ArborGen Holdings Announces Interim Result

ArborGen Holdings Half Year Results
23 November 2021

Unaudited Results for the Six Months to 30 September 2021 (1H FY22)
All dollar values in US dollars unless otherwise stated
 ArborGen continues to make progress in markets with identified growth potential (the US and Brazil)
and remains on track to deliver its highest MCP sales year to date in the US.
 Agreement for the sale of ArborGen’s New Zealand and Australian business (ANZ business) for $22.25m
is now unconditional with completion scheduled for 30 November 2021. Proceeds will afford ArborGen
greater strategic and financial flexibility, strengthening our balance sheet so the company can pursue
growth opportunities.
 Positive uplift in revenue for continuing operations (excluding the ANZ business) and operating
earnings
1
of $0.6m (in line with pcp), with consolidated net loss of $0.5m reflecting inventory
adjustment, strategic review and lease termination write-off costs during the period.
 The company has re-confirmed guidance of US GAAP EBITDA
2
to be in the range of US$11.3 to $11.7m
for the FY22, subject to any future impact from supply chain and COVID related issues in the US.
----------------
ArborGen Holdings Limited (NZX: ARB) has announced its unaudited results for the six months to 30
September 2021, reporting a period of positive revenue and earnings growth in its US and Brazil markets.
The six-month consolidated result is presented showing the ArborGen’s New Zealand and Australian
businesses as discontinued. The sale of the ANZ business for $22.25m is now unconditional and completion
scheduled for 30 November 2021. The proceeds from the sale will afford ArborGen with greater strategic
and financial flexibility, strengthening our balance sheet so the company can pursue growth opportunities.
ArborGen’s core focus remains on growing sales of its higher margin proprietary advanced genetic products
(Mass Control Pollinated (MCP) and Varietals) in the United States and the company is on track to deliver
its highest MCP sales year in FY22, with year-to-date MCP sales orders now at approximately 104 million
seedlings, 24 million units higher than the prior year.
Further growth of MCP is expected in future years, driven by increased supply from flowers pollinated in
FY21 and ongoing maturity of orchards, and increasing adoption from both industrial and private landowner
customers. A number of large industrial customers have publicly stated MCP targets ranging from 75% to
100% of their plantings as maturing stands of MCP trees demonstrate compelling value gains, with a much

1
Earnings before other significant items - these comprise government grant subsidies of $0.9 million, and one-off
expenses relating to tenant eviction and accelerated upfront tenancy costs written off of $0.5 million, Brazil
inventory adjustment $0.2 million, and Strategic Review costs of $0.7 million. Other significant items in the prior
period comprised $2.3 million of government grant subsidies.
2
US GAAP EBITDA excludes NZ public company costs and the Strategic Review costs.

2

higher percentage of valuable sawtimber generated per acre. ArborGen is the clear MCP market leader in
the US, responsible for 80% of all MCP sales in the addressable market.
The US business is now poised to benefit from decades of investment in developing best-in-class proprietary
MCP products, increasing supply through orchard expansions across the US South, and upgrading both
industrial and private landowner customers to MCP seedlings.
ArborGen is replicating its US strategy in Brazil, to convert the market to products with superior genetics
from its portfolio of licensed and owned proprietary products. After years of oversupply, both pine and
eucalyptus seedling markets are now supply constrained. ArborGen is the only company providing superior,
proprietary genetics to Brazilian pine and eucalyptus growers and is well positioned to meet demand as it
addresses production capacity.
Strong underlying growth drivers – US housing growth, Brazil pulp and charcoal demand and carbon
markets – are supporting ArborGen’s positive outlook, with proceeds from the sale of the ANZ business to
provide flexibility to invest in new and existing opportunities.
Chair of ArborGen, David Knott Jr, said: “ArborGen is poised for growth, as we proceed with a strong balance
sheet and funding to execute our strategy and invest into new and existing opportunities. Our strategy is
working and the benefits of our long-term focus on advanced genetics is now becoming clear. The growing
demand for our seedlings is testament to the value we offer and gives us real confidence to continue with
our chosen pathway.
“Investors are increasingly interested in companies such as ours that provide sustainability benefits
alongside sound financial results. We now have the capacity to further investigate new opportunities in the
carbon market, as well as the use of our technology for other crops. It has been a busy six months for our
team, as we have focused on continuing to grow our business against a background of Covid-restrictions
and supply chain issues, as well as the strategic review, and they have done a great job.”

Financial Performance
Revenue for ArborGen’s continuing operations in the US and Brazil was $4.6m, up 59% on the prior
comparative period (pcp). Operating earnings before other significant items of $0.6m. The US and Brazil are
both markets that have been identified as offering significant growth potential for ArborGen.
The company reported a net loss of $0.5m (excluding the ANZ business), which included Government
subsidies of $0.9m and costs of $1.4m associated with inventory adjustments, the strategic review and a
lease termination write-off.
Net debt was reduced to $29.9m as at 30 September 2021. Tree stock sales in the US are weighted towards
the second half of the fiscal year and, along with the proceeds of the sale, debt is expected to reduce
materially in the second half of the year.
Outlook
Demand for MCP seedlings is growing and ArborGen is on track to deliver its highest MCP sales year in the
US in FY22. Timber prices remain strong and recent weather conditions have been conducive to site
preparation and seedling planting activities, which bodes well for the rest of the season and the FY23
financial year. Strong sales and margin growth is also being seen in Brazil.

3

In the short term, there are supply constraints particularly in our western regions due to extreme rain
conditions, which resulted in the loss of 25 million seedlings early in the season (almost all open pollinated
or OP seedlings). The harvest of softwood timber in the US South is also expected to fall short of previous
expectations, largely due to pandemic related supply-chain issues and numerous weather events leading
to temporary mill shutdowns. This will have a flow-on effect on the number of seedlings being purchased
for replanting, particularly in the coastal regions. Approximately 90% of overall available seedlings are
currently sold. Inflationary cost pressures are also expected to impact in the FY22 financial year, although
will be incorporated into new pricing and contracts for FY23 onwards.
The company has re-confirmed guidance of US GAAP EBITDA
1
to be in the range of US$11.3 to $11.7m for
FY22, subject to any future impact from supply chain and COVID related issues in the US. This includes $2
million related to ArborGen ANZ’s six-month performance, and $0.9 million of non-recurring costs.

ENDS
Any enquiries should be directed to:
Sharon Ludher-Chandra
Company Secretary & Performance Improvement Director (NZ-based)
E: info@arborgenholdings.com
Tel: 021 898 624

http://www.arborgenholdings.com or email info@arborgenholdings.com


ArborGen
ArborGen is the largest commercial global seedling supplier and a leading provider of advanced genetics, for the forest industry.
Employing state-of-the-art technology, ArborGen is developing high-value products that significantly improve the productivity of a
given acre of land by enabling our customers to grow trees that yield more wood per acre with greater consistency and quality in a
shorter period of time. For more information, please visit ArborGen’s website at www.arborgen.com.

