Bioceres Crop Solutions Corp. (BIOX) Reports Q2 Revenues Miss
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Bioceres Crop Solutions Corp. (NYSE: BIOX) reported Q2 revenue for the quarter came in at $48.7 million versus the consensus estimate of $67.6 million.
Financial & Operational Highlights
- Received regulatory approval for the Company’s proprietary drought-tolerant HB4 wheat from the Ministry of Agriculture in Argentina, Latin America´s largest wheat producing country. Bioceres’ HB4 wheat is the world’s first and only drought-tolerant wheat to receive regulatory approval.
- Achieved HB4 wheat seed inventory in line to meet prior guidance, positioning the Company to have between 60,000 and 130,000 hectares of HB4 wheat planted during the next crop season.
- HB4 wheat out-yielded commercial varieties commonly used by growers by 13.5% on average across all environments and locations. In lower yielding environments, representing one third of all hectares harvested, the average yield improvement was 42% – this is more than twice the performance estimated using historical data.
- Drought-tolerant HB4 soybean planted on approximately 23,000 hectares. Number of participating growers increased over 867% to 148, which demonstrates strong end-user appetite.
- Post-acquisition of full ownership in Verdeca, entered partnership with Nature Source Improved Plants (NSIP) to establish an advanced HB4 soybean breeding program targeting the U.S., which can also be leveraged across other key international markets. Bioceres will combine its field data with NSIP’s computational optimization technologies, unlocking the power of artificial intelligence to maximize selection gains and reduce time to market.
- Due to severe droughts in certain regions of South America, revenues in the second quarter of fiscal 2021 were $47.7 million, compared to revenues of $57.0 million in the same year-ago quarter. Total comparable revenues for trailing twelve months increased 8% to $167.8 million, compared to $155.5 million in the same year-ago period.
- Contributed goods for HB4 Program increased significantly to $3.6 million (approximately $120 per hectare farmed) with gross margin of approximately 60%. The value of these contributed goods will be recognized as revenues once the realized inventories are sold as seed or grain, but no longer contributed.
Mr. Federico Trucco, Bioceres Chairman & Chief Executive Officer, commented: “As a technology company, our value proposition is centered on developing highly differentiated solutions that create economic incentives, in the form of improved yields, enhanced management practices, and other efficiencies, to further decarbonize production processes while regenerating agricultural ecosystems. With this central purpose in mind, we have been investing over the last 18 years in a technology called HB4, a solution that evolved from a drought-tolerant seed to a double-cropping production system, being validated today in what we call our HB4 Program.
“During the quarter we achieved the first approval ever for this technology in wheat, the perfect complement to HB4 soybean in our system’s approach. We discussed the implications of this approval in our September earnings call. Today, we are presenting the data obtained from our first pre-commercial production season with independent growers, reporting a yield performance that more than doubles our historical data in the low-end productivity environments. We have also achieved the seed volume and quality that will allow us to increase by up to 20-times the number of hectares in the next season. With a significant increase in growers and hectares for HB4 soybean as well, we remain in the early innings of demonstrating the significant economic and environmental benefits our HB4 system can provide for growers and consumers, alike.
“As we collect more data through our digital platform and work closely with partners, such as NSIP, we stand in a unique position to not only develop HB4 seed varieties that are ideally suited for each geography, but also to provide valuable carbon emission and water utilization data for end-consumers concerned about agricultural sustainability,” concluded Trucco.
Mr. Enrique Lopez Lecube, Chief Financial Officer of Bioceres, said: “Our fiscal second quarter was characterized by dry weather conditions in some regions of key South American markets. Despite the climatic headwinds during the quarter, we were able to maintain top line growth and preserve profitability on a trailing twelve-months basis, proving the resiliency of our business. We also significantly lowered financing costs as a result of our continuous initiatives to gain financial flexibility through debt profile and maturities improvement, an area on which we intend to continue identifying opportunities for Bioceres. The solid cash position we maintain allowed us to support working capital needs and complete significant transactions, such as the acquisition of Verdeca’s 50% stake – which gives us full ownership of the HB4 soybean technology – and with the acquisition behind us, we are now focused on fast-tracking our HB4 inventory build as we prepare for a broad commercial launch,” concluded Lopez Lecube.
For earnings history and earnings-related data on Bioceres Crop Solutions Corp. (BIOX) click here.
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