Bioceres Crop Solutions Reports Fiscal Second Quarter 2023 Financial and Operational Results

Rhea-AI Summary

Bioceres Crop Solutions Corp. (NASDAQ: BIOX) reported a 7% decline in total revenues for Q2 FY23, totaling $94.4 million, primarily due to severe drought conditions in Argentina, which halved wheat output. However, sales in North America partially offset losses. The adjusted EBITDA stood at $10.3 million, a decrease of 43% YoY, with gross profit down 28%. Despite adverse weather, the HB4 Wheat technology showed a 43% yield improvement versus conventional varieties, and HB4 Soy sales were initiated in Brazil. Management expects a resumption of growth in the latter half of the fiscal year as conditions improve.

Positive

• HB4 Wheat demonstrated a 43% yield increase under drought conditions, outperforming conventional varieties.
• Revenue growth of 26% in the first half of FY23 compared to the previous year.
• Successful launch of HB4 Soy in Brazil, expanding market reach and product offerings.
• Trigall Genetics acquired 80% of wheat breeding assets in Australia.

Negative

• Total revenues decreased by 7% year-over-year, reflecting adverse weather impacts.
• Adjusted EBITDA dropped by 43% YoY, negatively affecting profitability.
• Gross profit declined by 28%, indicating pressure on margins.

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

ROSARIO, Argentina--(BUSINESS WIRE)-- 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

Source: Bioceres Crop Solutions Corp.

FAQ

What were Bioceres' Q2 FY23 revenue figures?

Bioceres reported total revenues of $94.4 million for Q2 FY23, a 7% decline year-over-year.

How did the drought in Argentina impact Bioceres' financial results?

The severe drought in Argentina reduced wheat output by 50%, contributing to a decrease in total revenues and gross profit.

What is the expected impact of HB4 technology on future revenue?

Management anticipates that HB4 technology could generate an additional $15-$20 million in EBITDA by FY24.

How did the company perform in the first half of FY23 compared to last year?

For the first half of FY23, Bioceres saw a 26% increase in total revenues compared to the previous year.

When will Bioceres provide updates on its financial performance?

Bioceres will host a conference call on February 9, 2023, to discuss its financial results and outlook.