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Results announcement
(for Equity Security issuer/Equity and Debt Security issuer)
Name of issuer
Reporting Period
Previous Reporting Period
Currency
Amount (millions)Percentage change
Revenue from continuing operationsUS$4.658.6%
Total RevenueUS$14.017.6%
Net profit/(loss) from continuing operations -US$0.5n/a
Total net profit/(loss) US$0.1-97.5%
Amount per Quoted Equity Security
Imputed amount per Quoted Equity Security
Record Date
Dividend Payment Date
Current period
Prior comparable
period
Net tangible assets per Quoted Equity SecurityUS 10 cps US 9 cps
A brief explanation of any of the figures above necessary to
enable the figures to be understood
Name of person authorised to make this announcement
Contact person for this announcement
Contact phone number
Contact email address
Date of release through MAP
Interim/Final Dividend
No dividend is proposed for the period
Results for announcement to the market
ArborGen Holdings Limited
6 months to 30 September 2021
6 months to 30 September 2020
US Dollars
23 November 2021
Not applicable
Not applicable
Not applicable
Please refer to accompanying releases
Authority for this announcement
Sharon Ludher-Chandra
Sharon Ludher-Chandra
09 356 9800
info@arborgenholdings.com

---

Interim Report 2021

1





INTERIM REPORT 2021

The Board of ArborGen Holdings Limited is pleased to present the Interim Report for the six months ended 30
September 2021. All dollar values are in US currency unless otherwise stated.


Highlights for the Six Months to 30 September 2021

 The core US strategy premised on growing sales of ArborGen’s higher margin proprietary advanced genetic
products (Mass Control Pollinated (MCP®) and Varietals), has been unfolding robustly:
 On track to deliver the highest MCP sales year in the US in FY22 with year-to-date MCP sales orders now
at approximately 104 million seedlings, 24 million units higher than the prior year.
 MCP unit sales to the US private landowner segment are projected to be up more than 45% compared to
prior year.
 Further growth of MCP expected in future years driven by increased supply from flowers pollinated in
FY21 and ongoing maturity of orchards, and increasing adoption from both industrial and private
landowner customers.
 Executed non-exclusive license agreement with a company focused on using biotechnology to develop trees
that better capture and store carbon.
 Solid forecast FY22 sales and margin growth in Brazil where ArborGen is the only company providing superior,
proprietary genetics to pine and eucalyptus growers. Strong underlying growth drivers - US housing growth,
Brazil pulp and charcoal demand, carbon markets.
 Added opportunity to extend proprietary intellectual property into other crop species.
 Entered into sale agreement to sell New Zealand and Australian operations (ArborGen ANZ) for NZ$22.25
million, now unconditional with completion scheduled for 30 November 2021. Sale proceeds provide flexibility
to invest in the Company’s higher growth US and Brazilian businesses, explore investment in new growth
opportunities in in vitro and carbon related segments, and repay debt in the US.

2

Financial Performance

Continuing Operations for the Six Months ended 30 September*



US $m 30 Sept 21 30 Sept 20
Revenue 4.6 2.9
Operating Earnings (before other significant items)
1
0.6 0.7
Other Significant Items (0.6) 2.3
Net (Loss) / Earnings from Continuing Operations
2
(0.5) 2.4
Net Cash from Operating Activities (all operations) 0.1 3.4
Net Debt 29.9 30.3
* The six month consolidated result has been restated to exclude ArborGen’s New Zealand and Australian businesses, with the sale of the
ANZ business for $22.5m now unconditional and completion scheduled for 30 November 2021.

During the six-month period, the Group reported:
 Revenue of $4.6 million from continuing operations in the US and Brazil, up 59% on the prior comparative
period (pcp).
 Operating earnings (before other significant items)
1
of $0.6 million, in line with the pcp.
 Net loss from continuing operations of $0.5 million
2
which includes $0.9 million of government grant income,
$0.5 million of lease termination write-off costs, $0.2 million of costs related to an inventory adjustment in
Brazil, and $0.7 million of strategic review costs. This compares with net earnings from continuing operations
of $2 million in the prior period which included $2.3 million of government grant income.
 Net cash from total operating activities of $0.1 million, down from the $3.4 million recorded in the prior
comparable period which included $2.6 million of government grant subsidies received. No subsidies were
received by the continuing operations in the current period.
 Net debt (excluding capitalised leases) of $29.9 million, down from $30.3 million in the prior comparable
period. Treestock sales in the US are weighted to the second half of the fiscal year (US sales activities commence
in December), which will result in lower net debt at 31 March 2022. In addition, the sale proceeds from the
sale of ArborGen ANZ, expected on 30 November 2021, will further reduce net debt materially.
 The company has re-confirmed guidance of US GAAP EBITDA
3
to be in the range of US$11.3 to $11.7 million
for the fiscal year ending 31 March 2022 (FY22), subject to any future impact from supply chain and COVID
related issues in the US.









1
Other significant items comprise government grant subsidies of $0.9 million, and one-off expenses relating to tenant
eviction and accelerated upfront tenancy costs written off of $0.5 million, Brazil inventory adjustment $0.2 million, and
Strategic Review costs of $0.7 million. Other significant items in the prior period comprised US government grant of $2.3
million of and ANZ $0.3 million (discontinued).
2
Net earnings include a biological asset gain of $7.2 million ($7.2 million gain in the prior period) which relates to a
share of earnings on seedling crop still in the ground, as required under IFRS.
3
US GAAP EBITDA excludes NZ public company costs and the Strategic Review costs.

3

Dear Shareholder

Key Growth and Strategic Initiatives

We remain focused on executing the key strategic, operational, and financial goals we have set for the business,
and we are making good progress.
 Expanding our supply of proprietary advanced genetics, and growing sales of advanced products;
 Improving cash flow generation;
 Expanding our footprint in our core growth regions; and
 Mitigating the risk of adverse climatic events.

ArborGen’s Core Growth Strategy – MCP Sales Growth in the US
Our core strategy continues to be growing the sales of our higher margin proprietary advanced genetic products
(Mass Control Pollinated (MCP) and Varietals) in the United States and to drive advanced genetics adoption.
ArborGen has a very strong competitive position in the US and we are poised to benefit from decades of
investment in developing best-in-class proprietary MCP products, expanding supply through orchard expansions
across the US South, and upgrading both industrial and private landowner customers to the productivity benefits
of MCP seedlings.

We have the most advanced and broadly adapted MCP product pipeline in the industry, with more than 20 years
of field trials and published evidence supporting the superior performance of our proprietary MCP. We have over
115 trials evaluating MCP families, the oldest being 25 years old, across the entire market that validate the
performance of our genetics. Importantly, there are now over 380 million MCP trees aged five years and older,
planted on 1,200 square miles across the US South, that provide irrefutable visual evidence of the substantial
gains in forest productivity and value, over traditional Open Pollinated (OP) seedlings. The performance of these
maturing stands, which are developing better than predicted, is a significant driver of MCP adoption.

The investments we made back in 2011 and 2012 to materially expand our MCP orchard capacity are now
delivering. Approximately 70% of our orchard trees are now aged 7 – 9 years, which is the beginning of their seed
productive phase, with productivity increasing as the trees mature. Our MCP pipeline continues to improve as
we integrate new, better MCP parents into our orchards.

In February 2021, we had our highest ever MCP bagging and pollination season. The resulting conelets are now
on the trees and will be harvested in November 2022, with the seed extracted from these cones available for
MCP seedling production in 2023 (sales in fiscal year ending March 2024).

We are projecting the 2022 cones harvested to generate over 200 million MCP seedling equivalents.

