Following the consummation on March 14, 2019 of the previously
announced business combination between Bioceres LLC and Union
Acquisition Corp., Bioceres Crop Solutions Corp. (“Bioceres Crop
Solutions”, the “Company”, “we”, “us” or “our”) (NYSE American:
BIOX), a fully integrated provider of crop productivity solutions
company, today announced its consolidated financial results for the
three-month and six-month periods ended December 31, 2018.
Second Quarter ended December 31, 2018
highlights
- Revenues increased by 33% to
$62.5 million, as compared to $47.1 million during the same period
in 2017.
- Gross profit increased by 52% to
$29.3 million, as compared to $19.3 million during the same period
in 2017.
- Adjusted EBITDA increased by
121% or $11.1 million to $20.3 million from $9.1 million during
the same period in 2017.
Six-month period ended December 31,
2018 highlights
- Revenues increased by 14% to
$92.1 million, as compared to $81.0 million during the same period
in 2017.
- Gross profit increased by 34% to
$44.4 million, as compared to $33.1 million during the same period
in 2017.
- Adjusted EBITDA increased by 83%
or $13.2 million to $29.2 million from $16.0 million during the
same period in 2017.
“This is our first earnings report since initiating our NYSE
American listing last Friday, and we are delighted to show a very
robust performance for the last quarter and the second half of the
2018 calendar year. This financial performance is the result of
multiple growth initiatives currently under execution, most
significantly growth in our micro-beaded fertilizer and
international businesses. There is also a shift in our product mix
away from third-party products, resulting in an improvement in
gross margin profiles. Although these numbers have exceeded our
initial projections for the reported period, we are not revising at
this time our projections for our fiscal year 2019,” said Federico
Trucco, CEO of Bioceres Crop Solutions.
“Over the past two quarters we have been able to accomplish
consistent growth in revenues while increasing our Adjusted EBITDA
margin. These results have led to a total Adjusted EBITDA of $35.6
million for the last twelve-month (“LTM”) period ended December 31,
2018. Despite being very satisfied with this strong margin
performance, we do not anticipate this trend to expand throughout
the following two quarters and therefore maintain $38 million as
our Adjusted EBITDA target for the full fiscal year ending June
2019,” said Enrique López Lecube, CFO of Bioceres Crop
Solutions.
The unaudited financial information in this press release has
been prepared consistently with International Accounting Standards
34, “Interim Financial Reporting” as issued by the International
Accounting Standards Board.
This press release does not contain Bioceres Crop Solutions’
financial information but presents the financial information of the
Bioceres Inc Crop Business (as defined below) on a carve-out basis,
combined with that of Bioceres Semillas S.A. (collectively, the
“Group”).
The Bioceres Inc Crop Business is defined as the contributed
crop business net assets made by Bioceres, Inc. (which was
converted to Bioceres LLC) to BCS Holdings, Inc (a wholly-owned
subsidiary of Bioceres Crop Solutions) pursuant to the business
combination that was consummated on March 14, 2019.
Considering the recent completion of the business combination
between Bioceres LLC and Union Acquisition Corp., Bioceres Crop
Solutions will not hold a conference call at this time. Instead,
the Company intends to host a conference call and webcast to
comprehensively discuss its full annual results and performance for
the fiscal year ending June 30, 2019 at the time of their
release.
About Bioceres Crop Solutions
Bioceres Crop Solutions is a fully integrated provider of crop
productivity solutions, including seeds, seed traits, seed
treatments, biologicals, high-value adjuvants and fertilizers.
Unlike most industry participants that specialize in a single
technology, chemistry, product, condition or stage of plant
development, Bioceres Crop Solutions has developed a
multi-discipline and multi-product platform capable of providing
solutions throughout the entire crop cycle, from pre-planting to
transportation and storage. Bioceres Crop Solutions’ platform is
designed to cost effectively bring high value technologies to
market through an open architecture approach. Bioceres Crop
Solutions’ headquarters and primary operations are based in
Argentina, which is its key end-market as well as one of the
largest markets globally for genetically modified crops. Through
its main operational subsidiary Rizobacter, Bioceres Crop Solutions
has a growing and significant international presence, particularly
in Brazil and Paraguay.
