ArborGen Holdings Interim Results and Revised FY25 Guidance

Page 1




ArborGen Interim Results and Revised FY25 Guidance
26 November 2024: ArborGen Holdings Limited (NZX: ARB) (ArborGen or the Company) has released
its unaudited results for the six months ended 30 September 2024. All dollar values are in US
currency unless otherwise stated.
The company has made good strategic progress, further expanding its nursery footprint and
improving operational processes in Brazil, and streamlining the US network as it positions itself for a
return in demand.
CEO Justin Birch said: “ArborGen continues to demonstrate resilience and deliver solid results despite
the challenging market, particularly in the US South which remains at the low end of the cycle. Our
long-term focus on advanced genetics is delivering superior prices and margin, even as the broader
market faces pressure. We are well-positioned to respond swiftly and capitalise on opportunities as
the market cycle turns upward.
“Brazil remains an exciting growth opportunity for ArborGen and we are continuing to expand our
production capacity and target higher margin sales. The steps we are taking now to strengthen our
processes and operations will support the business as it continues its growth trajectory.”
1H25 Financial Performance
Sales revenue for the half year was down 3% to $12.8m, following a record 78% year on year
increase in the corresponding prior half year period (pcp 1H24), but remains significantly ahead of
1H23. Revenue is predominantly from Brazil, with the majority of US sales recognised in the second
half of the year.
Cost of sales increased 15% compared to pcp, due to higher US seed cost as a result of the freeze
event in late 2022, as well as inventory losses from earlier flooding after planting; and following
operational adjustments in Brazil. Cost mitigation efforts remain a priority across both regions, with
significant operational savings being seen in the US from the sale of the in vitro business, the closure
of the Taylor Nursery and lease of the Ridgeville building.
The company has reported a net loss after tax of $(2.1)m (1H24: $(0.1)m). Excluding one-off and
unusual items of $2.0m, Adjusted US GAAP EBITDA
1
was $(2.7)m (1H24: $(0.5)m).


1
Adjusted US GAAP EBITDA is a non-GAAP financial measure and excludes one-off and unusual items which may include restructure costs,
impairments and write downs on assets, acquisition/sale transaction costs and other one-off items. In 1H25, one-off and unusual items
were $2m. Refer to page 8 in the Interim Report for reconciliation table. Management believes this measure provides useful information,
as it is used internally to evaluate performance, and it is also a measure that equity analysts focus on for comparative company
performance purpose.

Page 2


The sale of the in vitro business for $4.1m in July 2024 aided the reduction of debt, providing
increased headroom for investment in productivity and growth opportunities. This includes
investments in container capacity in the US, and the purchase of a further nursery in Brazil for $2.5m
which settled on 1 November 2024 and will be earnings accretive in FY25. Cash was $4.3m at 30
September 2024, with net debt of $19.9m compared to $14.4m as at 31 March 2024 (1H24: $16.7m),
with the increase mainly due to working capital timing and strategic capex projects.
The company commenced an on-market share buyback of up to US$500,000 in September 2024. This
was active for several weeks before being paused for the black out period prior to the release of the
half year results, and will recommence on 2 December 2024. The buyback reflects the Board’s
confidence in the long-term strategy and opportunities for the business. As at 30 September 2024,
286,029 shares had been purchased at an average price of $0.147 per share.
US South
Adverse economic and sector headwinds have continued and, alongside extreme weather events,
are having a compounding effect on the industry in the US South. Pulp prices remain at historical
lows, lumber demand and prices are down, sawmills are curtailing production, and weather has
impacted the ability for some customers to prepare for planting. Taken together, this has seen some
forestry owners defer harvesting and therefore planting of new seedlings until conditions improve.
When it occurs, a recovery in the residential construction market will drive demand for higher quality
lumber, for which ArborGen’s MCP® seedlings are ideally suited.
Hurricanes and drought conditions have had minimal effect on the FY25 crop, however, they have
had some impact on the seed inventory buffer for future years. ArborGen confirms it has sufficient
inventory to meet projected customer demand. The company continues to take steps to protect its
assets from extreme weather, with the investment in container planting playing a critical role in
minimising the damage from the recent hurricanes.
The long-term macro trends in the US are positive and ArborGen has the capacity and the resources
to leverage future demand. A recovery in demand for saw timber is projected to start in mid-2025 as
the US economy improves, although the timing remains uncertain.
Brazil
In Brazil, ArborGen is one of the largest commercial providers of pine and eucalyptus seedlings and is
well positioned to meet growing market demand for more resilient, higher yield clones. The
company is continuing to shift sales from licensed products to proprietary ArborGen genetic
seedlings which will deliver superior prices and higher margins. This transition is having some short-
term impact on operations and costs.
While revenue and average selling price were slightly higher in local currency, Brazil seedling sales
were down 5% on pcp, partly due to a severe drought in the last part of the half year which impacted
customers’ ability to plant. However, recent favourable weather conditions have seen sales volumes
start to normalise.

Page 3


Momentum is continuing and ArborGen is growing rapidly to expand production capacity and
capability, with the recent acquisition of the Eco Empreendimentos nursery. An operational reset has
been undertaken to strengthen the team and improve financial processes and systems, with one-off
adjustments impacting cost of sales in FY25. The steps we are taking now to strengthen our
processes and operations will support the business as it continues its growth trajectory.
FY25 Outlook and Revised Guidance
The company’s overall goal remains to drive sales of its advanced genetics seedlings in its target
markets in the US South and Brazil, both of which offer strong growth and commercial potential.
Growth momentum and higher volumes are expected in Brazil in 2H25 following the softer first half
year. Headwinds in the US South are expected to continue to impact across the industry, resulting in
lower demand and offsetting the growth in Brazil. Given this, ArborGen is expecting full year Group
sales volumes to be down on last year with a corresponding impact on earnings. Excluding one-off
and unusual items, Adjusted US GAAP EBITDA is therefore expected to be between $8.5m to $10m
(FY24: $12.8m).

