Verde’s financial results for the period ending December 31, 2023, are being examined by its auditors. In the interim, the Company offers an estimation of its FY 2023 results (non-audited), as follows:[2]^,[3]

• Sales: 427,750 tons of Product
• CDR potential: 17,680 tons of CO₂[4]
• Revenue from sales range: C$37.5 million – C$38.5 million
• EBITDA^[5] range: C$1.5 million – C$2.5 million
• Net loss range: C$5.0 million – C$6.0 million

“Despite our high expectations for the second half of the year, following the appointment of a new commercial leadership, the results in Q4 were the most disappointing of the year”, commented Verde’s Founder, President & CEO Cristiano Veloso.

The unaudited preliminary financial results in this press release are based on information available to the Company as of the date of this release and is subject to revision upon finalizing the audit of the Company’s annual consolidated financial statements for the fiscal year ending December 31, 2023.  The unaudited preliminary financial results in this press release have been prepared by and its management on a reasonable basis, reflecting their best estimates and judgments.

2024 Guidance

“We are currently engaged in multiple discussions with potential partners for our carbon removal project and with prospective buyers of carbon credits. The successful conclusion of these negotiations could result in a substantial adjustment to our production and financial projection for 2024. By operating at full capacity, with an annual production of 3 million tons, we could potentially generate up to 300 thousand tons of CDRs per year. We are working hard to meet our targets, with the expectation of improving these figures as the year progresses,” continued Mr. Veloso.

Verde’s guidance for 2024 is detailed in the table below:

As previously announced, Verde has held back any hurried sale of carbon credits in favor of a long-term strategy that will reflect the higher value of the permanent carbon removal potentially performed by its Products.[10]

The 2024 guidance is underpinned by the following assumptions:

• Average Brazilian Real (“R$”) to Canadian dollar exchange rate: C$1.00 = R$3.70.
• Average Brazilian Real (“R$”) to US dollar exchange rate: US$1.00 = R$4.88.

• Trade Receivables average of 100 days.

• Average KCl CFR Brazil price of US$295, with an overall discount rate of 10%, resulting in a final price of US$265.

• Product sale mix: BAKS sales are 8% of the total.
• Crude oil Brent price: US$80.00.
• Selic Rate: reduction from 11.75% in December 2023 to 9.25% in December 2024.

• Sales Incoterms: 82% CIF and 18% FOB.
• Sales channels: 65% direct sales and 35% indirect sales.
• Weighted average freight cost per ton: $47.

Verde’s 2024 sales target represents a potential 87% growth Year-on-Year (“YoY”), compared to 2023.

The Company plans to release its audited financial statements and related notes for FY 2023 on March 29, 2024, after the close of trading on the Toronto Stock Exchange. These results will be available to the public on SEDAR+ (www.sedarplus.ca/) and the Company’s website (www.investor.verde.ag/). The Company will issue a news wire alert when earnings materials are publicly available.

Verde will host a conference call on Tuesday, April 02, 2024, at 10:00 am Eastern Time, to discuss Q4 and FY 2023 results and provide an update. The questions must be submitted in advance through the following link: https://bit.ly/Questions_Q4-FY2023

Subscribe using the following link and receive the conference details by email: https://bit.ly/Q4-FY2023_ResultsPresentation

About Verde AgriTech

Verde is an agricultural technology Company that produces potash fertilizers. Our purpose is to improve the health of all people and the planet. Rooting our solutions in nature, we make agriculture healthier, more productive, and profitable.

Verde is a fully integrated Company: it mines and processes its main feedstock from its 100% owned mineral properties, then sells and distributes the Product.

Verde’s focus on research and development has resulted in one patent and eight patents pending. Among its proprietary technologies are Cambridge Tech, 3D Alliance, MicroS Technology, N Keeper, and Bio Revolution.[11] Currently, the Company is fully licensed to produce up to 2.8 million tons per year of its multinutrient potassium fertilizers K Forte® and BAKS®, sold internationally as Super Greensand®. In 2022, it became Brazil’s largest potash producer by capacity.[12] Verde has a combined measured and indicated mineral resource of 1.47 billion tons at 9.28% K₂O and an inferred mineral resource of 1.85 billion tons at 8.60% K₂O (using a 7.5% K₂O cut-off grade).[13] This amounts to 295.70 million tons of potash in K₂O. For context, in 2021 Brazil’s total consumption of potash in K₂O was 6.57 million[14].

Brazil ranks second in global potash demand and is its single largest importer, currently depending on external sources for over 97% of its potash needs. In 2022, potash accounted for approximately 3% of all Brazilian imports by dollar value.[15]

Corporate Presentation

For further information on the Company, please view shareholders’ deck:

https://verde.docsend.com/view/tw55q5qa9ut9kbrb

Investors Newsletter

Subscribe to receive the Company’s updates at:

http://cloud.marketing.verde.ag/InvestorsSubscription

Cautionary Language and Forward-Looking Statements

All Mineral Reserve and Mineral Resources estimates reported by the Company were estimated in accordance with the Canadian National Instrument 43-101 and the Canadian Institute of Mining, Metallurgy, and Petroleum Definition Standards (May 10, 2014). These standards differ significantly from the requirements of the U.S. Securities and Exchange Commission. Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability.

This document contains “forward-looking information” within the meaning of Canadian securities legislation and “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995. This information and these statements, referred to herein as “forward-looking statements” are made as of the date of this document. Forward-looking statements relate to future events or future performance and reflect current estimates, predictions, expectations or beliefs regarding future events and include, but are not limited to, statements with respect to:

• the estimated amount and grade of Mineral Resources and Mineral Reserves;
• the estimated amount of CO₂ removal per ton of rock;
• the PFS representing a viable development option for the Project;
• estimates of the capital costs of constructing mine facilities and bringing a mine into production, of sustaining capital and the duration of financing payback periods;
• the estimated amount of future production, both produced and sold;
• timing of disclosure for the PFS and recommendations from the Special Committee;
• the Company’s competitive position in Brazil and demand for potash; and,
• estimates of operating costs and total costs, net cash flow, net present value and economic returns from an operating mine.

Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives or future events or performance (often, but not always, using words or phrases such as “expects”, “anticipates”, “plans”, “projects”, “estimates”, “envisages”, “assumes”, “intends”, “strategy”, “goals”, “objectives” or variations thereof or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements.

