Severe drought in Argentina temporarily
interrupted growth trajectory; decline in Argentina partially
offset by higher sales in North America
HB4 Wheat outperformed top commercial
varieties, on average, across all environments with a 43% yield
increase in targeted conditions
Bioceres Crop Solutions Corp. (Bioceres) (NASDAQ:
BIOX), a fully integrated provider of crop productivity
solutions designed to enable the transition of agriculture towards
carbon neutrality, announced financial results for the fiscal
second quarter ended December 31, 2022. Financial results are
expressed in U.S. dollars and are presented in accordance with
International Financial Reporting Standards. All comparisons in
this announcement are year-over-year (YoY), unless otherwise
noted.
FINANCIAL & BUSINESS HIGHLIGHTS
- Historical drought during 2Q23 in Argentina slashed
wheat output by 50% countrywide and delayed soybean and corn
planting. Planting progress for soybeans lagged by 20-to-30
percentage points as compared with the historical average for the
entire optimal planting window.
- Total revenues in 2Q23 were $94.4 million, a 7% decrease
compared with the pro forma revenues for the second quarter of last
year, which include historical revenues from Pro Farm. Sales growth
in North America partially offset the decline in Argentina.
- Adjusted EBITDA for the quarter was $10.3 million and
was primarily affected by a decline in gross profit contribution
from sales in Argentina.
- Under severe drought conditions HB4 Wheat showed higher
yields than conventional varieties across all environments, with an
average 43% yield improvement in targeted environments. Seed
inventories and product performance are on track to meet FY23
expectations.
- HB4 Soy is on track despite unusually difficult planting
conditions in Argentina. Half of the current seed multiplication
area has been planted with new generation varieties. HB4 Soy
program was launched with growers in Brazil.
- Trigall Genetics (a Bioceres joint venture) closed the 80%
acquisition of wheat breeding assets in Australia.
MANAGEMENT REVIEW
Mr. Federico Trucco, Bioceres´ Chief Executive Officer,
commented: “As we anticipated during our prior earnings call, our
growth momentum has been transiently interrupted by unusually
severe drought conditions in Argentina, which extended throughout
the entire planting window for summer crops. Although we are flat
when compared with last year’s revenue for the quarter, we are down
by 7% year-over-year for this three-month period on a pro forma
basis after including Pro Farm’s operations. This circumstantial
decline interrupts a run of seven consecutive quarters of top-line
growth and profitability expansion, which we expect to resume in
the second half of the fiscal year as weather conditions have
turned more favorable in our key commercial regions.”
“On a less circumstantial and more permanent front, the severe
drought conditions in Argentina have allowed us to put HB4
technology to the test, like never before. The performance of HB4
wheat has been outstanding on all fronts. In environments yielding
less than 2 tons per hectare, HB4 wheat has outperformed commercial
materials by an average yield improvement of 43%, winning in seven
out of every 10 locations and, averaging a win rate of eight out of
10 when aggregating the last three seasons. When confounding
effects from background genetics are neutralized ‒ as is the case
for comparisons among isogenic varieties (i.e. varieties that are
nearly genetically identical except for the presence of the HB4
gene) ‒ HB4 win rates increase to above 80%, across all
environments, not just those with yields below 2 tons per hectare,
ratifying the broad hectare opportunity resulting from the
technology.”
“From an HB4 wheat inventories perspective, we can cover up to
one-third of next season’s HB4 plantings with second generation
materials, allowing us to replace first generation varieties almost
fully by FY24, when we expect HB4 wheat to deliver $15-to-$20
million in incremental EBITDA. As a reminder, second-generation
materials show a double-digit genetic gain when compared with
first-generation materials in high-yielding environments,
outperforming top commercial varieties even when yields average
more than 4 tons per hectare.”
Mr. Enrique Lopez Lecube, Bioceres´ Chief Financial Officer,
noted, “While our fiscal second quarter results were adversely
affected by the severe drought in Argentina, we also saw the
benefit of strategic actions that drove our positive performance
for the first half of 2023 and will benefit our results going
forward. Our priorities to diversify our product portfolio, expand
our geographic presence and maintain a strong alliance with our
grower customers – all with an eye on managing costs – will allow
us to continue the momentum we saw in the first half of the year,
and drive further Adjusted EBITDA improvement. Moving forward, we
believe the extreme weather conditions we are seeing around the
world highlight the increasing need for our products. While weather
may temporarily affect our quarterly results from time to time, our
long-term growth trajectory remains robust.”
