Bioceres Crop Solutions Corp. (“Bioceres”) (NYSE American:
BIOX), a fully integrated provider of crop productivity
solutions, announced today its unaudited consolidated financial
results for fiscal second quarter 2020 and the six-month period
ended December 31, 2019. Financial Results are expressed in U.S.
dollars and are presented in accordance with International
Financial Reporting Standards.
2Q20 Financial and Business
Highlights
- Comparable Revenues up 6% YoY, with volume growth across key
product lines despite macroeconomic and weather headwinds in
Argentina. Continued expansion of adjuvants, seed treatment packs
and inoculants into Brazil and Uruguay, alongside a successful
salesforce restructuring in Paraguay, supported sales performance
for the quarter. Micro-beaded fertilizers’ ramp-up continued to
deliver sales growth as well.
- Adjusted EBITDA up 4% YoY, achieving $21.1 million for the
quarter with a margin expansion of 103 basis points to 33.5%.
- 395 hectares (976 acres) of EcoWheat were harvested during the
quarter. Yield benefits across different environments ranged from
8.0% (in highest-yielding fields) to 22.1%, compared to commercial
controls. Weather conditions were particularly conducive to
highlighting HB4® technology’s full potential. Seed inventory in
place for planting of projected 12,000 hectares (29,760 acres) in
4Q20.
- 2,905 hectares (7,178 acres) of EcoSoy were planted in
Argentina to ramp-up seed inventories. Seed produced expected to
enable planting of up to approximately 90,000 hectares during next
summer’s crop season in the southern hemisphere, moving the Company
closer to broad commercialization.
- Execution of strategic agreements with Okaratech Ltd enabled
beta-launch of digital platform to track and support activities in
EcoFields.
- Subsequent to quarter end, Bioceres entered into a
commercialization agreement for Rizobacter-branded biologicals with
Brett Young, a distributor with a solid footprint in Western Canada
and the US Northern Plains. This is expected to accelerate the
Company’s penetration in the northern hemisphere.
Commenting on the Company’s results, Mr. Federico Trucco, Chief
Executive Officer of Bioceres, said, “From a big picture
perspective, the most important milestone for the quarter was the
validation of EcoWheat performance at hundreds of hectares for the
first time. HB4 benefits were consistent with those estimated in
our product development trials, testifying to the robustness of our
R&D process. Off-season multiplication of EcoSoy inventories
allowed us to approximate the 3,000 hectares planted during the
quarter, keeping us on track with inventory ramp-up projections for
both crops. Also, an important achievement for the period was the
beta-launch of our digital platform, providing a very valuable
field to cloud data interface.
From an operating viewpoint, we were able to partially recover
sales in Argentina from the prior quarter while actively managing
costs, though this was not sufficient to accomplish the full growth
we expected for the period. In sum, we continue to execute on our
strategic priorities of leading with innovation, operating with
excellence and driving increased productivity. Our goal is to build
on the foundation for growth we have in place to take all our
businesses to the next level.”
Mr. Enrique Lopez Lecube, CFO of Bioceres, said “It was an
important accomplishment to confirm an overall growth trend in
revenues as well as EBITDA during the quarter considering the
adverse scenario under which the planting season unfolded in
Argentina, where macroeconomic and drought conditions generated
uncertainty amongst farmers. The commercial teams did a good job at
dealing with headwinds and partially recovering packs sales that
had not happened in Q1. Our business proved to be resilient with
multiple sources for growth and profitability. Brazil, Paraguay and
Uruguay continued to be an offsetting factor to Argentina, while
the micro-beaded fertilizers and adjuvants also performed
well.”
“In terms of financing we will continue to identify
opportunities that extend the maturity of our debt and maximize
cash generation, as well as securing future capital requirements
from our core initiative around HB4” Mr. Lopez Lecube
concluded.
REVIEW OF OPERATING PERFORMANCE
Installed capacity utilization of the micro-beaded fertilizer
plant for the twelve-month period ended December 31, 2019
reached 27.2%. This was a 22.5% YoY increase bringing total
production to 13.600 tons for the trailing twelve-month period,
driven by sales in Argentina, Brazil, Uruguay, Paraguay and
Bolivia.