ENDS

Authority for this announcement:
Justin Birch, President and CEO, ArborGen Holdings Limited
For more information, please contact:
Jackie Ellis, Ellis and Co e: jackie@ellisandco.co.nz, t: +64 27 2462505







ArborGen
ArborGen is the leading supplier of advanced seedling genetics to the global commercial forestry
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 and
www.arborgenholdings.com.

---

1



The Board of ArborGen Holdings Limited is pleased to present the Interim Report for the six months ended
30 September 2024 (1H25). All dollar values are in US currency unless otherwise stated.

Table of Contents
Our Vision 2
Six Months at a Glance 3
Chairman and CEO’s report 5
Understanding our financials 7
Financial statements 9
Investor information 19



Disclaimer: This report may contain forward-looking statements with respect to the financial condition, results of operations and
business, and business strategy of ArborGen. Information about the future, by its nature, involves inherent risks and uncertainties.
Accordingly, nothing in this report is a promise or representation as to the future or a promise or representation that a transaction or
The Board of ArborGen Holdings Limited is pleased to present the Interim Report for the six months ended
INTERIM
REPORT
for the six months ended
30 September 2024

1



The Board of ArborGen Holdings Limited is pleased to present the Interim Report for the six months ended
30 September 2024 (1H25). All dollar values are in US currency unless otherwise stated.

Table of Contents
Our Vision 2
Six Months at a Glance 3
Chairman and CEO’s report 5
Understanding our financials 7
Financial statements 9
Investor information 18



Disclaimer: This report may contain forward-looking statements with respect to the financial condition, results of operations and
business, and business strategy of ArborGen. Information about the future, by its nature, involves inherent risks and uncertainties.
Accordingly, nothing in this report is a promise or representation as to the future or a promise or representation that a transaction or
outcome referred to in this presentation will proceed or occur on the basis described in this report. Statements or assumptions in
this report as to future matters may prove to be incorrect.

2


Our Vision
To be the world-leading provider of value-added, high-quality seedlings for the forestry industry,
creating thriving forests that benefit landowners, the environment, and future generations
through unmatched industry expertise.

DUAL PATHWAY STRATEGY
Driving growth and leveraging long-term demand trends

GO TO MARKET OPERATING STRENGTH
Grow demand and sales of higher value advanced
genetic seedlings
Enable a strong foundation for the future
• United States: expand market and increase MCP®
adoption
1

• Brazil: opportunistic and measured expansion
• Focus on market-driven genetics for the future
• Strengthen the organisation and develop a
performance culture
• Optimise total productivity



DELIVERING INCREASED VALUE FOR FOREST OWNERS

ArborGen’s advanced genetics seedlings deliver:

BETTER LOG
STRAIGHTNESS
& REDUCED
FORKING
40
%
+

HIGHER REVENUE
MORE
DISEASE
RESISTANCE
50
%
+

GREATER NET
PRESENT VALUE
60
%
+

MORE SAWTIMBER
AT FINAL HARVEST





1
MCP is Mass Control Pollinated advanced genetics seedlings

3



Six Months at a Glance
Commercial Highlights
• Clear growth strategy with defined pathways to future growth
• Established a new share buyback programme
• Continuing focus on efficiencies and cost management

United States: Margin Expansion and Measured Growth
• Challenging market conditions continuing for longer than anticipated, US South remains at the low end of
the cycle with soft demand
• Streamlining the business and delivering cost savings - sale of the in vitro business, closure of Taylor
Nursery and lease of Ridgeville building
• Continuing investment in container capacity proving beneficial during extreme weather events
• Some impact on seed inventory buffer from hurricane and drought conditions in the six-month period

Brazil: Accelerated Growth Opportunities
• Continuing to shift sales from licensed products to proprietary ArborGen genetic seedlings
• Operational reset resulting in a stronger team and improved financial processes and systems
• Continuing to expand production capacity with acquisition of further nursery, settled post-period end on
1 November 2024
• Remains an exciting growth opportunity for ArborGen

4


Financial Snapshot
For the six months ended 30 September 2024
All dollar values are in US currency unless otherwise stated. Percentage comparatives to prior comparative
period (pcp).
• Sales revenue down 3% to $12.8m, following a record 78% year-on-year increase in the corresponding prior
half year period (1H24), but remains significantly higher than 1H23
• Cost of sales increased 15% compared to pcp, due to higher US seed cost as a result of the freeze event in
late 2022, as well as inventory losses from earlier flooding after planting, and following operational
adjustments in Brazil
• Net loss after tax of $(2.1)m
• Adjusted US GAAP EBITDA of $(2.7)m, excluding one-off items totalling $2m

1H25 1H24 1H23
US$ millions
Revenue 12.8 13.2 7.4
Gross profit 3.1 4.8 1.8
Operating profit before financing costs and tax (2.5) 2.3 (0.6)
Net earnings/(loss) after tax (2.1) (0.1) (1.6)
Net debt 19.9 16.7 17.5
Adjusted US GAAP EBITDA
1
(2.7) (0.5) (2.9)


FY25 guidance for softer sales volumes as a result of market conditions, resulting in Adjusted US GAAP
EBITDA to be between $8.5m to $10m (FY24: $12.8m).


