of gross sales, much less larger consulting and authorized expense associated to Lavoro’s public firm bills, in addition to rising allowance for anticipated credit score losses because of the affect of El Nino on our anticipated [FIAGROquota] (ph) cost schedules, had been offset by the brand new initiatives charging low overhead bills. All three operation segments noticed unfavourable year-over-year change in adjusted EBITDA, in addition to adjusted EBITDA margin. No recurring bills excluded from adjusted EBITDA elevated by $5.four million to $8.5 million in Q1 2024. Because of, primary, M&A accounting and tax due diligence bills $0.9 million, which features a one-time [deal break] (ph) price associated to NS Agro, ensuing from suspending our plans to amass them.
Second, the supply of the second half of the DeSPAC bonus to workers that will likely be paid in Q3 2024, $1.Three million. And final, associated get together consultancy providers bills, acknowledged as non-recurring $2.Three million and the rise of $1.Three million amortization of the honest worth of inventories bought from acquired firms, which pertains to buy accounts.
Having stated that, I am going to move the ball again to Ruy.
Ruy Cunha
Thanks, Julien. And now I am going to transfer to my concluding remarks. Guys, we’re residing in a really uncommon scenario within the world ag markets, however notably in Brazil. Though grain costs and ag enter worth changes are regular and anticipated the depth of a few of these actions was not seen within the final decade, given the excessive stock ranges carried by retailers. On high of that, we had the extreme affect from El Nino that created further challenges to farmers.
On this context, Lavoro is performing to mitigate short-term impacts in our outcomes, and on the similar time, we’re positioning the corporate to capitalize on the anticipated market restoration. Lavoro has gained market share within the first quarter and employed new skilled RTVs that may convey potential new gross sales of greater than $100 million for the subsequent fiscal yr. The market situation is non permanent and can enhance because the secular traits and powerful fundamentals of Latam agriculture haven’t modified. When this happens, Lavoro will likely be in an excellent higher place to ship sturdy outcomes and additional consolidate our management place.
And with that, I’ll flip to your questions.
Query-and-Reply Session
Operator
Thanks. Girls and gents, at the moment we will likely be conducting a question-and-answer session. [Operator Instructions] Our first query comes from the road of Bobby Burleson with Canaccord. Please proceed along with your query.
Bobby Burleson
Hello. Thanks for taking my questions. So I suppose perhaps simply beginning with the share achieve efforts that you simply highlighted. This can be a powerful market clearly in Brazil, however you guys are working to sort of speed up these share beneficial properties. I am curious, your place out there versus different gamers and the way that may benefit you in some methods? And perhaps simply broaden on the efforts underway to drive share achieve.
Ruy Cunha
Hello, Bob. Thanks for the query. Sure, completely. We’re really accelerating our share achieve by means of some actions that embody, as I discussed, the hiring of skilled gross sales consultants that — on this tougher situation, they see the chance of becoming a member of an organization that’s extra strong and with larger progress views. So now we have been very profitable in attracting new RTVs, in addition to now we have been reaching a really low degree of attrition between our present RTVs. So I believe this can be a first key part of that.
Along with this, now we have been very profitable in additionally making ready our logistics to ship merchandise to shoppers and to take orders within the final minute as farmers weren’t taking the identical method as earlier years of putting orders prematurely. So we have managed to current the very sturdy quantity progress that Julian has talked about by being higher ready to provide these last-minute orders and we plan to proceed doing so. So I believe there is a mixture of things, however ultimately, it is associated to our sturdy place to serve this market.
Bobby Burleson
Okay. Nice. After which simply shortly on the comparability to 2014. I suppose that is the worst atmosphere you have seen since. And I am questioning perhaps simply distinction the best way issues unfolded when it comes to restoration from 2014 versus the best way issues are positioned to recuperate, in your opinion, from this present scenario?
Ruy Cunha
Sure, I believe, Bobby, the distinction between the present situation in 2014 is that: first, the magnitude of the change in costs weren’t even that shut. So now we have a, let’s say, larger depth of worth adjustments on this time, notably within the fertilizers and herbicides. And I believe one other level that’s essential is that, the stock on the retail channel is at a a lot larger degree this time, as a result of retailers had been making ready for scarcity of merchandise. So what could also be totally different this time is the tempo of which the retail comes again to regular stock ranges and the scenario of the general market normalize. So it is going to be a, I’d say, slower restoration this time and it’s undoubtedly slower than what now we have anticipated. We see early indicators of enchancment, so we see enhancements within the degree of inventories, we see farmers already planning for the subsequent crops, however I believe the timing will likely be longer this time.
