Brazil's 3tentos cuts soy crop outlook amid floods
Brazilian agribusiness company 3tentos cut its soybean crop outlook for this season because of the floods ravaging southern Rio Grande do Sul state.
An important part of 3tentos' operations is headquartered in Rio Grande do Sul, the second-largest soybean producer in the country, which has been facing heavy rainfall since 29 April that has killed 107 people, according to the state's civil defense.
As a result, Rio Grande do Su's soybean crop may drop to 20mn-21mn metric tonnes (t) from 23mn-24mn t previously predicted, according to 3tentos' chief executive Luis Osorio Dumoncel. At least 80pc of soybeans harvested this year are stored in warehouses or ports.
"We have been working tirelessly to maintain all operations in the supply of inputs, grains, feed and biofuels," he said during a quarterly earnings call.
The company sees a "tiny risk" to its supply chains of pesticides, seeds and fertilizers because of the floods. On the logistics side, alternative export routes have also been used to ship products such as soybean meal, chief operating officer Joao Marcelo Dumoncel said.
1Q results
3tentos' first quarter sales reached R2.68bn ($520mn), a 48.5pc hike from the same period a year earlier, driven by the industry, biodiesel and soybean meal segments.
The industry segment, the firm's largest, accounted for R1.52bn in sales, rising by 69pc year-over-year.
Soybean meal and other products' revenues totaled R927.6mn, 72pc higher than in the first quarter in 2023. Biodiesel sales increased by 64pc to R591mn, thanks to the increase in biofuel blending mandate to 14pc from 12pc since March.
"We are confident that the biodiesel operation will help the company's margin this year," Dumoncel said. The firm's soybean crushing margins rose by 3.3pc in the quarter, settling at R442/t, driven by biodiesel production.
3tentos' grain sales grew by almost 27pc to R560mn. Revenues in the agriculture feedstocks segment — such as fertilizers, pesticides and seeds — reached R601mn in the first quarter, up by 35pc from a year prior.
The company's first quarter income totaled R156.44mn, a 51pc increase from the same period last year.
3tentos also started to build its first corn crushing unit to produce ethanol and dried distillers' grain (DDG). The company completed the issuance of debt securities worth R560.73mn this week.
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