1
Adjusted US GAAP EBITDA is a non-GAAP financial measure and excludes one-off and unusual items which may include
restructure costs, impairments and write downs on assets, acquisition/sale transaction costs and other one-off items. In
1H25, one-off and unusual items were $2m. Refer to page 8 for reconciliation table. Management believes this measure
provides useful information, as it is used internally to evaluate performance, and it is also a measure that equity analysts
focus on for comparative company performance purpose.

5


Report from the Chair and CEO

Dear Shareholder
We have made good strategic progress in the first half of the 2025 financial year. In Brazil, we have further
expanded our nursery footprint and improved operational processes, while in the US, we have streamlined our
network and are positioning ourselves for a return in demand.
Soft market conditions in both markets, as well as adverse weather events, continue to hamper our sales.
Although revenue was lower compared to the very strong same period last year (1H24), it remains well ahead of
our 1H23 result. The majority of our revenue in the first half is from sales in Brazil, with our US sales recognised
in the second half of our financial year
1
.
We have a clear strategy in place, with defined pathways for growth. Our teams are focused on navigating the
current market conditions and delivering value to our customers and shareholders. Our long-term focus on
advanced genetics is delivering superior prices and margin, even as the broader market faces pressure. We are
well-positioned to respond swiftly and capitalise on opportunities as the market cycle turns upward.
US South: Margin Expansion and Measured Growth
Adverse economic and sector headwinds have continued and, alongside extreme weather events, are having a
compounding effect on the industry in the US South. Pulp prices remain at historical lows, lumber demand and
prices are down, sawmills are curtailing production, and weather has impacted the ability for some customers
to prepare for planting. Taken together, this has seen some forestry owners defer harvesting and therefore
planting of new seedlings until conditions improve. When it occurs, a recovery in the residential construction
market will drive demand for higher quality lumber, for which ArborGen’s MCP seedlings are ideally suited.
We are focused on retaining our market position, streamlining the business and delivering cost efficiencies.
Hurricanes and drought conditions have had minimal effect on the FY25 crop, and while there has been some
impact on the seed inventory buffer for future years, we continue to have sufficient inventory to meet projected
customer demand. We continue to take steps to protect our assets from extreme weather, with our investment
in container planting playing a critical role in minimising the damage from the recent hurricanes.
The long-term macro trends in the US are positive and we have the capacity and the resources to leverage future
demand. A recovery in demand for saw timber is projected to start in mid-2025 as the US economy improves,
although the timing remains uncertain.
Brazil: Accelerated Growth Opportunities
In Brazil, ArborGen is one of the largest commercial providers of pine and eucalyptus seedlings and is well
positioned to meet growing market demand for more resilient, higher yield clones. We are continuing to shift
sales from licensed products to proprietary ArborGen genetic seedlings which will deliver superior prices and
higher margins. This transition is having some short-term impact on operations and costs.
While revenue and average selling price were slightly higher in local currency, Brazil seedling sales were down
5% on pcp, partly due to a severe drought in the last part of the half year which impacted customers’ ability to
plant. However, recent favourable weather conditions have seen sales volumes start to normalise.
Brazil is an exciting growth opportunity for ArborGen and we are growing rapidly to expand production capacity
and capability, with the recent acquisition of the Eco Empreendimentos nursery. An operational reset has been
undertaken to strengthen the team and improve financial processes and systems, with one-off adjustments
impacting cost of sales in FY25. The steps we are taking now to strengthen our processes and operations will
support the business as it continues its growth trajectory.


1
Refer to pages 7 and 8 for more information on harvest, sales and revenue recognition timing.

6


1H25 Financial Performance
Sales revenue for the half year was down 3% to $12.8m, following a record 78% year-on-year increase in the
corresponding prior half year period (pcp 1H24), but remains significantly ahead of 1H23. Revenue is
predominantly from Brazil, with the majority of US sales recognised in the second half of the year.
Cost of sales increased 15% compared to pcp, due to higher US seed cost as a result of the freeze event in late
2022, as well as inventory losses from earlier flooding after planting, and following accounting adjustments in
Brazil. Cost mitigation efforts remain a priority across both regions, with significant operational savings to be
seen in the US from the sale of the in vitro business, the closure of the Taylor Nursery and lease of the Ridgeville
building.
ArborGen reported a net loss after tax of $(2.1)m (1H24: $(0.1)m). Excluding one-off and unusual items of $2m,
Adjusted US GAAP EBITDA was $(2.7)m (1H24: $(0.5)m).
The sale of the in vitro business for $4.1m in July 2024 aided the reduction of debt, providing increased
headroom for investment in productivity and growth opportunities. This includes investments in container
capacity in the US, and the purchase of a further nursery in Brazil for $2.5m which settled on 1 November 2024
and will be earnings accretive in FY25. Cash was $4.3m at 30 September 2024, with net debt of $19.9m
compared to $14.4m as at 31 March 2024 (1H24: $16.7m), with the increase mainly due to working capital
timing and strategic capex projects.
We were pleased to commence an on-market share buyback of up to US$500,000 in September 2024. This
buyback reflects your Board’s confidence in the long-term strategy and opportunities for our business. As at 30
September 2024, 286,029 shares had been purchased at an average price of $0.147 per share.
FY25 Outlook and Revised Guidance
Our overall goal remains to drive sales of our advanced genetics seedlings in our target markets in the US South
and Brazil, both of which offer strong growth and commercial potential.
Growth momentum and higher volumes are expected in Brazil in 2H25 following the softer first half year.
Headwinds in the US South are expected to continue to impact across the industry, resulting in lower demand
and offsetting the growth in Brazil. Given this, ArborGen is expecting full year Group sales volumes to be down
on last year with a corresponding impact on earnings. Excluding one-off and unusual items, Adjusted US GAAP
EBITDA is therefore expected to be between $8.5m to $10m (FY24: $12.8m).
We remain confident and optimistic about ArborGen’s future. Thank you to our shareholders for your continued
support.




