Bioceres Crop Solutions (BIOX) - 2022 Q2 - Quarterly Report

Unaudited Interim Condensed Consolidated Financial Statements This section presents the company's financial position, comprehensive income, equity changes, and cash flows for the interim period ended December 31, 2021, highlighting significant financial performance and balance sheet shifts Statements of Financial Position As of December 31, 2021, total assets increased to $469.6 million from $394.6 million, driven by current assets, while total liabilities rose to $358.2 million from $304.3 million, primarily due to non-current borrowings, resulting in an equity increase to $111.4 million Consolidated Statement of Financial Position (in USD) | Account | 12/31/2021 | 06/30/2021 | | :--- | :--- | :--- | | Total Current Assets | 272,038,956 | 211,489,658 | | Total Non-Current Assets | 197,600,606 | 183,100,299 | | Total Assets | 469,639,562 | 394,589,957 | | Total Current Liabilities | 180,151,507 | 168,037,855 | | Total Non-Current Liabilities | 178,078,454 | 136,261,798 | | Total Liabilities | 358,229,961 | 304,299,653 | | Total Equity | 111,409,601 | 90,290,304 | | Total Equity and Liabilities | 469,639,562 | 394,589,957 | - The increase in current assets was largely due to a rise in Trade Receivables (from $88.8 million to $119.3 million) and Inventories (from $61.0 million to $87.3 million)[3] - The growth in total liabilities was primarily driven by an increase in non-current borrowings, which rose from $48.0 million to $90.7 million[4] Statements of Comprehensive Income For the six months ended December 31, 2021, revenues significantly increased to $158.7 million from $90.1 million, leading to a profit of $7.6 million compared to a prior-year loss of $4.6 million, with basic EPS at $0.1046 and total comprehensive income at $21.2 million Six-Month Performance Summary (in USD) | Metric | Six-months ended 12/31/2021 | Six-months ended 12/31/2020 | | :--- | :--- | :--- | | Revenues from contracts | 158,667,650 | 90,108,598 | | Operating profit | 27,741,426 | 19,902,485 | | Profit (loss) for the period | 7,603,722 | (4,571,304) | | Total comprehensive profit (loss) | 21,226,210 | (3,776,177) | | Basic profit (loss) per share | 0.1046 | (0.1663) | | Diluted profit (loss) per share | 0.1014 | (0.1663) | - Revenue for the three-month period ended Dec 31, 2021, nearly doubled to $92.3 million from $48.0 million in the same period of 2020[5] Statements of Changes in Equity Total equity increased from $90.3 million to $111.4 million during the six months ended December 31, 2021, primarily driven by a $7.6 million profit and $13.6 million in other comprehensive income, including foreign currency translation gains Changes in Equity for the Six-Month Period Ended 12/31/2021 (in USD) | Description | Amount | | :--- | :--- | | Equity at 06/30/2021 | 90,290,304 | | Share-based incentives | 873,409 | | Changes in non-controlling interests | (980,322) | | Profit for the period | 7,603,722 | | Other comprehensive income | 13,622,488 | | Equity at 12/31/2021 | 111,409,601 | - In the comparable prior-year period (six months ended Dec 31, 2020), total equity decreased from $60.7 million to $77.9 million, impacted by a net loss of $4.6 million but supported by share issuances totaling $21.8 million[9] Statements of Cash Flows For the six months ended December 31, 2021, net cash used in operating activities improved to $19.9 million, investing activities generated $4.0 million, and financing activities generated $17.8 million, resulting in cash and cash equivalents of $36.4 million at period-end Six-Month Cash Flow Summary (in USD) | Activity | 12/31/2021 | 12/31/2020 | | :--- | :--- | :--- | | Net cash flows used in operating activities | (19,867,508) | (23,645,659) | | Net cash flows generated by (used in) investing activities | 3,966,879 | (12,195,310) | | Net cash flows generated by financing activities | 17,777,727 | 12,173,742 | | Net increase (decrease) in cash | 1,877,098 | (23,667,227) | | Cash at end of period | 36,366,131 | 19,130,206 | - The negative operating cash flow was primarily due to working capital adjustments, including a $34.5 million increase in trade receivables and a $35.2 million increase in inventories[13] - Financing activities were driven by $79.9 million in proceeds from borrowings, offset by $58.8 million in repayments[15] Notes to the Financial Statements This section provides detailed explanations of the accounting policies, operational factors, and specific components of the financial statements, including segment information and post-reporting events General Information and Accounting Policies (Notes 1-3) Bioceres Crop Solutions Corp. is a global provider of crop productivity technologies, with financial statements