Vittia Fertilizantes e Biologicos SA
BOVESPA:VITT3
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Vittia Fertilizantes e Biologicos SA
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Good morning. Welcome to the video conference for the first quarter of 2024 from Vittia. This conference is being recorded, and you can access the replay on the company's website and also the official YouTube channel. The presentation is available for download also. [Operator Instructions].
Before continuing, I will reinforce that the declarations are based on the [indiscernible] and suppositions from Vittia and the current information of the company. These declarations may involve risks and uncertainties, given the mean about future events and depend on circumstances that may or not happen. Investors, analysts and journalists must consider that events related to the macroeconomic environment and other factors that may make results be different from those in the respective declarations. We have Mr. Wilson Romanini, CEO; Alexandre Del Frizzo, CFO and R&D Director; and then Henrique Monteiro Ferro, R&D Director also. And now I will pass the floor to Mr. Wilson Romanini, that will give the first discussion.
[Interpreted] So now thank you all for being here. We will talk now about our results for the first quarter 2024. Beginning here, our gross revenue from the biological segment reached BRL 50.1 million, a little below the first quarter for '23 minus 6.9%, being that in biological defensive, we recorded 44.0% in the first quarter, which is 4.1% less than the previous quarter. Our net revenue amounted to BRL 121.6 million in the first quarter for this year and 18.2% less when comparing to the quarter of 2023. Our net result income was BRL 0.8 million. It was 93.6% less than the previous quarter. Our EBITDA totaled BRL 6.8 million in our first quarter for this year, 73.1% less than the first quarter for 2023.
Our CapEx was around BRL 7.1 million, 37% less than the previous quarter. Speaking about -- the performance of the first quarter of 2024. As we have said on the last presentation, we come from a complicated year, the end of 2023 continued to be worse in the first quarter of '24, where we had climate issues surfacing that have already been given an entire problem within the productivity sphere. It's interesting that in the end of the cycle, things slowed down and the perception that we had that we would have a major reduction in the volume of production in grains in Brazil did not happen. It was not what we hoped but was not the catastrophe that we were hoping for. The [indiscernible] are present, but the strong rains came so effectively, the reroproduce -- had a perception that it should continue their investment. This is based on when we think about the volumes that have showed some stability, but they had a potential and resilience given our technologies. They noticed that our technologies will make the difference in their productivity.
The stock that we had, the excess of stock we had within the rural properties and the distributors diminished, which gives a clear perception that there will need a reposition of inputs for this '24, '25 crop. We have a more favorable expectation when we did the presentation for you, of the fourth quarter of 2023. We are right now with a volume of requests that are much greater year. So things are happening. We no longer see a drop of prices, even if we have seen mainly in some products that we need to import, we have seen a big growth in the maritime delivery. So we believe that we are even going to have from the second quarter, a higher price, a higher volume and consequently a need to repair and automatically increasing the prices of our projects. We have a scenario that is much more ease when regarding the climate area. We are working -- going to [ El Nina that ] now establishes a more favorable harvest point. So we can see clearly that things are modifying themselves. The last calculation that we did, we have an expression that we had no light at the end of the tunnel and now we are lighting up right now. And we hope that in this year, the company we'll be able to have a greater volume in revenue and automatically in terms of results. We now have an important focus. We have a job in the commodities in terms of the inputs. And the relationship of exchange, both from soy, cotton, corn, coffee, sugarcane is very favorable right now.
So we understand clearly that they will do investments seeking to increase productivity on our position. We continue to invest strongly in our MDI in improving our biological lines, innovating. We are working strongly on this. Later Henrique will speak about this year. We have a metric within our company of having a financial solidity. We -- as you can notice, we have worked when we get our SG&A for the fourth quarter of '23, when comparing to the first quarter of '24, we have an interesting drop an important point is that this modify our shares. We are now working in an intense way of rationalizing our resources and always strengthening partners, positioning ourselves in an effective way with our current partners. So this is our work. Now I will pass the floor to Alexandre Del Frizzo, that will continue with the presentation.