Adjuvants aggregated volume in fiscal 2Q20 increased 10%
compared to the same period in fiscal 2019. This was led by Brazil
which delivered 37% growth YoY as the Company continues to execute
its growth strategy in that country. Other international
subsidiaries, ex-Argentina, increased 18% YoY. Argentina volume was
up 6% maintaining the leading position in the high-end adjuvants
market. For the six-month period ended December 31, 2019 adjuvants
aggregated volume increased 3% compared to the same period in 2018,
which factors in a shift from high volume, lower margin products
into higher margin adjuvants in Argentina.
Inoculants and seed treatment doses aggregated volume in
fiscal 2Q20 increased 5% YoY, reflecting partial recovery of
purchases delayed for summer crops’ seed treatment packs in
Argentina and higher packs sales in other countries. For the
six-month period ended December 31, 2019, inoculant doses decreased
3% compared to the same period in 2018 partially reflecting delayed
purchases in the prior quarter.
REVIEW OF FISCAL SECOND QUARTER 2020 RESULTS
Comparable Revenues and Comparable Gross Profit are key
operational metrics used by the management team to assess the
Company's underlying financial and operating performance. The
Company has introduced the term “Comparable” to reflect the result
of a given metric excluding the impact of IAS 29.
For comparison purposes, the impact of adopting IAS 29 is
presented separately in each of the applicable sections of this
earnings release, in a column denominated “IAS 29”. For further
information please review Application of IAS 29 section.
Revenues
Table 1: Fiscal 2Q Revenues by Segment
(Figures in US dollars)
As Reported
IAS 29
Comparable
2Q 2019
2Q 2020
% Chg.
2Q 2019
2Q 2020
2Q 2019
2Q 2020
% Chg.
Revenue by segment
Crop protection
31,761,913
33,142,238
4%
(4,004,579)
(3,299,345)
27,757,334
29,842,893
8%
Seed and integrated products
12,956,881
13,902,612
7%
(1,011,722)
(1,140,526)
11,945,159
12,762,086
7%
Crop nutrition
17,740,448
15,949,438
(10%)
(3,554,121)
(1,512,574)
14,186,327
14,436,864
2%
Total revenue
62,459,242
62,994,288
1%
(8,570,422)
(5,952,446)
53,888,820
57,041,842
6%
Revenues as reported remained flat at $63.0 million in
fiscal 2Q20, compared to $62.5 million during fiscal 2Q19,
negatively impacted by IAS29 adjustment.
Comparable Revenues during the quarter increased 6% YoY,
driven by growth in adjuvants, seed treatment packs and inoculants
in Brazil, Uruguay and Paraguay, as well as sustained micro-beaded
fertilizers sales growth. This was partially offset by weaker than
anticipated seed treatment packs sales in Argentina, where
macroeconomic and weather uncertainty faced by farmers at planting
did not permit a full recovery of delayed fiscal 1Q20 pack
sales.
- Crop Protection comparable revenues for the quarter
increased 8% YoY, or $2.1 million, to $29.8 million, driven by
adjuvants sales in Argentina and Brazil, as well as higher sales of
seed treatment therapics, insecticides and fungicides. This growth
was partially offset by lower baits sales in Argentina which are
highly sensitive to climate conditions.
- Seed and Integrated Products comparable revenues for the
quarter increased 7% YoY, or $0.8 million, to $12.8 million.
Increased revenues seed treatment packs explain growth compared to
the same quarter of the previous fiscal year. Additionally, the
segment benefitted from a shift in product presentation, as Brazil
and Paraguay partially replaced stand-alone inoculants doses
previously accounted for in Crop Nutrition, with full seed
treatment packs sales reported under Seed and Integrated Products.
Seed treatment packs sales in Argentina though, were weaker than
anticipated and not enough to fully recover delayed fiscal 1Q20
sales of summer crops.
