Tree seedling provider ArborGen has reported strong financial results for the first half of the 2023 financial year, thanks to record sales volumes in Brazil.
Revenue for the six months to September 30 surged 78 percent to $13.2 million, leading to a 167 percent increase in gross profit to $4.8m.
However, the company has revised its guidance for the full year, with lower-than-expected seedling sales anticipated in the United States.
ArborGen said it continues to focus on increasing market share and adoption of its advanced genetics tree seedlings in the US, as well as expanding in Brazil.
The company's net debt increased by $3.7m over the first half of the year, primarily due to working capital movement and the repurchase of outstanding warrants.
ArborGen's cash position at the end of September was $4.3m, with net debt of $16.7m.
In terms of operational performance, the company saw strong sales in Brazil and had orders for 87 percent of available seedlings in the US South, despite challenges in the industry and delays by some customers.
ArborGen has undertaken a review and quality audit of its US seed inventory, resulting in a $1.8m provision for older, low-demand, and low-quality seed.
It has also focused on formalising productivity plans and processes, including downsizing its New Zealand corporate office and recruiting for two new US-based roles.
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