Dave Knott
Chairman

Justin Birch
Chief Executive Officer

7


Understanding Our Financials
Key Reporting Measures
Historically, the majority of ArborGen’s operating business has been based in the US. Therefore, financial
statements are presented in US dollars.
As a New Zealand listed company, our financial statements are prepared in accordance with NZ International
Financial Reporting Standards. The Company uses US GAAP EBITDA and Adjusted US GAAP EBITDA when
discussing financial performance.
US GAAP EBITDA is a non-GAAP financial measure and is not recognised within IFRS. Non-GAAP financial
measures should not be viewed in isolation nor considered as a substitute for measures reported in accordance
with GAAP. Management believes that US GAAP EBITDA provides useful information, as it is used internally to
evaluate performance, and it is also a measure that equity analysts focus on for comparative company
performance purposes, as the measure removes distortions caused by differences in asset age, depreciation
policies and debt:equity structures.
Adjusted US GAAP EBITDA excludes transactions considered to be non-trading in their nature or size, and
one-off or unusual transactions, which can arise as the result of a specific event or circumstance or transaction
that is not expected to occur frequently. Excluding these items can assist users in forming a view on the
underlying performance of the group.
IFRS EBITDA vs US GAAP EBITDA: 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 differences in accounting for leases. Because of
these differences, US GAAP results, and in particular ‘Adjusted US GAAP EBITDA’ cannot be easily derived from
reported IFRS numbers.
Harvest, Sales and Revenue Recognition Timeline
In the US, we recognise the majority of revenue in the second half of the financial year, however, harvesting and
production costs are incurred and recognised throughout the year.
• In year 1, we collect pollen from selected trees, bag flowers and pollinate. We then leave these for 18
months to mature.
• In year 2, between October and December we harvest the pinecones and extract the seeds, and then sow
the seeds from January to March. These seedlings take approximately nine months to grow and are
classified as ‘biological assets’ in our inventory. Each financial period, we adjust the fair value of these
biological assets, based on our expected sales price. This is a non-financial fair value adjustment.
• We pre-sell these seedlings to customers from March and throughout the planting season and then lift and
dispatch them to customers December through to March of the following year. We recognise the revenue at
the time of sale, that is, in the second half of our financial year.
In Brazil, the sales cycle is less cyclical with year-round sales. This is due to the more temperate climate and
growing conditions where seedlings can be grown and planted year-round, both for eucalyptus and pine.
Fair Value Adjustment of Biological Assets
ArborGen assess the value of seedlings in the US (the expected sales price) and adjusts the fair value of these
biological assets, as required under NZ IFRS. The impact of this is in the interim results, with most seedlings
lifted and sold by financial year end.
In 1H25, assessment of the fair value of biological assets resulted in a $(4.3)m adjustment in the financial
statements (1H24: $(6.8)m).

8


Foreign exchange
ArborGen operates in the United States and Brazil. The Brazil operations are to a large degree internally self-
sufficient from a funding perspective, which limits the effect of relative currency movements to the net earnings
and balance sheet translation impacts.

Adjusted US GAAP EBITDA Reconciliation
Financial year ending March 1H25 1H24
Revenue - US 0.6 0.3
Revenue - Brazil 12.2 12.9
Total Revenue 12.8 13.2
Gross Margin (excluding DDA
1
) 3.9 5.7
Less SG&A 5.7 4.5
Less R&D 1.6 1.9
Plus Other income (expense) (2.6) (2.9)
US GAAP EBITDA (0.7) (3.6)
Adjustments:
Restructuring and transition costs 0.4 1.3
Seed provision - 1.8
Value added taxation reversal (0.7) -
Sale of assets (2.3) -
Other 0.6 -
Adjusted US GAAP EBITDA (2.7) (0.5)






1
Depreciation, depletion and amortisation

9


Financial Statements

ArborGen Holdings Limited and Subsidiaries
CONSOLIDATED CONDENSED INCOME STATEMENT
F or the si x months e nde d 30 Se pte mbe r 2024
Unaudited
Audited
Unaudited
6 months
Y e a r e nde d
6 months
Se p 2024
Ma r 2024
Se p 2023
N ote s
US$m
US$m
US$m
Revenue
12.8


67.7


13.2


Cost of sales
5
(9.7)


(43.7)


(8.4)


Gross prof i t
3. 1


24. 0


4. 8


Change in fair value of biological assets
4
4.3


-


6.8


Intellectual property amortisation
5
(3.9)


(7.7)


(3.9)


Administration expense
(6.3)


(11.8)


(5.4)


Ope ra ti ng e a rni ngs e xc ludi ng i te ms be low
(2. 8)


4. 5


2. 3


CEO transition, seed review and other
5
0.3


(4.7)


(3.1)


Ope ra ti ng loss be f ore f i na nc i ng e xpe nse
(2. 5)


(0. 2)


(0. 8)


Financial income
0.1


0.4


0.2


Financing expense
(0.8)


(1.8)


(0.9)


Loss be f ore ta xa ti on
(3. 2)


(1. 6)


(1. 5)


Tax benefit
1.1


1.4


1.4


N e t loss a f te r ta x
(2. 1)


(0. 2)


(0. 1)


Weighted average number of shares outstanding (millions of shares)
Basic
526.6


505.8


510.7


Diluted
528.8


509.0


528.9




The accompanying notes form part of, and are to be read in conjunction with, these financial statements.