- Crop Nutrition comparable revenues for the quarter were
roughly flat YoY at $14.4 million. Growth in micro-beaded sales was
offset by the decline in inoculants sales following the
aforementioned shift from stand-alone inoculants to seed treatment
packs in Brazil and Paraguay which redirected revenues from Crop
Nutrition into Seed & Integrated Products.
Table 2: Fiscal 1H Revenues by Segment
(Figures in US dollars)
As Reported
IAS 29
Comparable
1H 2019
1H 2020
% Chg.
1H 2019
1H 2020
1H 2019
1Q 2020
% Chg.
Revenue by segment
Crop protection
46,435,705
51,095,406
10%
(1,421,365)
(1,783,599)
45,014,340
49,311,807
10%
Seed and integrated products
19,494,529
19,432,060
(0%)
(531,096)
(937,472)
18,963,433
18,494,588
(2%)
Crop nutrition
26,141,232
28,718,480
10%
(874,994)
(232,937)
25,266,238
28,485,543
13%
Total revenue
92,071,466
99,245,946
8%
(2,827,454)
(2,954,008)
89,244,012
96,291,938
8%
Revenues as reported increased to $99.2 million in fiscal
1H20 from $92.1 million in fiscal 1H19.
Comparable Revenues during the six-month period increased
8% YoY, driven by growth in the Crop Protection and Crop Nutrition
segments, slightly offset by a decrease in the Seed &
Integrated Products segment.
- Crop Protection comparable revenues for the six-months
delivered a 10% YoY growth, or $4.3 million, reaching $49.3
million, mainly explained by adjuvants growth in Brazil and
Argentina during the first half of the fiscal year.
- Seed and Integrated Products comparable revenues for the
six-month period decreased 2% YoY, or $0.5 million, to $18.5
million. This was due to an overall decline in seed treatment packs
sales in Argentina as macroeconomic and weather uncertainty faced
by farmers at planting affected decisions throughout the period.
This was partially offset by higher seed revenues generated by
growth in seed royalty payments during the fiscal first quarter,
and higher seed treatment packs sales in Brazil and Paraguay.
- Crop Nutrition comparable revenues for the six-month
period increased 13% YoY, or $3.2 million, to $28.5 million, mainly
driven by growth in micro-beaded fertilizers in Argentina, Brazil
and Paraguay. Inoculants growth was lower than micro-beaded
fertilizers as Brazil and Paraguay replaced stand-alone inoculants
with seed treatment packs reported under Seed and Integrated
Products.
Gross Profit
Table 3: 2Q Gross Profit by Segment
(Figures in US dollars)
As Reported
IAS 29
Comparable
2Q 2019
2Q 2020
% Chg.
2Q 2019
2Q 2020
2Q 2019
2Q 2020
% Chg.
Gross profit by segment
Crop protection
13,032,449
14,721,630
13%
314,570
(297,963)
13,347,019
14,423,667
8%
Seed and integrated products
8,861,698
9,269,809
5%
(3,055,185)
(679,247)
5,806,513
8,590,562
48%
Crop nutrition
7,411,426
6,040,121
(19%)
1,851,326
746,806
9,262,752
6,786,927
(27%)
Total Gross profit
29,305,573
30,031,560
2%
(889,288)
(230,404)
28,416,285
29,801,156
5%
% Gross profit
46.9%
47.7%
75 bps
52.7%
52.2%
(49 bps)
Reported Gross profit in fiscal 2Q20 was $30.0 million
compared to $29.3 million in the same period of the prior year an
increase of 2%.
Comparable gross profit for the quarter was $29.8 million
compared to $28.4 million in the year-ago quarter an increase of
5%. Comparable gross margin for the period was 52.2%, 49 basis
points lower than the same period of the prior year. Most of the
Company’s revenues are pegged to the US dollar, while a significant
portion of production costs are denominated in Argentine pesos. The
net effect between the depreciation and inflation rate had a
neutral impact YoY on quarterly margins. Gross profit & margins
were driven by the following performance by business segment:
- Crop Protection comparable gross profit for the quarter
was $14.4 million, up from to $13.3 million in fiscal 2Q19 and
gross margin remained at 48% compared to the year ago quarter,
reflecting a steady product mix within the segment.