Importantly, ArborGen’s MCP bagging process, orchard genetic fingerprinting, and rigorous quality control
processes all work towards ensuring product purity for our customers.

MCP adoption by both our industrial and private landowner customers has been growing steadily. MCP seedlings
now represent around 62% of our Industrial customer orders and around 25% of our private landowner customer
orders, up from 51% and 15% respectively in FY21.

4

A number of large industrial customers have publicly stated MCP targets ranging from 75% to 100% of their
plantings as maturing stands of MCP trees demonstrate compelling value gains, with a much higher percentage
of valuable sawtimber generated per acre. Demand for sawtimber in the US South is expected to grow
significantly over the next few years supported by strong housing demand (new homes and remodelling). This
in turn is supported by favourable demographics and structural supply constraints in Canada and Western United
States which is driving significant sawmill expansion in the US South.

ArborGen is the clear MCP market leader in the US, responsible for approximately 80% of all MCP sales in the
addressable market, and is the only company with a portfolio of MCP products addressing the entire US South
loblolly market.

Brazil Strategy

ArborGen has grown to become one of the largest commercial suppliers of eucalyptus and loblolly pine seedlings
in the Brazilian market.

We are replicating our US strategy to convert the market to products with superior genetics in Brazil. Our product
portfolio includes:
 Advanced eucalyptus products licensed from International Paper, Gerdau and Vallourec under exclusive
license arrangements
 ArborGen’s own proprietary eucalyptus products, the first of which will be launched in 2022-2023
 ArborGen’s proprietary loblolly pine genetics
 Pine genetics licensed from Arauco and CMPC

We have a pipeline of products that span the entire development timeframe from crossing eucalyptus parents
to the final stages of pre-commercialisation (semi-commercial scale plantings on customer land).

After years of oversupply, both pine and eucalyptus seedling markets are now supply constrained, with
increasing domestic and export demand for softwood (pine), new pulp mills (eucalyptus) and strong charcoal
markets as a result of increasing iron ore demand.

Pine and eucalyptus growers are looking for new genetics, and in this respect, ArborGen is the only company
providing superior, proprietary genetics to Brazilian pine and eucalyptus growers.

A growing market and unmet needs have created strong tailwinds for our Brazilian business, however a key
constraint for us currently is production capacity which we are looking to address in coming months.





New Growth Opportunities – Reducing Greenhouse Gas Emissions
The increasing focus on reducing greenhouse gases globally and the growing emphasis on the role trees can play
in offsetting carbon emissions is creating new opportunities for ArborGen.

Forests have an important role to play in the reduction of greenhouse gas emissions:
 Trees capture carbon dioxide, one of the main greenhouse gases, from the atmosphere and store it in trunks,
branches, foliage and roots.
 Typically, about half a tree’s dry weight is carbon, which can be multiplied approximately by 3.7 to work out
how much carbon dioxide the tree has absorbed from the atmosphere.
 The rate of carbon absorption through forest depends on the speed of the plants’ growth. Pine in particular,
is adept at growing fast and absorbing carbon dioxide while it is still young.

5

Many of the world’s largest companies have set carbon goals as part of their ESG commitments. These
commitments are driving demand for CO
2
offset credits. For example, Microsoft vows to be carbon negative by
2030. The Microsoft Climate Innovation Fund invested in NCX, a venture-backed climate tech company focussed
on the largest forest carbon project (by acreage) in the continental United States. BP aims to be net zero by 2050,
and have acquired majority stake in largest US forest carbon offset developer Finite Carbon.
ArborGen is currently working on developing our carbon strategy for the United States market. A core part of that
strategy will be articulating to parties the value of our advanced genetics products which fix up to 40% more
carbon than traditional OP genetics. We will comment on this further in coming months.



ArborGen’s Elite Genetics Sequester 27-45% More CO
2


The reduction in years 15-16 relate to thinning of the plantations.


Sale of ArborGen ANZ

Consistent with our goals to focus on our core growth markets, on 1 November 2021, we announced that we had
entered into an agreement to sell our New Zealand and Australian businesses (ArborGen ANZ) to a New Zealand-
based consortium of private investors for NZ$22.25 million. The agreement is now unconditional and settlement
is expected to occur on 30 November 2021.

As explained in our market announcement, ArborGen ANZ is an operationally separate and significantly smaller
operation than ArborGen’s US business with a lower growth profile compared to our other markets. The business
is currently operating at around its maximum combined productive capacity of approximately 30 million tree
stocks per annum in NZ and 5.5 million per annum in Australia, and further expansion of capacity to grow the
core forestry and horticulture businesses would require significant additional capital spend.

The sale of ArborGen ANZ will realise value for the comparatively mature ANZ business and affords us great
strategic and financial flexibility to invest in expanding our high growth US and Brazilian businesses, explore
investment in new growth opportunities in in vitro and carbon related segments and repay debt.

6

Outlook

Demand for MCP seedlings is growing and ArborGen is on track to deliver its highest MCP sales year in the US in
FY22, year-to-date MCP sales orders now at approximately 104 million seedlings, 24 million units higher than the
prior year. Timber prices remain strong and recent weather conditions have been conducive to site preparation
and seedling planting activities, which bodes well for the rest of the season and the FY23 financial year.
Strong sales and margin growth is also being seen in Brazil (in both our pine and eucalyptus products). We expect
to lift sales and margins substantially next fiscal year assuming supply constraints are addressed.
In the short term, there are supply constraints particularly in our US western regions due to extreme rain
conditions resulting in the loss of 25m seedlings early in the season. The harvest of softwood timber in the US
South is also expected to fall short of previous expectations, largely due to pandemic related supply-chain issues
and numerous weather events leading to temporary mill shutdowns. This will have a flow-on effect on the
number of seedlings being purchased for replanting, particularly in the coastal regions. Approximately 90% of
overall available seedlings are currently sold. Inflationary cost pressures are also expected to impact in the FY22
financial year, although will be incorporated into new pricing and contracts for FY23 onwards.
As noted in the financial performance section, we are also recognising some one-time charges (mostly non-cash
in the current period) totalling $0.9 million relating to the eviction of the defaulting tenant of our headquarter
premises in Ridgeville, South Carolina, an inventory cost adjustment in Brazil, and higher varietal costs due to a
change in accounting policy (we are expensing FY23 costs that historically would be capitalised in inventory). We
have engaged a broker to find a replacement tenant and are also working with the defaulting tenant’s bank to
find a suitable tenant.
FY22 also includes a new multi-year non-exclusive license agreement with a company focused on using
biotechnology to develop trees that better capture and store carbon which resulted in an additional $0.5 million
of income in FY22. The non-exclusive license gives the party access to our technology necessary for the
development of transgenic and CRISPR (gene edited) pine products.
Taking into account all of the above factors, as announced late last month we are currently projecting US GAAP
EBITDA
3
for FY22 to be in the range of $11.3 to $11.7 million. This includes $2 million related to ArborGen ANZ’s
six-month performance, and $0.9 million of one-time costs noted above. Rental income from the Ridgeville
premises is expected to generate $0.5 to $0.6 million on an annualised basis when a new tenant is found. The
industry is still experiencing the impacts of the pandemic (i.e. disrupted supply chains with the flow on effects)
which could impact final seedling sales this fiscal year. That said, demand and timber prices remain strong, and
the weather in the US south has been much drier than forecasted which is conducive to site preparation and
seedling planting activities, which is positive for the balance of the season, and bodes well for the fiscal year
ending March 2023.
We expect the cash generated from operations this fiscal year and from the sale of ArborGen ANZ, will result in
net debt dropping to between $10 - $11 million by fiscal year end, materially strengthening ArborGen’s balance
sheet (including through cash interest cost savings), and placing us in a strong position to explore growth
opportunities.