Now I will detail the operational performance and financial performance of the company. So we had a favorable quarter -- we can see with regards to demand and prices, we had a drop in the quarter of all of our product lines of inoculants, we had an important drop. It doesn't represent the quarter as much, but we had also a basically drop by our product that was launched recently the RXL, if phosphorus. However, the most traditional line, which is inoculants for soy for corn had no drop. They even had a small growth in terms of volume. In biopesticides under the point of view of the gross revenue, we had an increasing volume around 6% which implicates that this drop that we can see here of 4% is on prices. So as I said, it happened in all of our lines, we do not see the pressure that we had in the last quarters.
And one of biopesticides had a drop of around 10% in prices. This is a drop that is similar to the last quarter of the fourth quarter of '23. We know that the price of biopesticides tends to go down mainly due to the technologies that become more older. And we believe that working with this drop in prices of 10% is a drop that can even be beneficial on the point of view of demand, bringing a competitiveness to the technology when comparing to the other chemical technologies. The full year fertilizers also had a small drop impacting prices. The organo minerals, I will mention when we speak about other issues, but we are fishing rhythm of our [indiscernible]. This is a line, as you said, we have been fighting to bring profitability. And usually, when we -- the more we sell the more harm we bring in. So we are seeking to reduce these operations and bring this line to stability in terms of margins. Speaking about soil micronutrients. This is a project that, in the first quarter had a more retracted demand, but it's not a project that we hope to have a drop throughout the year. and much like the industrial products and others in this quarter, we can see we had a more retracted demand is a product that had a low demand in terms of products. But highlighting here the biological lines in part having presented. Despite having presented a drop in revenue, we have not seen a drop in the first quarter with regards to volume when comparing the inoculants and biopesticides.
Volumes were much close to stability. Speaking about the margins on quarter with a loss drop in revenue. We had a small drop in the full year fertilizers and industrial product in my soil micronutrients. We had a small dilution of fixed costs when we enter to the order line that I have mentioned previously, which is of soil conditioners and organo minerals, we can see that we once more had a negative result. But as I said, the strategy now is to diminish this negative result and diminish the size of the operation. So this was actually quite positive. We are having less revenue, but as you can see, we are losing less. In this line, under the point of view of margin of contribution, not considering other issues, we had a gain of 2.3 percentage points quarter against quarter.
So I think that our challenge here is to re-adequate. This is happening in our manufacturing structure and our fixed cost so we can have a small operation, but that delivers at least a neutral result, but up until the moment that we can come back to have a normal situation in the market of Organo Minerals and for us to redefine our direction of this business within our group. I think I mean -- I did not speak about the biological product. I think that I lapped it for last. It's the one that is most relevant for us under the point of view of contributions, we had a drop of margins, a drop of around 12%, 13%, a little smaller when compared to the fourth quarter, but I would like to highlight that this level of drop is not what we expect for the year. We had 2 typical quarters when talking about some aspects, the fourth quarter of last year, there was an impact in our soil fermentation, like any startup, you brought levels of low levels of productivity, some losses from operational adjustments and brought a greater impact in dropping the margins.
In this first quarter, we have a severe impact, the most relevant one, which was the known dilution of fixed costs for biologicals. The net revenue is around [ 50% ]. This is an operation in which most of the industrial costs are fixed. We have a netting of costs of GGF quarter against quarter due to the second phase for the soil fermentation. So in this quarter, what weighs in on margin drop was the increase of fixed courses. But this scenario of reducing the revenue of biologicals is not what we work on through the year. We work with the growth of revenue for this line. And so we are going to try to dilute the fixed costs. We do not expect such a drop above 10%. This is not what we hope for, what we have seen in the last quarter and what you're seeing right now. This is not what we hope for the year. We hope to have a margin drop. As I have said, we work with a drop of prices of around 10%. This is a market that is developing itself, having new competitors, and we have a drop of prices on top of technologies that are becoming more consolidated, which is relevant when we see for the fourth quarter and the first quarter, which is the project in the base on both there, and we have this expressed in our numbers, but we understand that the drop of margin for the year will be at most under the [indiscernible] of percentage. Like last year, I think we had a drop last year of 6% in the year for the line of Biologicals. We are working also to improve the productivity of our manufacturer. We have seen with this drop of prices we saw the market consolidating. We became a focus for initiatives to improve productivity. So if we have success in these initiatives, the drop may be even smaller than 6%.