- Seed and Integrated Products comparable gross profit was
$8.6 million, compared to $5.8 million in the year-ago quarter
following the aforementioned shift in inoculant sales into seed
treatment packs sales in Brazil and Paraguay that redirected
revenues from Crop Nutrition into Seed and Integrated Products.
Gross margin was 67% up from 49% in the year-ago quarter,
reflecting an increase of high margin seed packs in the mix.
- Crop Nutrition comparable gross profit was $6.8 million
in fiscal 2Q20, compared to $9.3 million in the prior year quarter
following lower inoculants sales shifted to seed treatment packs
included in the Seed and Integrated Products segment. Gross margin
was 47% compared to 65% in fiscal 2Q19, due to a higher share of
lower margin micro-beaded fertilizers within the segment.
Table 4: 1H Gross Profit by Segment
(Figures in US dollars)
As Reported
IAS 29
Comparable
1H 2019
1H 2020
% Chg.
1H 2019
1H 2020
1H 2019
1H 2020
% Chg.
Gross profit by segment
Crop protection
20,356,745
22,469,322
10%
1,400,748
(76,138)
21,757,493
22,393,184
3%
Seed and integrated products
13,209,310
12,174,337
(8%)
(2,343,245)
70,175
10,866,065
12,244,512
13%
Crop nutrition
10,852,732
11,294,485
4%
3,521,452
1,633,062
14,374,184
12,927,547
(10%)
Total Gross profit
44,418,787
45,938,144
3%
2,578,954
1,627,099
46,997,741
47,565,243
1%
% Gross profit
48.2%
46.3%
(196 bps)
52.7%
49.4%
(327 bps)
Reported Gross profit for the six-month period increased
3% to $45.9 million from to $44.4 million in fiscal 1H19.
Comparable gross profit for the six-month period was
$47.6 million up from $47.0 million in the year-ago period.
Comparable gross margin for the period was 49% vis a vis 53% in the
prior year period reflecting FX and inflation dynamics in Argentina
that affected production costs. The sharp depreciation of the
currency that occurred in calendar 2018 (fiscal 1H19) had
positively impacted results for the prior year’s period, but was
not reflected in fiscal 1H20. Gross profit and margins were driven
by the following factors in each business segment:
- Crop Protection comparable gross profit for the
six-month period was $22.4 million up from $21.8 million in the
year-ago period. Comparable gross margin for the six-months was
45%, 292 basis points lower than the prior year explained by the
impact of the aforementioned FX and inflation dynamics on
manufacturing costs translated into US dollars in Argentina.
- Seed and Integrated Products comparable gross profit was
$12.2 million for the six-month period up from $10.9 million in the
year-ago period, with gross margin up 900 basis points to 66% from
57% in fiscal 1H19. Gross margin improvement in fiscal 1H20 was
lower than the quarter increase, as FX and inflation dynamics on
manufacturing costs mitigated the benefit from higher seed
treatment packs and seed royalties’ participation in the product
mix.
- Crop Nutrition comparable gross profit was $12.9 million
for the six-month period against $14.4 million in the year-ago
period. Comparable gross margin for the period was 45% compared to
57% in the prior year period, reflecting higher participation of
micro-beaded fertilizers in the product mix, as well as FX and
inflation dynamics on manufacturing costs.
Selling, General and Administrative Expenses
SG&A in fiscal 2Q20 was $10.5 million, down from $10.7
million in the same period of the prior year, reflecting cost
efficiencies.
SG&A for the six-month period was $19.2 million. Excluding a
one-time expense of $1.1 million stock-based compensation and
transaction expenses accrued in 1Q20, SG&A for fiscal 1H20
would have been $18.1 million compared to $16.8 million in the
corresponding year-ago period. The increase for fiscal 1H20 is
mainly explained by FX and inflation dynamics in Argentina, as most
of the business support functions are headquartered in the country,
and the corresponding costs denominated in local currency. The
sharp depreciation of the Argentine peso that occurred in calendar
2018 had a positive impact in fiscal 1H19 results, while fiscal
1H20 did not get a similar benefit in terms of SG&A.