For more information, visit www.biocerescrops.com.
Forward-Looking Statements
This press release includes “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements are subject to known and
unknown risks and uncertainties, many of which may be beyond our
control. We caution you that the forward-looking information
presented in this press release is not a guarantee of future
events, and that actual events may differ materially from those
made in or suggested by the forward-looking information contained
in this press release. Any forward-looking information presented
herein is made only as of the date of this press release, and we do
not undertake any obligation to update or revise any
forward-looking information to reflect changes in assumptions, the
occurrence of unanticipated events, or otherwise.
Non-IFRS Financial Information
We supplement the use of IFRS financial measures with non-IFRS
financial measures, including Adjusted EBITDA. We define Adjusted
EBITDA as profit/(loss) exclusive of financial income/(costs),
income tax benefit/(expense), depreciation, amortization,
share-based compensation and inventory purchase allocation.
We believe that Adjusted EBITDA provides useful supplemental
information to investors about us and our results. Adjusted EBITDA
is among the measures used by our management team to evaluate our
financial and operating performance and make day-to-day financial
and operating decisions. In addition, Adjusted EBITDA and similarly
titled measures are frequently used by our competitors, rating
agencies, securities analysts, investors and other parties to
evaluate companies in our industry. We also believe that Adjusted
EBITDA is helpful to investors because it provides additional
information about trends in our core operating performance prior to
considering the impact of capital structure, depreciation,
amortization and taxation on our results. Adjusted EBITDA should
not be considered in isolation or as a substitute for other
measures of financial performance reported in accordance with IFRS.
Adjusted EBITDA has limitations as an analytical tool,
including:
- Adjusted EBITDA does not reflect
changes in, including cash requirements for, our working capital
needs or contractual commitments;
- Adjusted EBITDA does not reflect our
financial expenses, or the cash requirements to service interest or
principal payments on our indebtedness, or interest income or other
financial income;
- Adjusted EBITDA does not reflect our
income tax expense or the cash requirements to pay our income
taxes;
- although depreciation and amortization
are non-cash charges, the assets being depreciated or amortized
often will need to be replaced in the future, and Adjusted EBITDA
does not reflect any cash requirements for the replacements;
- although share-based compensation is a
non-cash charge, Adjusted EBITDA does not consider the potentially
dilutive impact of share-based compensation; and
- other companies may calculate Adjusted
EBITDA and similarly titled measures differently, limiting its
usefulness as a comparative measure.
We compensate for the inherent limitations associated with using
Adjusted EBITDA through disclosure of these limitations,
presentation of our combined financial statements in accordance
with IFRS and reconciliation of Adjusted EBITDA to the most
directly comparable IFRS measure, income/(loss) for the period or
year.
Application of IAS 29
Argentina has been classified as a hyperinflationary economy
under the terms of IAS 29 from July 1, 2018. IAS 29 requires, to
adjust all non-monetary items in the statement of financial
position by applying a general price index from the day they were
booked to the end of the reporting period. At the same time, it
also requires that all items in the statement of income are
expressed in terms of the measuring unit current at the end of the
reporting period. Consequently, on a monthly basis, results of
operations for each reporting period are measured in Argentine
Pesos and adjusted for inflation by the applicable monthly
inflation rate each month. All amounts need to be restated by
applying the change in the general price index from the dates when
the items of income and expenses were initially recorded in the
financial statements. As a result, each monthly results of
operations are readjusted each successive month to reflect changes
in the monthly inflation rate.