7

We would like to thank all of our stakeholders for their continued support – it is very much appreciated. As noted
at the outset, we are putting considerable effort into the operational performance and cash generation of this
business. We are committed to delivering increasing value for our shareholders.


Dave Knott Jr
Chairman

23 November 2021
Andrew Baum
CEO

8

ArborGen Hol di ngs Li mi ted and Subs i di ari es
Consolidated Income Statement
For the six months ended 30 September 2021Slides for Discontinued
Re-pres ented
(1)
Unaudi tedAudi tedUnaudi ted
6 monthsYear ended6 months
Sep 2021Mar 2021Sep 2020
NotesUS$mUS$mUS$m
Revenue4.6 42.8 2.9
Cos t of s al es4
(4.1) (27.2) (2.4)
Gross profit0.5 15.6 0.5
Change i n fai r val ue of bi ol ogi cal as s ets4
7.2 -7.2
Other i ncome- 0.8 0.3
Admi ni s trati on expens e
(7.1) (15.1) (7.3)
Operating earnings excluding items below0.6 1.3 0.7
Strategi c revi ew cos ts , government grants and other5
(0.6) 1.7 2.3
Operating profit (loss) before financing expense-3.0 3.0
Fi nanci ng expens e(0.9) (2.0) (1.0)
Profit (loss) before taxation(0.9) 1.0 2.0
Tax benefi t0.4 0.6 0.4
Net earnings (loss) after taxation from continuing operations(0.5) 1.6 2.4
Net earni ngs after taxati on from di s conti nued operati ons100.6 1.6 1.6
Net earnings (loss)0.1 3.2 4.0
Earni ngs (l os s ) per s hare i nformati on (cents per s hare)
From onti nui ng operati ons
Bas i c(0.1) 0.3 0.5
Di l uted(0.1) 0.3 0.5
From conti nui ng and di s conti nued operati ons
Bas i c-0.6 0.8
Di l uted-0.6 0.8
Wei ghted average number of s hares outs tandi ng (mi l l i ons of s hares )
Bas i c500.3 499.5 499.4
Di l uted504.2 502.8 499.4
The accompanyi ng notes form part of, and are to be read i n conjuncti on wi th, thes e fi nanci al s tatements .


(1) The period ended 31 March 2021 and 30 September 2020 have been re-presented to show net profit after taxation from discontinued
operations separately.

9

ArborGen Hol di ngs Li mi ted and Subs i di ari es
Consolidated Statement of Comprehensive Income
For the six months ended 30 September 2021
Unaudi tedAudi tedUnaudi ted
6 monthsYear ended6 months
Sep 2021Mar 2021Sep 2020
NotesUS$mUS$mUS$m
Net earnings (loss)0.1 3.2 4.0
Items that may be recl as s i fi ed to the Cons ol i dated Income Statement:
Movement i n currency trans l ati on res erve9(0.2) 2.2 1.2
Movement i n hedge res erve9- 0.4 -
Other comprehensive earnings (loss) (net of tax)(0.2) 2.6 1.2
Total comprehensive earnings (loss)(0.1) 5.8 5.2


ArborGen Hol di ngs Li mi ted and Subs i di ari es
Statement of Changes in Equity
For the six months ended 30 September 2021
Unaudi tedAudi tedUnaudi ted
6 monthsYear ended6 months
Sep 2021Mar 2021Sep 2020
NotesUS$mUS$mUS$m
Total comprehensive earnings (loss)(0.1) 5.8 5.2
Movement i n ArborGen Hol di ngs s harehol ders ' equi ty:
Movement i n i s s ued capi tal80.3 0.2 0.2
Movement i n s hare bas ed payment res erve9
(0.1) 0.3 0.1
Total movement in shareholder equity0.1 6.3 5.5
Openi ng Group equi ty148.2 141.9 141.9
Closing group equity148.3 148.2 147.4

10

ArborGen Hol di ngs Li mi ted and Subs i di ari es
Consolidated Statement of Cash Flows
For the six months ended 30 September 2021Slides for Discontinued
6 monthsYear ended6 months
Sep 2021Mar 2021Sep 2020
US$mUS$mUS$m
Cas h was provi ded from operati ng acti vi ti es
Recei pts from cus tomers24.1 52.5 19.3
Government grants recei ved0.2 4.6 2.6
Cas h provi ded from operati ng acti vi ti es
24.3 57.1 21.9
Payments to s uppl i ers , empl oyees and other(24.2) (47.2) (18.5)
Cas h (us ed i n) operati ng acti vi ti es(24.2) (47.2) (18.5)
Net cash from (used in) operating activities0.1 9.9 3.4
Inves tment i n fi xed as s ets(0.5) (1.0) (0.7)
Inves tment i n i ntel l ectual property
(1.4) (3.7) (1.8)
Net cash from (used in) investing activities(1.9) (4.7) (2.5)
Debt drawdowns1.7 8.5 6.0
Repayment of l eas e l i abi l i ti es(0.1) (1.3) (0.5)
Debt repayment
(1.1) (12.4) (6.1)
Interes t pai d(0.9) (2.0) (1.2)
Net cash from (used in) financing activities(0.4) (7.2) (1.8)
Net movement in cash(2.2) (2.0) (0.9)
Openi ng cas h, l i qui d depos i ts and res tri cted cas h
6.2 7.9 7.9
Effect of exchange rate changes on net cas h
(0.1) 0.3 0.1
Closing cash, liquid deposits and restricted cash3.9 6.2 7.1
Net earni ngs after taxati on0.1 3.2 4.0
Adj us tment for:
Fi nanci ng expens e
0.9 2.0 1.0
Depreci ati on and amorti s ati ons
4.4 10.2 4.2
Taxati on
(0.3) (0.6) (0.4)
Forei gn exchange
(0.2) 0.4 0.1
Deferred grant i ncome- 0.9 -
Change i n fai r val ue of bi ol ogi cal as s ets
(6.3) 0.1 (6.8)
Other non cas h i tems
0.1 0.7 0.3
Cas h fl ow from operati ons before net worki ng capi tal movement
(1.3) 16.9 2.4
Trade and other recei vabl es
6.9 (1.7) 6.5
Inventory
(5.1) (5.3) (7.4)
Trade and other payabl es
(0.4) - 1.9
Net worki ng capi tal movement
1.4 (7.0) 1.0
Net cash from operating activities0.1 9.9 3.4
The accompanyi ng notes form part of, and are to be read i n conj uncti on wi th, thes e fi nanci al s tatements .