Furthermore, higher commercial expenses related to business growth,
partially offset by lower professional fees and outsourced
services, also explain the increase for the six-month period.
Research & Development
R&D expenses include ongoing efforts to maintain and
continuously upgrade the Company’s existing product portfolio.
R&D expenses in fiscal 2Q20 increased YoY by $1.0 million and
were $2.1 million in the six-month period.
Adjusted EBITDA & Adjusted EBITDA Margin
During fiscal 2Q20, the Company reported Adjusted EBITDA of
$21.0 million, up from $20.3 million in fiscal 2Q19. Adjusted
EBITDA margin was 33.5% compared to 32.5% in the prior year quarter
an increase of 103 basis points.
Table 5: 2Q20 Adjusted EBITDA Reconciliation and Adjusted
EBITDA Margin
(Figures in US dollars)
2Q 2019
2Q 2020
% Chg.
Loss for the year
11,165,810
12,649,826
13.3%
Income tax (benefit)/expense
7,021,142
3,443,508
(51.0%)
Finance results
823,618
3,471,629
321.5%
Depreciation of PP&E and intangibles
assets
1,254,968
1,244,502
(0.8%)
Stock-based compensation charges
5,117
1,069,629
20802.8%
Transaction expenses
-
(783,296)
NA
Adjusted EBITDA
20,270,655
21,095,798
4.1%
Adjusted EBITDA Margin
32.5%
33.5%
103 bps
For the six-month period, Bioceres reported Adjusted EBITDA of
$29.2 million, compared with $29.3 million in fiscal 1H19. Adjusted
EBITDA margin was 29.5% compared to 31.8% in the prior year
quarter. Growth in Brazil, Uruguay and Paraguay, coupled with
ongoing ramp-up in the micro-beaded fertilizer business and
SG&A cost efficiencies were offset by lower revenues in seed
treatment packs in Argentina and FX versus inflation dynamics,
resulting in a lower EBITDA margin for fiscal 1H20.
Table 6: 1H20 Adjusted EBITDA Reconciliation and Adjusted
EBITDA Margin
(Figures in US dollars)
1H 2019
1H 2020
% Chg.
Loss for the year
7,566,553
4,672,081
(38.3%)
Income tax (benefit)/expense
5,050,749
1,204,655
(76.1%)
Finance results
14,559,272
19,868,676
36.5%
Depreciation of PP&E and intangibles
assets
2,077,123
2,400,623
15.6%
Stock-based compensation charges
8,921
1,867,334
20831.9%
Transaction expenses
-
(783,296)
NA
Adjusted EBITDA
29,262,618
29,230,073
(0.1%)
Adjusted EBITDA Margin
31.8%
29.5%
(233 bps)
Financial Income and Loss
Table 7: 2Q20 Net finance result
(Figures in US dollars)
2Q 2019
2Q 2020
Chg.
% Chg.
Exchange differences
950,126
(4,551,732)
(5,501,858)
(579.1%)
Interest expenses
(7,134,751)
(6,352,266)
782,485
(11.0%)
Financial commissions
(762,094)
(530,457)
231,637
(30.4%)
Other finance result
544,062
4,132,604
3,588,542
659.6%
Net gain of inflation effect on monetary
items
5,579,039
3,830,222
(1,748,817)
(31.3%)
Total net finance result
(823,618)
(3,471,629)
(2,648,011)
321.5%
Interest expense from financial debt obligations represents the
main financial metric that management uses to assess cost of
financing. Exchange rate differences, net gains or losses of the
inflation effect on monetary items, and other financial results
include items that are believed to have a limited impact on the
underlying business as a significant portion of both cash flows and
financial debt obligations are linked to the US dollar.
During fiscal 2Q20 the Company reported a total net financial
loss of $3.5 million compared to a net financial loss of $0.8
million in fiscal 2Q19. Cash financial expenses represented by
interest expenses and financial commissions decreased $1.0 million
due to a more efficient debt structure. Total non-cash financial
results decreased $3.7 million as a result of a negative variation
of $5.5 million in exchange rate differences and a $1.7 million
decrease from net gain of inflation effect on monetary items, which
was partially offset by a positive variation in other financial
results for a total of $3.6 million.
