Bioceres Crop Solutions Corp. (BIOX) Reports Q2 Revenues Miss

Bioceres Crop Solutions Corp. (NYSE: BIOX) reported Q2 revenue for the quarter came in at $62.46 million versus the consensus estimate of $72 million.

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.

For earnings history and earnings-related data on Bioceres Crop Solutions Corp. (BIOX) click here.

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