10


ArborGen Holdings Limited and Subsidiaries
CONSOLIDATED CONDENSED STATEMENT OF COMPREHENSIVE INCOME
F or the si x months e nde d 30 Se pte mbe r 2024
UnauditedAuditedUnaudited
6 monthsY e a r e nde d6 months
Se p 2024Ma r 2024Se p 2023
N ote sUS$mUS$mUS$m
N e t loss a f te r ta x(2. 1) (0. 2) (0. 1)
Items that may be reclassified to the Consolidated Income Statement:
Movement in currency translation reserve9(1.1) 0.2 0.3
Movement in hedge reserve9(0.3) (0.1) 0.1
Othe r c ompre he nsi ve e a rni ngs (loss) (ne t of ta x)(1. 4) 0. 1 0. 4
T ota l c ompre he nsi ve e a rni ngs (loss)(3. 5) (0. 1) 0. 3
ArborGen Holdings Limited and Subsidiaries
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
F or the si x months e nde d 30 Se pte mbe r 2024
UnauditedAuditedUnaudited
6 monthsY e a r e nde d6 months
Se p 2024Ma r 2024Se p 2023
N ote sUS$mUS$mUS$m
T ota l c ompre he nsi ve e a rni ngs (loss)(3. 5) (0. 1) 0. 3
Movement in ArborGen Holdings shareholders' equity:
Movement in issued capital80.3 0.4 0.3
Movement in share-based payment reserve9
- 0.5 0.1
Repurchase of warrants9
- (1.4) (1.4)
T ota l move me nt i n sha re holde r e qui ty(3. 2) (0. 6) (0. 7)
Opening Group equity148.7 149.3 149.3
C losi ng Group e qui ty145. 5 148. 7 148. 6


The accompanying notes form part of, and are to be read in conjunction with, these financial statements.

11


ArborGen Holdings Limited and Subsidiaries
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
F or the si x months e nde d 30 Se pte mbe r 2024
UnauditedAuditedUnaudited
6 monthsY e a r e nde d6 months
Se p 2024Ma r 2024Se p 2023
N ote sUS$mUS$mUS$m
Cash was provided from operating activities
Receipts from customers28.5 67.1 30.9
Cash provided from operating activities
28.5 67.1 30.9
Payments to suppliers, employees and other(31.2) (54.1) (28.0)
Tax paid(1.0) (1.3) (0.8)
Cash (used in) operating activities
(32.2) (55.4) (28.8)
N e t c a sh f rom (use d i n) ope ra ti ng a c ti vi ti e s
(3. 7) 11. 7 2. 1
Interest received0.1 0.4 0.2
Proceeds on sale of fixed assets114.1
- -
Investment in fixed assets(1.9) (2.9) (1.0)
Investment in intellectual property
(1.6) (3.7) (1.9)
N e t c a sh f rom (use d i n) i nve sti ng a c ti vi ti e s
0. 7 (6. 2) (2. 7)
Debt drawdowns13.2 13.2 0.6
Repayment of lease liabilities(1.0) (3.7) (0.8)
Debt repayment
(10.1) (18.9) (5.3)
Interest paid(0.1) (1.8) (0.9)
Repurchase of warrants- (1.4) (1.4)
N e t c a sh f rom (use d i n) f i na nc i ng a c ti vi ti e s
2. 0 (12. 6) (7. 8)
N e t move me nt i n c a sh
(1. 0) (7. 1) (8. 4)
Opening cash, liquid deposits and restricted cash
5.6 12.7 12.7
Effect of exchange rate changes on net cash
(0.3)
- -
C losi ng c a sh, li qui d de posi ts a nd re stri c te d c a sh4. 3 5. 6 4. 3
Net loss after taxation
(2.1) (0.2) (0.1)
Adjustment for:
Financial income(0.1) (0.4)
-
Financing expense
0.8 1.8 0.9
Depreciation and amortisation
7.3 11.6 5.7
Tax (benefit) / expense
(1.1) (1.4) (1.4)
Foreign exchange
(0.4) 0.1 0.2
Share-based payments
- -
0.4
Change in fair value of biological assets
(4.3)
-
(6.8)
Other non cash items
(0.2) 0.1
-
Cash flow from operations before net working capital movement(0.1) 11.6 (1.1)
Trade and other receivables7.4 1.4 7.1
Inventory(9.5) (3.5) (8.3)
Trade and other payables(0.5) 3.6 5.2
Net working capital movement(2.6) 1.5 4.0
Cash tax paid(1.0) (1.4) (0.8)
N e t c a sh f rom ope ra ti ng a c ti vi ti e s(3. 7) 11. 7 2. 1


The accompanying notes form part of, and are to be read in conjunction with, these financial statements.