So summarizing here, it is a quarter where we had a similar drop of the first quarter, but we are not working as if it was a normal level of drop. About our expenses, we had a 10% growth in our SG&A but it's important to talk about the lines that we produce, we had a smaller reversion on the first quarter of '24 when comparing to the previous quarter. to the other quarter for '23. So we can see that we provisioned more than we saw under the point of view of nonpayment. It does not mean that we are seeing a higher level of nonpayment. It even means actually that the first quarter is aligned with what we have foreseen. What happened is that we had a good year in 2023 and some of the provisions were reverted. It's not a scenario for '24. We are having a good performance as to receiving, we have an import receivable had in '24 good performance, but it was as we hoped. That's why we have this difference when talking about reversion. When talking about administrative, we had a reduction aligned with what we see we have been talking about for the market about rationalizing the company in this difficult moment. And about other expenses, although we have grown 7%, this was important when comparing to what they were performing last year with a growth around 20% of the selling expenses, we may even see a greater deceleration when comparing to last year. So this is not 100% in the numbers. The adjustments were not 100% captured into the numbers of the first quarter. We obviously do not work with a big reduction. We work with the goal of staying very close to the revenue of last year or with book growth. As Rustom said, we are not restructuring our company. We are just seeking to rationalize our efforts.
As a result mainly of the demand and the drop of revenue, we had an important drop in EBITDA. It's important to inform that this is one number that does not represent the year as a whole, both for the first and the second quarter. The drop really was relevant, but when comparing to the year, it's one that we see that we can manage, when do we come back to have a good performance for the next quarter, so we can deliver a growth EBITDA for the year. About the CapEx, we had around an interesting reduction when comparing to last year. We have some investments for the year, but with a consolidated level that is lower to the last year, also adjusting to this scenario, we are more -- we are rationalizing more our CapEx for the main investments, which was to finalize the microbiological plants that added up BRL 7 million, for example. It is already beginning to operate is a facility that is doing ramp up in this first quarter. The process of ramp-up for microbiologicals is a little slower than the growth of insects.
We inaugurated our administrative office. We talked about the strategy of changing our headquarters to [indiscernible] to seek to attract or have a broader base of human resources. Obviously, we will keep our operations in [indiscernible], part of the administrative roles will also be there, but the idea is to just aggregate a new hub to contribute to our operations. And it's an investment that is not that relevant in microbiologicals to improve our capacity. About cash flow management. We have a traditionally traditional quarter for assuming our flow. We have a natural increase of debt in this quarter. However, we have closed the quarter with a net debt smaller when comparing to the first quarter of '23. Regarding EBITDA and net debt, we had an increase due to the worst EBITDA performance, but this is the peak of our debt for the year. This is the highest period, and we can see that the level is still very comfortable remembering that we also did a purchase program that was very relevant in the fourth quarter. If it was not for this, this index of 1.7x would go around 1.5x.
We had a better performance about the financial result with a net debt of 20% lower. We even inverted, we had a positive result, especially in the -- due to the AVP that ends up being connected to operation, then our position as a net debt. First, you have a net debt about this and have a positive financial result is something that does not make sense, but it is the math that ends up giving this result. When talking about income tax and social contribution. We had a worse performance than last year with a negative of BRL 500,000. This is broadly expected due to the end of [indiscernible], which will increase. And as a result -- as a final result, we had a drop of our net margin and net profit. However, business is still very positive. So even though we had perhaps one of the worst quarters that we had when talking about financial performance, we are still within a positive scenario in the end, even though it's almost stable.
Now I will pass the floor to Henrique to further detail our R&D investments.
Thank you, Alexandre. Good morning. Vittia continued strong with its investments in R&DI, both on projects and the product portfolio as well as when talking about structuring, labs and investing our in focusing our investments, it's for developing new technologies, biological products for agriculture, both inoculants as well as biopesticides. But we are still investing in new technologies related to nourishing plants, which are fertilized special fertilizers. When comparing the periods, we can see that the first quarter of '24. Our investment in biological product is around BRL 5,618 an increase of 6.4% when comparing to the previous month of '23 investment in fertilizers and new technologies for nourishment was aligned with last year's performance of just a small increase of 4.8%.
