Business update
(Thomson Reuters ONE) -
Regulated information
Devgen nv
Business update
Zwijnaarde, Belgium - November 16, 2010 - Devgen nv (Euronext Brussels; DEVG)
issues today a business and financial update for the third quarter 2010.
Seed business
In India, where Devgen already holds the nr 3 position in the hybrid rice seed
market, its newly launched products performed well in the market. Devgen expects
to grow market share for these products as of next year. In Q3 Devgen selected
new rice hybrids from its pipeline, for launch in 2011 and 2012. These premium
products address big market segments in India where Devgen is not present today,
give high yield to the farmer and improved seed production yields to Devgen.
These new pipeline products should also support Devgen to achieve important
improvements with respect of gross margins in its rice business in the future.
In Philippines Devgen received positive feedback from farmers on the performance
of its hybrid rice Masuwerte(®) in the rainy season. Few hybrids perform well in
the rainy season because of its strong winds and high disease pressures.
Previously the product launch of Masuwerte(®) in the dry season was also well
received by the farmers.
In Q3 several Devgen products that meet farmer and consumer requirements were
selected for provincial and national registration in Vietnam. In Vietnam Devgen
focuses on the South, a 4 million ha market, where extensive testing of Devgen's
hybrid rice pipeline was done for the last 2 years. If successful, this offers
Devgen the potential to sell its hybrids in this market by mid 2012.
Devgen, together with its partner PT. (Persero) Sang Hyang Seri, started this
week sales of DG 1 SHS hybrid rice seed, across the key rice growing areas in
Indonesia (Java, Sumatra and Sulawesi), in time for the upcoming planting
season. This is a major milestone, as Indonesia is the third largest potential
hybrid rice market (12m ha) after India and China.
In Q3 Devgen furthermore entered a new phase in its introduction of biotech
traits in India. Devgen's new greenhouses were inaugurated in Hyderabad in
September.
Nematicides
Two important milestones were reached in our nematicide business:
(1) Devgen's nematicide was Annex I listed by the EU regulatory authorities,
which is a key milestone towards its market introduction in Europe.
(2) Devgen's nematicide proved itself in a new market: we received positive
feedback from peanut farmers in the US regarding the efficacy of Devguard(®).
This forms the basis for expanding sales activities next year.
Thierry Bogaert, CEO of Devgen comments on the key achievements in Q3 2010:
"Overall Devgen made in 2010 significant progress in validating its business and
technology strategy and remains in a good position to be top 5 in hybrid rice
seed in India and South East Asia. With products for each of its target
countries, Devgen can proceed confidently with expanding its teams and seed
supply infrastructure in its selected markets: India, Indonesia, Philippines and
Vietnam. In the background, the need for growing more rice on less land and the
increasing value of rice as a basic food source is also becoming more and more
apparent (IRRI congress, Hanoi Nov 2011) and further validates our investment
case."
Thierry Bogaert continues: "We are especially pleased with our most recent
business developments in Indonesia. Devgen is fully committed to be part of the
successful introduction of hybrid rice in the country together with its partner
PT (Persero) Sang Hyang Seri."
Financial update for the first three quarters of 2010
In 2010, Devgen's overall turnover for seed is under pressure, caused by
multiple challenges including anomalous weather conditions and output price
reductions for sunflower making farmers decide to plant another crop. Despite an
overall shortage of vegetable oil production in India, sunflower oil prices and
the acreage of sunflower planted fluctuate in a 4-5 year cycle which in 2010 was
expected to be at its lowest point. Devgen's entire substantial growth in hybrid
sorghum sales in India and in hybrid rice sales in India and the Philippines is
neutralized by low sales of hybrid sunflower seed in India. Considering the
progress made in its core business case and the cyclical nature of the sunflower
oil prices in India, Devgen expects this to be transitory.
* Revenues for the first 3 quarters amount to 15.8 million ? compared to 14.5
million ? over the same period last year. Revenues during Q3 amounted to
3.5 million ? compared to 5.9 million ? last year. Revenues for Q3 related
to both R&D and sunflower sales with the overall reduction entirely for the
account of sunflower sales.
* EBITDA up to September 30, 2010 amounts to a loss of -1.9 million ? down
from -3.2 million ? for the same period last year.
* Net loss to date amounts to -3.7 million ? compared to -4.9 million ? over
the same period last year.
* Cash and cash equivalents are at 30.7 million ? on September 30, down from
33.3 million ? reported on June 30.
