Verde’s Q1 2022 revenue grows 1,260%
Results surpass EPS guidance by 254%
Belo Horizonte, Brazil. Verde AgriTech Plc (TSX: “NPK”) (OTCQB: “AMHPF”) (“Verde” or the “Company”) is pleased to announce its financial results for the first quarter of 2022 (“Q1 2022”).
Q1 2022 Financials
- Revenue increased by 1,260% in Q1 2022, to $11,304,000 compared to $831,000 in Q1 2021.
- Revenue in Brazilian Real (“R$”) increased by 1,196% in Q1 2022, to R$46,627,000 compared to R$3,597,000 in Q1 2021.
- Sales by volume increased by 574% in Q1 2022, to 111,667 tonnes sold compared to 16,558 tonnes sold in Q1 2021.
- Gross margin increased to 77% in Q1 2022, compared to 41% in Q1 2021.
- EBITDA before non-cash events increased to $3,678,000 in Q1 2022, compared to an operating loss of $887,000 in Q1 2021.
- Net profit increased to $3,033,000 in Q1 2022, compared to a net loss of $1,811,000 in Q1 2021.
Subsequent Events
- In April 2022, the Company announced that Plant 2 was on track to start production in Q3 2022, initially with a 1,200,000 tpy production capacity, as announced by the Company in the press release published on March 03, 2022. The final Plant 2 capacity of 2,400,000 tpy is expected to be reached in Q4 2022. Therefore, by Q4 2022, with Plant 2’s expansion, overall production capacity is expected to be 3,000,000 tpy, establishing Verde as Brazil’s largest potash producer.
- In April 2022, the Market Study (the “Study”) that will underpin the preparation of the New Pre-Feasibility Study announced by the Company on March 01, 2021 (the “PFS”) was concluded. The Study calculated the potential Brazilian agricultural market for potash, sulphur, and the micronutrients zinc, boron, copper and manganese. The Study was conducted between May 2021 and March 2022, it will be an integral part of the PFS. The PFS will contemplate a scenario of total annual production of up to 50,000,000 tonnes per year (“tpy”) of Verde’s Product, equivalent to 63% of the total Brazilian potash consumption in 2021.
- In April 2022, Bio Revolution, Verde’s newest technology that enables the incorporation of microorganisms to mineral fertilizers, was launched by the Company.[1] K Forte® will be the first fertilizer in the world to use Bio Revolution technology. Bacillus aryabhattai, widely renowned in agriculture for its multiple benefits, will be the first microorganism to be incorporated into Verde’s Product. Verde’s Plant 1 is already equipped with a facility for deploying Bio Revolution. At Plant 2, a proportionally larger Bio Revolution facility will be built, with operations expected by the end of 2022.
- In May 2022, Verde announced an increase in its 2022 guidance, previously published on January 10, 2022. The revised 2022 guidance provides for sales of 1,000,000 tonnes of Verde’s multinutrient potassium products, BAKS® and K Forte® sold internationally as Super Greensand® (the “Product”), with revenue of C$109.09 million, EBITDA of C$49.06 million and net earnings per share (“EPS”) of C$0.87. The 2023 guidance provides for sales of 2,000,000 tonnes.
“2022 has started in a very shaky manner for the agricultural market globally. In Brazil, which depends on imports for over 96% of its potash supplies, the concern with fertilizers has been at the forethought of most farmers. Despite the record rainfalls during the period, which postponed Verde’s delivery of an additional 25,133 tonnes of Product in Q1 2022, our Team successfully reached a growing portion of Brazil’s market. Verde’s target towards the delivery of 1,000,000 tonnes by the end of 2022 is further boosted by these latest results.” declared Verde’s Founder, President & CEO Cristiano Veloso.
2022 Guidance
On May 03, 2022, Verde announced an increase in its 2022 and 2023 guidance,[2]previously published on January 10, 2022.[3] The Company’s original and revised 2022 targets are detailed on a quarterly basis, to reflect the market demand’s seasonality, as follows:
| Period | Q1 2022 | Q2 2022 | Q3 2022 | Q4 2022 | FY 2022 |
| Guidance | Original
Jan 2022 | Achieved
in Q1 2022 | Original
Jan 2022 | Revised
May 2022 | Original
Jan 2022 | Revised
May 2022 | Original
Jan 2022 | Revised
May 2022 | Original
Jan 2022 | Revised
May 2022 |
| EPS (C$) | 0.02 | 0.06 | 0.18 | 0.21 | 0.25 | 0.35 | 0.06 | 0.25 | 0.50 | 0.87 |
| EBITDA (C$’000)[4] | 1,358 | 3,678 | 10,155 | 11,808 | 13,414 | 19,259 | 3,506 | 14,319 | 28,434 | 49,065 |
| Revenue (C$’000) | 10,070 | 11,304 | 21,954 | 22,902 | 27,228 | 40,121 | 13,011 | 34,769 | 72,263 | 109,097 |
| Sales target (tonnes) | 115,000 | 111,667 | 200,000 | 200,000 | 250,000 | 353,718 | 135,000 | 334,615 | 700,000 | 1,000,000 |
The 2022 guidance is underpinned by the following assumptions:
- Average Brazilian Real (“R$”) to Canadian Dollar exchange rate: C$1.00 = R$4.40
- Verde’s Product CIF and FOB average price for the full year, including delivered orders, committed orders and projected orders: C$109 per tonne
- Sales Incoterms: 50% CIF and 50% FOB
- Sales channels: 40% direct sales and 60% indirect sales
2023 Guidance
For 2023, Verde’s updated sales volume target is 2,000,000 tonnes. This target represents a potential 100% growth Year-on-Year (“YoY”).
| Period | FY 2023 |
| Guidance | Original
Jan 2022 | Revised
May 2022 |
| Sales target (tonnes) | 1,400,000 | 2,000,000 |
Selected Annual Financial Information
The table below summarizes Q1 2022 financial results compared to Q1 2021:
All amounts in
CAD $’000 | Q1 2022 | Q1 2021 |
| Tonnes sold ‘000 | 112 | 17 |
| Revenue per tonne sold $ | 101 | 50 |
| Production cost per tonne sold $ | (24) | (30) |
| Gross Profit per tonne sold $ | 77 | 20 |
| Gross Margin |