Table 8: 1H20 Net finance result
(Figures in US dollars)
1H 2019
1H 2020
Chg.
% Chg.
Exchange differences
(12,111,338)
(16,064,570)
(3,953,232)
32.6%
Interest expenses
(11,177,537)
(11,422,645)
(245,108)
2.2%
Financial commissions
(1,058,499)
(781,528)
276,971
(26.2%)
Other finance result
(77,700)
2,436,175
2,513,875
(3235.4%)
Net gain of inflation effect on monetary
items
9,865,802
5,963,892
(3,901,910)
(39.5%)
Total net finance result
(14,559,272)
(19,868,676)
(5,309,404)
36.5%
For fiscal 1H20, the Company reported a net financial loss of
$19.9 million compared to a net financial loss of $14.6 million in
fiscal 1H19. Cash financial expenses decreased $0.03 million as a
$0.3 million decline in financial commissions more than offset a
$0.2 million increase in interest expenses. Total non-cash
financial results decreased $5.3 million as a result of a negative
variation of $4.0 million in exchange rate differences and $4.0
million decrease from net gain of inflation on monetary items,
which was partially offset by a positive variation in other
financial results for a total of $2.5 million.
Balance Sheet & Cash Flow
Table 9: Capitalization and Debt Ratio
(Figures in US dollars)
As of December 31,
2018
2019
Total Debt 1
- Short-Term Debt
93,518,145
66,982,391
- Long-Term Debt
18,026,397
40,082,075
Cash and Cash Equivalents
(4,251,154)
(10,568,858)
Restricted short-term deposit
(4,327,670)
(4,369,254)
Total Net Debt
102,965,718
92,126,354
Equity attributable to equity holders of
the parent
24,830,569
46,741,879
Equity attributable to non-controlling
interests
30,013,719
14,325,877
Capitalization
157,810,006
153,194,110
LTM Adjusted EBITDA
35,617,261
41,312,661
Net Debt /LTM Adjusted EBITDA
2.89x
2.23x
1- Excludes discounted checks.
Cash and cash equivalents on December 31, 2019 were $10.6
million. As of June 2019, cash and cash equivalents increased by
$7.1 million, while the total debt balance decreased by $0.7
million to $92.1 million.
During fiscal 2Q20, the Company made capital expenditures of
$0.4 million compared to $1.3 million in fiscal 2Q19. For fiscal
1H20, total capital expenditures amounted to $1.0 million. Bioceres
has an asset base in place to support near and long-term growth.
Therefore, funds invested in the first half of the year were
primarily used for maintenance capex.
Net Debt to LTM Adjusted EBITDA improved to 2.23x in 2Q20
from 2.89x reported at the end of fiscal 2Q19 and from 2.24x at the
close of fiscal 4Q19. Sequentially, the debt ratio increased from
2.14x at the end of fiscal 1Q20, reflecting higher debt levels in
fiscal 2Q20 to finance working capital needs to support the high
planting season in the southern cone.
SUBSEQUENT EVENTS
Rizobacter Subsidiary Enters Distribution Agreement with
Brett Young
In January 2020 Bioceres’ subsidiary Rizobacter appointed
Canadian seed company Brett Young as a distribution partner for its
branded products in Western Canada and the U.S. Northern Plains.
Through this agreement, Rizobacter’s biologicals, which incorporate
novel technologies and offer significant improvements to on-seed
life and liquid inoculant performance, will now be available to
soybean and pulse growers for the first time in many of these
geographies.
2Q20 EARNINGS CONFERENCE CALL
When:
February 11, 2020
Times:
8:00 a.m. Eastern time
Who:
Mr. Federico Trucco, Chief Executive
Officer
Mr. Enrique Lecube, Chief Financial
Officer
Mr. Maximo Goya, Investor Relations
Leader
Dial-in:
1-844-839-9680 (U.S. domestic);
1-647-689-2346 (International)
Conference ID:
3459619
Webcast:
https://investors.biocerescrops.com/home/default.aspx
About Bioceres Crop Solutions Corp.
