Genetics and Advanced Nutrition segments offset the difficulties in Health in Benchmark's Q2 2024 results, which keeps the company optimistic about expectations for the full year.
Photo: Benchmark Holdings.
Benchmark Holdings' fiscal year 2024 (FY24) began in October, so it recently presented its unaudited interim results for its Q2 2024 and H1 2014. After suffering through a challenging Q1 2024, the aquaculture biotechnology company is now optimistic. "Positive quarterly momentum maintained and well on track to meet full year management's expectations," it said in the release announcing the results.
In taking stock of its results for Q2 2024, Benchmark spoke of the "good visibility of revenue" in Genetics, highlighting in particular what it described as "excellent progress" in Chile, where they report advances in attracting new clients that lay the foundations for future growth. Benchmark Genetics Chile has had a new General Manager since last September when Berta Contreras Mutis assumed the role.
In addition, the company highlighted the launch of a new product portfolio in salmon genetics and the successful launch of the most affordable genotyping product portfolio for aquaculture. In its earnings report, Benchmark also referred to the infectious salmon anemia (ISA) incident reported in February this year, which, according to the release, had "no operational or financial consequences" for the company.
As far as the Advanced Nutrition segment is concerned, Benchmark said it is well-positioned for market recovery. According to the company, the strategy and mitigation measures adopted in response to the difficult shrimp markets are yielding positive results.
"Green shoots of recovery in the shrimp market translating into demand for the Group's hatchery portfolio as the industry prepares to increase production," the release read.
Finally, concerning the Health division, the company said it continues to progress in developing a new business model for Ectosan® Vet and CleanTreat® aimed at reducing infrastructure costs. To this end, it is rationalizing the existing infrastructure to adapt it to this new model. In addition, he highlighted strong sales of its sea lice solution, Salmosan® Vet.
"We will continue to manage costs and reduce our capital exposure, taking the second CleanTreat® unit out ahead of the low season for sea lice treatments. Our established sea lice treatment Salmosan® Vet is performing well into the second half of the year," Benchmark said.
Regarding the financial results for Q2 2024 ended March 31, Group revenue was £39.8 million, 10% below the strong Q2 FY23 (-3% CER - Constant Exchange Rates). Adjusted EBITDA was £9.9 million, in line with Q2 FY23, and ahead +9% at constant exchange rates. Adjusted EBITDA margin excluding fair value movement on biological assets of 25% was in line with the Group's medium-term target (Q2 FY2023: 22%).
Segment by segment, Genetics revenues were £13.2m (Q2 FY23: £12.9m), an increase of 7% CER, while Advanced Nutrition revenues were £21.1m (Q2 FY23: £22.6m), a rise of 3% CER, with both divisions in line with the same period last year - slightly up in Genetics, slightly down in Advanced Nutrition. Healthcare revenues were £5.4m (Q2 FY23: £8.7m), a significant fall of 35% CER.
For H1 2024, revenue was £80.2 million, down 19% from a strong 1HFY23 (-12% CER), but, according to Benchmark, "13% above the H2 FY23 period showing positive sequential progress against a backdrop of difficult conditions in the shrimp markets."
Meanwhile, H1 2024 adjusted EBITDA was £17.3 million, down 23% (-15% CER). Adjusted EBITDA margin, excluding fair value movement, was marginally below 22% (H1 FY23: 23%), with a higher contribution from joint venture earnings offsetting a slightly lower gross profit margin of 49% (H1 FY23: 50%).
As said, Benchmark Holdings said the company is trading in line with management's expectations for the full year. However, that has not changed the Board's decision announced in January to undertake a formal review of the company's strategic options, including a possible formal sale process. "This process remains ongoing," it said now.
Commenting on the results, Trond Williksen, CEO, said he is pleased with the company's performance in the second quarter, and the first half as a whole, "which demonstrated good momentum in the business supporting our positive outlook."
"We have delivered strong trading in our established business areas, have made excellent progress in Chile, one of our key growth vectors, and made significant progress in our innovation programme where our recent investment to strengthen our innovation capabilities is bearing fruit. We remain focused on the transition to a new business model for Ectosan® Vet and CleanTreat® which will strengthen our sea lice solutions portfolio and deliver a much needed alternative to our customers," Williksen continued.
"With our unique platform of mission critical specialised solutions in areas where we hold market leading positions we are strongly positioned to continue to deliver growth and to build sustainable shareholder value," Benchmark Holdings CEO concluded.
Benchmark is a market-leading aquaculture biotechnology company specialized in products and solutions to enhance aquaculture productivity and sustainability. It has a strong market presence in genetics, early-stage nutrition, and sea lice solutions, backed by significant investment in capital, intellectual property, and expertise. The company's strategy is driven by innovation, focusing on continuous genetic improvement in growth and disease resistance.