Bobby Burleson
Okay. Tremendous useful.
Tigran Karapetian
And Bobby, if I could add a few factors. I believe simply contrasting 2014 and this cycle. This cycle, you had successfully plenty of unrelated, whether or not geopolitical or pandemic-related occasions happen, and El Nino being the newest one. That had been not likely associated to the market, to the provision and demand for these merchandise, simply hit all on the similar time. 2014, the decline then was pushed by sort of the hangover from the ethanol mandate within the US. So it was extra of a provide and demand query. Right here, so far as inputs are involved, it is form of reverting to the imply after the post-pandemic shock to the system.
Now, a few issues which might be totally different is that, so far as Brazilian farmers are involved, they’re in glorious form. Actually, even regardless of these headwinds, their margins are nonetheless double digits. And they’re going to see a restoration subsequent yr as soon as a whole lot of these traits dissipate and normalize. In order that’s a few issues only for you to consider as you evaluate these two cycles.
Bobby Burleson
Okay. Thanks Tigran. Thanks, Ruy. I am going to leap again within the queue. Thanks.
Operator
[Operator Instructions] Our subsequent query comes from the road of Ben Theurer with Barclays. Please proceed along with your query. Ben, your line is reside. You will have your line on mute. Our subsequent query comes from the road of Vincent Anderson with Stifel. Please proceed along with your query.
Vincent Anderson
Sure, thanks. Good night, guys. So I simply wished to dig into the biologicals part of the steering. I do know you are beginning up new capability, so perhaps there’s some mounted value absorption there that you simply’re not getting on this revised steering. However perhaps past that, are you able to speak in regards to the revised expectations between repeat clients that aren’t shopping for versus simply tempo of adoption being slower on this market atmosphere?
Ruy Cunha
Hello, Vincent, I believe I can begin after which [indiscernible] can praise you. So, very first thing, the short-term affect on the organic resolution is said to the truth that farmers are extra skeptical to take a position now within the corn crop. So now we have decrease anticipated margins for the second crop and now we have additionally a shorter time window for this crop because the soy crop obtained delayed, so we get larger dangers for them to take a position. So I believe the extent of adoption of organic options within the corn crop this time will likely be decrease than within the earlier yr. So that is what’s mirrored in our steering. I do not assume that is — once more, it is not a structural change, nevertheless it’s one thing that may have an effect on the subsequent corn crop.
Relating to our new facility, now we have the power prepared. We is not going to provoke manufacturing on the brand new facility till August. So we are going to most probably postpone a number of the further prices associated to initiating this operation. And we anticipate the market to normalize after which we are going to ultimately speed up once more. So I believe it is a non permanent factor that we’ll face over the subsequent months.
Vincent Anderson
That is useful, thanks. After which simply perhaps going again to steering as an entire, simply to assist body your determination making course of. The drought clearly has been creating for a few months now. Internationally fertilizer costs have been falling for some time now. So I am making an attempt to only perceive the place the tipping level was when it comes to your expectations on the yr. And is it simply so simple as you needed to make quantity commitments earlier than you had been sure corn could be delayed? Or is there one thing else that I am lacking?
Ruy Cunha
So I believe in comparison with our final dialogue, a number of the issues which have modified, first is the truth that we anticipate a number of the margins on the inputs to be enhancing and costs, not costs from suppliers to retailers, however finish costs to farmers to be recovering quicker. So one factor that we noticed is that, given the aggressive situation out there, we proceed to see costs at very low and weird ranges from retailers to farmers. One other factor that has brought on this concern is what Tigran has simply talked about on the local weather occasions, notably the El Nino implications. And we noticed the scenario getting worse as each the soy crop was affected when it comes to replanting. So farmers had been planting after which they’ve ultimately to replant a number of the soy and likewise the shrinkage of time — window time for the safrinha. So I believe these had been the primary adjustments. So mainly the markets — we proceed to consider that the markets will recuperate and the challenges are non permanent, however the tempo is simply totally different based mostly on what I simply described.
Vincent Anderson
Okay, that is useful. After which perhaps only one final one on sort of simply Brazil on the whole, as a result of the US would not have two rising seasons. So I haven’t got a great comparability. However is the Brazilian farmer — is there a possibility proper now for a Brazilian farmer who’s a really tough safrinha corn atmosphere to then promote them extra product to maximise soybean yields or have a lot of the alternatives to do sort of in season changes to issues like nutrient ranges or biologicals, has that window largely handed?