After the restatement explained above, IAS 21 “The Effects of
Changes in Foreign Exchange Rates”, addresses the way results must
be translated under inflation accounting, stating that all amounts
shall be translated at the closing rate at the date of the most
recent statement of financial position. Accordingly, monthly
results of operations in Argentine Pesos, after adjustment for
inflation pursuant to IAS 29, as described above, must then be
converted into U.S dollars at the closing exchange rate for such
monthly reported period. This conversion changes every prior
reported monthly statement of income in U.S dollars as each monthly
amount is readjusted under IAS 29 for inflation per above and
reconverted at different exchange rates for each monthly reported
period under IAS 21. As a result, the impact of monthly
inflationary adjustments and monthly conversion adjustments vary
the results of operation month to month until year end.
Table 1: Consolidated statement of
comprehensive income
Six-monthperiod ended
Six-monthperiod ended
Three-monthperiod ended
Three-monthperiod ended
LTM periodended
12/31/2018 12/31/2017 12/31/2018
12/31/2017 12/31/2018 Total revenue 92,071,466
81,007,237 62,459,242 47,133,076 144,606,933 Cost of sales
(47,652,679) (47,866,280) (33,153,669) (27,854,647) (76,880,950)
Gross profit 44,418,787 33,140,957
29,305,573 19,278,429 67,725,983 % Gross
profit 48% 41% 47% 41% 47% Operating expenses (17,769,209)
(21,926,674) (10,640,232) (12,593,092) (35,056,323) Share of profit
(loss) of JV 812,593 (72,238) 732,437 (127,355) (1,251,970) Other
income or expenses, net (298,562) 286,772 (400,173) 343,650 28,055
Operating profit 27,163,609 11,428,817
18,997,605 6,901,632 31,445,745 Finance
result (14,546,307) (13,192,795) (810,653) (7,752,674) (42,304,228)
Profit / (Loss) before income tax 12,617,302
(1,763,978) 18,186,952 (851,042)
(10,858,483) Income tax (5,050,749) 5,856,052
(7,021,142) 5,566,215 21,716
Profit / (Loss) for the period
7,566,553 4,092,074 11,165,810
4,715,173 (10,836,767) Other comprehensive
income or (loss) (2,511,723) (11,651,111) 13,883,530 (7,494,623)
(22,694,166)
Total comprehensive income / (loss)
5,054,830 (7,559,037) 25,049,340
(2,779,450) (33,530,933) Profit for the period
attributable to: Equity holders of the parent 4,229,006 1,127,545
6,847,451 1,953,863 (7,938,072) Non-controlling interests 3,337,547
2,964,529 4,318,359 2,761,310 (2,898,695) 7,566,553 4,092,074
11,165,810 4,715,173 (10,836,767) Total comprehensive income /
(loss) attributable to: Equity holders of the parent 2,258,578
(6,184,443) 16,505,763 (2,444,850) (25,484,051) Non-controlling
interests 2,796,252 (1,374,594) 8,543,577 (334,600) (8,046,882)
5,054,830 (7,559,037) 25,049,340 (2,779,450) (33,530,933)
Table 2: Adjusted EBITDA
reconciliation
The table below provides a reconciliation
of our loss for the period/year to Adjusted EBITDA.