prepared under IAS 34 in US Dollars, applying IAS 29 for hyperinflationary economies, and including non-material reclassifications to prior period cash flows - The company is a fully integrated provider of crop productivity technologies, including a biotech platform for seeds, microbial ag-inputs, and crop nutrition/protection solutions[18] - The financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting and should be read in conjunction with the annual statements as of June 30, 2021[20][21] - Due to hyperinflation in Argentina, the company applies IAS 29, which requires restating non-monetary items using a general price index, with the presentation currency being the US Dollar[25][30] - The Group revised its previously issued cash flow statement for December 31, 2020, to reclassify certain short-term investments to cash equivalents and move purchases of own shares from investing to financing activities, with the impact deemed non-material[33] Operational Factors (Notes 4-5) The Group's agricultural operations were largely exempt from COVID-19 disruptions, with no material financial impact, though future uncertainties remain, and the business exhibits high seasonality with sales concentrated in the third and fourth calendar quarters - The Group's operations in agricultural production and commercialization have been mostly exempted from disruptions caused by COVID-19, with no material impact on financial condition or results[42] - The business is highly seasonal, with sales concentrated in the third and fourth quarters of the calendar year, aligning with the South American growing season, which leads to significant fluctuations in quarterly results[45] Details of Financial Position (Note 6) This note provides a detailed breakdown of key balance sheet items as of December 31, 2021, showing significant increases in inventories and trade receivables, growth in biological assets (HB4 Wheat), modest increases in PP&E and intangible assets, and a shift in borrowings towards a higher non-current portion Inventories (Note 6.5) Total inventories increased to $87.3 million as of December 31, 2021, from $61.0 million on June 30, 2021, primarily due to growth in resale, manufactured, and agricultural products Inventory Breakdown (in USD) | Category | 12/31/2021 | 06/30/2021 | | :--- | :--- | :--- | | Resale products | 31,157,840 | 21,368,521 | | Manufactured products | 14,169,831 | 10,902,683 | | Agricultural products | 31,031,179 | 21,984,626 | | Supplies | 10,209,965 | 6,320,594 | | Total (Net of allowance) | 87,308,712 | 61,037,551 | Biological Assets (Note 6.6) Biological assets increased to $8.1 million as of December 31, 2021, from $2.3 million, driven by costs incurred and fair value changes, with HB4 Wheat accounting for $5.9 million of the total - The value of biological assets grew from $2.3 million to $8.1 million during the six-month period, with HB4 Wheat being the largest component at $5.9 million[54] Property, Plant and Equipment (Note 6.7) The net carrying amount of Property, Plant, and Equipment (PP&E) slightly increased to $48.9 million from $48.0 million, with Land and Buildings remaining the largest asset class at $35.1 million, reflecting $1.8 million in additions and $1.7 million in depreciation PP&E Summary (in USD) | Category | 12/31/2021 | 06/30/2021 | | :--- | :--- | :--- | | Gross carrying amount | 67,386,521 | 63,974,402 | | Accumulated depreciation | (18,439,966) | (16,019,806) | | Net carrying amount | 48,946,555 | 47,954,596 | Intangible Assets (Note 6.8) The net carrying amount of intangible assets increased to $72.6 million from $67.3 million, primarily comprising the HB4 soy and breeding program ($29.5 million) and customer loyalty ($20.9 million), with $2.4 million in capitalized R&D expenditures Intangible Assets Summary (in USD) | Category | 12/31/2021 | 06/30/2021 | | :--- | :--- | :--- | | Gross carrying amount | 85,908,018 | 78,019,203 | | Accumulated amortization | (13,345,000) | (10,676,841) | | Net carrying amount | 72,563,018 | 67,342,362 | - Key intangible assets include the HB4 soy and breeding program ($29.5 million), customer loyalty ($20.9 million), and trademarks and patents ($7.3 million)[66] Borrowings (Note 6.11) Total borrowings increased to $139.0 million from $124.8 million, with a significant shift from current to non-current liabilities, as current borrowings decreased to $48.2 million while non-current borrowings rose to $90.7 million, partly due to a $20 million corporate bond offering Borrowings Breakdown (in USD) | Category | 12/31/2021 | 06/30/2021 | | :--- | :--- | :--- | | Current Borrowings | 48,230,663 | 76,785,857 | | Non-Current Borrowings | 90,738,228 | 47,988,468 | | Total Borrowings | 138,968,891 | 124,774,325 | - On December 