12


ArborGen Holdings Limited and Subsidiaries
CONSOLIDATED CONDENSED BALANCE SHEET
A s a t 30 Se pte mbe r 2024
Unaudited
Audited
Unaudited
Se p 2024
Ma r 2024
Se p 2023
N ote s
US$m
US$m
US$m
C urre nt a sse ts
Cash and liquid deposits
4.3


5.6


4.3


Trade and other receivables
4.9


12.6


6.9


Inventory
4
48.8


35.1


46.7


T ota l c urre nt a sse ts
58. 0


53. 3


57. 9


N on- c urre nt a sse ts
Fixed assets
37.1


36.6


33.8


Derivative financial instruments
0.3


0.6


0.8


Right-of-use assets
7.3


7.1


7.4


Intellectual property
83.5


88.9


90.9


Deferred taxation asset
11.5


10.8


11.0


T ota l non- c urre nt a sse ts
139. 7


144. 0


143. 9


T ota l a sse ts
197. 7


197. 3


201. 8


C urre nt li a bi li ti e s
Trade, other payables and provisions
(15.2)


(14.3)


(16.3)


Current lease obligation
(1.6)


(1.5)


(3.9)


Current debt
6
(1.2)


(1.2)


(1.1)


Current taxation liability
(0.1)


(0.6)


(0.7)


T ota l c urre nt li a bi li ti e s
(18. 1)


(17. 6)


(22. 0)


T e rm li a bi li ti e s
Term debt
6
(23.0)


(18.8)


(19.9)


Lease obligation
(4.7)


(5.2)


(3.6)


Deferred taxation liability
(6.2)


(7.0)


(7.7)


Other
(0.2)


-


-


T ota l te rm li a bi li ti e s
(34. 1)


(31. 0)


(31. 2)


T ota l li a bi li ti e s
(52. 2)


(48. 6)


(53. 2)


N e t a sse ts
145. 5


148. 7


148. 6


Equi ty
Share capital
8
203.7


203.4


203.3


Reserves
9
(58.2)


(54.7)


(54.7)


T ota l Group e qui ty
145. 5


148. 7


148. 6






Dave Knott
Chairman of the Board

26 November 2024

Paul Smart
Audit Committee Chairman
Both of the above signatories certifies that these financial statements comply with New Zealand generally accepted
accounting standards and present a true and fair view of the financial affairs of the ArborGen Holdings Group.

The accompanying notes form part of, and are to be read in conjunction with, these financial statements.

13


ArborGen Holdings Limited and Subsidiaries
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
F or the si x months e nde d 30 Se pte mbe r 2024


1 Basis of Presentation
The unaudited interim consolidated condensed financial statements presented are those of ArborGen Holdings
Limited (the Company) and Subsidiaries (the Group) for the six months from 1 April 2024 to 30 September 2024.
The financial statements have been prepared in accordance with New Zealand International Accounting
Standard 34. Because they are condensed interim statements, they do not include all of the information required
to be disclosed for full annual financial statements.
These interim financial consolidated condensed statements should be read in conjunction with the audited
financial statements for the periods ended 31 March 2024 and 31 March 2023, which have been prepared in
accordance with New Zealand International Financial Reporting Standards (NZ IFRS) and International Financial
Reporting Standards (IFRS).
The Company 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 2024.
2 Approval of Accounts

These interim consolidated condensed financial statements have been prepared on a consolidated Group basis
and were approved for issue by the Board of Directors on 26 November 2024.
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 to March 2024 statutory report, note 4, for greater detail). Actual results could differ from
those estimates.
4 Inventory and Fair Value Adjustment on Biological Asset

UnauditedAuditedUnaudited
6 monthsY e a r e nde d6 months
Se p 2024Ma r 2024Se p 2023
US$mUS$mUS$m
Opening balance continuing operations
- - -
Change in fair value of biological assets recognised in income statement
Fair value change for crop to be lifted in the coming period4.3
-
6.8
T ota l c ha nge i n f a i r va lue of bi ologi c a l a sse ts re c ogni se d i n the4. 3
-
6. 8
i nc ome sta te me nt
C losi ng f a i r va lue upli f t bi ologi c a l a sse t4. 3 - 6. 8



At 30 September, only the US crop (to be lifted prior to year end) is fair valued. This fair value uplift will reverse at
year end upon lifting of the crop.

14


ArborGen Holdings Limited and Subsidiaries
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
F or the si x months e nde d 30 Se pte mbe r 2024


5 Expenses Include

Unaudited
Audited
Unaudited
6 months
Y e a r e nde d
6 months
Se p 2024
Ma r 2024
Se p 2023
US$m
US$m
US$m
Depreciation and amortisation included in:
Cost of sales expense
(0.7)


(2.9)


(0.7)


Intellectual property amortisation
(3.9)


(7.7)


(3.9)


Administration expense: general and administration
(0.5)


(1.0)


(0.5)


Total depreciation and amortisations
(5.1)


(11.6)


(5.1)


Seed provision
(1)
-


(1.8)


(1.8)


Value added taxation - valuation allowance
(2)
0.7


(1.0)


-


CEO transition costs
(3)
(0.4)


(1.9)


(1.3)


C EO tra nsi ti on, se e d re vi e w a nd othe r
0. 3


(4. 7)


(3. 1)




(1) As a result of our education efforts, our customers have been shifting into higher genetic seedlings and away from the lower genetic
seedlings. This has led to our inventory of the lower genetic seed growing relative to the total seed inventory. We have reviewed our
seed inventory requirements against our six-year seed demand, taking into account seed age, genetics, customer demand and our
availability of alternative genetic seed by provenance. As a result of the review, we have expensed $1.8 million as a seed provision
which was netted against inventory, and represented approximately 10% of our finished goods seed cost. Most of the seed will be
retained as we attempt to find a use for it; however, the lowest quality seed will be destroyed.
(2) A valuation allowance of $1 million was applied to certain value added taxation credits at 31 March 2024 that, due to uncertainty,
might not be collectable. Upon further review of these value added tax requirements as of 30 September 2024, it was determined
that $0.7 million of this allowance should be reversed.
(3) CEO transition costs of $0.4 million were accrued for CEO Justin Birch's equity grant (March 2024: $1 million). March 2024 also
included Justin's sign-on and relocation costs of $0.3 million, legal and recruitments costs of $0.3 million, and $0.3 million of
severance for the former CEO.
6 Current Debt and Term Debt

At 30 September 2024, the Group had debt facilities with the following banks: Synovus Financial Corporation
(Synovus) and AgSouth Farm Credit (AgSouth) in the United States.

