GENT-ZWIJNAARDE, BELGIUM--(Marketwire - May 17, 2010) -
Regulated information
Financial update for the first quarter 2010
* Revenues of 3.032 KEUR compared to 1.359 KEUR over the same period last year. These are mainly non-seed revenues as there is no planting season during the reporting period.
* EBITDA amounts to a loss of 591 KEUR down from 3.237 KEUR for the same period last year. This is attributable to a combination of higher income and lower expenses for R&D and marketing.
* Net loss of 1.168 KEUR compared to 3.925 KEUR over the same period last year.
* Cash and cash equivalents are at 41.797 KEUR, down from 45.762 KEUR at the start of the year. Cash burn is in line with guidance given.
Business highlights seeds & traits (Jan - May 15) and outlook for 2010
Devgen is confident to achieve its objectives to grow its seed business by 35 to 40% during 2010, assuming a normal 2010 monsoon (forecasts by the metrological department of India to date are encouraging) and a good June-September production season for rice in Philippines.
India:
- Devgen’s hybrid seed production season in India is nearing completion. For the second year in a row, severe a-biotic and biotic stress factors were experienced in part of the production areas. Devgen’s harvested volumes for all crops are sufficient to achieve the targeted revenue increases.
- We expect 2010 to be a good year for rice, sorghum and pearl millet, with respect of both selling prices and sales volumes. Advance bookings in these crops are strong, validating the effectiveness of Devgen’s strong demand generation with farmers and distributors.
- As output prices for sunflower are low at current, farmers are expected to plant less sunflower this season (this is a 3-4 yr cycle). We nevertheless remain confident on achieving substantial volume growth in sunflower.
South-East Asia:
- Masuwerte® was launched successfully with good feedback from farmers. Sales will be ramped in the upcoming sales season (May - June).
- Devgen’s first commercial scale production season in Philippines confirmed the good seed productivity potential of the Masuwerte® hybrid. This will result in a positive impact on production cost. A second production season starts in June.
- Product launch and first sales of DG-1-SHS in Indonesia are on target for 2010.
- Seed production in Indonesia in the joint Strategic Business Unit for seed production with Sang Hyang Seri (Persero) is being initiated.
Milestones which support Devgen’s future growth:
- Devgen launched a new premium rice hybrid, Frontline Gold 1531. This rice hybrid was especially developed for the northeastern and western part of India where rice is mainly cultivated during the wet season. Frontline Gold RH 1531, a leading hybrid in 2009 DRR governmental trials[1], benefits the farmer in multiple ways: high yield, superior grain quality, better tolerance to diseases & lodging and maturation in only 120 - 125 days.
- First sales of Devgen’s new drought and heat resistant pearl millet DB 5000, launched at the end of 2009. This product enables Devgen’s entry in the large summer pearl millet market.
- Devgen accessed a new distribution channel offering information, products and services to farmers through the GSK[2] network in collaboration with the Indian Post. Taking into consideration the India Post’s ubiquitous network of over 155,000 post offices across the country, this initiative holds great potential for future revenue generation. This new distribution channel is complementary to Devgen’s current distribution channel through regional distributors and local dealers.
- Devgen and the International Rice Research Institute (IRRI) established a partnership for the development of hybrid rice varieties capable of withstanding drought more efficiently than the presently available varieties. A-biotic stress such as drought is a substantial yield-limiting factor for farmers who depend on rain to irrigate their land. It is the aim of both IRRI and Devgen to offer solutions to farmers to increase their yields in the face of water scarcity.
- In India import licenses were obtained for biotech rice to be entered into the country for further development. On completion of Devgen’s biotech infrastructure in India in Q2, development of biotech rice will start in India with a focus on insect and herbicide tolerance.
- Monsanto Company announced that it had moved a corn rootworm trait based on RNAi technology from phase 1 to phase 2 in its pipeline.
Business Highlights - Crop Protection
- After obtaining approval in 2009 in the US for its nematicide, for application in peanuts, Devgen is on track to realize first year sales in this market. Devgen further targets obtaining regulatory approval to enter the high value tomato and cucurbit market segment in the US. Devgen’s nematicide will be launched in the US under the brandname Enclosure®.
- Devgen submitted registration dossiers in additional European countries for application of its nematicide on high value vegetables. Devgen’s nematicide will be sold in Europe under the brandname Devguard®.
About Devgen
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 will be launched in US in 2010.
Incorporated in 1997, Devgen has offices in Ghent (Belgium), and has subsidiaries in Singapore, Hyderabad (India), General Santos (Philippines) and Delaware (US), totalling about 280 employees.
For more information please contact: Thierry Bogaert, CEO Wim Goemaere, CFO Tel. +32 9 324.24.24 Tel. +32 9324.24.24 Thierry.Bogaert@devgen.com Wim.Goemaere@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.
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[1] Directorate Rice Research India Annual Progress Report 2009, vol 1 - Varietal improvement
[2] Gramin Suvidha Kendra (GSK, gsk.mcxindia.com)
[HUG#1416166]
PR ENG FINAL: http://hugin.info/135721/R/1416166/366820.pdf