All forward-looking statements are based on Verde’s or its consultants’ current beliefs as well as various assumptions made by them and information currently available to them. The most significant assumptions are set forth above, but generally these assumptions include, but are not limited to:

• the presence of and continuity of resources and reserves at the Project at estimated grades;
• the estimation of CO₂ removal based on the chemical and mineralogical composition of assumed resources and reserves;
• the geotechnical and metallurgical characteristics of rock conforming to sampled results; including the quantities of water and the quality of the water that must be diverted or treated during mining operations;
• the capacities and durability of various machinery and equipment;
• the availability of personnel, machinery and equipment at estimated prices and within the estimated delivery times;
• currency exchange rates;
• Super Greensand® and K Forte® sales prices, market size and exchange rate assumed;
• appropriate discount rates applied to the cash flows in the economic analysis;
• tax rates and royalty rates applicable to the proposed mining operation;
• the availability of acceptable financing under assumed structure and costs;
• anticipated mining losses and dilution;
• reasonable contingency requirements;
• success in realizing proposed operations;
• receipt of permits and other regulatory approvals on acceptable terms; and
• the fulfilment of environmental assessment commitments and arrangements with local communities.

Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Many forward-looking statements are made assuming the correctness of other forward looking statements, such as statements of net present value and internal rates of return, which are based on most of the other forward-looking statements and assumptions herein. The cost information is also prepared using current values, but the time for incurring the costs will be in the future and it is assumed costs will remain stable over the relevant period.

By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that estimates, forecasts, projections and other forward-looking statements will not be achieved or that assumptions do not reflect future experience. We caution readers not to place undue reliance on these forward-looking statements as a number of important factors could cause the actual outcomes to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates assumptions and intentions expressed in such forward-looking statements. These risk factors may be generally stated as the risk that the assumptions and estimates expressed above do not occur as forecast, but specifically include, without limitation: risks relating to variations in the mineral content within the material identified as Mineral Resources and Mineral Reserves from that predicted; variations in rates of recovery and extraction; the geotechnical characteristics of the rock mined or through which infrastructure is built differing from that predicted, the quantity of water that will need to be diverted or treated during mining operations being different from what is expected to be encountered during mining operations or post closure, or the rate of flow of the water being different; developments in world metals markets; risks relating to fluctuations in the Brazilian Real relative to the Canadian dollar; increases in the estimated capital and operating costs or unanticipated costs; difficulties attracting the necessary work force; increases in financing costs or adverse changes to the terms of available financing, if any; tax rates or royalties being greater than assumed; changes in development or mining plans due to changes in logistical, technical or other factors; changes in project parameters as plans continue to be refined; risks relating to receipt of regulatory approvals; delays in stakeholder negotiations; changes in regulations applying to the development, operation, and closure of mining operations from what currently exists; the effects of competition in the markets in which Verde operates; operational and infrastructure risks and the additional risks described in Verde’s Annual Information Form filed with SEDAR in Canada (available at www.sedar.com) for the year ended December 31, 2021. Verde cautions that the foregoing list of factors that may affect future results is not exhaustive.

When relying on our forward-looking statements to make decisions with respect to Verde, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Verde does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by Verde or on our behalf, except as required by law.

For additional information please contact:

Cristiano Veloso, Chief Executive Officer and Founder

Tel: +55 (31) 3245 0205; Email: investor@verde.ag

www.verde.ag | www.investor.verde.ag

[1] 1 ton of Long-Term Net CO₂ Removal (CDR) is equivalent to 1 carbon credit.

[2] Average Brazilian Real (“R$”) to Canadian dollar exchange rate: C$1.00 = R$3.70.

[3] The financial results for FY 2023 do not include the revenue from potential sales of carbon credits.

[4] Out of the total sales in FY 2023, 268,907 tons were sold in compliance with our Monitoring, Verification, and Report (“MRV”) Protocol, qualifying them as potential carbon credits. This volume has the potential to capture up to 32,198 tons of CO₂ from the atmosphere via Enhanced Rock Weathering (“ERW”), with a net CDR potential of 17,680 tons of CO₂.

[5] Before non-cash events.

[6] FY 2024 financial guidance does not include any potential revenue from the sale of carbon credits.

[7] Out of the total sales targeted for FY 2024, 455,000 – 520,000 tons are expected to be sold in compliance with our MRV Protocol, qualifying them as potential carbon credits. This volume has the potential to capture 54,600 – 62,400 tons of CO₂ from the atmosphere via ERW, with a net CDR potential of 33,513 – 38,300 tons of CO₂.

[8] Before non-cash events.

[9] Non GAAP measure.

[10] For further information, please see “Verde appoints Vice President of Corporate Development”.

[11] Learn more about our technologies: https://verde.docsend.com/view/yvthnpuv8jx6g4r9

[12] See the release at: https://investor.verde.ag/verde-starts-ramp-up-of-plant-2s-second-stage-to-reach-production-of-2-4mtpy/

[13] As per the National Instrument 43-101 Standards of Disclosure for Mineral Projects within Canada (“NI 43 -101”), filed on SEDAR in 2017. See the Pre-Feasibility Study at: https://investor.verde.ag/wp-content/uploads/2021/01/NI-43-101-Pre-Feasibility-Technical-Report-Cerrado-Verde-Project.pdf

[14] Source: Brazilian Fertilizer Mixers Association (from “Associação Misturadores de Adubo do Brasil“, in Portuguese).

[15] Source: Brazilian Comex Stat, available at: http://comexstat.mdic.gov.br/en/geral

The post Verde Announces 2024 Guidance, Highlighting Carbon Capture Potential for the Year, and Provides Update on 2023 Results appeared first on Verde AgriTech.

Plant 2 is ramping up production to 1.2 million tonnes per year (“Mtpy”) of Verde’s multinutrient potassium product, K Forte®, sold internationally as Super Greensand® (the “Product”). As part of Plant 2’s logistics, the Company has been upgrading road infrastructure, including 22 kms of roads, 14 kms of asphalting, and the construction of a new bridge. At its peak, the Company employed 350 people in the construction works of Plant 2 and correlated infrastructure, currently 125 people are working on the road foundation to overcome the groundwater issues.

The unforeseen groundwater, which placed in risk structural stability, was detected in two critical points of the road. The preceding geotechnical drilling had not uncovered the risk areas and palliative groundworks proved insufficient to adequately remediate the situation. The revamped foundation work will delay the road’s operability. Therefore, the renewed road will only support Plant 2’s output in Q4 2022.

