Bioceres Crop Solutions Corp. Reports Financial Results for the Second Quarter and First Half Ended December 31, 2018
Following the consummation on March 14, 2019 of the previously announced business combination between Bioceres LLC and Union Acquisition Corp., Bioceres Crop Solutions Corp. (“Bioceres Crop Solutions”, the “Company”, “we”, “us” or “our”) (NYSE American: BIOX), a fully integrated provider of crop productivity solutions company, today announced its consolidated financial results for the three-month and six-month periods ended December 31, 2018.
Second Quarter ended December 31, 2018 highlights
- Revenues increased by 33% to $62.5 million, as compared to $47.1 million during the same period in 2017.
- Gross profit increased by 52% to $29.3 million, as compared to $19.3 million during the same period in 2017.
- Adjusted EBITDA increased by 121% or $11.1 million to $20.3 million from $9.1 million during the same period in 2017.
Six-month period ended December 31, 2018 highlights
- Revenues increased by 14% to $92.1 million, as compared to $81.0 million during the same period in 2017.
- Gross profit increased by 34% to $44.4 million, as compared to $33.1 million during the same period in 2017.
- Adjusted EBITDA increased by 83% or $13.2 million to $29.2 million from $16.0 million during the same period in 2017.
“This is our first earnings report since initiating our NYSE American listing last Friday, and we are delighted to show a very robust performance for the last quarter and the second half of the 2018 calendar year. This financial performance is the result of multiple growth initiatives currently under execution, most significantly growth in our micro-beaded fertilizer and international businesses. There is also a shift in our product mix away from third-party products, resulting in an improvement in gross margin profiles. Although these numbers have exceeded our initial projections for the reported period, we are not revising at this time our projections for our fiscal year 2019,” said Federico Trucco, CEO of Bioceres Crop Solutions.
“Over the past two quarters we have been able to accomplish consistent growth in revenues while increasing our Adjusted EBITDA margin. These results have led to a total Adjusted EBITDA of $35.6 million for the last twelve-month (“LTM”) period ended December 31, 2018. Despite being very satisfied with this strong margin performance, we do not anticipate this trend to expand throughout the following two quarters and therefore maintain $38 million as our Adjusted EBITDA target for the full fiscal year ending June 2019,” said Enrique López Lecube, CFO of Bioceres Crop Solutions.
The unaudited financial information in this press release has been prepared consistently with International Accounting Standards 34, “Interim Financial Reporting” as issued by the International Accounting Standards Board.
This press release does not contain Bioceres Crop Solutions’ financial information but presents the financial information of the Bioceres Inc Crop Business (as defined below) on a carve-out basis, combined with that of Bioceres Semillas S.A. (collectively, the “Group”).
The Bioceres Inc Crop Business is defined as the contributed crop business net assets made by Bioceres, Inc. (which was converted to Bioceres LLC) to BCS Holdings, Inc (a wholly-owned subsidiary of Bioceres Crop Solutions) pursuant to the business combination that was consummated on March 14, 2019.
Considering the recent completion of the business combination between Bioceres LLC and Union Acquisition Corp., Bioceres Crop Solutions will not hold a conference call at this time. Instead, the Company intends to host a conference call and webcast to comprehensively discuss its full annual results and performance for the fiscal year ending June 30, 2019 at the time of their release.
About Bioceres Crop Solutions
Bioceres Crop Solutions is a fully integrated provider of crop productivity solutions, including seeds, seed traits, seed treatments, biologicals, high-value adjuvants and fertilizers. Unlike most industry participants that specialize in a single technology, chemistry, product, condition or stage of plant development, Bioceres Crop Solutions has developed a multi-discipline and multi-product platform capable of providing solutions throughout the entire crop cycle, from pre-planting to transportation and storage. Bioceres Crop Solutions’ platform is designed to cost effectively bring high value technologies to market through an open architecture approach. Bioceres Crop Solutions’ headquarters and primary operations are based in Argentina, which is its key end-market as well as one of the largest markets globally for genetically modified crops. Through its main operational subsidiary Rizobacter, Bioceres Crop Solutions has a growing and significant international presence, particularly in Brazil and Paraguay.
For more information, visit www.biocerescrops.com.
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
We supplement the use of IFRS financial measures with non-IFRS financial measures, including Adjusted EBITDA. We define Adjusted EBITDA as profit/(loss) exclusive of financial income/(costs), income tax benefit/(expense), depreciation, amortization, share-based compensation and inventory purchase allocation.
We believe that Adjusted EBITDA provides useful supplemental information to investors about us and our results. Adjusted EBITDA is among the measures used by our management team to evaluate our 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 our competitors, rating agencies, securities analysts, investors and other parties to evaluate companies in our industry. We also believe that Adjusted EBITDA is helpful to investors because it provides additional information about trends in our core operating performance prior to considering the impact of capital structure, depreciation, amortization and taxation on our 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, our working capital needs or contractual commitments;
- Adjusted EBITDA does not reflect our financial expenses, or the cash requirements to service interest or principal payments on our indebtedness, or interest income or other financial income;
- Adjusted EBITDA does not reflect our income tax expense or the cash requirements to pay our 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.
We compensate for the inherent limitations associated with using Adjusted EBITDA through disclosure of these limitations, presentation of our 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.
Application of IAS 29
Argentina has been classified as a hyperinflationary economy under the terms of IAS 29 from July 1, 2018. IAS 29 requires, to adjust 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.