Norofert announces 10% increase in revenue and a 24% in net profit in 9M 2024

Norofert, the leading producer of organic agricultural inputs and biotechnology provider for agriculture in Romania, listed on the AeRO market of the Bucharest Stock Exchange, recorded a turnover of RON 35.5 million in the first nine months of 2024, marking a 10% increase compared to the same period last year. This growth was driven by the production and commercialization of agricultural inputs, including results from the USA operations.   Despite a challenging agricultural context in Romania, characterized by drought and low crop prices, the company demonstrated resilience and achieved a net profit increase of over 24%, reaching RON 1.4 million in the first nine months of 2024.   Vlad Popescu, President of the Board, Norofert: „The results achieved in the first nine months of the year reflect the company’s ability to adapt to a challenging context and confirm the viability of our business model. Additionally, in Q3 2024, we announced the expansion of operations in Brazil through a strategic partnership and the construction of a new factory in collaboration with the Brazilian group Engenutri. Furthermore, we are preparing to launch a corporate bond issuance worth RON 15 million, which will support investments in expanding the irrigation infrastructure at the Zimnicea farm and accelerating international market expansion. Our strategic priorities remain focused on increasing our presence in the U.S. and Brazil, along with continuous innovation in developing solutions for sustainable agriculture. We are confident that our long-term strategy will deliver value to our shareholders, customers, and partners.”   Key consolidated figures for the first 9 months of 2024: The Group’s fixed assets reached RON 28.3 million, a 21% increase, primarily due to investments in the irrigation system and the research laboratory. These assets are essential for the company’s development strategy, enabling the production of a broader range of products and ensuring a stronger competitive market position. Receivables remained at a similar level compared to last year, reflecting a cautious sales policy, as the agricultural sector experienced a very challenging year. The collection rate remained high, at approximately 93%, due to rigorous client selection and a prudent risk management policy. Total liabilities amounted to RON 57.3 million, representing an increase of nearly 4% compared to the same period last year, driven by the increase in the factoring ceiling required to finance sales and improve cash flow. Operating revenues amounted to RON 38 million, a decrease of only 1%, mainly influenced by the lack of liquidity in the agribusiness market during the first half of 2024. Operating expenses remained similar to last year, at approximately RON 34 million. The operating profit was RON 4.2 million, almost 9% lower than the same period last year, due to higher depreciation expenses. Under these conditions, the company’s net profit was RON 1.4 million, marking a 24% increase compared to the result recorded in the first nine months of 2023.   Announced investments in the first 9 months of 2024:   In Romania: The completion of the first stage of the research laboratory in Filipestii de Padure and the contracting of a RON 4.1 million loan through the IMM INVEST Plus program for the acquisition of irrigation systems and pivot irrigation equipment.   The funds are being used to finalize the irrigation system for 340 hectares out of the 1,000 hectares operated organically at the Zimnicea Farm. The total value of the investment project is approximately RON 4.9 million, of which the company’s own contribution will be 15%.   In the USA: Norofert inaugurated a production line in Watertown, South Dakota, in May 2024, with a capacity of 8,000 liters per day. This facility allows the company to produce specialized inputs for soil health and foliar nutrition, utilizing bacteria produced in the Filipestii de Padure laboratory.   The investment of EUR 250,000 for assembling the input production line was carried out through Norofert AG, a company established in partnership with Gary Lamb, an entrepreneur with over 30 years of experience in agribusiness in the Midwest, USA.   Additionally, the company signed a distribution contract with one of the major distributors in Watertown, covering the regions of South Dakota, North Dakota, and Minnesota.   In Brazil: The establishment of Norofert Brasil LTDA, in partnership with Engenutri, for the construction of a factory with a capacity of 15,000 liters per day. The project, valued at EUR 500,000, is co-financed by both partners.   Norofert Brasil LTDA will begin the construction of the factory in November, and the work is estimated to be completed in approximately two months. The space for the production line, covering 500 sqm, has already been contracted, and bacteria produced at the Filipestii de Padure laboratory in Romania will be used.   The product approval process for the Brazilian market is expected to be completed by June 2025.   Financial results for the first 9 months of 2024 are presented according to RAS (Romanian Accounting Standards) and under IFRS (International Financial Reporting Standards).   The group’s consolidated results include the performance of the parent company, Norofert S.A., as well as that of the 100% owned subsidiary Agroprod CEV S.R.L. Agroprod CEV cultivates 1,000 hectares of agricultural land under organic management in Zimnicea, Teleorman County. The consolidation also includes 51% of the results from NOROFER AG LLC.