UPL Ltd reported a net loss of ₹384 crore for the quarter ended June 2024 on flattish revenue growth and challenges in its seeds business. The company posted a net profit of ₹166 crore in the same quarter last year
Revenue growth for the June quarter was flat at 1 per cent at ₹9,076 crore over the same period last year’s ₹8,963 crore. The revenue growth was driven by a 16 per cent increase in volumes, a 14 per cent decline in prices and a negative foreign exchange impact of 1 per cent, the company said.
UPL’s seeds business faced headwinds on account of weather challenges that impacted production, created inventory shortages and supply constraints leading to a revenue drop of 7 per cent and EBITDA drop of 30 per cent year on year.
“We continue to see strong fundamentals in the global crop protection market, with farm gate demand for our products at or above last year levels in most regions. Herbicides led the growth in North America, driven by glufosinate and clethodim. Our herbicide performance in Brazil also did well. Fungicides growth was led by higher volumes in Europe and North America. Revenue growth in our Natural Plant Protection (NPP) business was impressive, up 10 per cent versus last year, driven by a strong performance in Europe, among other regions.” said Mike Frank, CEO, UPL Corporation Ltd.
UPL’s India revenues were down nine per cent at ₹1,872 crore over the same period last year’s ₹2,054 crore. Ashish Dobhal, CEO, UPL SAS, said, “On our India Crop Protection business, we continued our efforts to restructure the business through strict credit policies and tighter credit terms, which lead to a postponement of sales closer to season, and the consequent impact on Q1FY25 revenues. However our contribution margins and cash flows have improved and working capital reduced, giving us the confidence that this is the right structural move for us in India.”
UPL scrip closed 4 per cent lower at ₹537.70 on the BSE on Friday. Bhupen Dubey, CEO, Advanta, said: On our global seeds platform, Advanta, we saw some headwinds in Q1FY25 on account of weather challenges that impacted production, created inventory shortages and supply constraints, leading to the impact on sales and EBITDA margins.”
Frank said, “Our contribution margin compressed by about 600 bps vs Q1FY24. This was primarily due to price decline, and partially offset with lower cost of goods. Increased freight costs and foreign exchange were also headwinds on margins this quarter”.