11

ArborGen Hol di ngs Li mi ted and Subs i di ari es
Consolidated Balance Sheet
Slides for Discontinued
As at 30 September 2021
Unaudi tedAudi tedUnaudi ted
Sep 2021Mar 2021Sep 2020
NotesUS$mUS$mUS$m
Current assets
Cas h and l i qui d depos i ts
3.9 6.2 5.1
Res tri cted cas h- - 2.0
Trade and other recei vabl es
2.7 12.2 4.0
Inventory
41.4 34.5 44.2
As s ets hel d for s al e1017.6 - -
Total current assets
65.6 52.9 55.3
Non current assets
Fi xed as s ets
32.8 43.3 44.0
Ri ght-of-us e as s ets
4.8 5.8 6.4
Intel l ectual property
99.6 101.3 102.5
Total non current assets
137.2 150.4 152.9
Total assets
202.8 203.3 208.2
Current liabilities
Trade, other payabl es and provi s i ons
(10.7) (13.1) (14.9)
Current l eas e obl i gati on(0.6) (0.8) (0.5)
Current debt6(4.9) (1.0) (4.6)
Current taxati on l i abi l i ty(0.1) (0.1) -
Deferred grant i ncome- (0.9) -
Li abi l i ti es as s oci ated wi th as s ets hel d for s al e10(3.7) - -
Total current liabilities
(20.1) (15.9) (20.0)
Term liabilities
Term debt
6(28.9) (32.6) (32.8)
Deri vati ve fi nanci al i ns truments
(0.3) (0.3) (0.7)
Leas e obl i gati on(4.4) (5.1) (5.9)
Deferred taxati on l i abi l i ty
(0.8) (1.2) (1.4)
Total term liabilities
(34.4) (39.2) (40.8)
Total liabilities(54.5) (55.1) (60.8)
Net assets148.3 148.2 147.4
Equity
Share capi tal
8202.8 202.5 202.5
Res erves
9(54.5) (54.3) (55.1)
Total group equity148.3 148.2 147.4
Net Asset Backing US 30 cps US 30 cps US 30 cps
Dave Knott JrPaul Smart
Chai rman of the BoardAudi t Commi ttee Chai rman
23 November 2021

12

ArborGen Hol di ngs Li mi ted and Subsi di ari es
Notes to the Consolidated Financial Statements
For the six months ended 30 September 2021

1 BASIS OF PRESENTATION
The unaudited financial statements presented are those of ArborGen Holdings Limited and Subsidiaries (the Group) for the six
months from 1 April 2021 to 30 September 2021. The financial statements have been prepared in accordance with New Zealand
International Accounting Standard 34, and because they are interim statements they do not include all of the information
required to be disclosed for full annual financial statements.
These financial statements should be read in conjunction with the audited financial statements for the periods ended 31 March
2021 and 31 March 2020, which have been prepared in accordance with New Zealand International Financial Reporting
Standards (NZ IFRS) and International Financial Reporting Standards (IFRS).
ArborGen Holdings Limited is registered in New Zealand under the Companies Act 1993, is listed on the New Zealand Stock
Exchange, and is a FMC Reporting Entity under the Financial Markets Conduct Act 2013.
The presentation currency used in the preparation of these financial statements is United States dollars (US$), rounded to the
nearest hundred thousand dollars. Consequently all financial numbers are in US$ unless otherwise stated.
Changes in prior year disclosure comparatives have been made to align with the current year presentation.
Accounting Policies
The accounting policies applied are consistent with those applied in the annual financial statements for the period ended 31
March 2021. Noting the recognition of Australia and New Zealand as discontinued operations (refer to 10) and the treatment
of US varietal programme (refer to note 4).

2 APPROVAL OF ACCOUNTS
These financial statements have been prepared on a consolidated Group basis and were approved for issue by the Board of
Directors on 23 November 2021.

3 USE OF ESTIMATES AND JUDGEMENT
The preparation of financial statements in conformity with NZ IFRS requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during the reporting period (refer March 2021
statutory report, note 4, for greater detail). Actual results could differ from those estimates.

4 INVENTORY AND FAIR VALUE ADJUSTMENT ON BIOLOGICAL ASSETS
Unaudi tedAudi tedUnaudi ted
6 monthsYear ended6 months
Sep 2021Mar 2021Sep 2020
Openi ng bal ance0.8 0.9 0.9
Change i n fai r val ue of bi ol ogi cal assets recogni sed i n i ncome statement
Fai r val ue change for crop to be l i fted i n the comi ng peri od - conti nui ng7.2 0.8 7.7
Reversal of pri or peri od fai r val ue change - di sconti nued(0.9) (0.9) (0.9)
Total change in fair value of biological assets recognised in the income statement6.3 (0.1) 6.8
Closing fair value uplift biological assets7.1 0.8 7.7


At 30 September primarily the US crop (which will be lifted prior to year end) is established and fair valued. This fair value will
reverse at year end in March upon sale of the crop. At 31 March 2021, only the Australasian crops were established and fair
valued. The Australasian crops are primarily lifted from late May through to September each year. Consistent with the
treatment of the Australasian business as "held for sale", the fair value adjustment recognised for the Australasian crop at 30
September 2021 is part of asset held for sale.
In the US, ArborGen has chosen to scale varietal production back in FY23 and FY24 as we transition to a more cost effective
and reliable production system, pursuing production directly from somatic embryos. As a result costs of $0.2 million have been
expensed in cost of sales that previously would have been capitalised to inventory and recognised in the following year.

13


ArborGen Hol di ngs Li mi ted and Subsi di ari es
Notes to the Consolidated Financial Statements
For the six months ended 30 September 2021

5
STRATEGIC REVIEW COSTS, GOVERNMENT GRANTS AND OTHER

Under the various governmental Covid-19 recovery plans ArborGen has received support in the US, New Zealand and
Australia. In March 2021 ArborGen Inc received a second SBA loan under the CARES Act Paycheck Protection Program (PPP)
of US$2.0 million. As with the previous PPP loan, this funding was to ensure ArborGen retained all employees and avoided
any layoffs. Similar to the previous loan if all employees were kept on the payroll for eight weeks and at least 60% of the loan
is used for payroll related costs plus rent, mortgage interest, or utilities payments over the eight week period the loan will
be forgiven. At 31 March 2021 $0.9 million of this tranche was recognised as a liability, these funds have since been used to
fund payroll costs including benefits and other business related costs. Consequently application has been made for
forgiveness, and the remaining loan has been released into earnings. Forgiveness for the first round of PPP funding (from
May 2020) was received in July 2021. We have also applied for forgiveness of the March 2021 PPP funding.

More than offsetting the release of the PPP funding are the costs relating to the strategic review announced on 30 June
2021, the inventory adjustment recognised in Brazil and costs related to the eviction of the head office tenant.

The objective of the strategic review is to consider all options to unlock value for the benefit of all shareholders. These
options could include (but are not limited to) a potential sale of all of the shares in, or all or some of the assets of the
Company, or a US listing. On 1 November 2021, ArborGen announced it had entered into an agreement to sell the assets of
its Australian and New Zealand operations to Geyser Limited Partnership (now ArborGen ANZ Limited Partnership, refer to
note 10 for more details). Year to date the Group has incurred costs in relation to the strategic review totalling $0.7 million,
including costs specifically related to the sale of the ANZ operations. Additionally, an inventory adjustment of $0.2 million
was recognised in Brazil, this adjustment returned the carrying value of opening inventory to a normal production cost
(standard cost per seedling).