Totaling an invest of BRL 1.197 million. Regarding the CapEx, we have invested in the first quarter for BRL 1.2 million. 1/3 of this investment went for the bio prospection sector and bio-processes to equip the acquisition of new equipment related to bioprocesses and recruitment for helping in developing formulations. 1/3 of this investment went to structuring our R&D lab for macro biologicals and the rest of investments went to acquiring and building a new vegetation house. In [indiscernible] to help on the demand that comes from the bio-prospection sector and bioprocess. In the first quarter, we had two approvals for the MAPA, regarding new recommendations -- new recommendations for biological targets into pesticides, biopesticides from Vittia. We had the approval of the biological target cultural that tops with sugarcane, a product that is very unique for. This is even important -- is an important disease that is difficult to control even due to -- for the chemical pesticides to approve these to control this disease that makes sugarcane red.
The other approval was for controlling nematodes in rice. For the first quarter, it's worth to highlight that we are already collecting the fruit, the labors of bio prospection, we have begun requesting reps, which is the special temporary registry of new micro organisms from bioprospection to control plagues, diseases, beyond microorganisms with the world of stabilizing phosphorus, potassium and others. And they are new microorganisms, from Vittia that on new terms and other new species, we have the expectation of collecting the fruits of our labors for these products for the next years. And I give the floor back to Alexandre to finalize.
Thank you. About the shares or stock price, we have been suffering from the consolidation of this difficult scenario for the agri business. Now within the first quarter, we were below the IPO when comparing our performances, we begin to see here internally that there is an important detachment of the investors' perception on investing in agribusiness, and how the stock -- the value of our shares, we understand the issues that weighed in on our shares like the low index of liquidity, it's a share that is still unknown. And even this scenario that is hard for agribusiness, but we understand that nowadays, each time, this is very far from what we have for the company. So even within this, we are performing a repurchase program in the first quarter where we had an important volume of around BRL 16 million allocated for our repurchase program. We closed the first one and opened a new one.
Now we have around 4 million shares available so we can execute the repurchase program. I'm not saying taking profit, let's say, because we always mentioned, it's not our strategy to take profit from a low moment to repurchase but it ends up being like an obligation for us, understanding this difference between the company's value and the prices that we need to maximize for our shareholders. We need to maximize the value for them. So we have this program going on, we have another part of it being performed, and we can see that we need to pay attention to this strategy. About our governance, it's worth to highlight that we have a new member of our counsel. He was elected Recently, Fabio [indiscernible] he is an experienced professional from the sector. He has been acting in the area, [indiscernible] company on specialties, is coming as a COO for Brazil and he was also part of the PL group after acquiring with the COO, Brazil for [indiscernible], he is a person with a lot of market knowledge, specialties, both for Defense & Nutrition, and we will help us to establish our growth strategies.
And based on this, we have created a we created a strategic growth committee where Fabio will be ahead alongside our Commercial Director, Rodrigo and our Marketing Director, [indiscernible].
[Operator Instructions] And our first question is from Larissa Pérez a seel-side analyst from Itau.
Can you hear me well?
Yes.
We are very happy to know that you are seeing light at the end of the tunnel. This was a very interesting comment. And my first question is regarding this environment with trust, despite the challenges you have talked during this that you are trusting the revenue in the EBITDA for the year. We'd like to believe that this trust extends to the cash generation. If you can talk more about converting the EBITDA for the year, if you're going to have a difference in CapEx or [indiscernible], anything that may convert this? And a second issue that I would like to mention is regarding the mix effect in the margin dynamics. We talked about this during this we have reported a margin that was pressed when compared to last year, but there was an improvement. So I have mentioned the effects, but I would like you to understand if you could mention about this new dynamic of mix between the first quarter, the second quarter, how much impacted biologicals, if we can hope to have a positive effect from mix looking at the next 9 months. So I think this is more about product/commercial. These are my two questions.
Would like to begin talking about the cash generation and then I will talk about the trust, the issue of mix of products, I think it will give a better dynamic for us to do it like that. Well, speaking about the generation of cash for the year, December against December, we will not have a year of generating a lot of cash because what happens in our sector is, for example, the result when talking about the cash flow ends up coming in the next year. So for this year, we are hoping -- I mean, I'm sorry, for the end of the year for the net debt, and it's very similar to last year when talking about the nominal issue. This is relative, so we are going to have a [indiscernible] to the leverage as it grows, for the EBITDA considering a lower CapEx, but also when with our growth coming back, we are now having more cash flow when comparing to December. As you know, when we grow, we consume our capital, which is precisely this term that we work on the market of receiving after the end of the crop.