Tigran Karapetian
Vincent, the best way to consider it’s the purpose why the delayed planting and harvesting of soybean is impacting the safrinha, which will not be tremendous apparent at first. However successfully, there is a window while you begin planting the safrinha, usually early to mid-Feb all the best way to early March. And the explanation why you wish to plant then is as a result of the extra drought-like or potential for drought-like circumstances in Brazil on the whole kick in in April, Could, and you don’t need your seedlings to be within the progress phases when these issues occur. And so, what occurs when you’ve a delayed planting for the safrinha is you improve the chance. The farmer has the next danger of dealing with yield challenges. And subsequently, what they’re doing is both they’re doing what they did final yr, in order that they preserve planting precisely like they did final yr, or they’re downgrading know-how when it comes to medium know-how for the seed, or they’re shifting their crop sort to different varieties, whether or not it is beans or sorghum or different varieties. And people clearly even have potential for demand for agrochemicals. However from our standpoint, what’s impacting us extra so is the corn seed enterprise for us, which is the next margin in agrochemicals and fertilizers.
Vincent Anderson
Proper. Sure, what I used to be getting at is, a farmer dealing with that probability. Does it change their buying behaviors on the soy that is already within the floor? Nevertheless it sounds just like the affect of corn simply outweighs any alternative for incremental gross sales into the present soybean crop that’s inflicting the delay.
Tigran Karapetian
Sure, that is in all probability a great assumption.
Vincent Anderson
Okay. All proper. Properly, thanks.
Operator
Our subsequent query comes from the road of Brian Wright with ROTH. Please proceed along with your query.
Brian Wright
Thanks. Good afternoon. [indiscernible] somewhat little bit of how to consider the problem between a medium tech seed atmosphere per safrinha versus your sort of view per planted hectare. So how to consider the related affect or the magnitude of the affect on every of these in your outlook?
Tigran Karapetian
I might say it is a few issues. Part of it’s the downgrading. Part of it’s simply much less acres. We went from, I believe, early November [indiscernible] and a number of the consultancies had been forecasting acres to be anyplace between minus 2 to plus 5. I believe now the consensus is extra like anyplace between minus 10 and minus 3. So it is form of shifted. And it is also impacting our crop care enterprise within the sense that our biologicals — Agrobiologica does promote bioinsecticides for the corn for sure bugs and we anticipate that to be a headwind because of — what is going on on in safrinha. Now the fact is, there’s nonetheless a pair weeks left and so we took, I might say, an method of not guessing and form of taking what we thought was a situation that is possible and fairly than wait, there’s probabilities that the acres really find yourself being higher than we anticipate, however we did not wish to take an opportunity.
Brian Wright
Okay. So it sounds such as you’re sort of considering extra alongside, like, did this outlook is sort of extra predicated on a minus 10 on acres than the minus 3, or is that the vary you are sort of considering so far as what you are predicating issues on?
Tigran Karapetian
Brian, sure. I believe extra essential than the discount in acres right here is the idea behind the extent of technification that farmers will wish to apply within the corn crop. That is really extra impactful to the general retail outcomes, proper? So we mainly consider that they might be buying and selling down some seeds within the sense that utilizing decrease know-how seeds and likewise decrease utility of organic options. It isn’t as a lot because the discount in space that, as Tigran talked about, there’s nonetheless not a consensus on this market, however I believe there’s an general consensus that farmers will likely be extra cautious this yr with these sorts of know-how investments.
Brian Wright
Okay, No, thanks. If I may ask you yet another simply on — the press launch has talked about methods to go on the de-stocking and similar to — and the right way to weigh it and also you additionally talked about the fertilizer, however simply perhaps how to consider relative affect. Is it extra fertilizer, extra crop safety on the destocking or such as you simply assist us determine the relative significance of these?
Ruy Cunha
The crop safety is a very powerful class within the destocking course of now. So I believe fertilizers, they’d an affect, however wanting ahead, a very powerful class to be is the extent of destocking of herbicides, fungicides and pesticides. So that is what we anticipate to see normalization over the subsequent months.
Brian Wright
Okay, and I simply wish to be certain that, I’ve learn — so I am recalling the press launch appropriately that the thought course of is, by the tip of March sort of time-frame? Is the sort of view on the considerably full on the destocking or is {that a} honest characterization?