2022 Guidance

Brazilian agricultural seasonality sees peak demand for Product in Q3 and early Q4. Plant 1 is operating at capacity to meet that demand but Plant 2’s delayed output will miss most of the 2022 season’s peak demand, thereby negatively impacting the Company’s full year volume. Verde is still in line to meet its original 2022 Guidance,[2] as revised below for Q3 and Q4 in comparison with the realized results for Q1 and Q2 2022:

Following the lower than expected deliveries from Plant 2 because of logistical issues during Q3 2022, the original 2022 annual Guidance is expected to be achieved thanks to Plant 1’s continued operation at capacity and Plant 2´s successful commissioning and dispatch of Product within the next 4 to 8 weeks.

Client´s demand for Product continues to outstrip current delivery capacity. The Company is offering discounts for Q4 2022 and Q1 2023 delivery, in order to maximise Plant 2 output in those seasonally weak months, as well as to generate more market penetration.

For 2023, Verde’s sales volume target remains unchanged at a minimum of 2 Mtpy tonnes of Product. Construction of Plant 3, which is expected to add a further 10 Mtpy of Product, is pending government permits and is therefore expected to begin construction in 2024.

Plant 1 and 2 Capacity Expansion

Over the years, Verde has optimized processing routes and machinery calibration.  Therefore, in light of such experience, both Plants 1 and 2 are being re-assessed to determine how equipment and process optimization will enable increased production volumes beyond their current nominal capacities. To implement the potential upgrades, Verde will apply for relevant government licences for total Plant 1 and 2 capacity exceeding 2.8 Mtpy.

Paid for Growth

Paid for Growth (“P4G”) strategy, a cornerstone program aimed at distributing gains to shareholders either through share buyback or dividends,[4] will be withheld for 2022 in order to ensure Verde’s continued accelerated expansion, including Plant 2 and Plant 3, without issuance of new shareholder-diluting equity. P4G is expected to distribute Verde’s first gains to shareholders in 2023.

“While it is disappointing to face a delay at the very end of what has otherwise been a ´non-equity financed´ construction of Plant 2, we are pleased by the overall pace and safety of the endeavour. Supported by the growing demand from current and new clients, at Verde we look forward to a future of sustainable and steadily expanding production. In that spirit, we celebrate our Plant 2´s commissioning and our 2022 outlook for over 70% year-on-year growth of production. We hold our heads high and look forward to advance the P4G strategy and lead our market segment in Brazil in the near future,” commented Verde’s Founder, President & CEO, Cristiano Veloso.

Board Revision

Verde is concluding a renewal of its Board of Directors to better meet the threshold set by certain shareholder advisory firms, which have deemed part of its Board as ‘non-independent directors’ either because the directors hold too many shares in the Company or the directors have held extensive tenures. Therefore, the following directors will gracefully step down: Mr. Getúlio Fonseca, Mr. Paulo Sérgio Ribeiro and Mr. Michael St Aldwyn, who have served on the board of Verde over a combined 24 years.

Mr. Fonseca was appointed to the Board in 2007 and was a contributing member of the Audit Committee and the Chairman of the Compensation Committee.

Mr. Ribeiro was appointed to the Board in 2017 and was a contributing member of the Corporate Governance & Nominating Committee.

Mr. St Aldwyn was appointed to the Board in 2018 and was a contributing member of the Audit Committee, and Compensation Committee, also serving as the Chairman of the Corporate Governance & Nominating Committee, and as Lead Independent Director.

“We would like to thank Getúlio Fonseca, Paulo Sérgio Ribeiro and Michael St Aldwyn for their many years of service and contribution to Verde’s growth. Their experience and inputs were invaluable to the Company, for which I thank them on behalf of Verde’s team, our shareholders and stakeholders,” commented Mr. Veloso.

The Company will seize the opportunity to enhance Board diversity and, in light of Verde’s recent move to Singapore,[5] to comply with local regulations that mandate that at least one board member needs to be a Singaporean resident. The Board changes are expected to be concluded and announced in the following weeks, without material impact to Verde’s ongoing expansionary strategies.

About Verde AgriTech

Verde is an agricultural technology company that produces potash fertilizers. Our purpose is to improve the health of all people and the planet. Rooting our solutions in nature, we make agriculture healthier, more productive, and profitable.

Verde is a fully integrated company, from the mining and processing its main feedstock from its 100% owned mineral properties, to the Product sales processes, which also include direct technical advice for farmers, and distribution.

Verde’s focus on research and development has resulted in one patent and eight patents pending. Among its proprietary technologies are Cambridge Tech, 3D Alliance, MicroS Technology, N Keeper, and Bio Revolution.[6] Currently, the Company is fully licensed to produce up to 2.8 million tonnes per year of its multinutrient potassium fertilizers K Forte® and BAKS®, sold internationally as Super Greensand®.[7] By the end of 2022, it plans to become Brazil’s largest potash producer by capacity.[8] Verde has a combined measured and indicated mineral resource of 1.47 billion tonnes at 9.28% K₂O and an inferred mineral resource of 1.85 billion tonnes at 8.60% K₂O (using a 7.5% K₂O cut-off grade).[9] This amounts to 295.70 million tonnes of potash in K₂O. For context, in 2021 Brazil’s total consumption of potash in K₂O was 7.92 million.[10]

Brazil ranks second in global potash demand and is its single largest importer, currently depending on external sources for over 96% of its potash needs. In 2021, potash accounted for approximately 2% of all Brazilian imports by dollar value.

Corporate Presentation

For further information on the Company, please view shareholders’ deck:

https://verde.docsend.com/view/7ifqptdkh55cutpk

Investors Newsletter

Subscribe to receive the Company’s updates at:

http://cloud.marketing.verde.ag/InvestorsSubscription

The last edition of the newsletter can be accessed at:

Cautionary Language and Forward-Looking Statements

All Mineral Reserve and Mineral Resources estimates reported by the Company were estimated in accordance with the Canadian National Instrument 43-101 and the Canadian Institute of Mining, Metallurgy, and Petroleum Definition Standards (May 10, 2014). These standards differ significantly from the requirements of the U.S. Securities and Exchange Commission. Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability.

This document contains “forward-looking information” within the meaning of Canadian securities legislation and “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995. This information and these statements, referred to herein as “forward-looking statements” are made as of the date of this document. Forward-looking statements relate to future events or future performance and reflect current estimates, predictions, expectations or beliefs regarding future events and include, but are not limited to, statements with respect to:

• the estimated amount and grade of Mineral Resources and Mineral Reserves;
• the PFS representing a viable development option for the Project;
• estimates of the capital costs of constructing mine facilities and bringing a mine into production, of sustaining capital and the duration of financing payback periods;
• the estimated amount of future production, both produced and sold;
• timing of disclosure for the PFS and recommendations from the Special Committee;
• the Company’s competitive position in Brazil and demand for potash; and,
• estimates of operating costs and total costs, net cash flow, net present value and economic returns from an operating mine.

Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives or future events or performance (often, but not always, using words or phrases such as “expects”, “anticipates”, “plans”, “projects”, “estimates”, “envisages”, “assumes”, “intends”, “strategy”, “goals”, “objectives” or variations thereof or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements.

All forward-looking statements are based on Verde’s or its consultants’ current beliefs as well as various assumptions made by them and information currently available to them. The most significant assumptions are set forth above, but generally these assumptions include, but are not limited to:

• the presence of and continuity of resources and reserves at the Project at estimated grades;
• the geotechnical and metallurgical characteristics of rock conforming to sampled results; including the quantities of water and the quality of the water that must be diverted or treated during mining     operations;
• the capacities and durability of various machinery and equipment;
• the availability of personnel, machinery and equipment at estimated prices and within the estimated delivery times;
• currency exchange rates;
• Super Greensand® and K Forte® sales prices, market size and exchange rate assumed;
• appropriate discount rates applied to the cash flows in the economic analysis;
• tax rates and royalty rates applicable to the proposed mining operation;
• the availability of acceptable financing under assumed structure and costs;
• anticipated mining losses and dilution;
• reasonable contingency requirements;
• success in realizing proposed operations;
• receipt of permits and other regulatory approvals on acceptable terms; and
• the fulfilment of environmental assessment commitments and arrangements with local

Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Many forward-looking statements are made assuming the correctness of other forward looking statements, such as statements of net present value and internal rates of return, which are based on most of the other forward-looking statements and assumptions herein. The cost information is also prepared using current values, but the time for incurring the costs will be in the future and it is assumed costs will remain stable over the relevant period.

By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that estimates, forecasts, projections and other forward-looking statements will not be achieved or that assumptions do not reflect future experience. We caution readers not to place undue reliance on these forward-looking statements as a number of important factors could cause the actual outcomes to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates assumptions and intentions expressed in such forward-looking statements. These risk factors may be generally stated as the risk that the assumptions and estimates expressed above do not occur as forecast, but specifically include, without limitation: risks relating to variations in the mineral content within the material identified as Mineral Resources and Mineral Reserves from that predicted; variations in rates of recovery and extraction; the geotechnical characteristics of the rock mined or through which infrastructure is built differing from that predicted, the quantity of water that will need to be diverted or treated during mining operations being different from what is expected to be encountered during mining operations or post closure, or the rate of flow of the water being different; developments in world metals markets; risks relating to fluctuations in the Brazilian Real relative to the Canadian dollar; increases in the estimated capital and operating costs or unanticipated costs; difficulties attracting the necessary work force; increases in financing costs or adverse changes to the terms of available financing, if any; tax rates or royalties being greater than assumed; changes in development or mining plans due to changes in logistical, technical or other factors; changes in project parameters as plans continue to be refined; risks relating to receipt of regulatory approvals; delays in stakeholder negotiations; changes in regulations applying to the development, operation, and closure of mining operations from what currently exists; the effects of competition in the markets in which Verde operates; operational and infrastructure risks and the additional risks described in Verde’s Annual Information Form filed with SEDAR in Canada (available at www.sedar.com) for the year ended December 31, 2021. Verde cautions that the foregoing list of factors that may affect future results is not exhaustive.

When relying on our forward-looking statements to make decisions with respect to Verde, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Verde does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by Verde or on our behalf, except as required by law.

For additional information please contact:

Cristiano Veloso, Founder, Chairman & Chief Executive Officer

Tel: +55 (31) 3245 0205; Email: investor@verde.ag

www.investor.verde.ag | www.supergreensand.com | www.verde.ag

[1] See press release at: https://investor.verde.ag/verde-announces-commissioning-of-its-plant-2/

[2] See press release at: https://investor.verde.ag/verde-announces-2022-guidance-and-two-year-outlook/

[3] Before non-cash events.

[4] See press release at: https://investor.verde.ag/verde-announces-plans-for-first-distribution-of-gains-and-restructure/

[5] See release at: https://investor.verde.ag/verde-announces-completion-of-redomiciliation-process-to-singapore/

[6] Learn more about our technologies: https://verde.docsend.com/view/yvthnpuv8jx6g4r9

[7] See the release at: https://investor.verde.ag/2-5-million-tonnes-per-year-potash-mining-concession-granted-to-verde/

[8] See the release at: https://investor.verde.ag/verde-to-reach-3-million-tonnes-potash-production-capacity-in-2022/

[9] As per the National Instrument 43-101 Standards of Disclosure for Mineral Projects within Canada (“NI 43 -101”), filed on SEDAR in 2017. See the Pre-Feasibility Study at: https://investor.verde.ag/wp-content/uploads/2021/01/NI-43-101-Pre-Feasibility-Technical-Report-Cerrado-Verde-Project.pdf

[10] Union of the Agricultural Fertilizers and Correctives Industry, in the State of São Paulo (“SIACESP”, from Sindicato da Indústria de Fertilizantes e Corretivos Agropecuários, no Estado de São Paulo).

The post Verde Provides Update appeared first on Verde AgriTech.

Belo Horizonte, Brazil. Verde AgriTech Plc (TSX: “NPK”) (OTCQB: “AMHPF”) (“Verde” or the “Company”) is pleased to announce its financial results for the first quarter of 2022 (“Q1 2022”).

Q1 2022 Financials

• Revenue increased by 1,260% in Q1 2022, to $11,304,000 compared to $831,000 in Q1 2021.
• Revenue in Brazilian Real (“R$”) increased by 1,196% in Q1 2022, to R$46,627,000 compared to R$3,597,000 in Q1 2021.
• Sales by volume increased by 574% in Q1 2022, to 111,667 tonnes sold compared to 16,558 tonnes sold in Q1 2021.
• Gross margin increased to 77% in Q1 2022, compared to 41% in Q1 2021.
• EBITDA before non-cash events increased to $3,678,000 in Q1 2022, compared to an operating loss of $887,000 in Q1 2021.
• Net profit increased to $3,033,000 in Q1 2022, compared to a net loss of $1,811,000 in Q1 2021.

