Earnings Season: as Novozymes, DSM, Amyris, Gevo, Corbion, and Aemetis report, who’s up, who’s down?

August 16, 2018 |

In today’s Digest, let’s look at trends driving the industry’s results at scale — and while money is not the measure of all progress, it is the ultimate yardstick and especially for companies that have reached industrial scale. So, let’s look at Q2 earnings statements now just coming out from four of the sector’s signature companies in fuels, enzymes, crop development & protection, and nutrition and wellness. Namely, Novozymes, DSM, Amyris, Gevo, Corbion, and Aemetis.


The Top Line. In Denmark, Novozymes reported 4% organic sales growth for the first half and a 5 percent jump in Q2 with bioenergy reporting a 14% jump. Overall, net profit grew 5% and the company affirmed its 2018 guidance. Sales dipped to DKK 7,018m from DKK 7,278m, and EBITDA was flat at DKK 2,464m, although we primarily attribute that to currency shifts.

The Big Highlights. Growth in Food & Beverages and Agriculture & Feed; Bioenergy particularly strong. Good ramp-up of recent product launches. +7% organic sales growth in emerging markets; Freshness & hygiene platform in Household Care developing according to plan with first commercial product available in stores in the Philippines. 

Peder Holk Nielsen, President & CEO of Novozymes: “Overall, I’m satisfied with our performance in the first half year. Bioenergy performed very well, whereas Household Care was softer than expected. Our innovation pipeline is solid, and a stronger commercial and emerging market focus is paying off. We’re launching a new, exciting product for animal health, and both our freshness & hygiene platform for laundry and the new corn inoculant are making good progress. And while uncertainty around global trade and agricultural markets persists, we remain committed to our 2018 guidance.”


The Top Line. In the Netherlands, DSM reported a good H1 with organic sales growth in underlying business estimated at 10% and adjusted EBITDA growth of underlying business estimated at 7%, with sales of €4,794 million and adjusted EBITDA of €771 million.

The Big Highlights. Nutrition: an estimated 8% underlying organic sales growth and Adjusted EBITDA growth of underlying business estimated at 6%. Materials: 7% organic sales growth and Adjusted EBITDA growth of 5%. DSM also confirmed its full year outlook 2018, as provided at Q1 2018, and expects an Adjusted EBITDA growth towards 25% and a related higher ROCE growth

Feike Sijbesma, CEO/Chairman DSM Managing Board, commented: “Our ongoing focus on driving above market growth while pursuing efficiency initiatives and maintaining capital discipline, continues to drive our results. Following a strong start to the year, we are very pleased to report very good H1 results, with organic growth above market across all our businesses, and strong underlying Adjusted EBITDA growth despite significant foreign exchange headwinds. During the quarter, we also took another important step in monetizing our partnerships through announcing our exits from Fibrant and DSM Sinochem Pharmaceuticals. Our business conditions remain strong and we reiterate our full year 2018 outlook.

“We are convinced our recent strategy update will create enhanced organic sales growth and continued EBITDA momentum, as DSM evolves further towards a purpose-led, science-based company in Nutrition, Health and Sustainable Living. The step-up in our dividend for 2018, already reflected in the interim dividend, demonstrates our confidence in our future earnings growth.”


The Top Line. In the Netherlands, Corbion reported H1 2018 sales of € 439.2 million, a decrease of 4.9% compared to H1 2017, entirely due to negative currency effects. Organic sales growth was 3.1%. EBITDA excluding one-off items in H1 2018 decreased by 19.0% to € 71.5 million due to negative currency effects and the inclusion of the Algae Ingredients business. Organic EBITDA excluding one-off items increased by 1.2% in H1 2018. 

The Big Highlights. The acquisition of the Algae Ingredients business (TerraVia assets + SB Renewable Oils joint venture) has added an algae fermentation platform to Corbion. In H1 2018, the main focus areas for the algae platform were (1) to bring the SB Renewable Oils production facility and its products to Corbion standards and specifications. Corbion noted that the algae fermentation technology itself is performing as – and in some cases even better than – expected; (2) to restart the demo plant in Peoria (successfully completed in February); and (3) the relocation of the laboratories to a new location in San Francisco. In June Corbion acquired the remaining 49.9% interest in the SB Renewable Oils joint venture (Orindiúva, Brazil). 

The second half of 2018 should see the start-up of the Total Corbion PLA joint venture plant in Thailand. 

