Plant Health Care (PHC ) announced this morning solid revenue and sales growth in a trading update for the 6 months ended 30 June 2022.
Revenue climed 60% to $5.6m, compared to $3.5m in H1 2021. Sales in South America soared 333% following the launch of Saori in Brazil, the company's first PREtec product in the country. PREtec is a biotechnology that stimulates a plant to defend itself by using peptides from natural proteins, a "vaccine for plants" of sorts. Plant Health Care expects revenue from sales of Saori to grow to US$5m by 2025.
Harpin 𝜶β revenue increased by 37% to US$3.3m., with strong growth in sugar cane, citrus, cotton, and specialty crops. Harpin αβ is a natural method of activating a plant's defense systems, again similar to a vaccine, that makes plants more resilient and improves yields.
Sales in North America were also up an impressive 133%. In the US, sales of Harpin αβ-based products are currently focused on grapes, citrus, and specialty crops, with plans to extend into cotton and soybeans. Plant Health Care plans to launch PREtec-based products in the US as well through distributor Wilbur Ellis H2 2022, pending regulatory permits.
Third-party revenue was also up 36% US$1.5m. Gross margin jumped to 61%, from 56% last year, while cash reserves grew stand a comfortable $6.3m.
Expansion Continues
In addition to its strong financial performance, the company reported on its ongoing global expansion plans.
Plant Health Care signed several new distribution agreements, including with Ager Agro in Argentina and Uruguay for ProAct (Harpin αβ-based), and Nutrien in Brazil for Saori (PREtec-based). Plant Health Care also signed a long-term supply agreement with a European fermentation company to enable at-scale production of Harpin αβ. The Company now has agreements with some of the world's largest distributors, enabling significant market access.
Jeff Tweedy was appointed CEO as of 22 June 2022, and former CEO Chris Richards was appointed Non-Executive Chairman. Jeff Tweedy last week gave an interview to Vox's John Hughman. Click here for that conversation.
View from Vox
In H1 2022, Plant Health Care continued to see accelerated adoption of Harpin 𝜶β in large markets, including the US and Brazil. In South America sales soared 333%, driven by the introduction of Saori (PREtec-based) and strong demand for H2Copla (Harpin αβ-based) from sugar cane processors. Nutrien, the Company's Saori distributor in Brazil, expects to treat 150,000 hectares of soybeans in 2022, expanding to more than 1 million hectares by 2025, driving $5m of revenue. Plant Health Care sees $10 million of potential sales of Saori and Harpin αβ just in Brazil.
Plant Health Care has ambitious plans for its PREtec platform. After the Saori launch in Brazil, PRETec will be introduced in the US later this year. Following that mielestonee, the company expects at least one PREtec product launch in a major market every year, facilitated by its growing network of large global distributors.
The global market for biological products is growing at 12% per annum and is projected to reach US$19 billion by 2026. Since 2018, Plant Health Care has evolved its strategy from a focus on licensing its technology to major suppliers of agrochemicals, towards working with distributors. That strategy has paid off as today's results clearly show. Plant Health Care's goal is to deliver $30m of sales in 2025, which is firmly on track with this update.
Investors cheered today's news and PHC shares soared c. 14% in early trading. Its shares have remained flat YTD, defying the broader downturn in equities. The company is well-funded with a $6.3m cash position to support future expansion. With steadily increasing orders, a growing network of suppliers and distributors, and currently high prices of agricultural commodities, Plant Health Care should deliver full-year results at minimum in line with expectations, and likely in excess of current expectations.
Jeff Tweedy had an optimistic outlook: "Even in current volatile economic conditions... we expect to see continued robust demand for our products in the second half of 2022. Over the longer term, sustainable agriculture is a growing sector. Farmers face many challenges, including the impacts of climate change such as drought and the need to work more sustainably. Our biological products produce better quality crops and deliver higher yield which means Plant Health Care is the ideal company to help farmers."
Follow News & Updates from Plant Health Care: