Verde Agritech Ltd · TSX:NPK
Verde Agritech — Q1 2022 Earnings Presentation
28 slides from Verde Agritech's earnings presentation, May 2022
Slide 1: Q1 2022 Update
Q1 2022 Update 1
Slide 2: Disclaimer
DISCLAIMER If you are risk averse don’t buy our stock. Don’t rely on anything on this We are not good enough for you to invest if you: presentation. This presentation contains certain forward-looking information, which includes but is not limited to, statements with respect to Verde AgriTech Plc’s (
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Slide 4: Summary
DISCLAIMER Summary 05 Updated Pre-Feasibility Study 06 Q1 2022 Highlights 08 Q1 2022 Financial Statements 09 Operational Summary 10 Key Metrics 11 SG&A Expenses 13 Other Highlights 14 Summary of Interest-Bearing Loans 15 Brazilian Economic Scenario 17 Potassium Chloride Price 18 2022 guidance 19 202
Slide 5: Summary
Summary • Verde increased its 2022 guidance, previously published on January 10, 2022. The revised 2022 guidance provides for sales of 1.00M tonnes with revenue of C$109.09M, EBITDA of C$49.06M and net earnings per share of C$0.87. The 2023 guidance provides for sales of 2.00M tonnes. • The Company
Slide 6: Updated Pre-Feasibility Study
Updated Pre-Feasibility Study On May 16, 2022, the Company disclosed the conclusions of the Pre-Feasibility Study that supplants the Pre-Feasibility Study completed in December 2017: The PFS contemplates three Product compositions: • The Product as a source of potash (“K2O”) • The Product as a sourc
Slide 7: Summary of the financial-economic analysis at each production scenario
Summary of the financial-economic analysis at each production scenario1, considering the Product composition of K2O Product composition K2O 2 10Mtpy Plant 3 Description Unit 23Mtpy Scenario 50Mtpy Scenario Scenario Proven and probable reserves million tonnes 715.67 715.67 1,297.66 K2O grade % 10.01
Slide 8: Q1 2022 Highlights
Q1 2022 Highlights Cash Ability to generate significant free cash flow in the long term. Cash utilised from investing activities increased by 913% in Q1 2022, to $3.38M compared to $334K in Q1 2021. Trade and other receivables increased by 517% in Q1 2022, to $17.6M compared to $2.9M in Q1 2021. Tot
Slide 9: Q1 2022 Financial Statements
Q1 2022 Financial Statements All amounts in C$’000 Q1 2022 Q1 2021 YoY Revenue 11,304 831 1260% Production costs (2,654) (490) (441%) Gross Profit 8,650 341 2434% Gross Margin 77% 41% N/A Sales and product delivery freight expenses (3,931) (531) 640% General and administrative expenses (1,041) (697)
Slide 10: Operational Summary
Operational Summary All amounts in CAD, except percentages Q1 2022 Q1 2021 YoY Tonnes sold ‘000 112 17 574% Revenue per tonne sold $ 101 50 102% Production cost per tonne sold $ (24) (30) 20% Gross Profit per tonne sold $ 77 20 276% Gross Margin 77% 41% N/A Operational Summary – Excluding freight re
Slide 11: Key Metrics Quarterly
Key Metrics Quarterly Sales (Tonnes) Revenue (‘000 CAD) 160000 153,674 12000 11,304 10,651 10,851 140000 134,350 10000 120000 111,667 105,769 96,233 8000 100000 80000 71,183 6000 5,376 62,895 60000 56,585 3,956 4000 3,055 40000 32,221 2,492 2,209 23,600 20,641 2000 16,558 1,329 1,491 20000 831 692 1
Slide 12: Key Metrics Yearly
Key Metrics Yearly Sales (Tonnes) Revenue (‘000 CAD) 1,200,000 120,000 109,0971 1,000,000 1 1,000,000 100,000 800,000 80,000 600,000 60,000 400,133 400,000 40,000 27,710 243,707 200,000 20,000 119,809 9,167 29,648 Up to 6,029 Q1 2022 1,358 Up to Q1 2022 - - 2018 2019 2020 2021 2022 2018 2019 2020 20
Slide 13: Sales, General and Administrative Expenses
Sales, General and Administrative Expenses All amounts in CAD $’000, except percentages Q1 2022 Q1 2021 YoY Sales Expenses Sales and marketing expenses (822) (293) (181%) Fees paid to sales agents (136) (9) (1431%) Product delivery freight expenses (2,973) (229) (1197%) Total sales expenses (3,931)
Slide 14: Other Highlights