Subsequent Events

• In April 2022, the Company announced that Plant 2 was on track to start production in Q3 2022, initially with a 1,200,000 tpy production capacity, as announced by the Company in the press release published on March 03, 2022. The final Plant 2 capacity of 2,400,000 tpy is expected to be reached in Q4 2022. Therefore, by Q4 2022, with Plant 2’s expansion, overall production capacity is expected to be 3,000,000 tpy, establishing Verde as Brazil’s largest potash producer.
• In April 2022, the Market Study (the “Study”) that will underpin the preparation of the New Pre-Feasibility Study announced by the Company on March 01, 2021 (the “PFS”) was concluded. The Study calculated the potential Brazilian agricultural market for potash, sulphur, and the micronutrients zinc, boron, copper and manganese. The Study was conducted between May 2021 and March 2022, it will be an integral part of the PFS. The PFS will contemplate a scenario of total annual production of up to 50,000,000 tonnes per year (“tpy”) of Verde’s Product, equivalent to 63% of the total Brazilian potash consumption in 2021.
• In April 2022, Bio Revolution, Verde’s newest technology that enables the incorporation of microorganisms to mineral fertilizers, was launched by the Company.[1]​ K Forte® will be the first fertilizer in the world to use Bio Revolution technology. Bacillus aryabhattai, widely renowned in agriculture for its multiple benefits, will be the first microorganism to be incorporated into Verde’s Product. ​Verde’s Plant 1 is already equipped with a facility for deploying Bio Revolution. At Plant 2, a proportionally larger Bio Revolution facility will be built, with operations expected by the end of 2022.​
• In May 2022, Verde announced an increase in its 2022 guidance, previously published on January 10, 2022. The revised 2022 guidance provides for sales of 1,000,000 tonnes of Verde’s multinutrient potassium products, BAKS® and K Forte® sold internationally as Super Greensand® (the “Product”), with revenue of C$109.09 million, EBITDA of C$49.06 million and net earnings per share (“EPS”) of C$0.87. The 2023 guidance provides for sales of 2,000,000 tonnes.

“2022 has started in a very shaky manner for the agricultural market globally. In Brazil, which depends on imports for over 96% of its potash supplies, the concern with fertilizers has been at the forethought of most farmers. Despite the record rainfalls during the period, which postponed Verde’s delivery of an additional 25,133 tonnes of Product in Q1 2022, our Team successfully reached a growing portion of Brazil’s market. Verde’s target towards the delivery of 1,000,000 tonnes by the end of 2022 is further boosted by these latest results.”  declared Verde’s Founder, President & CEO Cristiano Veloso.

2022 Guidance

On May 03, 2022, Verde announced an increase in its 2022 and 2023 guidance,^[2] previously published on January 10, 2022.^[3] The Company’s original and revised 2022 targets are detailed on a quarterly basis, to reflect the market demand’s seasonality, as follows:

The 2022 guidance is underpinned by the following assumptions:

• Average Brazilian Real (“R$”) to Canadian Dollar exchange rate: C$1.00 = R$4.40
• Verde’s Product CIF and FOB average price for the full year, including delivered orders, committed orders and projected orders: C$109 per tonne
• Sales Incoterms: 50% CIF and 50% FOB
• Sales channels: 40% direct sales and 60% indirect sales

2023 Guidance

For 2023, Verde’s updated sales volume target is 2,000,000 tonnes. This target represents a potential 100% growth Year-on-Year (“YoY”).

Selected Annual Financial Information

The table below summarizes Q1 2022 financial results compared to Q1 2021:

⁽¹⁾ – Non GAAP measure
⁽²⁾ – Included in General and Administrative expenses in financial statements

External Factors

Revenue and costs are affected by external factors, including changes in the exchange rates between the C$ and R$ along with fluctuations in potassium chloride CIF (Minas Gerais) prices. The table below summaries these changes.

⁽¹⁾ – Source: Acerto Limited Report.

Net Profits and EPS

The Company generated a net profit of $3,033,000 for Q1 2022, an increase of $4,844,000 compared to a net loss of $1,811,000 for Q1 2021. The basic earnings per share was $0.060 for Q1 2022, compared to loss per share of $0.036 for Q1 2021.

Product Sales

Sales by volume increased by 574% in Q1 2022, to 111,667 tonnes sold compared to 16,558 tonnes sold in Q1 2021.

Revenue

Revenue from sales increased by 1,260% in Q1 2022, to $11,304,000 from the sale of 111,667 tonnes of the Product, at $101 per tonne sold; compared to $831,000 in Q1 2021 from the sale of 16,558 tonnes of the Product, at $50 per tonne sold.

Revenue per tonne excluding freight expenses (FOB price) improved by 105% in Q1 2022, to $75 compared to $36 in Q1 2021.

The KCl price increased by 204% in Q1 2022, compared to Q1 2021. Verde did not, however, see a proportional increase in its pricing for Q1 2022 sales because it had sold part of its Q1 production in Q4 2021 and discounts are applied.

Revenue per tonne in Q1 2022 was higher than Q1 2021 mainly due to:

1. Product volume sold as CIF (Cost Insurance and Freight) increased from 34% of total sales in Q1 2021 to 60% in Q1 2022.
2. Potassium Chloride CIF (Minas Gerais) price increased from US$315-395 per tonne in Q1 2021 to US$800-US$1,200 per tonne in Q1 2022 (as reported by Acerto Limited, a market intelligence firm).

Production costs

Production costs include all direct costs from mining, processing, and the addition of other nutrients to the Product, such as Sulphur and Boron. They also include the logistics costs from the mine to the factory and related salaries.

Production costs increased by 442% in Q1 2022, to $2,654,000 compared to $490,000 in Q1 2021. This was due to a 574% increase in volume sold, from 16,558 tonnes in Q1 2022 to 111,667 tonnes in Q1 2021. Cost per tonne decreased by 20% in Q1 2022, to $24 compared to $30 in Q1 2021. This reduction was mainly driven by fixed cost dilution in Q1 2022.

Sales Expenses

Sales and marketing expenses

Sales and marketing expenses include employees’ salaries, car rentals, travel within Brazil, hotel expenses, customer relationship management (CRM) software licenses, and the promotion of the Product in marketing events.

Expenses increased by 181% in Q1 2022, to $822,000 compared to $293,000 in Q1 2021, mainly due to a further expansion of Verde’s sales and marketing team, with professional headcount in the team increasing from an average of 43 in Q1 2021 to 62 in Q1 2022. This increase is in line with the Company’s accelerated growth strategy.

Fees paid to independent sales agents

As part of Verde’s marketing and sales strategy, the Company pays out commissions to its independent sales agents.

Fees paid to independent sales agents increased by 1431% in Q1 2022, to $136,000 compared to $9,000 in

Q1 2021, as a direct result of increased sales and higher volume sold by sales agents compared to internal sales and distributors.

