ArborGen Holdings (ARB) H2 2024 earnings summary

Executive summary

• Achieved record revenue of $67.7m, up 21% year-over-year, and record Adjusted US GAAP EBITDA of $12.8m, up 39% from the prior year, driven by strong performance in Brazil and solid US pricing and margins despite lower volumes.

• Strategic reset, including divestment of Australasian operations and expansion in Brazil, contributed to improved results; Brazil now accounts for 39% of seedling sales revenue, up from 30% last year.

• Leadership changes included appointment of new CEO Justin Birch and key senior roles, with a focus on advanced genetics and operational efficiency.

• Sale of non-core in vitro business and closure of Taylor Nursery to free up cash and reduce costs by $1m annually.

Financial highlights

• Revenue increased 21% to $67.7m compared to the prior year; gross profit rose 32% to $24.0m.

• Adjusted US GAAP EBITDA reached $12.8m, up 39% year-over-year; US GAAP EBITDA (including one-offs) was $7.6m, down 26%.

• Net loss after tax improved to $0.2m from $2.5m loss in the prior year.

• Net debt (excluding leases) was $14.4m as of 31 March 2024; cash and equivalents stood at $5.6m.

• One-off items totaled $5.2m, including $1.8m seed provision, $1.0m VAT allowance, $1.9m CEO transition costs, and $0.5m restructuring.

Outlook and guidance

• Expect continued growth momentum in Brazil and flat sales volumes in the US for FY25 due to ongoing market conditions.

• Focus remains on transitioning customers to higher value products and expanding production capacity, especially in Brazil.

• Cost savings from Taylor Nursery closure and in vitro business sale will partially offset increased investment in team and nurseries.