• Revenue: Declined by 24% compared to the year-ago quarter, totaling $106 million.
• Gross Margin: Improved from 37% to 42% during the quarter.
• Net Debt: Stood at $238 million, with a leverage ratio of 3.3.
• Adjusted EBITDA: Reached $15.4 million, down from approximately $24 million in the previous year.
• Crop Protection Revenue: Decreased by 20% year-to-date, with a 29% drop in Argentina.
• Crop Nutrition Sales: Totaled $28 million in the second quarter, primarily affected by a decline in micro fertilizer sales in Argentina.
• Gross Profit: Totaled $45 million, with segment variations; crop protection gross profit at $20 million, a 22% decline.
• Inventory Levels: Reduced by 18% compared to last year.

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

Release Date: February 12, 2025

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

Positive Points

• Bioceres Crop Solutions Corp (NASDAQ:BIOX) maintained or increased market share in key product segments despite challenging market conditions.
• The company improved its gross margin from 37% to 42% during the quarter, indicating better cost management.
• Sales outside of Argentina grew, showcasing the success of the company's geographic diversification strategy.
• Bioceres Crop Solutions Corp (NASDAQ:BIOX) announced strategic partnerships with GDM and Florimondere, which are expected to enhance its product offerings and market reach.
• The appointment of Mile Marinoff as Chief Commercial Officer is expected to streamline commercial operations and accelerate growth.

Negative Points

• Revenues declined by 24% compared to the previous year, primarily due to poor sales performance in Argentina.
• The Argentine market faced significant challenges, including lower commodity prices and reduced farmer income, impacting sales.
• The company's adjusted EBITDA decreased significantly, driven by lower gross profit and increased SG&A expenses.
• Bioceres Crop Solutions Corp (NASDAQ:BIOX) experienced a decline in crop protection revenues by 20%, mainly due to market contraction in Argentina.
• The company's leverage ratio increased to 3.3, above the target threshold of 3, indicating higher financial risk.

Q & A Highlights

Q: Can you explain the economic impact of transitioning the seed business and how it will progress over time? A: Federico Trucco, CEO, explained that transitioning the seed business will initially affect cost structure, with benefits expected in 2 to 3 years. The partnerships, particularly with trade managers and GDM, will broaden opportunities beyond drought tolerance, allowing for more significant results in the future.

Q: How will the transition impact the balance sheet and working capital? A: Enrique Lopez Lecube, CFO, stated that the strategic pivot will free up working capital tied to the seed business, allowing reallocation to other areas. This will result in reduced SG&A expenses and cash returning to the balance sheet over the next 3 to 4 quarters.

Q: What is Bioceres' strategy in the market following this transition? A: Federico Trucco, CEO, emphasized a focus on the biological side of the business, leveraging existing GMO platforms for gene editing improvements. The strategy involves partnering with others for new seed products, using existing patented backbones for market-ready innovations.

Q: Can you discuss the expectations for OpEx savings in the coming quarters? A: Enrique Lopez Lecube, CFO, mentioned a broader effort to downsize teams and adjust cost structures across the business. A meaningful reduction in OpEx is expected before year-end, contributing to EBITDA stabilization despite current market challenges.

Q: How does the partnership with GDM affect R&D and potential solutions for crop challenges? A: Federico Trucco, CEO, highlighted that the partnership with GDM will combine forces to address challenges like target spot in soybeans. The collaboration will leverage Bioceres' biological offerings and GMO platforms to develop market-ready solutions.

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