Devgen half year revenues increased 45%

The Belgian biotechnology company Devgen has reported revenues for the first six months of 2011 amount to € 17.8 million compared to € 12.3 million for the same period last year. This 45% increase was entirely due to the solid performance of Devgen’s seed business. Revenues from product sales (seeds) amounted to € 11.9 million, nearly double the turnover of € 6.0 million realized over the same period last year. The significantly higher volumes of hybrid rice and the sales generated from the distribution of cotton seeds, following the agreement with Vikram Seeds, contributed to the top line growth. Revenues associated with R&D activities (Monsanto Company and Sumitomo Chemical Company) amount to € 5.8 million for the first six months of 2011, slightly below the € 6.2 realized over the same period last year. Devgen’s gross profit in the first half of 2011 was € 8.4 million up 27% from € 6.6 million in H1 2010.

Devgen confirms its expectation of substantial growth of turnover for the full year 2011. This confidence is based on expected revenues out of research and development to be in line with plan and the very strong turnover realized from product sales during the first half of 2011. Product sales realized during the first half of 2011 account up to approximately 90% of the sales which can be realized for the FY 2011.

In Devgen’s seed business, most sales take place in the first half, while operating costs increase significantly in the second half as the company initiates its investment in marketing and seed production in preparation for the 2012 sales season. Devgen therefore expects a considerably lower operating result for the second half of 2011 compared to the result realized in H1 2011.

Following the equity fund raising in March this year, and taking into account the outcome of the operations for H2, including continuous attention for strict cash control, Devgen expects to end the year with a cash position of approximately € 40 million (including restricted cash of € 5.6 million).