Product delivery freight expenses

Product delivery freight expenses increased by 1197% in Q1 2022, to $2,973,000 compared to $229,000 in Q1 2021, as the Company has significantly increased the volume sold as CIF (Cost Insurance and Freight), up from 34% of total sales in Q1 2021 to 60% in Q1 2022 and due to higher fuel prices, which increased 44% in Q1 2022 compared to Q1 2021.

General and Administrative Expenses

General administrative expenses

These costs include general office expenses, rent, bank fees, insurance, foreign exchange variances and remuneration of executive and administrative staff in Brazil.

Expenses decreased by 14% in Q1 2022, to $410,000 compared to $478,000 in Q1 2021 mainly due to incentive compensation to the key management in Q1 2021.

Despite the reduction, salary costs have increased in 2022 as they include additional administrative employees, with professional headcount in the team increasing from an average of 26 in Q1 2021 to 57 in Q1 2022 to help support the Company’s growth.

Legal, professional, consultancy and audit costs

Legal and professional fees include legal, professional, consultancy fees along with accountancy, audit and regulatory costs. Consultancy fees are consultants employed in Brazil, such as accounting services, patent process, lawyer’s fees and regulatory consultants.

Expenses increased by 159% in Q1 2022, to $411,000 compared to $159,000 in Q1 2021, due to higher expenses with environmental, legal, accounting, and IT consultancies.

IT/Software expenses

IT/Software expenses include software licenses such as Microsoft Office, Customer Relationship Management (CRM) software and enterprise resource planning (ERP).

Expenses increased by 290% in Q1 2022, to $204,000 compared to $52,000 in Q1 2022, mainly due to CRM and ERP consultants services.

Taxes and licences

Taxes and licence expenses include general taxes, product branding and licence costs.

Expenses increased in Q1 2022, to $16,000 compared to $8,000 in Q1 2022.

Share Based and Bonus Payments (Non-Cash Event)

These costs represent the expense associated with stock options granted to employees and directors and non-cash bonuses paid to key management.

Share Based Payments costs decreased by 92% in Q1 2022, to $64,000 compared to $822,000 in Q1 2021.

Q1 2022 Results Conference Call

The Company will host a conference call on Wednesday, May 25, 2022, at 09:00 am Eastern Time, to discuss Q4 and FY 2021 results and provide an update. Subscribe using the link below and receive the conference details by email.

The questions can be submitted in advance through the following link up to 48 hours before the conference call:

The Company’s first quarter financial statements and related notes for the period ended March 31, 2021 are available to the public on SEDAR at www.sedar.com and the Company’s website at www.investor.verde.ag/.

About Verde AgriTech

Verde is an agricultural technology Company that produces potash fertilizers. Our purpose is to improve the health of all people and the planet. Rooting our solutions in nature, we make agriculture healthier, more productive, and profitable.

Verde is a fully integrated Company:  it mines and processes its main feedstock from its 100% owned mineral properties, then sells and distributes the Product.

Verde’s focus on research and development has resulted in one patent and eight patents pending. Among its proprietary technologies are Cambridge Tech, 3D Alliance, MicroS Technology, N Keeper, and Bio Revolution.[5] Currently, the Company is fully licensed to produce up to 2.8 million tonnes per year of its multinutrient potassium fertilizers K Forte® and BAKS®, sold internationally as Super Greensand®.[6]

By the end of 2022, Verde aims to become Brazil’s largest potash producer by capacity.[7] Verde has a combined measured and indicated mineral resource of 1.47 billion tonnes at 9.28% K₂O and an inferred mineral resource of 1.85 billion tonnes at 8.60% K₂O (using a 7.5% K₂O cut-off grade).[8] This amounts to 295.70 million tonnes of potash in K₂O. For context, in 2021 Brazil’s total consumption of potash in K₂O was 7.92 million.[9]

Brazil ranks second in global potash demand and is its single largest importer, currently depending on external sources for over 96% of its potash needs. In 2021, potash accounted for approximately 2% of all Brazilian imports by dollar value.

Corporate Presentation

For further information on the Company, please view shareholders’ deck: https://verde.docsend.com/view/tr4c6e5qhjr442t3

Investors Newsletter

Subscribe to receive the Company’s updates at:

http://cloud.marketing.verde.ag/InvestorsSubscription

The last edition of the newsletter can be accessed at: 

Cautionary Language and Forward-Looking Statements

This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of the applicable Canadian securities legislation. The Cautionary Language and Forward-Looking Statements can be accessed at this link.

For additional information please contact:

Cristiano Veloso, President, Chairman & Chief Executive Officer

Tel: +55 (31) 3245 0205; Email: investor@verde.ag

www.investor.verde.ag | www.supergreensand.com | www.verde.ag

[1] See the release at: https://investor.verde.ag/verde-launches-bio-revolution/

[2] See the release at: https://investor.verde.ag/verdes-2022-guidance-and-two-year-outlook-revised-upwards/

[3] See the release at: https://investor.verde.ag/verde-announces-2022-guidance-and-two-year-outlook/

^[4] Before non-cash events.

[5] Learn more about our technologies: https://verde.docsend.com/view/yvthnpuv8jx6g4r9

[6] See the release at: https://investor.verde.ag/2-5-million-tonnes-per-year-potash-mining-concession-granted-to-verde/

[7] See the release at: https://investor.verde.ag/verde-to-reach-3-million-tonnes-potash-production-capacity-in-2022/

[8] As per the National Instrument 43-101 Standards of Disclosure for Mineral Projects within Canada (“NI 43 -101”), filed on SEDAR in 2017. See the Pre-Feasibility Study at: https://investor.verde.ag/wp-content/uploads/2021/01/NI-43-101-Pre-Feasibility-Technical-Report-Cerrado-Verde-Project.pdf

[9] Union of the Agricultural Fertilizers and Correctives Industry, in the State of São Paulo (“SIACESP”, from Sindicato da Indústria de Fertilizantes e Corretivos Agropecuários, no Estado de São Paulo).

The post Verde’s Q1 2022 revenue grows 1,260% appeared first on Verde AgriTech.

Belo Horizonte, Brazil. Verde AgriTech Plc (TSX: “NPK”) (OTCQB: “AMHPF”) (“Verde” or the “Company”) is pleased to announce an increase in its 2022 and 2023 guidance, previously published on January 10, 2022[1]. The new 2022 guidance provides for sales of 1,000,000 tonnes of Verde’s multinutrient potassium products, BAKS® and K Forte® sold internationally as Super Greensand® (the “Product”), with revenue of C$109.09 million, EBITDA of C$49.06 million and net earnings per share (“EPS”) of C$0.87. The 2023 guidance provides for sales of 2,000,000 tonnes.

