SINGAPORE, Aug. 08, 2025 (GLOBE NEWSWIRE) — Verde AgriTech Ltd (TSX: “NPK”) (“Verde” or the “Company“) announces its financial results for the period ended June 30, 2025 (“Q2 2025“). All figures are in Canadian dollars, unless stated otherwise. Average exchange rate in Q2 2025: C$1.00 = R$4.08.
Q2 2025 HIGHLIGHTS
Operational and Financial Highlights
- Verde’s sales volume in Q2 2025 was 80,354 tons; a 6% reduction compared to Q2 2024, which generated $4.8 million in revenue during the quarter.
- Gross margin excluding freight was 58% during the quarter, compared to Q2 2024 gross margin of 55%.
- Sales and Marketing expenses in Q2 2025 were -$0.9 million, compared to -$1.0 million in Q2 2024.
- Positive operating cash inflow of $0.2 million was recorded during the quarter, compared to -$0.3 million cash outflow in Q2 2024.
- EBITDA before non-cash events was -$0.2 million in Q2 2025, compared to nil in Q2 2024.
- Net loss in Q2 2025 was -$2.4 million, compared to a -$2.6 million loss in Q2 2024.
- Cash of $2.4 million in Q2 2025 compared to $2.7 million in Q2 2024. Short-term receivables in the quarter were $8.2 million compared to $12.8 million in Q2 2024.
- The Company successfully completed the renegotiation of short-term and long-term loans in Q2 2025, with approximately 99.5% of loans classified as long-term versus 19.8% prior to the renegotiation. Short-term loans totaled $0.2 million in the quarter, compared to $22.9 million in Q2 2024.
Sustainability Highlights
- Product sold in Q2 2025 has the potential to capture up to 9,640 tons of carbon dioxide (“CO2“) from the atmosphere via Enhanced Rock Weathering (“ERW“).1 The potential net amount of carbon captured is estimated at 6,890 tons of CO2. In addition to the carbon removal potential, Q2 2025 sales avoided the emissions of 4,102 tons of CO2e, by substituting potassium chloride (“KCl“) fertilizers.2 Combining the potential carbon removal and carbon emissions avoided by the use of the product since the start of production in 2018, Verde’s total potential impact stands at 315,564 tons of CO2.3
- 6,368 tons of chloride have been prevented from being applied into soils in Q2 2025, by farmers who used the Product in lieu of KCl fertilizers.4 A total of 182,002 tons of chloride has been prevented from being applied into soil by Verde’s customers since the Company started production.5
“Against a backdrop of tight credit and elevated interest rates, our team delivered a resilient second quarter,” said Cristiano Veloso, Founder and Chief Executive Officer of Verde AgriTech. “By renegotiating more than 99 per cent of our debt into long‑term maturities, cutting unit production costs, and preserving a best‑in‑class 58 per cent gross margin (ex‑freight), we have fortified the balance sheet and protected cash flow while Brazil’s farm economy cycles through unprecedented volatility.”
“At the same time, every ton we sold in Q2 puts money back in growers’ pockets and carbon back in the ground. Since first production, our products have the potential to remove or avoid over 315,000 tons of CO₂ and have kept 182,000 tons of chloride out of Brazilian soils. That double dividend—higher crop productivity and climate impact—continues to differentiate Verde in the fertilizer market.”
“Looking ahead to the second half, our presence in core regions, launching tailored multi‑nutrient formulations. These priorities position Verde to capture the upside when sector demand rebounds, while creating enduring value for our customers, communities and shareholders.”
Q2 2025 IN REVIEW
Market Analysis
In Q2 2025, Brazil’s agricultural input sector continued to navigate the lingering effects of a prolonged downturn that began in 2022. High indebtedness among farmers and distributors, combined with limited access to credit and adverse market dynamics, led to cautious purchasing behavior. Many agribusinesses remain engaged in debt renegotiation processes — either judicial or informal — while suppliers across the chain have tightened credit policies and prioritized liquidity.6
Despite this challenging backdrop, certain indicators signaled a possible shift in market dynamics. Potash prices, particularly for potassium chloride (KCl), remained stable and showed a modest upward trend throughout the quarter.7
Like Verde, other players in the sector adopted measures to safeguard operations and improve resilience. Companies face a combination of climate-related delays, lower technology adoption, and farmer cost containment. Many have launched debt restructuring efforts to reduce short-term liabilities, preserve liquidity, and secure more sustainable financial terms.8 These actions reinforce a sector-wide emphasis on cost discipline, credit selectivity, and long-term stability. Verde maintained a conservative commercial strategy throughout the quarter, limiting sales exposure to higher-risk clients.
Macroeconomic Conditions
The macroeconomic environment in Brazil remained restrictive during Q2 2025. The SELIC rate stood at 15.00% at the end of the quarter and remained unchanged in the following month9— still among the highest real interest rates globally. These financing conditions continue to constrain credit availability for rural producers and delay investments in agricultural inputs. Projections suggest that the SELIC will remain at current levels through the end of 202510, while JP Morgan foresees it to gradually decrease to 10.75% by the end of 2026.11
Inflation forecasts for 2025 and 2026 stand at 5.10% and 4.40%12, respectively, suggesting a cautiously optimistic outlook that Brazil’s macroeconomic environment may be on a path toward stabilization in the medium term. Although working capital remains tight for many farmers, especially during the critical period for purchasing inputs such as fertilizers, the industry has adapted by shifting payment terms to post-harvest settlements, typically between 9 and 12 months. This practice, while standard in the agricultural sector, requires careful management of cash flow and credit exposure across the supply chain.
Global political developments involving key Brazilian trading partners, along with ongoing discussions around taxation and regulation, have introduced some uncertainty for farmers considering long-term investments. In response, many are taking a more conservative approach, prioritizing essential inputs and maintaining financial discipline. While this cautious sentiment has moderated short-term fertilizer demand, it also reflects a broader focus on operational efficiency and strategic resource allocation. As greater clarity emerges around policy and market dynamics, purchasing activity may begin to recover.13
EXTERNAL FACTORS
Revenue and costs are affected by external factors including changes in the exchange rates between the C$ and R$ along with fluctuations in potassium chloride spot CFR Brazil, agricultural commodities prices, interest rates, among other factors. For further details, please refer to the Q2 2025 Year in Review section.
RESULTS OF OPERATIONS
The following table provides information about three months ended June 30, 2025, as compared to the three months ended June 30, 2024. All amounts in CAD $’000.
| All amounts in CAD $’000 | 3 months ended Jun 30, 2025 |
3 months ended Jun 30, 2024 |
6 months ended Jun 30, 2025 |
6 months ended Jun 30, 2024 |
||||
| Tons sold ‘000 | 80 | 85 | 128 | 170 | ||||
| Average Revenue per ton sold $$ | 60 | 76 | 60 | 68 | ||||
| Average Production cost per ton sold $ | (16 | ) | (21 | ) | (16 | ) | (21 | ) |
| Average Gross Profit per ton sold $ s | 44 | 55 | 44 | 47 | ||||
| Gross Margin | 73 | % | 72 | % | 73 | % | 70 | % |
| Revenue | 4,800 | 6,480 | 7,652 | 11,548 | ||||
| Production costs(1) | (1,316 | ) | (1,815 | ) | (2,073 | ) | (3,486 | ) |
| Gross Profit | 3,484 | 4,665 | 5,579 | 8,062 | ||||
| Gross Margin | 73 | % | 72 | % | 73 | % | 70 | % |
| Sales and marketing expenses | (891 | ) | ||||||