H1 2016 results
Libourne – 15 September 2016 – Fermentalg, an industrial biotechnology company that specializes in the production of oils and proteins derived from microalgae, has published its results for the first half of 2016. Fermentalg's Board of Directors, which met on 13 September 2016, has approved the financial statements as at 30 June 2016. A limited review was carried out by the company's statutory auditors, and the half-yearly financial report will be available to the public no later than 30 September 2016.
Andrew Echatti, Chief Executive Officer, said: "The first half of 2016 marks an important stage in Fermentalg's development. The industrialization of our flagship product, DHA, was successfully launched in record time, and is clear proof of our ability as a company to rapidly go-to-market with a major new innovation. We have also prepared for the future, with the implementation of our roadmap for the 4 other programmes linked to our portfolio of products. All of this work has been carried out whilst respecting a strict policy of cost control and in close collaboration with the Board of Directors chaired by Philippe Lavielle."
Major headway for Fermentalg's 1st product: DHA
The strategic plan set in place last March defined the roadmap for the first 5 products to be developed by Fermentalg, with priority given to the commercialization of DHA before the end of the year.
DHA is a highly sought-after essential fatty acid (Omega 3) known for its role in the prevention of numerous illnesses. It is recognized for its beneficial effects on the brain (tissue, healthy development and increase in intellectual capacity) and the heart (reduction in triglycerides, cholesterol and the risk of cardiovascular disease).
Between March and September 2016, several key milestones were achieved:
- the signing of an industrial agreement for the large-scale production of DHA with ARD, a company specializing in bio-refining, industrial biotechnologies and bio-based chemistry;
- the completion of the DHA process book which is the last stage in pre-industrialization at the company's scientific facilities in Libourne and opens the way for large-scale production;
- the negotiations currently underway for a refining and logistics services contract with an expert from the edible oils industry which is expected to be finalized during the third quarter of 2016.
As a result, Fermentalg should be able to begin the production and commercialization of DHA as of the second half of 2016, once the test and scale-up phases have been completed (production using fermenters with a capacity of 150 m3) by its partner, ARD. Fermentalg's industrial investments for the first half of 2016 are estimated at €2 million (including materials and labor).
Definition of a roadmap for the portfolio of products
Alongside DHA, which is currently its most advanced product, Fermentalg has confirmed its calendar for the development of 4 additional products between now and 2020 (DHA+, BM Bastille, Phycocyanin and Astaxanthin).
End to construction for the IDU scheduled for the third quarter of 2016
In line with the industrial plan presented at the start of the year, Fermentalg intends to produce BM Bastille and Phycocyanin at its Industrial Development Unit (IDU) in Libourne (Gironde). The commissioning of the unit, which represents an estimated investment in the process of €23 million, is still scheduled for 2018.
The delivery of the building (excluding equipment) is expected at the end of the third quarter of 2016 and has so far represented an investment of €6.2 million.
Strict financial management and cash assets that are consistent with the needs of the plan
The strict financial management that has gone hand-in-hand with the implementation of this roadmap has enabled Fermentalg to maintain an adequate level of cash flow.
The company has notably reduced the budget allocated to research and development (€1.2 million for the first half of 2016 as against a figure of €1.7 million for the same period in 2015) given the maturity of its different programs, whilst upping its administrative and commercial expenditure (€1.9 million compared with €1.8 million) in order to strengthen its structure and prepare for the industrial and commercial deployment of its products. Since the end of its financial year, the company has recruited a full-time HR Director (1 July 2016) and Industrial Director (1 August 2016).
Fermentalg's current operating income[1] amounted to -€2.5 million for the first half of 2016 (vs. -€2.8 million for the first half of 2015). Excluding other income and expenses, net income amounted to -€2.6 million which is in line with the figure reported for the first six months of 2015.
Aside from the operating loss reported, Fermentalg's cash assets were also impacted by the investment for its IDU booked over the period (€3.0 million). At 30 June 2016, Fermentalg reported a gross cash position of €22.3 million (€28.5 million on 31 December 2015), a net cash position of €19.3 million (€25.6 million) and €41.7 million in equity (€44.4 million).
Stronger governance
Fermentalg also reinforced its governance with the co-option[2] of Philippe Lavielle as an independent director in May 2016 and his appointment as Chairman of the Board of Directors in September 2016.
An expert in the management of innovative companies primarily specializing in biotechnologies, Philippe Lavielle has lived and worked in San Francisco for more than 10 years. He also spent more than 20 years with Genencor, one of the leading architects in industrial enzymes acquired by DuPont, where he worked as Vice President and BU Manager before being named Executive Vice President in charge of Business Development.
About Fermentalg
Based in Libourne (Gironde), Fermentalg is an industrial biotechnology company and a global leader in the production of oils and proteins derived from the fermentation of microalgae. Its primary markets are the human nutrition and animal feed sectors and the green chemistry industry. Fermentalg shares are listed on Euronext in Paris (FR0011271600 - FALG). For more information, visit the Fermentalg website at: www.fermentalg.com.