+-------------------+--------------+-------------+--------------+--------------+
|Key financials up | | | | |
|to end of September|Quarter 3 2010| Quarter |Quarter 3 YTD |Quarter 3 YTD |
|2010 | | 3 2009 | 2010 | 2009 |
|(? '000) | | | | |
+-------------------+--------------+-------------+--------------+--------------+
|Revenues from | | | | |
|continued | 3,518| 5,886| 15,770| 14,504|
|operations | | | | |
+-------------------+--------------+-------------+--------------+--------------+
|EBITDA from | | | | |
|continued | -894| 877| -1,934| -3,163|
|operations | | | | |
+-------------------+--------------+-------------+--------------+--------------+
|Net loss from | | | | |
|continued | -1,360| 299| -3,692| -4,685|
|operations | | | | |
+-------------------+--------------+-------------+--------------+--------------+
|Net loss from | | | | |
|discontinued | 0| -38| 0| -200|
|operations | | | | |
+-------------------+--------------+-------------+--------------+--------------+
|Total net loss for | -1,360| 262| -3,692| -4,884|
|the period | | | | |
+-------------------+--------------+-------------+--------------+--------------+
| | | | 30.09.10| 31.12.09|
+-------------------+--------------+-------------+--------------+--------------+
|Cash and cash | | | 30,749| 45,762|
|equivalents | | | | |
+-------------------+--------------+-------------+--------------+--------------+
Outlook 2010
Revenues are now expected to amount to 20 million ?, up 10% compared to last
year entirely due to an increase of the R&D income (+34%) with sales of product
affected by a poor sunflower season offsetting growth in other crops and sales
realized in new areas such as the Philippines and Indonesia.
R&D expenditure is now set at approximately 9 million ? including depreciation.
Cash at year-end is expected to amount to 20 million ?.
About Devgen nv
Devgen's mission is to enable farmers to sustainably grow more food on less
land, with less water, agrochemicals and labour.
Devgen uses advanced biotechnology and molecular breeding technology to make
high yielding seeds and crop protection solutions with a superior environmental
profile. Devgen brings this technology to the market in the world's major food
and feed crops through two complementary strategies:
licensing Devgen technology for use in corn, cotton and soy and selected other
crops in exchange for R&D funding, and milestone and royalty payments;
producing and selling its premium hybrid seeds in major field crops such as
rice, sunflower, sorghum, and pearl millet, in the Indian subcontinent and
South-East Asia.
In its Crop Protection unit, Devgen developed an agro-chemical product that
protects crops from damage by parasitic nematodes. This nematicide was launched
in Turkey and in US.
Incorporated in 1997, Devgen has offices in Ghent (Belgium), and has
subsidiaries in Singapore, Hyderabad (India), General Santos (Philippines), and
Delaware (US), totaling about 280 employees.
For more information please contact:
Thierry Bogaert, CEO Wim Goemaere, CFO
Tel. +32 9 324 24 24 Tel. +32 9 324 24 24
Thierry.Bogaert(at)devgen.com Wim.Goemaere(at)devgen.com
Or visit: www.devgen.com
This press release may contain forward-looking statements containing the words
"anticipates", "expects" , "intends", "plans", "estimates", "may" and
"continues" as well as similar expressions. Such forward looking statements may
involve known and unknown risks, uncertainties and other factors which might
cause the actual results, performance or achievements of Devgen to be materially
different from any future results or achievements expressed or implied by such
forward-looking statements. Factors that could cause or contribute to such
differences include, among others: agricultural risks and difficulties,
including weather factors, diseases and pests, the costs and requirements of
regulatory compliance and the speed with which approvals are received; public
acceptance of biotechnology products; political, economic and social
developments in countries where Devgen operates and other risks and factors
detailed in the company's most recent annual report.
These forward looking statements speak only as of the date of publication of
this document. Devgen disclaims any obligation to update such forward looking
statements in this document to reflect any change in its expectations,
conditions or circumstances on which such statement is based, unless required by
law or regulation. This document does not constitute, or form part of, any offer
or invitation to sell or issue, or any solicitation of any offer, to purchase or
subscribe for any securities issued by Devgen NV.
[HUG#1463142]
PR ENG:
http://hugin.info/135721/R/1463142/402063.pdf
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Source: Devgen via Thomson Reuters ONE
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Datum: 16.11.2010 - 20:01 Uhr
Sprache: Deutsch
News-ID 48834
Anzahl Zeichen: 12707
contact information:
Town:
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Kategorie:
Business News
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