So this is our expectancy for the year. Without considering you execution of record programs are M&A that we have space for both strategies.
Well, speaking about the trust -- and the phrase I said that we had no light at the end of the tunnel. Well, we can notice that people remember this. I think that it's very important is that [indiscernible] will always be a company that is open to those who are on their side. For good of our bet. This is natural. This is part of us. We're here in management to effectively show what is happening in the market and what we see at that moment. But nowadays, the trust is much higher than in the first moment. As I said, we were coming from a period of drought. We had a drop in commodities, mainly in say it represents right now 45 million hectares of the 90 million that we have in Brazil, reaching 90 million, 80 million.
So truly, we had a very conservative position. Now the market has changed. We have an increase in commodities. So we had an increase of around 50% the inputs went down. And we understand that effectively, there were a producer will make investments and he needs to seek productivity. He wants that, and what I talked about initially, where we had a view of a harvest that is harmed. We did not expect for it to be like so, but it's much better than what we had hoped for the beginning when we get the prices that are being, let's say, worked on in terms of soy, there is a price considering a full American harvest. We know that problems in the middle of the past may happen. So we still have, let's say, a possibility of a drop in volume broadly speaking, we can reflect about the prices of commodities and so on. We see dollar display is different from the [indiscernible] this helps in Brazilian agri business. Part of the costs are still in [indiscernible] and automatically the producer, we'll have its products trade in dollars.
So things are very positive. We are living in a very different moment. I think that thinking internally, I think that all adjustments that we had to do were done, and I think it was well done -- this automatically generates results for the company to have a rationalization. You have a repositioning the dynamics of the commercial sector is higher now, even with the entrance of the director that we worked on with a directory doing the commercial part and marketing, we segregated this and we are having good results. We have been preparing ourselves in an interesting way with other cultures. So that's it. And when we speak about mix, this is aligned with what market is doing now. Our thesis on for the team is to show the best technologies. And automatically, when you have a higher technology, you have a higher price and automatically a better margin.
So this is what we are doing. Considering what will happen in 2024 for the Harvest '24-'25, it's clear for us that we are in a much more comfortable situation than we were in the beginning of the year.
Our next question comes from Gabriel Barra a sell-side analyst from Citi. Okay. Let's go for the next question, and then he enters next. Now let's receive Pedro [indiscernible] sell-side analyst from [indiscernible].
Hello. First all, I'm sorry, we ended up losing this part because we were in another teleconference. I'm sorry, if this was already addressed. So my first question is about the request. You have said that this growth was very strong. If you could talk about how much it would be this very strong? Perhaps qualitatively? Perhaps it would be interesting for us. And even on the charter for the request, my question is if this has been growing on top of new clients or if you see it through an increase in share of pocket for our clients, this is my first question.
And the second question is about allocation of capital. The company went through a difficult year. The worst is down there and you were able to keep a solid structure. You were doing a repurchase program. But my question is for M&A. You see -- do you see opportunities for M&A given that we have now a solid structure to accelerate growth through M&A.? And even on M&A, I'm still talking about M&A, not as recently, but you were talking that you saw less opportunities for biologics and more in [indiscernible] fertilizer. If this is capped if the opportunities continue to be with this business line than in biologicals? This is my question.
Pedro, regarding the requests that -- this is much higher than in the same period. We need to do some tie-ups. We had the first quarter restricted in negotiations in our request and this began to appear with a greater magnitude in the April. And so we have May and there is a very big relevance. It's very relevant. So it is a volume that is very interesting. If we compare it to last year's period, we have a growth of 4x for the charter for this period. When we get the magnitude for right now regarding the requests that entered and effectively are there. We have [ 20 20-something percent ] of increase considering the same period for last year. So [indiscernible] market began to change. The market changed a lot for 30, 40 days to here. When talking about our charter well, we have both of them. We have an increase in our traditional clients. Also, we are doing an interesting opening for new clients.
And from M&A, I think that Frizzo can talk about this view.
