Verde Agritech Ltd · TSX:NPK
Verde Agritech — Q2 2020 Earnings Presentation
23 slides from Verde Agritech's earnings presentation, November 2020
Slide 1: Q2 2020 Update
Q2 2020 Update “VERDE
Slide 2: Disclaimer
DISCLAIMER If you are risk averse don’t buy our stock. Don’t rely on anything on this presentation. This presentation contains certain forward-looking information, which includes but is not limited to, statements with respect to Verde AgriTech Plc’s (the Company’s) strategy, the commercial productio
Slide 3: Agenda
Highlights 04 Q2 2020 Financial Statements 05 Operational summary 06 S&GA Expenses 07 Other Highlights 08 Financial Summary 10 Brazilian economic scenario 12 Key metrics 14 Development and exploration 16 Appendix 19
Slide 4: Highlights Summary
HIG H L IG HTS SUMMAR Y The Company continues to show improved year-on-year sales, C a sh Ability to generate significant free cash flow in the long term. operational improvement and continued progress toward the Credit facilities totaling R$ 21.8 million approved by financial institutions in Brazil
Slide 5: Q2 2020 Financial Statements
Q2 2020 FINANCIAL STATEMENTS (Unaudited) All amounts in CAD $’000, except percentages Q2-2019 Q2 2020 YoY 2019 YTD 2020 YTD YoY Revenue 1,329 2,492 88% 1,483 3,001 102% Production costs (660) (955) (45%) (709) (1,286) (81%) Gross Profit 669 1,537 130% 774 1,715 122% Sales and General Administrative
Slide 6: Operational Summary
OPERATIONAL SUMMARY (Unaudited) All amounts in CAD $’000, except percentages and tonnes Q2-2019 Q2 2020 YoY 2019 YTD 2020 YTD YoY Tonnes sold 23,600 71,183 202% 24,645 81,353 230% Revenue per tonne sold 56 35 (38%) 60 37 (39%) Production cost per tonne sold (28) (13) 54% (29) (16) 45% Gross Profit p
Slide 7: Sales & General Administrative Expenses
SALES & GENERAL ADMINISTRATIVE EXPENSES (Unaudited) S&GA Expenses Q2-2019 Q2 2020 YoY 2019 YTD 2020 YTD YoY All amounts in CAD $’000, except percentages Sales and marketing expenses (285) (370) (30%) (375) (635) (70%) General administrative expenses (162) (196) (21%) (429) (416) 3% Distribution expe
Slide 8: Other Highlights
OTHER HIGHLIGHTS S&GA Expenses (C$’000) To n n e s S o l d Gross Margin 0 90,000 70% -92 81,353 62% -200 -117 80,000 -235 60% 57% -400 -285 71,183 -370 -375 -392 70,000 52% 50% -600 50% 60,000 -635 -800 -710 50,000 40% -1000 -952 40,000 30% -1200 30,000 -1271 23,600 24,645 -1400 20% 20,000 -1600 10%
Slide 9: Summary of Interest-Bearing Loans and Borrowings
SUMMARY OF INTEREST-BEARING LOANS AND BORROW INGS Grace period Lender Loan start date Purpose Term (months) Value (R$’000) Repayable by Total interest payable (months) CAPEX and Working Bradesco Jul, 2020 06 60 5,000 Jul, 2025 10,95% Capital Santander Jul, 2020 Equipment 06 18 359 Jul, 2022 10,00% S
Slide 10: Financial Summary
FINANCIAL SUMMARY Rev e n u e The Company recognised revenue of $2,5M, an increase of 87% compared to $1,3M in Q2 2019. Average revenue per tonne was lower than Q2 2019. The Product price is based on the current Potassium Chloride price. Therefore, the reduction of the average revenue per tonne was
Slide 11: Charts
CHARTS “VERDE
Slide 12: Brazilian Economic Scenario