23, 2021, the company completed a $20 million public offering of Series VII corporate bonds maturing in December 2024 with an annual interest rate of 1.49%[76] Details of Comprehensive Income (Note 7) This note details the income statement for the six months ended December 31, 2021, showing revenue growth to $158.7 million, a gross profit of $66.4 million, total R&D investment of $5.2 million, and improved net financial results at a cost of $13.4 million Revenue Breakdown (in USD) | Category | 12/31/2021 | 12/31/2020 | | :--- | :--- | :--- | | Sale of goods and services | 157,538,626 | 88,616,572 | | Royalties | 1,129,024 | 1,492,026 | | Total | 158,667,650 | 90,108,598 | R&D Investment Summary (in USD) | Category | 12/31/2021 | 12/31/2020 | | :--- | :--- | :--- | | R&D capitalized | 2,425,244 | 1,556,367 | | R&D expensed | 2,815,574 | 2,139,032 | | Total R&D | 5,240,818 | 3,695,399 | Net Financial Results (in USD) | Category | 12/31/2021 | 12/31/2020 | | :--- | :--- | :--- | | Financial costs | (6,763,065) | (10,642,180) | | Other financial results | (6,638,224) | (7,990,156) | | Total net financial results | (13,401,289) | (18,632,336) | Taxation and EPS (Notes 8-9) For the six months ended December 31, 2021, the company reported an income tax expense of $6.7 million on a $14.3 million profit before tax, with basic EPS at $0.1046 and diluted EPS at $0.1014, marking a significant improvement from the prior-year loss per share Income Tax Expense (in USD) | Category | 12/31/2021 | 12/31/2020 | | :--- | :--- | :--- | | Current tax expense | (11,916,178) | (6,716,736) | | Deferred tax | 5,179,763 | 875,283 | | Total | (6,736,415) | (5,841,453) | Earnings Per Share (EPS) | Metric | Six-months ended 12/31/2021 | Six-months ended 12/31/2020 | | :--- | :--- | :--- | | Basic EPS | 0.0834 | (0.1663) | | Diluted EPS | 0.0808 | (0.1663) | Segment and Investment Information (Notes 12-13) The company operates three segments: Crop Protection ($82.6 million revenue), Crop Nutrition ($51.9 million revenue), and Seed and Integrated Products ($25.1 million revenue), with the latter achieving the highest gross margin at 64%, and holds $34.1 million in joint venture investments Segment Performance for Six Months Ended 12/31/2021 (in USD) | Segment | Total Revenue | Cost of Sales | Gross Profit | Gross Margin % | | :--- | :--- | :--- | :--- | :--- | | Seed and integrated products | 25,110,137 | (8,988,420) | 16,121,717 | 64% | | Crop protection | 82,603,469 | (57,480,257) | 25,123,212 | 30% | | Crop nutrition | 51,855,492 | (26,746,765) | 25,108,727 | 48% | - Compared to the prior year, all segments showed strong revenue growth, with Crop Nutrition revenue more than doubling from $21.2 million to $51.9 million, and Crop Protection revenue growing from $48.7 million to $82.6 million[109] - Investments in joint ventures and associates totaled $34.1 million as of December 31, 2021, with Synertech Industrias S.A. being the largest holding at $30.9 million[104] Compensation and Share-Based Payments (Notes 16-17) For the six months ended December 31, 2021, key management personnel compensation totaled $1.7 million, including $0.9 million in share-based incentives, with 93,600 new options granted under plans with exercise prices of $4.55 and $5.55, resulting in a $0.6 million charge for option plans and $0.25 million for bonuses Key Management Personnel Compensation (in USD) | Category | 12/31/2021 | 12/31/2020 | | :--- | :--- | :--- | | Salaries, social security and other benefits | 803,905 | 1,079,894 | | Share-based incentives | 873,407 | 636,519 | | Total | 1,677,312 | 1,716,413 | - The company has share option plans for directors and management with exercise prices of $4.55 and $5.55 per share, expiring in 2029 and 2030, respectively[124] - The total charge recognized for share-based payments during the period was $0.6 million for option plans and $0.25 million for annual bonuses[130][131][132] Other Disclosures (Notes 18-20) As of December 31, 2021, lease liabilities totaled $1.2 million with corresponding right-of-use assets valued at $1.5 million, and no significant changes to contingencies or commitments occurred since the last annual report, nor were there any significant post-reporting period events requiring adjustment or disclosure Lease Summary (in USD) | Account | 12/31/2021 | 06/30/2021 | | :--- | :--- | :--- | | Right-of-use leased asset | 1,488,608 | 1,327,660 | | Lease liability (Total) | 1,205,745 | 1,140,717 | - There were no significant changes to contingencies, commitments, or restrictions on profit distribution since the annual financial statement of June 30, 2021[136] - No significant events occurred after the December 31, 2021 reporting period that would require adjustment or disclosure[137]