Further, expenses of $0.5 million relating to the eviction of the defaulting sub-lessee from the headquarter premises in
Ridgeville, South Carolina were recognised. This includes the accelerated recognition of tenancy costs and other expenses
of the eviction process. ArborGen Inc is in the process of finding new tenants for the premises.

6
CURRENT DEBT AND TERM DEBT

At 30 September 2021 the Group had debt facilities with the following banks: Synovus Financial Corporation (Synovus) and
AgSouth Farm Credit (AgSouth) in the United States and Westpac New Zealand Limited (Westpac) in New Zealand. In addition
the Group has subordinated promissory notes (Notes) (issued to Directors, shareholders and senior management in August
2019) to facilitate the US Ridgeville headquarters property purchase.

ArborGen Inc has a non-revolving promissory note issued to AgSouth for $9.3 million (2020: $9.9 million) bearing interest at
4.95%, with a maturity date of 1 May 2036. This facility is secured against ArborGen's US real estate properties, with an
annual principal repayment of $0.6 million in May each year. ArborGen's revolving facility agreement with Synovus, is a $17
million letter of credit (LOC) and is classified as term debt as at 30 September 2021. The facility has an expiry date of 31
August 2023 and annual 60-day (continuous) pay down maximum borrowing limit of $10 million (between 1 March and 31
August). The LOC bears interest at the 30 day LIBOR base rate plus 2.75%, subject to a minimum annual rate of 3.5%, and is
collateralised by all of ArborGen Inc's United States assets not otherwise pledged under the AgSouth agreement. The credit
agreements with both Synovus and AgSouth include covenants which require ArborGen Inc to maintain a minimum net worth
of $29 million and $24 million respectively. ArborGen New Zealand Unlimited (ArborGen NZ) has a NZ$2 million line of credit
facility, which is subject to renewal on an annual basis, and categorised as part of the disposal group. As part of the
acquisition of the US Ridgeville headquarters premises the Group has two financing facilities. The first is represented by the
Notes (refer to note 11) issued by ArborGen Inc to related parties (being Directors, shareholders and senior management)
for $2.88 million. The Notes are fully subordinated to all bank debt, repayable at maturity (August 2022), and due to their
subordinated nature attracts a 7% per annum interest rate, payable six monthly in arrears.

14

ArborGen Hol di ngs Li mi ted and Subsi di ari es
Notes to the Consolidated Financial Statements
For the six months ended 30 September 2021


Rubicon Industries USA LLC (RIUSA) has a $10.7 million (2020: $11.1 million) mortgage facility from Synovus secured by the
Ridgeville headquarters. The mortgage is a seven-year term facility, based on a 20-year amortising loan, incurring interest at
the 30-day LIBOR base rate plus 2% (currently 2.09%). The Group has entered into a seven-year interest rate swap, with
terms that match that of the mortgage, at a fixed rate of 3.52%. The mortgage requires RIUSA to maintain a debt service
coverage ratio of not less than 1.25:1 for the trailing 12 months.

At 30 September 2021 the Group held cash and liquid deposits of $3.9 million (2020: $7.1 million, including restricted cash
of $2 million) and had debt of $33.8 million and a lease liability of $5.0 million (2020: $37.4 million of debt plus $6.4 million
of lease liability).


7 SEGMENTAL INFORMATION SUMMARY
The Group has only one reportable segment, being 'forestry genetics' and each of the primary statements reflects the full
segmental operations.

Unaudi tedAudi tedUnaudi ted
6 monthsYear ended6 months
Sep 2021Mar 2021Sep 2020
Forestry geneticsNote
US$mUS$mUS$m
Operati ng revenue4.6 42.8 2.9
Net earni ngs (l os s ) after taxati on1.0 2.9 3.1
Total as s ets185.2 203.3 208.2
Li abi l i ti es(37.3) (54.9) (46.3)
Reconci l i ati on
Discontinued operations10
Operati ng revenue9.4 9.9 9.0
Net earni ngs after taxati on0.6 1.6 1.6
Total as s ets - di s conti nued17.6 - -
Li abi l i ti es - di s conti nued(3.8) - -
Corporate
Net earni ngs (l os s ) after taxati on(1.5) (1.3) (0.7)
Li abi l i ti es(13.4) (0.2) (14.5)
Total Group
Operati ng revenue - Total14.0 52.7 11.9
Operati ng revenue - Conti nui ng4.6 42.8 2.9
Operati ng revenue - Di s conti nued9.4 9.9 9.0
Net earni ngs (l os s ) after taxati on - Total0.1 3.2 4.0
Net earni ngs (l os s ) after taxati on - Conti nui ng(0.5) 1.6 2.4
Net earni ngs (l os s ) after taxati on - Di s conti nued0.6 1.6 1.6
Total as s ets202.8 203.3 208.2
Li abi l i ti es(54.5) (55.1) (60.8)

15

ArborGen Hol di ngs Li mi ted and Subsi di ari es
Notes to the Consolidated Financial Statements
For the six months ended 30 September 2021


8 CAPITAL

Unaudi tedAudi tedUnaudi ted
Sep 2021Mar 2021Sep 2020
Share capitalNoteUS$mUS$mUS$m
Share capi tal at the begi nni ng of the peri od202.5 202.3 202.3
Is s ue of s hares
(3)
90.2 - -
Ves ti ng of s hares - Non-Executi ve Di rectors Share Pl an
(1) (2)
90.1 0.2 0.2
Share capital202.8 202.5 202.5
Number of sharesSep 2021Mar 2021Sep 2020
Openi ng s hares on i s s ue499,611,738 499,395,391 499,395,391
Is s ue of s hares
(3)
91,620,391 216,347 0
Closing shares on issue501,232,129 499,611,738 499,395,391
Treasury stockSep 2021Mar 2021Sep 2020
Openi ng s hares on i s s ue1,102,683 1,931,700 1,931,700
Ves ti ng of s hares
(1)
(829,017) (829,017) (829,017)
Closing treasury stock shares on issue273,666 1,102,683 1,102,683



(1) In accordance with the shareholders' resolution passed at the ArborGen Holdings Annual Shareholders’ meeting held
on 17 September 2018, on 18 September 2018 ArborGen Holdings issued 1,666,050 new shares to the Rubicon Non-
Executive Directors Share Plan (the Trust). The Trust holds the shares on behalf of the three Directors (Tom Avery, Ozey
Horton, and Paul Smart, equally) until the vesting terms are met. The shares vest, to each Director, in three equal
tranches on the first, second and third anniversaries following the date of issue (18 September 2018), provided that the
Director remains a Director of the Company on the relevant anniversary date. The new shares were issued at the NZX
20-day market VWAP for ArborGen Holdings shares of NZ27.01 cents per share, for a total value of NZ$450,000. These
shares were accounted for as treasury stock until vesting, and the share based transactions are recorded in the share
based payment reserve. In September 2021 the third (and final) tranche of 555,351 shares vested to the three Directors
(185,117 each) (refer to note 11 for related party transactions), this plan has now been completed.
(2) In accordance with the shareholders' resolution passed at ArborGen Holdings Annual Shareholders’ meeting held on 17
September 2019, on 18 September 2019 ArborGen Holdings issued 820,998 new shares to the 2019 Rubicon Non-
Executive Director Share Plan (the 2019 Trust). The 2019 Trust will hold the shares on behalf of George Adams until the
vesting terms are met. The shares will vest in three equal tranches on the first, second and third anniversaries following
the date of issue (18 September 2019), provided that the Director remains a Director of the Company on the relevant
anniversary date. The new shares were issued at the NZX 20-day market VWAP for ArborGen Holding shares of NZ18.27
cents per share, for a total value of NZ$150,000. The share based transactions are recorded in the share based payment
reserve and the shares are accounted for as treasury stock until vesting. In September 2021 the second tranche of
273,666 shares vested to George (refer to note 11 for related party transactions).
(3) In July 2021 ArborGen awarded 3,933, 535 RSU's (restricted share units) to ArborGen Inc executives, in relation to its
FY2021 Long Term Incentive (2021 LTI) Plan. Pursuant to this award, ArborGen Holdings issued 1,620,391 new shares,
1,156,572 of those shares represent the first of three equal tranches awarded under the 2021 LTI Plan and 463,819
shares were issued to one retiring employee (with all three tranches vesting on retirement). The remaining RSU's
(2,313,144) will vest over the next two anniversaries of the award, provided that the holder of the RSU remains
employed by the ArborGen group on the applicable vesting date.