6.00 BRAZILIAN ECONOMIC SCENARIO 5.64 5.50 5.32 5.39 5.20 5.28 5.00 4.88 4.50 4.34 4.15 3.89 4.00 3.85 3.78 4.01 4.00 3.74 3.73 3.85 3.50 3.00 Brazilian Real Devaluation 2.50 2.00 From January to August 2020, the Brazilian Real devalued by 1.50 30% in relation to US Dollar¹ compared with the same pe
Slide 13: Potassium Chloride Price CFR Brazil (USD)
Potassium Chloride Price CFR Brazil (USD) Decrease of 34% from January 2019 to July 2020 400.00 357.50 350.00 300.00 250.00 235.10 200.00 150.00 100.00 50.00 - Jan/19 Feb/19 Mar/19 Apr/19 May/19 Jun/19 Jul/20 Aug/19 Sep/19 Oct/19 Nov/19 Dec/19 Jan/20 Feb/20 Mar/20 Apr/20 May/20 Jun/20 Jul/20 13 Sour
Slide 14: Key Metrics Quarterly
KEY METRICS QUARTERLY (Unaudited) Vo l u m e S o l d ( To n n e s ) Reve n u e ( ‘0 0 0 CAD) 119,809 6,029 120000 6000 100000 5000 81,353 80000 4000 71,183 62,895 3,055 3,002 60000 3000 2,492 40000 2000 32,221 29,648 1,491 1,329 1,358 23,600 20,641 20000 1000 692 666 10,170 9,007 510 1,093 154 0 0 Q
Slide 15: Sales Volume Year-on-Year Growth
SALES VOLUME YEAR–ON-YEAR GROW TH (TONNES) Increasing Sales Profile Most sales expected to take place from June to September, due to climatic driven agricultural cycle. Quarter 2018 2019 YoY Growth 2020 YoY Growth Q1 - 1,093 - 10,170 830% Q2 - 23,600 - 71,183 202% Q3 9,007 62,895 598% To be announce
Slide 16: Development and Exploration
D E V E LO PM E NT AN D E X PLO RATI O N
Slide 17: Permits Status – Last 12 Months
PERMITS STATUS – LAST 12 MONTHS Mine Pit Date Category Status Event 1 August 19, 2020 Environment Granted 233,000 tpy Operating License 2 March 30, 2020 Environment Applied 2,500,000 tpy Preliminary and Installation License 2 March 26, 2020 Mining Approved 25,000,000 tpy Feasibility Study 3 March 25
Slide 18: Permits Summary
PERMITS SUMMARY Verde is fully permitted to mine 432,800 tpy (i.e. Verde holds both a mining Concession/Permit and Environmental Licenses) and has submitted applications for an additional 2,500,000 tpy still pending approval. Fully Permitted to Produce Mining (tpy) Environmental (tpy) Mine Pit (tpy)
Slide 19: Appendix
APPENDIX “VERDE
Slide 20: Statements of Operations
STATEMENTS OF OPERATIONS (Unaudited) Continuing operations ($’000) Q2 2020 Q2 2019 YTD 2020 YTD 2020 1,329 3,001 Revenue 2,492 1,483 (660) (1,286) Production costs (955) (709) 669 1,715 Gross Profit 1,537 774 (786) (1,877) S&GA (Includes Non Cash Events) (983) (1,743) (117) (162) Operating Profit /
Slide 21: Balance Sheet
BALANCE SHEET (Unaudited) Restated 30 Jun 2020 31 Dec 2019 Assets ($’000) ($’000) Property, plant and equipment 2,192 2,113 Mineral properties 20,234 24,455 Intangible assets - - Total non-current assets 22,426 26,568 Inventory 243 293 Trade and other receivables 1,676 1,638 Cash and cash equivalent
Slide 22: Statement of Cashflow
STATEMENT OF CASHFLOW (Unaudited) Cash flows from operating activities ($’000) Q2 2020 Q2 2019 YTD 2020 YTD 2019 Operating profit / (loss) 553 (117) (163) (969) Depreciation 65 29 108 46 Foreign exchange differences (115) 21 (26) 263 Share-based payments 28 71 68 455 Decrease / (Increase) in invento
Slide 23: investor.verde.ag
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