The original target for 2022 was for sales of 700,000 tonnes of Product, with revenue of $72.26 million, EBITDA of $28.43 million, EPS of $0.50. The original target for 2023 was for sales of 1,400,000 tonnes of Product. If achieved, the new revenue target for 2022 will represent a Year-on-Year (“YoY”) growth of 294%.

2022 Guidance

The Company’s revised full year 2022 guidance is compared to the original targets and the 2021 results, as follows:

The detailed quarterly targets will be updated along with Q1 2022 results, to be released on May 16, 2021.

2023 Guidance

For 2023, Verde’s updated sales volume target is 2,000,000 tonnes. This target represents a potential 100% growth Year-on-Year (“YoY”).

On April 26, 2022, Verde announced the launch of Bio Revolution, a new technology that enables the incorporation of microorganisms to its Product.[4] Verde is the first company to commercialize a fertilizer with added microorganisms. As part of the Fourth Agricultural Revolution, microorganisms are seen as a vital component in boosting plant productivity. Bio Revolution will reduce costs for farmers by sustainably increasing the productivity and profitability. Given Verde’s first mover advantage, the Company is working to become world leader at offering a cost-efficient platform for adding microorganisms to agriculture.

Call with Cristiano Veloso, Founder and CEO

Cristiano Veloso will host a call on Monday, May 09, 2022, at 10:00 am Eastern Time, to discuss Verde in general and, more specifically, the role of the Company’s new Bio Revolution technology to the Fourth Agricultural Revolution. The call will be held on Twitter Spaces. Subscribe and join the Space using the link below:

About Verde AgriTech

Verde is an agricultural technology company that produces potash fertilizers. Our purpose is to improve the health of all people and the planet. Rooting our solutions in nature, we make agriculture healthier, more productive, and profitable.

Verde is a fully integrated company, from the mining and processing its main feedstock from its 100% owned mineral properties, to the Product sales processes, which also includes direct technical advice for farmers, and distribution.

Verde’s focus on research and development has resulted in one patent and eight patents pending. Among its proprietary technologies are Cambridge Tech, 3D Alliance, MicroS Technology, N Keeper, and Bio Revolution.[5] Currently, the Company is fully licensed to produce up to 2.8 million tonnes per year of its multinutrient potassium fertilizers K Forte® and BAKS®, sold internationally as Super Greensand®.[6] By the end of 2022, it plans to become Brazil’s largest potash producer by capacity.[7] Verde has a combined measured and indicated mineral resource of 1.47 billion tonnes at 9.28% K₂O and an inferred mineral resource of 1.85 billion tonnes at 8.60% K₂O (using a 7.5% K₂O cut-off grade).[8] This amounts to 295.70 million tonnes of potash in K₂O. For context, in 2021 Brazil’s total consumption of potash in K₂O was 7.92 million.[9]

Brazil ranks second in global potash demand and is its single largest importer, currently depending on external sources for over 96% of its potash needs. In 2021, potash accounted for approximately 2% of all Brazilian imports by dollar value.

Corporate Presentation

For further information on the Company, please view shareholders’ deck:

https://verde.docsend.com/view/9mryhmxmcqske7yd

Investors Newsletter

Subscribe to receive the Company’s updates at:

http://cloud.marketing.verde.ag/InvestorsSubscription

The last edition of the newsletter can be accessed at:

Cautionary Language and Forward-Looking Statements

This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of the applicable Canadian securities legislation. The Cautionary Language and Forward-Looking Statements can be accessed at this link.

For additional information please contact:

Cristiano Veloso, Founder, Chairman & Chief Executive Officer

Tel: +55 (31) 3245 0205; Email: investor@verde.ag

www.investor.verde.ag | www.supergreensand.com | www.verde.ag

[1] See the release at: https://investor.verde.ag/verde-announces-2022-guidance-and-two-year-outlook/

[2] See the release at: https://investor.verde.ag/verdes-q4-sales-by-volume-grow-137-driving-2021-net-profit-growth-to-540/

^[3]  Before non-cash events.

[4] See the release at: https://investor.verde.ag/verde-launches-bio-revolution/

[5] Learn more about our technologies: https://verde.docsend.com/view/yvthnpuv8jx6g4r9

[6] See the release at: https://investor.verde.ag/2-5-million-tonnes-per-year-potash-mining-concession-granted-to-verde/

[7] See the release at: https://investor.verde.ag/verde-to-reach-3-million-tonnes-potash-production-capacity-in-2022/

[8] As per the National Instrument 43-101 Standards of Disclosure for Mineral Projects within Canada (“NI 43 -101”), filed on SEDAR in 2017. See the Pre-Feasibility Study at: https://investor.verde.ag/wp-content/uploads/2021/01/NI-43-101-Pre-Feasibility-Technical-Report-Cerrado-Verde-Project.pdf

[9] Union of the Agricultural Fertilizers and Correctives Industry, in the State of São Paulo (“SIACESP”, from Sindicato da Indústria de Fertilizantes e Corretivos Agropecuários, no Estado de São Paulo).

The post Verde’s 2022 guidance and two-year outlook revised upwards appeared first on Verde AgriTech.

Belo Horizonte, Brazil. Verde AgriTech Plc (TSX: “NPK”) (OTCQB: “AMHPF”) (“Verde” or the “Company”) is pleased to announce its financial results for the fourth quarter 2021 (“Q4 2021”) and full year ended December 31, 2021 (“FY 2021”).

Q4 2021 Financials

• Revenue increased by 391% in Q4 2021, to $10,851,000 compared to $2,209,000 in Q4 2020.
• Revenue in Brazilian Real (“R$”) increased by 450% in Q4 2021, to R$46,723,000 compared to R$8,489,000 in Q4 2020.
• Sales by volume increased by 137% in Q4 2021, to 134,350 tonnes sold compared to 56,585 tonnes sold in Q4 2020.
• Gross margin increased to 75% in Q4 2021, compared to 59% in Q4 2020.
• Operating profit before non-cash events increased by 6786% in Q4 2021, to $2,452,000 compared to $36,000 in Q4 2020.
• Net profit increased to $1,878,000 in Q4 2021, compared to a net loss $192,000 in Q4 2020.