16

ArborGen Hol di ngs Li mi ted and Subsi di ari es
Notes to the Consolidated Financial Statements
For the six months ended 30 September 2021

9 RESERVES

Unaudi tedAudi tedUnaudi ted
Sep 2021Mar 2021Sep 2020
Retained earningsNoteUS$mUS$mUS$m
Openi ng bal ance(53.3) (56.5) (56.5)
Net earni ngs0.1 3.2 4.0
Closing balance(53.2) (53.3) (52.5)
Cash flow hedge reserve
(1)
Openi ng bal ance(0.3) (0.7) (0.7)
Fai r val ue gai ns (l os s es ) for the year- 0.4 -
Closing balance(0.3) (0.3) (0.7)
Share based payments reserve
Openi ng bal ance0.5 0.2 0.2
Non-Executi ve Di rectors Share Pl an8- 0.1 0.1
Non-Executi ve Di rectors Share Pl an s hares ves ted8(0.1) (0.2) (0.2)
Executi ve s ettl ement s hare pl an
(3)
0.2 0.4 0.2
Executi ve s ettl ement s hare pl an s hares ves ted
(2)
8(0.2) - -
Closing balance0.4 0.5 0.3
Currency translation reserve
Openi ng bal ance(1.2) (3.4) (3.4)
Trans l ati on of i ndependent forei gn operati ons(0.2) 2.2 1.2
Closing balance
(4)
(1.4) (1.2) (2.2)
Total reserves(54.5) (54.3) (55.1)


(1) The cash flow hedging reserve records the net movement of cash flow hedging instruments, being interest rate swaps
(refer to note 6).
(2) In July 2021 ArborGen awarded 3,933, 535 RSU's to ArborGen Inc executives, in relation to the 2021 LTI Plan. Pursuant
to this award, ArborGen Holdings issued 1,620,391 new shares, refer to note 8 for more details.
(3) In July 2021, the Board entered into a new RSUs agreement for 2,808,845 RSUI's to ArborGen Inc executives. Any award
is subject to the ArborGen Group's achieving certain financial performance hurdles in accordance with the ArborGen
2022 LTI Plan. Any RSUs awarded under the RSU Agreement will vest as ARB Ordinary Shares in three equal tranches on
three separate vesting dates, provided that the holder of the RSU remains employed by the ArborGen Group on the
applicable vesting date.
(4) The closing currency translation reserve includes a debit balance of $0.5 million relating to the Australian and New
Zealand operations.

10 DISCONTINUED OPERATIONS
Sale of ArborGen Australia and New Zealand's assets

On 1 November 2021, ArborGen announced it had entered into an agreement to sell the assets of its Australian and New
Zealand (ANZ) operations to Geyser Limited Partnership (now ArborGen ANZ Limited Partnership (ANZLP)). ANZLP is a
consortium of New Zealand investors predominantly comprising charitable trusts and private families, with the consortium
led by Mr Hugh Fletcher.

17

ArborGen Hol di ngs Li mi ted and Subsi di ari es
Notes to the Consolidated Financial Statements
For the six months ended 30 September 2021


ANZLP has agreed to acquire the business of ArborGen ANZ, comprising the assets (including goodwill) of ArborGen New
Zealand Unlimited and ArborGen Australia Pty Limited for a total purchase price of NZ$22.25 million on a debt free and cash
free basis and with a locked box mechanism applying from 1 October 2021. The purchase price of NZ$22.25 million will be
reduced by a working capital adjustment of NZ$450,000 reflecting the seasonality of the business. The transaction is
structured as an asset sale, with ANZLP assuming all ArborGen ANZ’s obligations (other than tax) which were incurred before
completion in the ordinary course of business.

In terms of the strategic review process, it became evident that there was strategic benefit in separating the ANZ business
from that of the US and Brazil. One significant advantage being, if the purchaser was an Australian or New Zealand resident,
that would remove the complexities of gaining approvals from both the Overseas Investment Office in New Zealand and the
Foreign Investment Review Board, as would be the case for a non ANZ resident entity. The Board saw the removal of this
complexity, together with the ability of a resident purchaser to transact quickly, meant a separation of the ANZ operations
was logical. The separation and disposal of ANZ is consistent with the Group’s long-term policy to focus its activities on the
Group’s US and Brazilian businesses. The ANZ transaction is expected to be completed on 30 November 2021 and as such
has been classified as a disposal group held for sale and presented separately in the statement of financial position. The
proceeds of disposal are expected to exceed the carrying amount of the related net assets and accordingly no impairment
losses have been recognised on the classification of these operations as held for sale. The major classes of assets and liabilities
comprising the operations classified as held for sale, are presented below.

On 19 November the Company announced that the agreement was now unconditional, following the conditions being
satisfied. Those conditions being, acceptance of offer of employment by more than 75% of permanent employees and the
approval by Radiata Pine Breeding Company Limited to transfer the 2.34% shareholding to the purchaser.

Included within the liabilities associated with discontinued operations is the ArborGen New Zealand Unlimited NZ$2 million
line of credit facility, which is subject to renewal on an annual basis.



UnauditedAuditedUnaudited
6 monthsYear ended6 months
Sep 2021Mar 2021Sep 2020
US$mUS$mUS$m
Gros s revenue9.4 9.9 9.0
Profi t before taxati on
(1)
0.8 1.6 1.6
Tax expens e on profi t before taxati on(0.1) - -
Net profit after taxation from discontinued operations0.6 1.6 1.6
(1) Profi t before taxati on from di s conti nued operati ons i ncl udes :
Depreci ati on0.5 0.4 0.3
Statement of cash flowsUnauditedAuditedUnaudited
for the peri od ended6 monthsYear ended6 months
Sep 2021Mar 2021Sep 2020
US$mUS$mUS$m
Net cash from:
Operati ng acti vi ti es1.2 1.7 1.8
Inves ti ng acti vi ti es(0.3) (0.2) (0.2)
Fi nanci ng acti vi ti es0.7 - -
Net cash from discontinued operations1.6 1.5 1.6

18


ArborGen Hol di ngs Li mi ted and Subsi di ari es
Notes to the Consolidated Financial Statements
For the six months ended 30 September 2021



Balance Sheet ItemsUnauditedAuditedUnaudited
As atSep 2021Mar 2021Sep 2020
US$mUS$mUS$m
Trade and other recei vabl es1.8 0.2 1.4
Inventory5.2 7.4 4.9
Fi xed assets10.0 10.1 9.6
Ri ght-of-use assets0.6 0.6 0.9
Assets held for sale17.6 18.3 16.9
Trade, other payabl es and provi si ons(2.4) (3.4) (2.4)
Current l ease obl i gati on(0.1) (0.1) (0.1)
Current debt(0.7) - -
Lease obl i gati on(0.6) (0.6) (0.8)
Liabilities associated with assets held for sale3.8 (4.1) (3.4)


11 RELATED PARTY TRANSACTIONS

Under the terms of the two Non-Executive Directors Share Plan's approved by shareholders (17 September 2018 and 17
September 2019), in September 2021 the final tranche of shares vested to the three Directors (Tom Avery, Ozey Horton and
Paul Smart) being 185,117 each (total 555,351) and second tranche of 273,666 shares vested to George Adams.

