Bioceres Crop Solutions Corp. current report, Q3 FY2021

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Bioceres Crop Solutions Corp. — Form 6-K Summary

Business context and reporting period

Bioceres Crop Solutions Corp. filed this Form 6-K on September 9, 2021, reporting fiscal fourth-quarter and full-year results for the periods ended June 30, 2021. Results are presented in U.S. dollars under IFRS and are unaudited. The company provides crop productivity technologies across crop protection, seed and integrated products, crop nutrition, and the HB4 biotechnology program.

Financial performance and key metrics

  • Fourth-quarter revenue: Reported revenue was $82.2 million, compared with $48.2 million in 4Q20. Comparable revenue, excluding the impact of IAS 29, increased 39% year over year to $72.4 million.
  • Full-year revenue: Reported revenue was $209.5 million, compared with $173.1 million in FY20. Comparable revenue increased 13% to $197.4 million.
  • Full-year segment revenue: Crop Protection was $114.1 million, Seed and Integrated Products was $34.8 million, and Crop Nutrition was $60.6 million.
  • Gross profit and margins: Full-year gross profit increased to $90.6 million from $79.5 million. Gross margin declined to 43.3% from 45.9%. Fourth-quarter gross margin was 39.4%, down from 47.4%.
  • Adjusted EBITDA: Full-year adjusted EBITDA increased to $48.3 million from $46.5 million, while adjusted EBITDA margin declined to 23.0% from 26.9%. Fourth-quarter adjusted EBITDA was $16.6 million, up 13% year over year.
  • Net income: The company reported a full-year net loss of $3.4 million, compared with net income of $4.2 million in FY20. Fourth-quarter net income was $1.8 million, compared with $3.1 million in 4Q20. Full-year income attributable to parent-company shareholders was a loss of $6.6 million.
  • Operating profit and finance result: Full-year operating profit was $38.3 million, compared with $39.1 million. The finance loss improved to $27.5 million from $32.7 million.
  • Cash and liquidity: Cash and cash equivalents were $35.9 million at June 30, 2021, compared with $42.5 million at June 30, 2020. The key-metrics table separately reports cash and cash equivalents of $49.2 million for FY21; the filing does not clearly reconcile this difference.
  • Debt: Current and non-current borrowings totaled approximately $121.8 million, compared with $104.9 million at June 30, 2020. Convertible notes were $48.7 million, compared with $43.0 million. Net debt to last-twelve-month adjusted EBITDA increased to 2.51x from 1.98x.
  • Financing: The company obtained $71.5 million of financing during FY21, including $43.0 million through Rizobacter Series IV and V corporate bonds and $28.5 million through equity financing related to the Verdeca acquisition and warrant tender offer.
  • Cash flow: The filing excerpt does not provide a clear operating, investing, or financing cash-flow figure.

Material changes versus the prior comparable period

  • Full-year comparable revenue increased 13%, with growth in all three segments, despite climate-related weakness in the second quarter.
  • Revenue growth was driven primarily by the micro-beaded fertilizer expansion plan and the Crop Protection business reorganization.
  • Full-year gross margin and adjusted EBITDA margin contracted despite higher revenue and EBITDA, reflecting changes in mix, costs, and business expansion.
  • HB4 Wheat planted hectares increased to 55,000 from 7,000, participating growers increased to 225 from 25, and contributed goods increased to $6.4 million from $1.4 million.
  • HB4 Soy harvested hectares increased to 23,000 from 3,000, participating growers increased to 148 from 15, and contributed goods increased to $1.9 million from $0.7 million.
  • HB4 contributed goods totaled $8.3 million for FY21, with an average gross margin of approximately 43%. These amounts will be recognized as revenue when the related inventories are sold as seed or grain and are no longer contributed.
  • Total assets increased to $390.0 million from $297.6 million, while total liabilities increased to $302.0 million from $236.8 million. Intangible assets increased to $67.3 million from $35.3 million.

Guidance, outlook, commentary, risks, and unusual items

  • Management expects the momentum from the second half of FY21 to continue into FY22, supported by revised crop nutrition and crop protection strategies and the continued rollout of HB4.
  • The company acquired the remaining HB4 Soy ownership interest in Verdeca LLC from Arcadia Biosciences, together with soybean gene-edited materials, crop-related Arcadia technologies, and Latin American rights to certain wheat traits and brands.
  • HB4 Soy performance met expectations in highly restricted environments, but germplasm drag affected performance in moderate- to high-productivity environments. Third-generation materials reportedly showed no drag versus leading commercial varieties.
  • Bioceres expanded its HB4 Soy collaboration with Grupo Don Mario into North America, targeting approximately 10 million hectares prone to water deficits. The company also continues collaboration with TMG in Latin America.
  • HB4 Soy received regulatory approval in Canada. HB4 Wheat applications were filed in Australia, New Zealand, Indonesia, and South Africa. Brazil’s CTNBio requested additional information, which the company filed after quarter-end.
  • Key risks include regulatory approval and commercialization of HB4 products, market acceptance, agricultural and climate conditions, COVID-19 impacts, inventory ramp-up, liquidity, financing costs, leverage, and the ability to achieve targeted breeding and product-development outcomes.
  • The successful exchange offer for all 24.2 million outstanding warrants reduced uncertainty regarding the future capital structure.
  • The filing contains forward-looking statements that are subject to material risks and uncertainties; management does not undertake to update them except as required by law.

Investor verification checklist

  • Reconcile the $49.2 million cash figure in the key-metrics table with the $35.9 million cash balance in the consolidated statement of financial position.
  • Review the full cash-flow statement and liquidity disclosures, which are not included in the provided excerpt.
  • Confirm the composition, maturities, covenants, and interest costs of borrowings, convertible notes, and Rizobacter bonds.
  • Assess the timing and accounting treatment of the $8.3 million of HB4 contributed goods that had not yet been recognized as revenue.
  • Monitor regulatory decisions for HB4 Wheat and HB4 Soy, especially Brazil’s review and other pending jurisdictions.
  • Evaluate whether third-generation HB4 Soy materials can address performance limitations and support broader commercialization.
  • Understand the effects of IAS 29 on reported versus comparable revenue and profitability.