Company update

Q1 and YTD 2014 trading update (preliminary numbers)

• YTD 2014 marked by progressive market environment for biologicals, continued consolidation and sharpened business focus for Agrinos; US growth, Mexico restructuring and R&D key priorities 
• Q1 sales revenues of USD 0.4m driven by the US market 
• 357 000 units deployed by end users in Mexico during Q1
• Cash collection of USD 0.7m  in Q1, of which USD 0.4m in Mexico
• Cost efficiency program on track, quarterly gross cash burn reduced to USD 6.9m in Q1
• Cash balance of USD 18.9m at the end of Q1
• D. Ry Wagner appointed as CEO, effective July 1, 2014

In connection with the year-end close and release of the annual report, the Board of Directors of Agrinos has announced balance sheet write downs and a strategy update. 

The Company has chosen to further risk the projected inflow of cash in Mexico on back of the lower than expected cash collection in this market during the spring. Hence, the board has decided to write down market rights and the receivables and loans in Agrinos Mexico by USD 20.5 million. This amount comes in addition to the provisions reported in the fourth quarter and full year 2013 interim report. As a result of the write-down and other year-end adjustments, the operating income for 2013 ended at negative USD 78.2 million in the Annual Report for 2013, compared with a negative USD 51.3 million in the fourth quarter and full year interim report. The deployment volumes in Mexico in the first quarter 2014 was 357 000 units, versus 492 000 in the first quarter last year. The reduction in deployment reflects the distributors’ reduced operational capacity as a consequence of the ongoing restructuring, as well as challenging weather conditions.

The deployment level in Mexico impacts the first quarter result. No sales revenues will be recognized in Mexico for the first quarter. Within the rest of the group sales amounted to USD 0.4 million, based on good progress in US.

The gross cash burn in the first quarter was USD 6.9 million, down from USD 7.7 million in the fourth quarter 2013. On the back of the development in parts of Mexico, further cost cuts have been implemented after the close of the first quarter.

The development in Mexico, the US and other geographies, as well as the biologicals market, resulted in a strategy update that was announced by the board in the annual report for 2013. The update highlights the following priorities: 1) focused and controlled commercial market activities, 2) targeted research and development to support existing and new commercial activities, 3) ensuring a lean and performing organization aligned to Agrinos’ priorities and 4) maintaining financial flexibility to support the company’s development and protection of the balance sheet.

Agrinos today also announced that its Board of Directors has appointed D. Ry Wagner as Chief Executive Officer. Effective July 1, 2014, Wagner will transition to CEO from his current role as Chief Technology Officer of Agrinos and Head of Agrinos US and Brazil Business Units. See separate news release.

First quarter 2014 interim reporting and conference call Thursday 26 June 2014
Agrinos will release its first quarter 2014 interim report Thursday 26 June and host a conference call supported by a slide presentation for investors and analysts at 14:30 CET the same day. A Q&A session will be arranged at the end of the call.

The interim report and the slide presentation will be available from the company’s website www.agrinos.com on Wednesday 26 June 2014 at 07:00 CET.

The company will revert with invitation to the event and call details.

Further information
Harald Bjørland
EVP Corporate Communications and Investor Relations
+47 908 58 221
harald.bjoerland@agrinos.com

About Agrinos

Agrinos is a biological crop input provider committed to improving the productivity and sustainability of modern agriculture. Agrinos’ range of High Yield Technology^® (“HYT^®”) products helps farmers to practice profitable agriculture by providing increased crop productivity, improved efficiency of conventional fertilizer and a reduced environmental footprint. 

Certified as organic and based on Agrinos’ proprietary technology, the HYT^® products provide benefits by strengthening the soil-based microbial ecosystem, stimulating crop development at key points in the growth cycle and boosting natural plant resistance to pathogens and threats. With solutions for a variety of crop categories, the technology comprising the HYT^® products has demonstrated its value in third-party trials in key agricultural regions worldwide.