ArborGen has two non-revolving promissory notes issued to AgSouth. The first is for $7.4 million bearing interest at
4.95%, with a maturity date of 1 May 2036 and an annual principal repayment of $0.6 million due 1 May each year.
The second is a $2.4 million facility, bearing interest at 8.2%, with a maturity date of 1 March 2044 and an annual
principal repayment of $0.26 million due 1 March each year. Both facilities are secured against ArborGen's US real
estate properties. The credit agreement with AgSouth includes a covenant requiring ArborGen to maintain a net
worth of $25 million. ArborGen has a three-year revolving facility with Synovus (expiring August 2026), bearing
interest at the 30-day SOFR base rate plus 2.75%, with a minimum annual rate of 4.75%, an annual 60-day
(continuous) pay down maximum borrowing limit (between 1 March and 31 August) of $7 million, and with no
equity covenants.

15


ArborGen Holdings Limited and Subsidiaries
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
F or the si x months e nde d 30 Se pte mbe r 2024


6 Current Debt and Term Debt continued

Rubicon Industries USA LLC (RIUSA) has a $9.3 million mortgage from Synovus, which is secured by the
headquarter's land and buildings. The mortgage is a seven-year term facility that expires August 2026 and is based
on a 20-year amortising loan, incurring interest at the 30-day SOFR base rate plus 2% . The Group has entered into
a seven-year interest rate swap with Synovus, with terms that match that of the mortgage, at a fixed rate of 3.52%.
The mark-to-market valuation provided by Synovus resulted in an unrealised gain of $0.3 million for the six months
ended 30 September 2024 which is disclosed as a derivative financial instrument on the balance sheet and as a
cash flow hedge reserve (see Note 9). The mortgage requires RIUSA to maintain a debt service coverage ration of
not less than 1.25:1 for the trailing 12 months.

At 30 September 2024, the Group held cash and liquid deposits of $4.3 million (2023: $4.3 million) and had debt of
$24.2 million and lease liabilities of $6.3 million (2023: $21 million of debt and $7.5 million of lease obligations).
The increase in debt is due to the second promissory note issued to AgSouth.
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.

Unaudited
Audited
Unaudited
6 months
Y e a r e nde d
6 months
Se p 2024
Ma r 2024
Se p 2023
F ore stry ge ne ti c s
US$m
US$m
US$m
Operating revenue
12.8


67.7


13.2


Net income (loss) after tax
(2.0)


0.9


0.8


Total assets
197.6


197.3


201.7


Liabilities
(52.0)


(48.6)


(36.5)


Re c onc i li a ti on
Corporate
Net loss after tax
(0.1)


(1.1)


(0.9)


Total assets
0.1


-


0.1


Liabilities
(0.2)


-


(16.7)


T ota l Group
Operating revenue
12.8


67.7


13.2


Net loss after tax
(2.1)


(0.2)


(0.1)


Total assets
197.7


197.3


201.8


Liabilities
(52.2)


(48.6)


(53.2)

16


ArborGen Holdings Limited and Subsidiaries
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
F or the si x months e nde d 30 Se pte mbe r 2024


8 Capital

Unaudited
Audited
Unaudited
Se p 2024
Ma r 2024
Se p 2023
Sha re c a pi ta l
US$m
US$m
US$m
Share capital at the beginning of the period
203.4


203.0


203.0


Vesting of shares - share plans
(1)
0.3


0.4


0.3


Sha re c a pi ta l
203.7


203.4


203.3


N umbe r of sha re s
Se p 2024
Ma r 2024
Se p 2023
Opening shares on issue
526,957,789
502,772,082
502,772,082


Issue of shares
(1)
(200,622)


419,386


419,386
Issue of shares
(2)
(286,029)


3,514,844


3,514,844


Issue of shares
-


20,251,477


20,251,477


N umbe r of sha re s on i ssue
526,471,138
526,957,789
526,957,789
T re a sury stoc k
Se p 2024
Ma r 2024
Se p 2023
Opening shares on issue
20,251,477


-


-


Issue of shares
(1)
(3,375,246)


20,251,477


20,251,477


Vesting of shares
-


-


-


N umbe r of sha re s on i ssue
16,876,231


20,251,477


20,251,477




(1) Pursuant to Justin Birch's employment agreement an equity grant of restricted ordinary shares (Restricted Shares) equal to 4% of
ordinary shares in ArborGen Holdings was made. On 27 July 2023, 9,780,000 shares were issued to the Trustee. Following
shareholder approval at the ASM on 20 September 2023, a further 10,471,477 shares were issued to the Trustee. The total
20,251,477 restricted shares are split into two being; 50% time-based shares and 50% performance-based shares. The time-
based shares will vest one third on the first anniversary of the employment commencement date (16 June 2023); and two thirds on
the second anniversary, subject to completion of continuous service with the Group (refer to Note 5). The performance-based
shares will vest 50% on the 1 June 2024 and the other 50% on 1 June 2025, subject to satisfaction of applicable performance
criteria determined by the compensation committee and completion of continuous service with the Group until the applicable
vesting date. Pursuant to the above June 2024 vesting date 3,375,246 treasury shares and 200,622 shares were redeemed
respectively.
(2) In accordance with the resolution passed at ArborGen Holdings Board of Directors’ meeting held on 26 August 2024, a share
buyback program was approved for a US dollar total of $500,000. This would commence in 2024 September. Through September
to black out date commencing 1 October 2024, 286,029 shares were bought back.