Reconciliation of Adjusted EBITDA:
Six-monthperiod ended
Six-monthperiod ended
Three-monthperiod ended
Three-monthperiod ended
LTM periodended
12/31/2018
12/31/2017
12/31/2018
12/31/2017
12/31/2018
Profit / (Loss) for the period 7,566,553 4,092,074
11,165,810 4,715,173 (10,836,767) Income tax (benefit)/expense
5,050,749 (5,856,052) 7,021,142 (5,566,215) (21,716) Finance
results 14,546,307 13,192,795 810,653 7,752,674 42,304,228
Depreciation of property, plant and equipment 1,084,831 1,159,959
680,547 525,528 2,155,753 Amortization of intangible assets 992,292
1,135,677 574,421 558,644 1,998,091 Inventory purchase price
allocation charge - 2,257,378 - 1,138,223 - Stock-based
compensation charges 8,921 34,219 5,117 23,679 4,707
Adjusted
EBITDA 29,249,653 16,016,050 20,257,690
9,147,706 35,604,296
Table 3: Segment information
The following tables present information
with respect to the Group’s reporting segments:
Period ended December 31, 2018
Seed
andintegratedproducts
Cropprotection
Cropnutrition
Combined Revenues Sale of goods 18,951,726
46,435,705 26,141,232 91,528,663 Royalties 518,933 518,933
Rendering of services 10,910 10,910
Government grants Grants
12,960
12,960
Total revenue 19,494,529 46,435,705
26,141,232 92,071,466
Cost of
sales (6,285,219) (26,078,960)
(15,288,500) (47,652,679)
Gross margin per
segment 13,209,310 20,356,745
10,852,732 44,418,787
Period ended
December 31, 2017
Seed
andintegratedproducts
Cropprotection
Cropnutrition
Combined Revenues Sale of goods 17,309,050
45,702,056 17,733,705 80,744,811 Royalties 150,335 150,335
Rendering of services 83,424 83,424
Government grants Grants
28,667
28,667
Total revenue 17,571,476 45,702,056
17,733,705 81,007,237
Cost of
sales (8,897,005) (30,573,546)
(8,395,729) (47,866,280)
Gross margin per
segment 8,674,471 15,128,510
9,337,976 33,140,957
Comparison of segment information for the six-month period
ended December 31, 2018 and 2017
As of July 1, 2018, the Group began to apply IAS 29 “Financial
reporting in hyperinflationary economies” to its financial
statements. As a result, results of operations for the six-month
period ended December 31, 2018 have been adjusted for the
application of such standard, while results of operations for the
six-month period ended December 31, 2017 have not.
Revenue
The change in the translation mechanism from the application of
IAS 29 had a positive impact of $2.8 million in the six-month
period ended December 31, 2018; however, excluding such impact,
sales increased by $7.5 million in crop nutrition revenues, by $1.4
million in seed and integrated products and decreased by $0.7
million in crop protection.
Revenue by business segment
Crop Protection. Revenue was $46.4 million for the
six-month period ended December 31, 2018, compared to $45.7 million
for the corresponding six-month period in 2017, primarily due to
the change in translation mechanism that resulted from the
application of IAS 29, which caused a $1.4 million increase, and an
increase in other crop protection revenues of $0.5 million. This
effect was partially offset by a decrease of revenues in
insecticides and fungicides of $0.2 million and a decrease in
adjuvants revenues of $0.9 million.
Seed and Integrated Products. Revenue for the six-month
period ended December 31, 2018 was $19.5 million, compared to $17.6
million for the corresponding six-month period in 2017, primarily
due to (i) the change in translation mechanism that resulted from
the application of IAS 29, which caused a US$0.5 million increase
in our reported revenue of seed and integrated products and (ii) an
increase in sales of our seed and integrated products of US$1.4
million.
Crop Nutrition. Revenue for the six-month period ended
December 31, 2018 was $26.1 million, compared to $17.7 million for
the corresponding six-month period in 2017, primarily due to the
change in translation mechanism that resulted from the application
of IAS 29, which caused an increase of $0.9 million in reported
accrued inoculants and fertilizers revenue, an increase of $6.8
million in revenues of fertilizers and an increase of $0.7 million
in inoculants sales.
Cost of sales
The change in the translation mechanism from the application of
IAS 29 resulted in an increase of $5.0 million in cost of sales for
the six-month period ended December 31, 2018; however, excluding
such impact, cost of sales decreased by $7.5 million in crop
protection, by $3.4 million in seed and integrated products and
increased by $5.7 million in crop nutrition. Cost of sales in the
six-mount period ended December 2017 increased due to a
non-recurring incremental cost related to Rizobacter’s Purchase
Price Allocation (“PPA”) adjustments in inventories of $1.4 million
in crop protection, $0.4 million in crop nutrition and $0.3 million
in seed and integrated products.
Cost of sales by business segment
Crop Protection. Our reported cost of sales was $26.1
million for the six-month period ended December 31, 2018, compared
to $30.6 million for the corresponding six-month period in 2017.