KEY FINANCIAL METRICS (In millions of U.S. dollars,
unless where otherwise stated)
Table 1: 2Q23 & 1H23 Key Financial
Metrics
2Q22 Pro forma1
2Q23
% Change
1H22 Pro forma1
1H23
% Change
Revenue by Segment
Crop Protection
56.3
53.3
(5%)
97.3
116.3
20%
Seed and Integrated Products
15.3
16.3
7%
24.0
30.2
26%
Crop Nutrition
29.5
24.7
(16%)
54.3
75.0
38%
Total Revenue
101.1
94.4
(7%)
175.6
221.5
26%
Gross Profit
48.7
35.3
(28%)
82.6
86.7
5%
Gross Margin
48.1%
37.4%
(1,076 bps)
45.5%
40.5%
(505 bps)
2Q22 Pro forma1
2Q23
% Change
1H22 Pro forma1
1H23
% Change
Adjusted EBITDA
18.3
10.3
(43%)
30.8
34.9
13%
1.
2Q22 and 1H22 pro forma financials include
Pro Farm historical numbers.
Summary: Drought in Argentina drove the decline in 2Q23
Crop Protection and Crop Nutrition revenues, partially offset by
moderate growth in the Seed and Integrated Products segment, which
included first-time HB4 Soy sales. Lower sales in Argentina were
partially offset by growth in other Latin American geographies.
Additionally, Pro Farm biological products delivered higher sales
in North America in the quarter, diversifying the product portfolio
internationally and in new product markets. Some 2Q23 sales were
realized in 1Q23 as commercial teams in Argentina locked-in early
sales to distributors and growers in anticipation of challenging
weather conditions. As a result, while revenues for 2Q23 decreased
7%, sales for 1H23 increased 26%. Overall gross profit declined 27%
in the quarter, a function of product mix and lower pricing for key
products in Argentina, where the commercial strategy focused on
increasing farmer proximity and preserving market share. Lower
sales and gross margins resulted in a lower Adjusted EBITDA of
$10.3 million. For the first half of FY23, gross profit was up 5%
and Adjusted EBITDA, at $34.9 million, was 13% higher
year-over-year on a pro forma basis.
For a full version of Bioceres fiscal second quarter 2023
earnings release, click here.
SECOND QUARTER 2023 EARNINGS CONFERENCE CALL
Management will host a conference call and question-and-answer
session, which will be accompanied by a presentation available
during the webcast or accessed via the investor relations section
of the company’s website.
To access the call, please use the following information:
Date:
Thursday, February 9, 2023
Time:
8:30 a.m. EST, 5:30 a.m. PST
Toll Free dial-in number:
1-844-200-6205
Toll/International dial-in
number:
1-929-526-1599
Conference ID:
689739
Webcast:
Click here
Please dial in 5-10 minutes prior to the start time to register
and join.
The conference call will be broadcast live and available for
replay here and via the investor relations section of the company’s
website here.
A replay of the call will be available through February 14,
2023, following the conference.
Toll Free Replay Number:
1-866-813-9403
International Replay Number:
+44 204 525 0658
Replay ID:
195470
About Bioceres Crop Solutions
Corp.
Bioceres Crop Solutions Corp. (NASDAQ: BIOX) is a fully
integrated provider of crop productivity technologies designed to
enable the transition of agriculture towards carbon neutrality. To
do this, Bioceres’ solutions create economic incentives for farmers
and other stakeholders to adopt environmentally friendlier
production practices. The company has a unique biotech platform
with high-impact, patented technologies for seeds and microbial
ag-inputs, as well as next generation Crop Nutrition and Protection
solutions. Through its HB4® program, the company is bringing
digital solutions to support growers’ decisions and provide
end-to-end traceability for production outputs. For more
information, visit here.
Forward-Looking Statements
This communication includes “forward-looking statements” within
the meaning of the “safe harbor” provisions of the United States
Private Securities Litigation Reform Act of 1995. Forward-looking
statements may be identified by the use of words such as
“forecast,” “intend,” “seek,” “target,” “anticipate,” “believe,”
“expect,” “estimate,” “plan,” “outlook,” and “project” and other
similar expressions that predict or indicate future events or
trends or that are not statements of historical matters. Such
forward-looking statements include estimated financial data and,
among others, statements related to the expected or potential
impact of the novel coronavirus (COVID-19) pandemic, and the
related responses by governments, clients and the company, on our
business, financial condition, liquidity position and results of
operations, and any such forward-looking statements, whether
concerning the COVID-19 pandemic or otherwise, involve risks,
assumptions and uncertainties. These forward-looking statements
include, but are not limited to, whether (i) the health and safety
measures implemented to safeguard employees and assure business
continuity will be successful, (ii) the uncertainty related to
COVID-19 in the farming community will be short lived, and (iii) we
will be able to coordinate efforts to ramp up inventories. Such
forward-looking statements are based on management’s reasonable
current assumptions, expectations, plans and forecasts regarding
the company’s current or future results and future business and
economic conditions more generally. Such forward-looking statements
involve risks, uncertainties and other factors, which may cause the
actual results, levels of activity, performance or achievement of
the company to be materially different from any future results
expressed or implied by such forward-looking statements, and there
can be no assurance that actual results will not differ materially
from management’s expectations or could affect the company’s
ability to achieve its strategic goals, including the uncertainties
relating to the impact of COVID-19 on the company’s business,
operations, liquidity and financial results and the other factors
that are described in the sections entitled “Risk Factors” in the
company's Securities and Exchange Commission filings updated from
time to time. The preceding list is not intended to be an
exhaustive list of all of our forward-looking statements.