Well, this strategy persists. We continue to look at M&A on how we can either aggregate new technologies or gain access to the market. When talking about aggregating new technologies, we have been seeing less opportunities available and then it would be like in the field that you said in the biological segments. When we look about biological companies, these are companies that end up not having contributions on new technologies and a very limited contribution when talking about access to the market. And even from the lack of resources and attractiveness, so we have a price that is very difficult. So it's very better to do a purchase. So when we see segments that can give access to the market, we can see other opportunities, and we can see a pricing that makes sense. So we continue to have these 2 strategies. We continue to look at our assets, but in a very disciplinary way, so we can just acquire this in the right price and that can bring value to the shareholders from Vittia. So that's it. that is basically that we began our strategy.
Now our next question comes from Gabriel Barra sell-side analyst from Citi.
I think that now it's working. I had just a technical problem here. For the questions I would like to say about 2 things. First, about the commercial strategy. We have been discussing this. And I think that the last year, there was an interview from Wiilson talking about direct sales, [indiscernible]. And then within this scenario that perhaps I would like to hear from Wilson is that now looking at these 2 to 3 years in the long history that Vittia has, if you continue if you think that this is the best strategy, if there is a change in courses going forward, if perhaps to leverage it by other channels would make sense?
If you could talk about the company's strategy regarding the distribution would help a lot. The second step and even coming back to the allocation of the capital, not only talking about M&A and with regards to the growth and repurchase. You have an open repurchase program talking about the prices of the company, you can see that we look at a very challenging scenario when we talk about prices. How do you see the repurchase in this context of allocating capital and growth? Frizzo spoke about targets and et cetera. But looking at the revenue when you compare to the company, how do you think about this ?
I will talk about the commercial strategy and then Frizzo can speak about the allocation of capital Well, the commercial strategy that we have continues to be the same. We are effectively working in the process of direct sales. We have partnerships with distributors, commodities, inputs and so on and cooperative. So things stay the same way. We are doing work, working seeking a better performance of our company. We have created an interesting point with our distribution centers and this helps to meet the distributors and effectively, they were a producer. When we talk about commercial strategy, it's still the same. What we have been doing is to improve our team. Sales needs to happen with our partners, but with a major efficiency of having Vittia's team in the field. So we have been working in this new rationalization that we did. In terms of resources within the company, the team was even strengthened and worked on some important steps or the commercial strategy, it's the same.
We have the thesis of being present in this chain, and this is what our work we have. It is important for us to be seeking some places at up until [indiscernible] we would do this in A was intense way for us to be able to put more businesses within the company and about allocation of capital, I think that Alexandre can speak better about this.
Well, about repurchase without a doubt one of the brilliant strategies that we have as revenue when we look at the financial solely I think which about multiples is cheaper than any other asset now in the market. And as I said, it's in the scenario that we hope for it would even contribute about profit per share for our shareholders. But about strategies, this is not what we would hope for. We would not like to use all this rest in a repurchase program, knowing that we can have strategic opportunities that will improve the competitive positioning that we have in the market. They are in an incipient market of biologicals. The scale will be important. This been important right now to dilute the cost of production to absorb our NDI expenditure, we know that we need to invest to bring new solutions about efficiency and so on. We need to scale this commercially.
This is a path we know that if we do not want to burn what we have and not have this flexibility to use when there is an opportunity of strengthening our position. So basically, that's it. And it's what I said we are in the opposite path, which is to have a company that is more expressive and increasing on liquidity. I mean, it's what would not. We execute things because, I mean, we need to think about the shareholders at the base -- about the best opportunities for our shareholders and repurchase right now for these prices is without a doubt on the top of the list.
Our next question comes from Nicolas an investor.
Why is soil controllers and organo mineral within negative gross margin? Would you like to answer Frizzo?
Okay. Well, this is something that we have been discussing for many quarters. We have entered this market with an expectancy before the problem that happened with fertilizers. With the beginning of the Ukrainian war, Russia -Ukraine war when we had a drastic change. And in the logic of fertilizers were somehow we had even an excessive concern with organo minerals and [indiscernible] many projects a wrong position from the market. And I think that the bill came not only for us, but most of them are, I'm not going to generalize, but for most of the market of organo mineral. And all companies face certain difficulty of having this operation -- profiting from this operation. So there is an issue that in last 2 years, the market worked outside of the logic of what this technology was for 4 to 5 years ago in excess of optimism with that price scenario that is much higher than the mineral fertilizers and some actions for companies of positioning products.
