Bioceres Crop Solutions Corp. (Bioceres) (NASDAQ: BIOX), a leader in the development and commercialization of productivity solutions designed to regenerate agricultural ecosystems while making crops more resilient to climate change, announced financial results for the fiscal third quarter ended March 31, 2023. 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
Total revenues were $93.6 million in 3Q23, a 33% increase compared to the pro forma numbers for the third quarter of last year, which are inclusive of historical revenues from Pro Farm. Topline growth was primarily driven by revenues in the Crop Nutrition segment, resulting from the initial proceeds generated by the strategic partnership with Syngenta, which more than offset the negative impact of the extended drought in Argentina.
Adjusted EBITDA was $35.8 million, mainly benefited by proceeds from the Syngenta agreement that were recognized in the quarter. On an LTM basis, adjusted EBITDA was $85.3 million.
Brazil’s National Biosafety Commission concluded the safety evaluation of HB4 Wheat, providing full approval for commercialization and cultivation in the country. Partnerships with EMBRAPA and OR Sementes in place to introgress HB4 trait into varieties adapted to Brazil, with focus on the Cerrados region.
HB4 Soy program in Brazil moving forward, with initial varieties performing favorably under diverse conditions. Seed inventory ramp-up on track to reach 10,000 hectares in 23/24 season.
Inaugural 2022 Sustainability Report published, documenting our journey in developing and commercializing technologies that address two major challenges confronting global agriculture: climate change and biodiversity preservation.
Mr. Federico Trucco, Bioceres´ Chief Executive Officer, commented: ″We are delighted to resume our growth trajectory with solid numbers reported in this quarter, despite the extended drought in Argentina, which continued to affect our sales in this important market. Our outstanding performance this quarter results from the combination of strategic actions we have taken over the last year to diversify the product and geographic exposure of our business. For instance, this quarter saw the initial benefits of the strategic partnership with Syngenta, which accelerates and broadens the international growth of our inoculant business.″
″We are also making great strides internationally on the HB4 front. In Brazil, our soybean program is steadily advancing, with an initial set of varieties tested by farmers in five states, with at least one variety consistently outperforming the top commercial alternatives. Brazil’s recent approval for HB4 Wheat commercialization and cultivation consolidated our collaboration with local institutions and seed developers such as Embrapa and OR Sementes. Additionally, the approval of HB4 grain importation by Brazil (adding to the prior approval for flour importation) allows us to diversify our go-to-market strategy in Argentina, where we are expanding original seed sales to a group of 45 seed multipliers, who can now build their own inventories for future, direct-to-farmer, certified seed sales. At the same time, we have enabled third parties such as Buck Semillas, to develop HB4 varieties with their own genetics, allowing us to more quickly address the needs of farmers in certain regions.″
Trucco added: ″As described in our recently published Sustainability Report, our portfolio of products promotes efficient resource use and protects soil health and ecosystem biodiversity while strengthening crops against weather conditions associated with climate change. We are encouraged to see that farmers adoption of good agricultural practices can be independent of regulations when science is used to align productivity incentives with positive externalities. This concept is at the heart of our all-around value proposition.″
Mr. Enrique Lopez Lecube, Bioceres´ Chief Financial Officer, noted ″This quarters’ strong results reflect the value of our strategic actions to diversify revenues, and to profit from our extensive portfolio of technologies in multiple ways. Results from the agreement with Syngenta were timely in helping us navigate our seasonally weakest quarter in a context of halted demand for some of our products due to unfavorable weather, particularly in Argentina. Both dynamics ─ weather patterns affecting seasonality and alternative revenue sources ─ are a reminder that our underlying performance is better assessed when looking at annual results. The results from the inoculants agreement recognized in the quarter drove improved revenues and profits, resulting in a strengthened financial position – a desirable position to be in considering the current turmoil in global markets. We feel confident about our ability to execute on short and mid-term plans, and if the drought situation in Argentina finally reverses in the coming weeks, we are optimistic about having a strong end to the fiscal year.″
KEY FINANCIAL METRICS
(In millions of U.S. dollars, unless where otherwise stated)
Table 1: 3Q23 & YTD Key Financial Metrics
1. 3Q22 and YTD22 pro forma financials include Pro Farm historical numbers.
Summary: 3Q23 revenues increased 33% to $93.6 million when compared to 3Q22 pro forma revenues that include historical sales from Pro Farm. The historical drought that affected Argentina in the previous quarter continued into 3Q23 negatively impacting product sales, particularly micro-beaded fertilizer sales. This decline was fully offset by the recognition of a large portion of the initial compensatory payment from the agreement with Syngenta, announced in September 2022. This agreement is part of the company’s strategy of revenue diversification and helped to offset the impact of an unusually severe drought in a key market. On a year-to-date basis, sales were up 28%. Gross profit and adjusted EBITDA for the quarter saw greater YOY increases (84% and 1200% respectively) as proceeds from the inoculant agreement flow directly to the bottom line. LTM adjusted EBITDA stood at $85.3 million.
For a full version of Bioceres third quarter 2023 earnings release, click here.
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