Therefore, you should not rely on any of these forward-looking
statements as predictions of future events. All forward-looking
statements contained in this release are qualified in their
entirety by this cautionary statement. Forward-looking statements
speak only as of the date they are or were made, and the company
does not intend to update or otherwise revise the forward-looking
statements to reflect events or circumstances after the date of
this release or to reflect the occurrence of unanticipated events,
except as required by law.
Unaudited Consolidated Statement of
Comprehensive Income
(Figures in U.S. dollars)
Three-month period ended
12/31/2022
Three-month period ended
12/31/2021
Total revenue
94,410,185
92,662,853
Cost of sales
(59,138,119)
(55,332,989)
Gross profit
35,272,066
37,329,864
% Gross profit
37%
40%
Operating expenses
(32,424,008)
(20,198,593)
Share of profit of JV
40,048
1,141,323
Other income or expenses, net
(669,137)
(571,365)
Operating profit
2,218,969
17,701,229
Financial result
(9,963,524)
(8,221,621)
Profit/(loss) before income tax
(7,744,555)
9,479,608
Income tax
(615,529)
(4,141,102)
Profit/(loss) for the period
(8,360,084)
5,338,506
Other comprehensive profit/(loss)
585,883
7,893,351
Total comprehensive profit/(loss)
(7,774,201)
13,231,857
Profit/(loss) for the period
attributable to:
Equity holders of the parent
(8,662,197)
3,427,093
Non-controlling interests
(550,212)
3,427,093
(9,212,409)
6,854,186
Total comprehensive profit/(loss)
attributable to:
Equity holders of the parent
(8,285,010)
3,427,093
Non-controlling interests
(341,516)
3,157,855
(8,626,526)
6,584,948
Weighted average number of
shares
Basic
62,710,957
41,104,331
Diluted
62,710,957
42,403,196
Unaudited Consolidated Statement of
Financial Position
(Figures in U.S. dollars)
ASSETS
12/31/2022
06/30/2022
CURRENT ASSETS
Cash and cash equivalents
68,550,022
33,475,266
Other financial assets
18,882,388
5,401,133
Trade receivables
178,230,222
111,752,310
Other receivables
25,653,800
19,327,584
Income and minimum presumed income taxes
recoverable
1,674,314
1,647,398
Inventories
157,647,583
126,044,122
Biological assets
581,100
57,313
Total current assets
451,219,429
297,705,126
NON-CURRENT ASSETS
Other financial assets
1,104,718
619,841
Trade receivables
-
200,412
Other receivables
3,173,261
2,254,199
Income and minimum presumed income taxes
recoverable
18,465
44,412
Deferred tax assets
4,619,306
4,011,374
Investments in joint ventures and
associates
38,810,692
38,554,092
Property, plant and equipment
63,794,675
49,908,325
Intangible assets
174,412,251
76,704,869
Goodwill
122,532,487
36,073,685
Right-of-use leased asset
13,164,994
12,144,026
Total non-current assets
421,630,849
220,515,235
Total assets
872,850,278
518,220,361
LIABILITIES
12/31/2022
06/30/2022
CURRENT LIABILITIES
Trade and other payables
160,017,912
125,849,620
Borrowings
105,462,623
71,301,468
Employee benefits and social security
9,867,633
7,619,121
Deferred revenue and advances from
customers
61,233,268
5,895,313
Income tax payable
1,012,347
7,538,764
Consideration for acquisition
1,943,216
3,048,562
Lease liabilities
3,007,806
1,412,904
Total current liabilities
342,544,805
222,665,752
NON-CURRENT LIABILITIES
Trade and other payables
810,921
-
Borrowings
79,109,119
74,177,169
Investments in joint ventures and
associates
122,059
717,948
Deferred tax liabilities
46,130,828
29,005,943
Provisions
5,543,219
603,022
Consideration for acquisitions
8,467,428
9,854,228
Convertible notes
72,558,213
12,559,071
Lease liability
10,880,795
10,338,380
Total non-current liabilities
223,622,582
137,255,761
Total liabilities
566,167,387
359,921,513
EQUITY
Equity attributable to owners of the
parent
272,692,323
127,358,573
Non-controlling interests
33,990,568
30,940,275
Total equity
306,682,891
158,298,848
Total equity and liabilities
872,850,278
518,220,361
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230208006033/en/
Bioceres Crop Solutions Paula Savanti Head of Investor
Relations investorrelations@biocerescrops.com
Bioceres Crop Solutions (NASDAQ:BIOX)
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