As part of the acquisition of the US Ridgeville headquarters premises the Group issued subordinated promissory notes
(Notes) to related parties (being Directors, shareholders and senior management) for $2.88 million. The Notes are fully
subordinated to all bank debt, repayable at maturity (August 2022), and due to their subordinated nature attract a 7% per
annum interest rate, payable six monthly in arrears.

12 NON-GAAP PERFORMANCE MEASURE

ArborGen Holdings shareholders and users of the financial statements are very interested in ArborGen Inc's underlying
performance under US-GAAP (as well as under IFRS), as that is the result that ArborGen Inc would report in a US ‘listing’
situation. ArborGen Holdings believes 'Adjusted US-GAAP EBITDA' provides useful information, as it is used internally to
evaluate performance. It is also a measure that equity analysts focus on for comparative company performance purposes,
as the measure removes distortions caused by different depreciation policies and debt:equity structures.

In contrast with US-GAAP, IFRS requires the capitalisation of ArborGen’s development spend, the amortisation of intellectual
property, the accrual of the change in fair value of biological assets on the seedling crop each year prior to its sale, and the
capitalisation of operating leases. Because of these differences, US-GAAP results, and in particular 'Adjusted US-GAAP
EBITDA' cannot be easily derived from reported IFRS numbers. For these reasons and in order to provide users with relevant
and understandable information we provide the reconciliation below.

EBITDA, US-GAAP EBITDA and Adjusted US-GAAP EBITDA are all non-GAAP financial measure and are not recognised under
NZ IFRS. As they are not necessarily uniformly defined or utilised, these measures may not be comparable with similarly
titled measures used by other companies. Non-GAAP financial measures should not be viewed in isolation or considered as
a substitute for measures reported in accordance with GAAP. The following table provides users useful ArborGen Inc
information for year-on-year comparison and reconciles net earnings to 'Adjusted US-GAAP EBITDA'.

19


ArborGen Hol di ngs Li mi ted and Subsi di ari es
Notes to the Consolidated Financial Statements
For the six months ended 30 September 2021
Unaudi tedAudi tedUnaudi ted
6 monthsYear ended6 months
Sep 2021Mar 2021Sep 2020
NoteUS$mUS$mUS$m
Revenue74.6 52.7 11.9
Cos t of s al es(4.1) (34.5) (9.2)
Gross profit0.5 18.2 2.7
Net profi t (l os s ) after taxati on71.0 4.5 4.7
l es s tax benefi t(0.4) (0.6) (0.4)
pl us Fi nanci ng expens e0.9 2.0 1.0
Operati ng profi t (l os s ) before fi nanci ng expens e1.5 5.9 5.3
pl us Depreci ati on and amorti s ati ons3.8 10.2 4.2
EBITDA (NZ IFRS)5.3 16.1 9.5
Add back NZ IFRS adjus tments
Inves tment i n i ntel l ectual property(1.4) (3.7) (1.8)
Change i n fai r val ue of bi ol ogi cal as s ets - conti nui ng4(7.2) 0.1 (6.8)
Other IFRS adjus tments (i ncl udi ng IFRS 16 adjus tment)(0.2) (1.2) (0.7)
Di s conti nued operati ons
(1)
10
2.1
- -
US-GAAP EBITDA profit (loss)(1.4) 11.3 0.2
Add back s i gni fi cant non-recurri ng i tems
Government Grants , Inventory adjus tment and other5(0.1) (2.0) (2.4)
Other expens es50.2 - -
Adjusted US-GAAP EBITDA(1.3) 9.3 (2.2)


(1) Includes; profit before taxation $0.7 million, adding back change in fair value of biological asset $0.9 million and Depreciation $0.5
million.

ARBORGEN HOLDINGS LIMITED AND SUBSIDIARIES

20

Investor Information


INVESTOR ENQUIRIES/REGISTERED OFFICE
Suite 7, 100 Parnell Road, Auckland
PO Box 68 249, Wellesley St,
Auckland 1141, New Zealand

Telephone: 64 9 356 9800
Email: info@arborgenholdings.com
Website: www.arborgenholdings.com
STOCK EXCHANGE LISTING
The Company’s shares (ARB) are listed on the NZSX.
SHAREHOLDER ENQUIRIES
Shareholders with enquiries about share transactions or
changes of address should contact the Share Registrar:

Computershare Investor Services Limited
Level 2, 159 Hurstmere Road
Takapuna, Auckland
Private Bag 92 119,
Auckland 1142, New Zealand

Telephone: 64 9 488 8777
Facsimile: 64 9 488 8787
Email: enquiry@computershare.co.nz

ELECTRONIC COMMUNICATIONS
You can elect to receive your shareholder communications
electronically.

To register, visit www.investorcentre.com/nz. To initially access this website, you will need your CSN or Holder Number
and FIN. You will be guided through a series of steps to register your account, including setting up a new user ID and
password for on-going use of the website. Once logged in, click on “My Profile”. In the Communication preferences
panel, click “update”.

Alternatively send your name, address and CSN or holder number to ecomms@computershare.co.nz advising you wish
to receive your ArborGen Holdings shareholder communications by email.



There are statements in this Report that are ‘forward looking
statements.’ As these forward-looking statements are
predictive in nature, they are subject to a number of risks and
uncertainties relating to the Group, many of which are beyond
our control.
In particular, ArborGen’s operations and results are
significantly influenced by the general level of economic
activity in the various sectors of the economies in which it
competes, particularly in the United States, Brazil, New
Zealand and Australia.
Fluctuations in industrial output and the impact that has on
global demand for wood fibre and hence harvest and
reforestation levels, government environmental and regional
development policies, capital availability, relative exchange
rates, interest rates, the profitability of our customers, can
each have a substantial impact on our operations and financial
condition.
ArborGen-specific risks and uncertainties include (in addition
to those broad economic factors noted above) the global
markets and geographies in which it operates, intellectual
property protection, regulatory approvals, public and
customer acceptance of genetically engineered products, the
rate of customer adoption of advanced seedling products, the
success of its research and development activities, weather
conditions, cone and seed inventory, biological matters, and
the fact that ArborGen’s annual crops and seed orchards are
not the subject of insurance cover.
As a result of the foregoing; actual results, conditions and
conclusions may differ materially from those expressed or
implied by such statements.