Bioceres Crop Solutions Corp. (NYSE American: 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 https://investors.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
The Company supplements the use of IFRS financial measures with
non-IFRS financial measures, including Adjusted EBITDA, Adjusted
EBITDA Margin, Net debt, Comparable revenues and Comparable gross
profit which exclude the impact of IAS29 as explained below.
The non-IFRS measures should not be considered in isolation or
as a substitute for measures of performance prepared in accordance
with IFRS and may be different from non-IFRS measures used by other
companies. In addition, the non-IFRS measures are not based on any
comprehensive set of accounting rules or principles. Non-IFRS
measures have limitations in that they do not reflect all of the
amounts associated with our results of operations as determined in
accordance with IFRS. This non-IFRS financial measures should only
be used to evaluate the Company’s results of operations in
conjunction with the most comparable IFRS financial measures.
Adjusted EBITDA and Adjusted EBITDA Margin
The Company defines Adjusted EBITDA as profit/(loss) exclusive
of financial income/(costs), income tax benefit/(expense),
depreciation, amortization, share-based compensation, inventory
purchase allocation and one-time transactional expenses.
Management believes that Adjusted EBITDA provides useful
supplemental information to investors about the Company and its
results. Adjusted EBITDA is among the measures used by the
management team to evaluate the Company’s 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 competitors, rating agencies, securities
analysts, investors and other parties to evaluate companies in the
same industry. Management also believes that Adjusted EBITDA is
helpful to investors because it provides additional information
about trends in the Company’s core operating performance prior to
considering the impact of capital structure, depreciation,
amortization and taxation on 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 working capital needs or contractual
commitments;
- Adjusted EBITDA does not reflect financial expenses, or the
cash requirements to service interest or principal payments on
indebtedness, or interest income or other financial income;
- Adjusted EBITDA does not reflect income tax expense or the cash
requirements to pay 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.
The Company compensates for the inherent limitations associated
with using Adjusted EBITDA through disclosure of these limitations,
presentation in the 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.
Comparable figures or Figures ex-IAS 29 (Comparable revenue and
Comparable gross margin)
Comparable figures or Figures ex-IAS 29 result from dividing
nominal Argentine pesos for the Argentine operations by the average
foreign exchange rate of the Argentine Peso against the US Dollar
in the period.
For comparison purposes, the impact of adopting IAS 29 is
presented separately in each of the applicable sections of this
earnings release, in a column denominated “IAS 29”. The IAS 29
adjustment results from the combined effect of: (i) the indexation
to reflect changes in purchasing power on results against a
dedicated line in the financial results, and (ii) the difference
between the translation of results at the closing exchange rate of
June 30, 2019 and the translation using the average year-to-date
rate on the reported period, as applicable to non-inflationary
economies.
Net Debt and Net Debt to Adjusted EBITDA
Net debt is defined as the sum of long and short-term borrowings
and finance payment from business combinations, less cash and cash
equivalents and restricted short-term deposit. This measure is used
by management and investment analysts and management believes it
shows the financial strength of the Company. Management is
consistently tracking the Company’s leverage position and its
ability to repay and service the debt obligations over time.
Therefore, management has set a leverage ratio target that is
measured by net debt divided by Adjusted EBITDA.
Application of IAS 29
Argentina has been classified as a hyperinflationary economy
under the terms of IAS 29 beginning July 1, 2018. IAS 29 requires,
adjusting 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.