So this is a technology that effectively is not being demanded for in the way that it should be due to dispositioning, it's not being as demanded by the producer in such a way that all the organo mineral companies have a lower net. These are lower margins for a technology that is more like a commodity. So when you have a demand and a level of sales that is much superior to what you had planned, which is what we had for extractor, we end up generating a negative result due to the fixed cost. Of course, in some trimesters, this was not a dynamic. This was the dynamics of prices. I [indiscernible] is the history first not advance that much because this is a very long story. And right now, where we can see that this is a market that will need some time to recover, to recover the technology or the correct position. And we have the strategy of not leaving the market, but diminishing as most as possible the operations so we can neutralize the negative impact. Technology is efficient. It works. It is interesting. But due to these dynamics right now, the company is -- not only Vittia, many companies do not have profitable business models.
Our next question comes from Fabio Renato WJ News Investor.
Good morning. Face-off the agri business [indiscernible] do the company have a negative impact if you can do [indiscernible] strategy? If you have, which would be the impact on the revenue?
Fabio the issue of you're going to [indiscernible] will impact the agribusiness as a whole. But Vittia is a position that is not a positioned into the [indiscernible]. And each year, we are trying to achieve more places there. but there is a certain difficulty and this comes from the old days of the company where we began in 1971 to produce inoculants at the time we had companies that would do this work which produce this and [indiscernible] and Vittia developed itself grew. So our position, mainly in [indiscernible] is one that is small. When we talk about the impact of [indiscernible], the effective areas for crop which are [indiscernible] region of [indiscernible]. So we had lost effective loss by the excess of freight. So we had a site that was not reduced so the producer ended up having this so, so it reduced his type of projection.
But the volume that you had on the field was not that much in the [indiscernible] region. This is -- I do not have the magnitude, but most of this was already collected. It's below the water. No one knows what will happen for a water technology like so. But if we analyze [indiscernible] when comparing to 2, 3 years in which there was a big drought, the productivity that year is still big. So we do not have effectively problems, major problems in this one due to the volume that we commercialize and the losses within Agro were not that significant. I think that agro and [indiscernible] up coming in a position in terms of productivity that is much higher than it had in the last 2 years.
Our next question comes from Willis Salon, buy-side analyst from Tejas.
I would like to know what you think is more replicable in the company?
Okay, Frizzo, can you answer that? I think the question has to do with our competitive advantages.
What I usually say is that we do not have a sole source of advantages. We have some different issues at the company that made us have a totally different position, which has a complete portfolio to meet the part of Nutrition and Defense. We have one of the most complete portfolios of the market. Our biological technologies are in the market. It's the most advanced company in this aspect, we were able to work on the crops it 100% biological one. This is a company that has many years in the market recognize accessing the market in all the regions with a strong team. So Vittia is adding up to the competencies that bring a different position in the market. This is our understanding. I don't know if -- I mean we do not have a patent if something is truly replicable, which is difficult to -- what is it what replicate is an asset that we have been building for more than 50 years, all of these advantages together in the same company.
Precisely that the sole point is that you said, we had no patent, and we have an expertise of more than 50 years. We know that technology is only a top when you were in the market. The market is dynamic. It seeks to mirror works in this sense. I know that Vittia is shown in this sense because we feel very clearly everything that we create of improvement of new solutions, the market runs to try to do a replica of this. So Vittia understands this and that it works on, I think that one of our greatest strengths is to have this commercial strategy of more than 50 years. R&D is very different. Here, we have [indiscernible] partner for the company to me. This is a guy that most knows this in terms of bio defenders in Brazil, and this is the work that we have been doing.
Our next question comes from Nicolas.
What is the capacity of [indiscernible] plant a full one? What would be the barest potential for the revenue?
Look, we have a company that has an extensive portfolio. Of course, we have a thing that we are understanding with soil micronutrients, the plan that we have a certain capacity of increasing not as strongly when we go to our world of biodefenders. Biopesticides, we have a very interesting capacity of increasing production. We have right now a work from the growth of business of this plant be part of special fertilizers, we have some issues. I mean generalizing everything. The company has a growth potential with its CapEx right now. But as to the volume of revenue that we could reach we do not have this value consolidated to pass to you.