The change in the translation mechanism from the application of IAS
29 resulted in an increase of $3.0 million in the six-month period
ended December 31, 2018; however, excluding such impact, cost of
sales decreased by $5.4 million in cost of sales of adjuvants and
by $2.1 million in cost of sales of insecticides, fungicides and
other crop protection products. Cost of sales in the six-mount
period ended December 2017 increased due to non-recurring
incremental cost related to PPA adjustments in inventories of $0.6
million in cost of sales of adjuvants and $0.8 million in cost of
sales of insecticides, fungicides and other crop protection
products.
Seed and Integrated Products. Our reported cost of sales
was $6.3 million for the six-month period ended December 31, 2018,
compared to $8.9 million for the corresponding six-month period in
2017. The change in the translation mechanism from the application
of IAS 29 resulted in an increase of $0.8 million in the six-month
period ended December 31, 2018; however, excluding such impact,
cost of sales decreased by $3.4 million in cost of sales of seed
and integrated products. Cost of sales in the six-mount period
ended December 2017 increased due to a non-recurring incremental
cost related to PPA adjustments in inventories of $0.3 million.
Crop Nutrition. Our reported cost of sales increased to
$15.3 million for the six-month period ended December 31, 2018,
from $8.4 million for the corresponding six-month period in 2017,
primarily due to the change in translation mechanism that resulted
from the application of IAS 29, which caused a $1.2 million
increase in the reported amount. Such increase was also due to an
increase of $4.6 million in cost of sales of fertilizers and $1.1
million in cost of inoculants. Cost of sales in the six-mount
period ended December 2017 increased due to a non-recurring
incremental cost related to PPA adjustments in inventories of $0.3
million in fertilizers and $0.1 million in inoculants.
Table 4: Consolidated statement of
financial position
ASSETS
12/31/2018 06/30/2018 CURRENT ASSETS Cash and
cash equivalents 4,251,154 2,215,103 Other financial assets
4,567,406 4,550,847 Trade receivables 82,120,771 52,888,427 Other
receivables 5,084,534 4,240,205 Income and minimum presumed income
taxes recoverable 61,834 2,082,269 Inventories 24,097,484
19,366,001
Total current assets 120,183,183 85,342,852
NON-CURRENT ASSETS Other financial assets 346,575
243,358 Other receivables 1,409,634 4,979,507 Income and minimum
presumed income taxes recoverable 570,231 126,653 Deferred tax
assets 624,646 5,601,821 Investments in joint ventures and
associates 27,144,578 19,072,055 Property, plant and equipment
42,703,375 40,177,146 Intangible assets 35,181,602 26,657,345
Goodwill 21,556,423 14,438,027
Total non-current assets
129,537,064 111,295,912
Total assets 249,720,247 196,638,764
LIABILITIES
12/31/2018 06/30/2018 CURRENT LIABILITIES
Trade and other payables 42,911,186 27,708,830 Borrowings
89,924,339 65,308,928 Employee benefits and social security
5,194,969 4,411,713 Deferred revenue and advances from customers
1,234,024 1,007,301 Income and minimum presumed income taxes
payable 708,189 2,569 Government grants 4,754 17,695 Financed
payment - Acquisition of business 19,338,121 20,223,590
Total
current liabilities 159,315,582 118,680,626
NON-CURRENT LIABILITIES Borrowings 18,026,397 25,708,205
Government grants 9,124 15,532 Investments in joint ventures and
associates 2,048,254 2,012,298 Deferred tax liabilities 14,974,403
13,591,942 Provisions 502,199 845,486 Financed payment -
Acquisition of business - 2,651,019
Total non-current
liabilities 35,560,377 44,824,482
Total liabilities
194,875,959 163,505,108
EQUITY
Equity attributable to owners of the parent 24,830,569
13,713,484
Non-controlling interests 30,013,719 19,420,172
Total equity 54,844,288 33,133,656
Total
equity and liabilities 249,720,247 196,638,764
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Investor RelationsLaura
Amelonginvestor@biocerescrops.comhttps://biocerescrops.com/investor-contact/
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