-Tables to Follow-
Unaudited Consolidated
Statement of Comprehensive Income
(Figures in US dollars)
Three-month period ended
Three-month period ended
Six-month period ended
Six-month period ended
12/31/2018
12/31/2019
12/31/2018
12/31/2019
Total revenue
62,459,242
62,994,288
92,071,466
99,245,946
Cost of sales
(33,153,669)
(32,962,728)
(47,652,679)
(53,307,802)
Gross profit
29,305,573
30,031,560
44,418,787
45,938,144
% Gross profit
47%
48%
48%
46%
Operating expenses
(10,627,267)
(11,421,021)
(17,756,244)
(21,309,671)
Share of profit (loss) of JV
732,437
1,240,958
812,593
1,298,505
Other income or expenses, net
(400,173)
(286,534)
(298,562)
(181,566)
Operating profit
19,010,570
19,564,963
27,176,574
25,745,412
Finance result
(823,618)
(3,471,629)
(14,559,272)
(19,868,676)
Loss before income tax
18,186,952
16,093,334
12,617,302
5,876,736
Income tax
(7,021,142)
(3,443,508)
(5,050,749)
(1,204,655)
Loss for the year
11,165,810
12,649,826
7,566,553
4,672,081
Other comprehensive loss
13,883,530
5,834,121
(2,511,723)
(7,566,525)
Total comprehensive loss
25,049,340
18,483,947
5,054,830
(2,894,444)
Profit / (loss) for the period
attributable to:
Equity holders of the parent
6,847,451
11,314,881
4,229,006
4,264,504
Non-controlling interests
4,318,359
1,334,945
3,337,547
407,577
11,165,810
12,649,826
7,566,553
4,672,081
Total comprehensive income / (loss)
attributable to:
Equity holders of the parent
16,505,763
16,286,073
2,258,578
(2,427,318)
Non-controlling interests
8,543,577
2,197,874
2,796,252
(467,126)
25,049,340
18,483,947
5,054,830
(2,894,444)
Unaudited Consolidated
Statement of Financial Position
(Figures in US dollars)
12/31/2019
06/30/2019
ASSETS
CURRENT ASSETS
Cash and cash equivalents
10,568,858
3,450,873
Other financial assets
5,018,453
4,683,508
Trade receivables
77,760,561
59,236,377
Other receivables
3,731,810
1,981,829
Income and minimum presumed income taxes
recoverable
80,039
1,263,795
Inventories
31,907,682
27,592,582
Total current assets
129,067,403
98,208,964
NON-CURRENT ASSETS
Other financial assets
334,615
376,413
Other receivables
1,752,131
1,560,310
Income and minimum presumed income taxes
recoverable
5,600
1,184
Deferred tax assets
1,987,574
3,743,709
Investments in joint ventures and
associates
24,270,981
25,321,028
Property, plant and equipment
41,586,032
43,834,548
Intangible assets
35,298,224
39,616,426
Goodwill
26,468,268
29,804,715
Right-of-use leased asset
807,833
-
Total non-current assets
132,511,258
144,258,333
Total assets
261,578,661
242,467,297
LIABILITIES
12/31/2019
06/30/2019
CURRENT LIABILITIES
Trade and other payables
55,356,154
40,578,494
Borrowings
71,083,500
66,477,209
Employee benefits and social security
4,662,697
5,357,218
Deferred revenue and advances from
customers
5,749,476
1,074,463
Income and minimum presumed income taxes
payable
2,109,114
142,028
Government grants
1,495
2,110
Financed payment - Acquisition of
business
-
2,826,611
Lease liability
657,633
-
Total current liabilities
139,620,069
116,458,133
NON-CURRENT LIABILITIES
Trade and other payables
452,654
452,654
Borrowings
40,082,075
37,079,521
Government grants
4,243
8,098
Due to joint ventures and associates
1,704,901
1,970,903
Deferred tax liabilities
16,328,476
21,101,871
Provisions
287,325
439,740
Warrants
1,302,524
2,861,511
Lease liability
528,179
-
Total non-current liabilities
60,890,836
63,914,298
Total liabilities
200,510,905
180,372,431
EQUITY
Equity attributable to owners of the
parent
46,741,879
47,301,863
Non-controlling interests
14,325,877
14,793,003
Total equity
61,067,756
62,094,866
Total equity and liabilities
261,578,661
242,467,297
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200211005412/en/
Investor Relations Maximo Goya, Investor Relations
+54-341-4861100 maximo.goya@biocerescrops.com
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