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Comprehensive income statement
(€ thousands)
30/06/16
31/12/2015
30/06/2015
Revenue
172
479
0
Other income from operations
466
1,185
705
Production costs
0
0
0
Research and Development expenses
-1,196
-3,096
-1,698
Administrative and sales expenses
-1,949
-4,236
-1,758
Other operating income and expenses
0
0
0
Operating income before share-based payments
-2,507
-5,668
-2,751
Payroll expenses linked to share-based payments
-8
-117
-38
Other non-current operating income and expenses
-284
-50
-50
Operating income after share-based payments
-2,799
-5,836
-2,839
Income from cash and cash equivalents
209
581
312
Cost of gross financial debt
-32
-56
-27
Cost of net financial debt
177
525
285
Other financial income and expenses
-2
16
5
Net tax expense
0
0
0
Consolidated net income
-2,624
-5,295
-2,549
Minority interests
0
6
-2
Consolidated net income (Group share)
-2,624
-5,288
-2,551
Other consolidated income
0
0
0
Global consolidated net income
-2,624
-5,295
-2,549
Minority interests
0
6
-2
Global consolidated net income (Group share)
-2,624
-5,288
-2,550
Consolidated net earnings per share (in euros)
-0.22
-0.44
-0.21
Consolidated diluted net earnings per share (in euros)
-0.22
-0.43
-0.21
Balance sheet
(€ thousands)
30/06/16
31/12/2015
30/06/2015
ASSETS
Goodwill
0
0
0
Intangible assets
4,925
4,241
3,569
Tangible assets
14,884
12,455
9,471
Non-current financial assets
132
351
342
Deferred tax assets
3,302
3,302
3,303
TOTAL NON-CURRENT ASSETS
23,244
20,349
16,685
Inventories
0
0
0
Client receivables
55
516
1
Corporate income tax receivables
0
15
19
Other receivables
3,624
3,969
2,985
Other non-financial current assets
0
0
0
Cash and cash equivalents
22,273
28,506
32,521
TOTAL CURRENT ASSETS
25,952
33,006
35,526
TOTAL ASSETS
49,196
53,355
52,211
LIABILITIES
Capital
484
484
484
Premiums
50,289
56,632
56,632
Reserves and retained earnings
-6,449
-7,466
-7,552
Global net income
-2,623
-5,287
-2,550
Shareholders' equity (Group share)
41,701
44,362
47,013
Minority interests
17
17
-24
TOTAL SHAREHOLDERS' EQUITY
41,718
44,380
46,989
Financial debt
2,933
2,902
2,034
Retirement commitments
65
56
77
Provisions for non-current risks
355
300
350
Other non-current liabilities
0
0
0
Affiliated companies
0
0
0
Deferred tax liabilities
0
0
0
TOTAL NON-CURRENT LIABILITIES
3,353
3,258
2,461
Bank overdrafts
0
900
82
Current accounts
0
0
0
Other financial debt
0
0
0
Provisions for current risks
0
0
0
Corporate income tax liabilities
0
0
0
Supplier debt
1,602
1,881
1,590
Other current liabilities
2,523
2,936
1,089
TOTAL CURRENT LIABILITIES
4,125
5,717
2,761
TOTAL LIABILITIES
49,196
53,355
52,211
Cash flow statement
30/06/16
31/12/2015
30/06/2015
Global net income
-2,624
-5,295
-2,549
Depreciation, amortization and provisions (excluding provisions against current assets)
591
992
572
Expenses on share-based payments
2
117
38
Other computed expenses
0
0
0
Change in deferred tax
0
0
0
Share in income of companies accounted for by the equity method
0
0
0
Gains and losses on disposals
169
0
0
Share in subsidies
0
0
0
Cash flow
-1,862
-4,186
-1,939
Cost of gross financial debt
31
56
27
Tax
0
0
0
Cash flow before cost of financial debt, net of tax
-1,831
-4,130
-1,912
Tax
15
0
0
Change in consumables
-61
12
-6
Change in client receivables
461
-486
29
Change in supplier payables
-197
1,078
829
Change in other current assets and liabilities (a)
8
-279
-980
Change in working capital requirement linked to operations
226
325
-128
Net cash flow linked to operations
-1,605
-3,805
-2,040
Production of fixed assets (capitalized R&D)
-867
-2,039
-1,029
299
739
376
Acquisitions of other tangible and intangible assets
-3,047
-8,407
-4,908
Change in fixed asset liabilities
-114
-264
-448
Acquisitions of financial fixed assets
0
-1
0
Disposals of other tangible and intangible assets
0
5
0
Disposals of financial assets
50
4
6
Cash linked to the acquisition and disposal of subsidiaries
0
0
0
Net cash flow linked to investments
-3,679
-9,963
-6,003
Capital increase linked to parent company
0
727
727
Capital increase reserved for employees
0
49
-17
Acquisitions and disposals of own shares
-49
-8
0
New borrowings and other financial debt
0
889
0
Repayments of borrowings and other financial debt
0
0
0
Change in current accounts
0
-54
1
Interest on borrowings and financial debt
0
0
-1
Net cash flow linked to financing
-49
1,603
710
Change in cash
-5,333
-12,165
-7,333
Opening cash (1)
27,607
39,772
39,772
Closing cash (1)
22,274
27,607
32,439
(a) o/w change in research tax credit:
242
-1,347
-737
(1) Available cash less bank overdrafts.
Regulated information
News releases under ongoing reporting obligations:
- News release on accounts, results
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Source: Actusnews