• Revenue: $464.8 million for the fiscal year, with a quarterly increase of 18% to $124 million.

• EBITDA: $81.4 million for the fiscal year, with a significant increase in the last quarter.

• Quarterly Revenue Growth: 18% increase, driven by HB4 and crop protection sales.

• Annual Revenue Growth: 11% increase compared to fiscal 2023.

• Seed & Integrated Products Growth: 70% annual growth, driven by HB4 sales.

• Crop Protection Revenue Growth: 10% annual increase, with improved margins.

• Crop Nutrition Sales: Decreased by 10% annually, impacted by lower Syngenta payments.

• Gross Margin: Decreased from 44% to 40% for the fiscal year.

• Adjusted EBITDA: Maintained above $81 million, despite challenges.

• Net Financial Debt: Increased annually but decreased sequentially, maintaining leverage below three turns.

• Warning! GuruFocus has detected 4 Warning Signs with BIOX.

Release Date: September 10, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Bioceres Crop Solutions Corp (NASDAQ:BIOX) achieved record high revenue and EBITDA levels at $464.8 million and $81.4 million, respectively, despite challenging market conditions.

• The company experienced an 18% increase in sales during the fourth quarter, with significant contributions from HB4 and crop protection sales.

• Bioceres Crop Solutions Corp (NASDAQ:BIOX) maintained a diversified revenue stream, which helped offset challenges in the microgrid fertilizers market.

• The company reported a 70% growth in the Seed & Integrated Products segment, driven by HB4 sales and downstream sales efforts.

• Bioceres Crop Solutions Corp (NASDAQ:BIOX) successfully managed its cost base, reducing fixed SG&A by $1.6 million in the quarter, contributing to improved profitability.

Negative Points

• The company fell short of its annual growth expectations, with less than double-digit growth, despite a strong performance in the previous year.

• Bioceres Crop Solutions Corp (NASDAQ:BIOX) faced a tougher than expected quarter in the crop nutrition segment, with a 10% decrease in sales due to lower Syngenta payments and reduced demand for fertilizers.

• The shift towards a more conventional business model for HB4 seeds requires a more patient approach to growth, impacting immediate revenue expectations.

• The company is reviewing its HB4 soy expectations for fiscal year '25, acknowledging that it may take one to two more years to achieve prior guidance.

• Bioceres Crop Solutions Corp (NASDAQ:BIOX) experienced challenges in the US market for bioprotection, with complex market conditions affecting sales.

Q & A Highlights

Q: Can you explain the dynamics of HB4 wheat during the quarter, particularly the changes from the third-quarter call? A: Federico Trucco, CEO, explained that the initial confidence was based on traditional channels and recurring customers. However, expectations for multipliers to drive further sales did not materialize as anticipated. The company underestimated the validation required for conventional sales and the impact of a fixed royalty load on pricing. Adjustments in pricing and data generation are planned to better align with market conditions.

Q: Has there been any change in the Board's philosophy regarding HB4 given recent challenges? A: Federico Trucco, CEO, noted that while there isn't a seismic change, there is a pivot towards a more conventional business model to improve capital efficiency. The Board emphasizes the need for partnerships with established companies to enhance the commercialization process, particularly for HB4 soy.

Q: What are the current trends and order book sentiments in Brazil and Argentina for the upcoming planting season? A: Federico Trucco, CEO, stated that Brazil and the US are progressing well compared to the previous year. However, in Argentina, there is uncertainty due to weather conditions affecting the corn-soybean mix. The company is monitoring the situation closely.

Q: How is the new leadership in the biologicals business expected to impact the company's strategy and growth? A: Federico Trucco, CEO, highlighted that the new leadership will focus on expanding into row crops and developing hybrid products that combine biological AIs with existing products to improve efficacy and environmental profiles. This approach aims to differentiate the company in the market and drive growth.

Q: What is the outlook for HB4 wheat in the US and Australia, and what are the expected timelines? A: Federico Trucco, CEO, indicated that the focus in the US is on hard red wheat genetics in the Midwest, with commercialization expected in two years or more. In Australia, field trials have begun, and regulatory processes are underway, but it will take a few years for full approval.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.