“I am happy to report that we have seen a continuation of improving organic sales growth rates in our Food business segment which returned to growth in Q2 after a challenging period,” comments Tjerk de Ruiter, CEO. “In the first half year, Corbion performed within the sales growth rate target bandwidth of our Creating Sustainable Growth strategy. Margins in Ingredient Solutions remained at a healthy level of around 20%. As expected, our profitability in Innovation Platforms is adversely impacted by the inclusion of the newly acquired Algae Ingredients business which is in an early stage of development. We believe that this platform offers many exciting growth opportunities for Corbion, leveraging our expertise of running industrial scale organic acid operations”,  


The Top Line. In California, Aemetis reported that Q2 revenues increased $4.3 million and gross margins increased by $1.1 million compared to the second quarter of 2017. Similarly, during the first half of 2018, revenues increased $15.7 million and gross margins increased by $3.5 million compared to the first half of 2017.

Revenues were $45.0 million for the second quarter of 2018 compared to $40.8 million for the second quarter of 2017, driven by an increase in ethanol sales volumes from 15.6 million gallons to 16.4 million gallons and by stronger wet distillers grain and glycerin demand and pricing.

Operating loss was $0.9 million for the second quarter of 2018, a reduction from the operating loss of $1.7 million for the second quarter of 2017. Net loss was $6.2 million for the second quarter of 2018, compared to a net loss of $6.0 million for the second quarter of 2017 due to higher interest expense.

The Big Highlights. The Riverbank cellulosic ethanol project achieved significant progress during Q2 2018, including engineering, environmental permitting and EPC project milestones. The value of California Low Carbon Fuel Standard credits rose steadily from $110 in late February to $184 per credit on June 30, 2018, significantly increasing the value of the low carbon advanced ethanol that is planned to be produced by the Riverbank plant from orchard and other agricultural waste. And, record gasoline demand in the second quarter helped drive expanded demand and increased pricing for ethanol,. Plus, the price of wet distillers grains increased by 34% and the price of glycerin increased by 28% compared to Q2 2017.

Aemetis also achieved major milestones in the construction and operation of a pretreatment unit at its India plant to produce high value distilled biodiesel from lower cost feedstock.


The Top Line. In Colorado, Gevo reported Q2 revenues of $9.4 million compared with $7.5 million in the same period in 2017. During the second quarter of 2018, revenues derived at the Luverne Facility related to ethanol sales and related products were $8.8 million, an increase of approximately $2.0 million from the same period in 2017. This was primarily a result of increased ethanol production and distiller grain prices in the second quarter of 2018 versus the same period in 2017. Non-GAAP cash EBITDA loss in the three months ended June 30, 2018 was $2.6 million, compared with a $4.4 million non-GAAP cash EBITDA loss in the same period in 2017.

The Big Highlights. In Q2, Gevo sold 6,281,409 shares of common stock (after giving effect to the one-for-twenty reverse stock split effected on June 1, 2018) under its at-the-market offering program, for gross proceeds of approximately $37.4 million, restructuring its balance sheet, and secured its first commercial off-take agreement for our renewable alcohol to jet fuel.  Specifically, a long-term agreement to supply its renewable alcohol-to-jet fuel (ATJ) to Avfuel Corporation, effective July 1, 2018. And, the Environmental Protection Agency announced the approval of isobutanol at a 16% blend level in gasoline for on-road use in automobiles.  Previously, isobutanol had been approved for on-road use up to a 12.5% blend.  A 16% isobutanol blend in gasoline provides the same oxygen content in gasoline as an E10 gasoline, and provides other value-added benefits such as low Reid Vapor Pressure or RVP, higher energy density, high octane, and low water solubility. 


The Top Line. In California, Amyris reported Q2 GAAP revenue for the second quarter of 2018 of $24.8 million, compared with $25.7 million for the second quarter of 2017. Grants and collaborations revenue was $11.4 million for the second quarter of 2018 compared with $10.3 million for the year-ago period. The company noted that Q2 revenue was $24.8 million compared with the same period in 2017 of $21.7 million when adjusted for the low margin product sales on contracts assigned to DSM. This reflects 15% growth on an absolute basis. GAAP net loss for the first half was $89.1 million compared to $47.6 million in 2017. Non-GAAP net loss for the first half of fiscal year 2018, excluding the non-cash items mentioned, was $47.5 million compared to a non-GAAP net loss for the first half of 2017 of $68.7 million.

The Big Highlights. The company Announced plans to partner with BGI, one of the world’s largest genomics companies in a new joint venture to discover, develop and commercialize human microbiome-targeting health and nutrition products in Greater China. The company also signed its Universidade Católica Portuguesa Porto Campus and AICEP Portugal Global agreement valued up to $50 million including investment funding and incentives allotted across parties involved. The grant provides funding to explore utilization of waste streams from fermentation to develop new products and applications while also advancing Amyris’s artificial intelligence (AI) and Informatics platform. And the company successfully launched Biossance brand in Brazil with sales doubling expectations within first 6 weeks. CEO John Melo said that the company’s natural sweetener product opportunity gained significant traction during the second quarter and we have the customers in place to sell all of our supply over the next three years. 

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