Company update: Restructuring the company to ensure viable growth
Q2 trading update
- Q2 sales revenues of USD 0.7m as no revenue has been recognized in Mexico due to distributors’ carrying sufficient inventory
- 370,000 units deployed to end users in Mexico during Q2, of which 170,000 units under government subsidy programs, strong growth compared with Q2 last year
- Net operating loss of USD 7.9m in Q2 reflecting low sales revenues
- Record quarterly cash inflow of USD 7.3m, USD 15.0m year to date
- Cash balance of approx USD 11m at the end of Q2, USD 7.5m as of today
Company restructuring initiated by the board to ensure shift in performance
- Kjetil Bøhn appointed as interim Group CEO, search for new ag experienced CEO started
- Board to be strengthened by two new members
- Accelerating measures to reduce cash burn and increase control
- New Mexico business unit management led by board member and seasoned Mexican business leader Gerardo Esquer, strong measures taken and cost base already reduced
- Refocus the business on organic sales in Mexico and profitable growth in the US
- Government subsidy programs in Mexico remains option with attractive upside
- Contemplating balance sheet strengthening
The company will provide further Q2 2013 and outlook details in a webcast presentation and call scheduled tomorrow Thursday 12 September 2013 at 14:30 CET. See further details below. Announcement of the full Q2 2013 interim report and financial statements will take place later in September.
Agrinos has developed substantially since inception in 2009, but following weaker than expected cash flow and operational control in Mexico, accelerating over the last two months, the board has initiated a restructuring of the company to ensure viable growth.
The company has conducted a strategic shift to ensure a sustainable organic business in Mexico without dependency on government subsidy programs and increase the importance of the US. Select other business units and markets with positive cash flow or significant potential will be maintained, while strict cash flow discipline is enforced. This will reduce the risk profile of Agrinos.
Agrinos has started to deliver into government subsidy programs in Mexico and through its distributors collected USD 4.0 million in late June and USD 3.5 million in September. The company sees potential for further cash inflow and positive development under the programs going forward.
The R&D portfolio will be managed to a strict budget with prioritization of early commercial candidates, while maintaining longer term optionality.
In conjunction with the restructuring, the Board of Agrinos has in understanding with the CEO, Tom Einar Jensen decided to relieve him of his duties. Kjetil Bøhn, founder and current vice chairman of the Board has been appointed as interim CEO and will retire from the board to lead the company forward while seeking a permanent replacement. Agrinos has experienced strong growth under Jensen’s leadership and established attractive positions. The new board and management will now consolidate and prepare the company for an IPO.
Contemplating balance sheet strengthening
The board is contemplating a balance sheet strengthening to provide more adequate funding for a refocused business, and has retained RS Platou Markets as financial advisor.
Conference call and webcast presentation Thursday 12 September 2013
A combined webcast and conference call will be hosted tomorrow Thursday 12 September 2013 at 14:30 CET.
In order to follow the presentation you may use one of the following channels:
a. Webcast – audio and slide presentation
The webcast can be accessed on http://media01.smartcom.no/Microsite/start.aspx?eventid=7125, or by following the webcast link on Agrinos’ investor relations section on the company website.
b. Conference call – listen in and Q&A session
|Participants - International:||+44 (0) 20 3427 1906|
|Participants - New York, USA:||+1 646 254 3366|
|Participants - Oslo, Norway:||+47 2316 2787|
EVP Corporate Communications and Investor Relations
+47 908 58 221
Agrinos is a biological crop input provider committed to improving the productivity and sustainability of modern agriculture. Agrinos’ range of High Yield Technology® (“HYT®”) products helps farmers to practice profitable agriculture by providing increased crop productivity, improved efficiency of conventional fertilizer and a reduced environmental footprint.
Certified as organic and based on Agrinos’ proprietary technology, the HYT® products provide benefits by strengthening the soil-based microbial ecosystem, stimulating crop development at key points in the growth cycle and boosting natural plant resistance to pathogens and threats. With solutions for a variety of crop categories, the technology comprising the HYT® products has demonstrated its value in third-party trials in key agricultural regions worldwide. Founded in 2009, Oslo-based Agrinos has more than 300 employees and has grown to include activities in Mexico, the USA, Colombia, Peru, Brazil, the UK, Spain, the Nordics, Ghana, Malaysia, Indonesia, India and the People’s Republic of China. Agrinos enjoys financial backing from a number of leading international investors and has a strong management team led by its chairman, Dr Thorleif Enger.« Return to News