I think that's it, Frizzo. I think we can do some exercise, but I think it's difficult. What we usually said is that in our biological plan, we have a capacity that is still very relevant, of course, depending on some investments. We presented this picture in a more detailed way. In our Vittia Day in the end of last year, this still persists, but we can alter this with what we have been working in the industrial part, even in improving our productivity. So about the biologicals, without a doubt we can [indiscernible] or try pull the revenue of Biopesticides in the structure that we have, of course, with some adjustments in general, that's it.
Our next question comes from WL Engle an Investor from [indiscernible].
After April 3, how is it different for the next semester?
I think [indiscernible] call is not working. Well, Gabriel, we had a level of receivable in April 30. That was very good. Now we had an interesting volume this coming from the movement from '23 and '30. We hope that we -- to receive it. There is nothing complex. We went from the question from Fabio, we won't have major problems. But I cannot answer you what would be the provision for I think those who can talk about this is Frizzo.
I'm sorry, I think the Internet did not work. Talking about [indiscernible]. Well, we had already said we had a small portfolio. You're going to save around BRL 12 million, between BRL 30 million and also for September it's BRL million and so on, being that I would say that 80% of that is as Wilson said, in unaffected regions. We have 20% in those who were affected, but we still do not have a clear view of how the payment would be. And if this just be a delay we still need to wait to have a better view. But you can see that this is not representative when we see the total.
So that's around BRL 12 million from the [indiscernible] that portfolio around 80%. So this [indiscernible] that we have in affected regions does not concern us about the nonpayment, the total loan payment for the company.
Just coming back to the question, had asked how was the PDG for the second quarter now that April has gone through?
It is normal. I mentioned this in the presentation. We are a normal PD. Vittia did not enter any legal recovery. We cannot promise that this will continue like so, but we can say that we did not enter in anyone. And we are hoping May 30 with no surprises, let's just try to have this view. We're going to be able to have this view on the next month.
Our next question comes from Jon Festes a buyside analyst from [ Audi Capital. ]
Hello, what's the component of growth in biologicals -- based on the recent requests that is referenced to the launch project -- the products that were launched recently. Could you talk about the difference of mergers in biological between new products and old products? And third, how do you see the impact of generic chemical funders with smaller prices in adaptive biologicals ?
Frizzo would you like to talk about this, and I will talk about the impact.
Sorry, sorry, I was could you repeat this, the margin?
Of course could you talk about the difference of biologicals between new products versus new?
Well, we do not have projects with relevance that were launched in the last, let's say, 12 months. So we are not having a big difference. Even these products still have a good margin -- what's happening is that we are beginning the process of these projects being more consolidated, we have a higher level of competition and so on. It's what we said, we are talking about a margin of around 70%. We cannot say the launches will be with higher margin levels, 80% is on, but it will depend on the technology. As we said, we had a drop in margins, but we still have a lot of margin. So we do not have this big differential even though we can see this between all the new products. Talking about the drop by defenders, of course, biopesticides is influence the market of biologicals. An important issue, I think, that is nowadays, we have right now a view that the producer has not received this, and we can see that this is more efficient than the own biopesticide you take gain, we have an effort around 70% in a chemical dividend around 48%. But this is a technology. We even have been talking about in the market. This is a work that companies need to do, but without a doubt dropping prices in biopesticides impacts the bio defenders.
The Q&A session is now closed. We would like to pass the floor to Wilson Romanini so he can do his final considerations.
Good morning to all of you. What we can say right now is that we always have said that Vittia will be very clear we're going to be together with it. So in 2023, we had a very challenging 2023. We had right now a beginning of '24, where we had things where -- things were still without any signals and you see that things are accommodating themselves. Agri is like this. I have been there for more than 30 years, and you have years that are excellent, you have worst years, you have normal years. what we understand right now is that this year of '24, '25 will be a good year. A normal -- much has changed, things have changed. We are always seeking to have a company that understands things and has a clear perception of these movements for us to always be able to close this in a positive manner. That's what I would like to pass to you. This scenario has changed and things will truly happen in a positive way, I think not only for Vittia, but for all the companies from agri business. That's it. Thank you very much.
This video conference is now closed. The area of investors is ready to answer further questions. We thank you for your participation, and have a good day.