17


ArborGen Holdings Limited and Subsidiaries
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
F or the si x months e nde d 30 Se pte mbe r 2024


9 Reserves

Unaudited
Audited
Unaudited
Se p 2024
Ma r 2024
Se p 2023
Re ta i ne d e a rni ngs
US$m
US$m
US$m
Opening balance
(55.7)


(54.1)


(54.1)


NPAT
(2.1)


(0.2)


(0.1)


Repurchase of warrants
(1)
-


(1.4)


(1.4)


C losi ng ba la nc e
(57.8)


(55.7)


(55.6)


C a sh f low he dge re se rve
(2)
Opening balance
0.6


0.7


0.7


Fair value gains (losses) for the year
(0.3)


(0.1)


0.1


C losi ng ba la nc e
0.3


0.6


0.8


Sha re ba se d pa yme nts re se rve
Opening balance
0.8


0.3


0.3


Executive share plan - shares vested
(3)
(0.3)


(0.4)


(0.3)


Executive share plan
(4)
0.3


0.9


0.4


C losi ng ba la nc e
0.8


0.8


0.4


C urre nc y tra nsla ti on re se rve
Opening balance
(0.4)


(0.6)


(0.6)


Translation of independent foreign operations
(1.1)


0.2


0.3


C losi ng ba la nc e
(1.5)


(0.4)


(0.3)


T ota l re se rve s
(58.2)


(54.7)


(54.7)




(1) In May 2023, ArborGen Inc repurchased all outstanding warrants (5% of the ArborGen Inc fully diluted shares) for $1.35 million.
Following the repurchase of the warrants, there are no more warrants, options or other rights to purchase ArborGen.
(2) The cash flow hedging reserve records the net movement of cash flow hedging instruments, being interest rate swaps. Refer to
Note 6.
(3) Pursuant to Justin Birch's employment agreement, an equity grant of Restricted Shares equal to 4% of ordinary shares in the
Company was made. The total 20,251,477 restricted shares are split into two being; 50% time-based shares and 50%
performance-based shares (refer to Note 10). In addition, Justin was guaranteed a short-term incentive of $425,000; 27% of
which was settled in the Company shares. The movement in the share based payment reserve represents the share based
payment portion of these accrued expenses.
(4) Pursuant to Justin Birch's employment agreement, the movement in the share based payment reserve represents an expense
accrual that will be subsequently settled by the issuance of shares (see item 3 above).
10 Related Party Transactions

Pursuant to Andrew Baum's employment cessation agreement, on 21 June 2023, Andrew was issued 3,514,844
new Company ordinary shares (refer to Notes 5, 8 and 9).

Pursuant to Justin Birch's employment agreement an equity grant of restricted ordinary shares (Restricted
Shares) was made, equal to 4% of ordinary shares in the Company. On 27 July, 9,780,000 shares were issued to
the Justin Birch Trust. Following shareholder approval at the ASM on 20 September 2023, a further 10,471,477
shares were issued to the Justin Birch Trust. The 20,251,477 restricted shares are split into two being; 50% time-
based shares and 50% performance-based shares. Pursuant to the July 2024 vesting date 3,375,246 shares
were redeemed.

18


ArborGen Holdings Limited and Subsidiaries
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
F or the si x months e nde d 30 Se pte mbe r 2024


11 Proceeds on Sale of Fixed Assets

The in vitro business and associated assets were sold May 2024. Intangible and fixed assets sold as part of this
transaction were netted in a nominal gain on sale.
12 Subsequent Events

As announced on 10 October 2024, the Company signed a memorandum of understanding to acquire the Eco
Empreendimentos nursery in Piauí, Brazil, for approximately USD$2.5 million, which will utilise seller financing
and cash. The contract was signed on 1 November 2024.


Investor Information

Investor Enquiries/Registered Office
Level 15, PwC Tower
15 Customs Street West,
Auckland 1010, New Zealand
PO Box 68 249, Victoria Street West,
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.

19









www.arborgenholdings.com

---

Results announcement




Results for announcement to the market
Name of issuer ArborGen Holdings Limited
Reporting Period 6 months to 30 September 2024
Previous Reporting Period 6 months to 30 September 2023
Currency US dollars
Amount (millions) Percentage change
Revenue from continuing
operations
$USD 12.8 -3%
Total Revenue $USD 12.8 -3%
Net profit/(loss) from
continuing operations
$USD (2.1) -2,000%
Total net profit/(loss) $USD (2.1) -2,000%
Interim/Final Dividend
Amount per Quoted Equity
Security
No dividend is proposed for the period
Imputed amount per Quoted
Equity Security
Not applicable
Record Date Not applicable
Dividend Payment Date Not applicable
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
US 12 cps US 11 cps
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Please refer to accompanying releases
Authority for this announcement
Name of person

authorised
to make this announcement
Christina M. Green
Contact person for this
announcement
Jackie Ellis
Contact phone number 027 246 2505
Contact email address jackie@ellisandco.co.nz
Date of release through MAP

26 November 2024

Unaudited financial statements accompany this announcement.