Other Highlights FOB vs CIF (tonnes) General Expenses (C$’000) 120,000 111,667 50 8 -150 -52 -16 100,000 -159 -204 -350 80,000 -410 -411 66,725 -550 -478 60,000 -750 44,942 -697 40,000 -950 16,558 -1150 -1,041 20,000 10,877 5,681 General Legal, IT/Software Taxes and Total General administrative prof
Slide 15: Summary of Interest-Bearing Loans and Borrowings
Summary of Interest-Bearing Loans and Borrowings Part 1: Balance at Lender Loan start Grace period Term Loan value Mar 31, Total interest Purpose Repayable by date (months) (months) (R$’000) 2022 payable* (C$’000) Santander Feb, 2022 Equipment 03 36 260 73 Feb, 2025 * CDI + 4,60% Santander Feb, 2022
Slide 16: Summary of Interest-Bearing Loans and Borrowings
Summary of Interest-Bearing Loans and Borrowings Part 2: Balance at Lender Loan start Grace period Term Loan value Mar 31, Total interest Purpose Repayable by date (months) (months) (R$’000) 2022 payable* (C$’000) ABC Brazil Aug, 2020 Equipment and 01 42 2,000 493 Mar, 2024 ** IPCA + 8,46% working c
Slide 17: 2022 guidance
2022 guidance On May 03, 2022, Verde announced an increase in its 2022 and 2023 guidance, previously published on Jan 10, 2022. The Company’s original and revised 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
Slide 18: 2023 guidance
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 The original sales volume target for 2023 was for
Slide 19: Brazilian Economic Scenario
USD/BRL Exchange Rate Brazilian Economic Scenario 5.80 5.65 5.60 5.53 5.42 Brazilian Real versus US Dollar 5.40 5.36 5.19 5.20 From January to March 2022, the Brazilian Real 4.97 5.00 valued by 4% in relation to US Dollar, compared to 4.80 the same period of 2020. 4.60 As of May 24, 2022, US$1.00 =
Slide 20: Potassium Chloride Price
Potassium Chloride Price Fluctuations in potassium chloride CIF (Minas Gerais) prices CIF MG (USD) 1400 KCl CIF (Minas Gerais) KCl CIF (Minas Gerais) 1200 Lowest Price Highest Price 1000 800 Q1 2022 US$800 US$1,200 600 Q1 2021 US$315 US$395 400 200 % +154% +204% 0 Low High Source: Acerto Limited Rep
Slide 21: Appendix
Appendix 21
Slide 22: Earned Growth Rate
Earned Growth Rate Earned Growth Rate (“EGR”) is an accounting-based methodology that provides companies with an objective, data-driven connection between customer success, repeat and expanded purchases, word-of-mouth recommendations, a positive company culture, and business results. It gauges custo
Slide 23: Environmental
Environmental Verde’s production process is sustainable. The processing does not require tailings dams, nor does it generate any waste by products. In sum, the ore recovery rate is 100%. The mined area is mainly composed of degraded pasturelands that, once mined, Verde transforms into tropical fores
Slide 24: Potassium Chloride Replacement
Potassium Chloride Replacement Potassium salt fertilizers are soil biodiversity’s number 1 enemy. The average farmer applies 200 kg of potassium chloride to the soil per hectare per year. This is equivalent to the application of 1,600 litres of bleach as far as killing soil biodiversity.¹ The world
Slide 25: Cultivando Amor Project
Cultivando Amor Project Cultivando Amor is an initiative from Verde, in which there is a partner charity institution for each of the project’s member cities. For each hectare in the region that is cultivated with BAKS® or K Forte®, Verde donates part of the sales’ profits to the partner institution
Slide 26: Permit Status – Last 12 months
Permit Status – Last 12 months Mine Pit Date Category Status Event 2 February 10, 2022 Mining Granted 2,500,000 tpy Mining Concession 26 26 VERDE AGRITECH
Slide 27: Permit Summary
Permit Summary Under Brazilian law, a pit is fully permitted to mine when the Group holds both a Mining Concession/Permit and Environmental License for that area. Verde is fully permitted to mine 2,833,000 tpy and has submitted concurrent mining and environmental applications for an additional 2,500
Slide 28: TSX: NPK | OTCQB: AMHPF
TSX: NPK | OTCQB: AMHPF investor.verde.ag 28