Tigran Karapetian
Brian, I believe it is laborious to say. I imply, definitely, a number of the knowledge that we have been listening to from consultancies that run surveys recommend that, as of December, we’re in all probability two thirds alongside the best way. However to be fairly sincere, the information is actually laborious to get. And we’ll actually see it after we see costs on the farm gate, as Ruy talked about, begin to recuperate. After which that will likely be actually the actual main indicator. And we have but to see a significant reversal or uptrend. It is form of been bouncing round in a spread sure means. Skew by skew is totally different, however usually talking, it is form of stabilizing. It has been bouncing round for the final couple of months.
Brian Wright
Okay, thanks a lot.
Operator
Our final query comes from the road of Ben Theurer with Barclays. Please proceed along with your query. Ben, your line is reside.
Ben Theurer
Okay. Does this work? Are you able to hear me? Hiya?
Ruy Cunha
Now we are able to hear you.
Ben Theurer
Oh, lastly, we obtained this achieved, know-how. To start with, thanks very a lot for squeezing me in on the finish. I had a number of technical points. So two issues I wished to ask. To start with, as you look into it, I imply, clearly the information we simply obtained is ending September and late January. However as we take into consideration the entire ag chem destocking that is been a difficulty in Brazil and all this excessive stock we have talked about. So what’s like your sort of like your finest guess with that softened outlook that we will get by means of this. Is that also going to final one, two, or much more quarters than that? So, something that you’ve got from off the bottom data, that may be my very first query. I am unsure when you’ve answered this already, however I obtained misplaced, so hopefully you may assist me out on that. And thanks very a lot for that.
Ruy Cunha
Ben, I believe we talked about that proper now it is laborious to foretell. What I can say is that, now we have some lead indicators that present that the extent of stock is enhancing. So while you evaluate the degrees of stock of shops in January final yr to December final yr, we noticed a decline again in the direction of, I might say, extra regular ranges. The factor is that, it is laborious to foretell if the normalization goes to happen between three months or six months. I believe proper now we will must see the event of safrinha, in addition to farmers’ intentions on beginning the brand new season, whether or not it will be delayed or if they are going to advance a few of their purchases. So I might say we should always see at the very least three months of this technique of destocking by what the native consultants say with the opportunity of extending a few months extra.
Ben Theurer
Okay, excellent. After which only for understanding causes, as a result of it has been some time that we had El Nino. You’ve got talked about it as having had an affect. Does that work to final somewhat longer in the same scenario as we had in El Nino for a few years prevailing? If we had been to imagine the same situation, are you able to body or assist us perceive what the market dynamics could be and the way that may affect your corporation simply from I suppose historic context that was once previously and the way we should always take into consideration the affect going ahead beneath the idea that El Nino goes to final?
Tigran Karapetian
Sure, I imply, Ben, all the time tough to foretell headache occasions. However I might say relative to the historic knowledge, this has been a very extreme El Nino. Simply to provide you one indicator, the share of soybeans that needed to be replanted in Brazil, so mainly that to scrap and replant all of it collectively was between 5% and 6%, which is four occasions to five occasions larger than regular. That is a reasonably large space. Clearly that is one other atypical factor, after the sequence of atypical issues taking place this yr. However we will not, clearly, predict what is going on to occur subsequent yr with the El Nino, however I might say relative to historic El Nino, this one has undoubtedly been on the extreme aspect.
Ben Theurer
Excellent. Properly, thanks very a lot and good luck with what’s left over right here.
Operator
That concludes our question-and-answer session. I might like at hand the decision again to administration for closing remarks.
Ruy Cunha
So I believe we lined a lot of the subjects already. Perhaps the final remark from my aspect is, I imply, it turned very clear all of the challenges, however we’re additionally, I believe it is essential to say that this disaster can also be a possibility for Lavoro to additional consolidate its management place. The corporate’s strong fundamentals will really act in our favor. So this second is an effective second for us to proceed increasing market share. We’ll proceed to put money into the acquisition of recent shoppers. And we anticipate to convey some information for the subsequent quarter based mostly on our continued investments out there. Thanks all for taking part and I will likely be all accessible for additional questions when you want. Thanks.
Operator
Girls and gents, this does conclude at this time’s teleconference. Thanks to your participation. You might disconnect your strains at the moment and have a beautiful day.