FY 2021 Financials

• Revenue increased by 202% in FY 2021, to $27,709,000 compared to $9,167,000 in FY 2020.
• Revenue in R$ increased by 239% in FY 2021, to R$119,310,000, compared to R$35,232,000 in FY 2020.
• Sales by volume increased by 64% in FY 2021, to 400,133 tonnes sold compared to 243,707 tonnes in FY 2020.
• Gross margin increased to 74% in FY 2021, compared to 62% in FY 2020.
• Operating profit before non-cash events increased by 305% in FY 2021, to $6,450,000 compared to $1,591,000 in FY 2020.
• Net profit increased by 540%, to $3,522,000 in FY 2021 compared to $550,000 in FY

Subsequent Events

• In January 2022, as a result of the Company’s continued accelerated market expansion, Verde announced its Paid for Growth (“P4G”) strategy, a cornerstone program aimed at distributing gains to shareholders. P4G strategy is possible because cashflow is now freed up thanks to Verde’s ability to finance expansion backed by future sales contracts. Previously, financing could only be secured by invoice discounting or guaranteed by capital goods; now, Verde’s future sales contracts are accepted as debt collateral.
• In February 2022, Verde adopted Earned Growth Rate (“EGR”) as a key metric for market success. EGR measures the sales growth by volume generated by returning customers and new client purchases made by existing clients’ referrals. The Company achieved an EGR of 165% in 2021, compared to a rate of 61% in 2020, demonstrating a higher client repurchase rate and successful client referrals.
• In February 2022, the Company received a new Mining Concession for the extraction of up to 2,500,000 tonnes per year (“tpy”) of Product. Verde is now fully permitted to produce up to 2,833,000 tpy.
• In February 2022, Verde AgriTech Plc’s Brazilian subsidiaries, Verde Fertilizantes LTDA and FVS Mineração LTDA, earned ISO 9001 and ISO 14001 certifications.
• In February 2022, the Company created a Special Committee to evaluate when and how to share profits with shareholders. The Special Committee to conduct the analysis is comprised of independent directors of the Board, consisting of Mr. Michael St Aldwyn (Verde’s Lead Independent Director), Mr. Renato Gomes and Mr. Paulo Sérgio Ribeiro.
• In February 2022, the Company’s Board of Directors unanimously approved an accelerated investment program to bolster an expansion plan that has two objectives: First, expand Plant 2’s operational capacity from 1,200,000 to 2,400,000 tpy by Q4 2022; and second, upgrade local infrastructure to sustain Plant 2’s logistics with added capacity to enable a future Plant 3. By Q4 2022, with Plant 2’s expansion, Verde expects to have raised its overall production capacity to 3,000,000 tpy. The approved expansion plan investment totals R$ 51 million Brazilian Reais (“R$”), which comes on top of the R$22 million previously approved for the construction of Plant 2. The Company aims to fund the expansion plan through a combination of future cashflow and debt finance backed by future sales contracts.

“Thanks to our team and all their efforts in 2021, Verde continued its accelerated growth with improving numbers in every subsequent quarter. We are excited and proud to be part of a team that is second to none when it comes to motivation and competence. We all recognize how fortunate we are to make a living while making a major contribution to the world”, declared Verde’s Founder, President & CEO Cristiano Veloso.

2021 Guidance

The Company’s original 2021 revenue guidance was R$50 million, the amount was revised upwards on November 15, 2021, to R$110 million. However, the realized 2021 revenue totalled R$119 million.

2022 Guidance

As announced in the press release published on January 10, 2022, the Company’s 2022 target, detailed on a quarterly basis to reflect the market demand’s seasonality, is as follows:

The 2022 guidance is underpinned by the following assumptions:

• Average Brazilian Real (“R$”) to Canadian dollar exchange rate: C$1.00 = R$4.40 (in March 18, 2022, the exchange rate closed at C$1.00 = R$3.99).
• Average KCl CFR Brazil of US$500, compared to current price of US$1,025 per tonne (as per the market intelligence firm Acerto Limited weekly price for March 17, 2022).
• Sales Incoterms: 50% CIF and 50% FOB.
• Sales channels: 50% direct sales and 50% indirect sales.

Note that the assumption above does not include the grant of a new mining concession, as originally presented in the January 10, 2022, press release, because in February, 2022, Verde was awarded a Mining Concession for extraction of an additional amount 2,500,000 tpy of Product, bringing Verde’s total permitted mining capacity to 2,833,000 tpy.

“The 2022 Guidance is a noticeable leap from 2021 numbers. We still expect, however, to revise these numbers upwards as the year progresses to reflect both Product demand and increased potash prices, despite Q1 having been one of the wettest ever rainy seasons and the oil price increases,” commented Cristiano Veloso.

2023 Guidance

For 2023, Verde’s original sales volume target is 1.4 million tonnes. This target represents a potential 100% growth Year-on-Year (“YoY”) but it is now under review in light of the recent total 2.8 million tonnes permitted production capacity following the permits received in February, 2022, and increased production potential for 2022.

2021’s Key Objectives:

On March 31, 2021, Verde announced its key objectives for the year. A review of those objectives is detailed below:

Achieve 10% of the Company’s total sales as BAKS®:

BAKS® accounted for 9.8% of the total volume sold in 2021. BAKS® demand outstripped Verde’s production capacity for the period.

Launch a new technology in the second quarter of 2021:

On June 02, 2021, the Company launched N Keeper®, a proprietary processing technology for glauconitic siltstone that alters its physical-chemical properties to enable ammonia retention for use as a calibrated additive in Nitrogen fertilizers. This combination is responsible for the reduction of Nitrogen volatilization loss, allowing more agronomic efficiency for farmers and contributing to the reduction of global warming impacts caused by Nitrogen fertilizers manufacturing and application.

Get ISO 9001 and ISO 14001 certified:

Verde AgriTech Plc’s Brazilian subsidiaries, Verde Fertilizantes LTDA and FVS Mineração LTDA, were ISO 9001 and ISO 14001 certified in February 2022.

Obtain the Mining Concession for 2,500,000 tpy for Mine Pit 2:

Verde received the Mining Concession for extraction of up to 2,500,000 tpy for Mine Pit 2, which will supply raw material for our Plant 2, to boost our production in the coming years. Verde is now fully permitted to produce up to 2,833,000 tpy.

This is one of the milestones towards the target of 25,000,000 tonnes annual production, which represents a NPV per share of $50.94, based on the NI 43-101 Pre-Feasibility Technical Report Cerrado Verde Project filed by the Company on SEDAR in 2017 (“Old Pre-Feasibility),^[1] which relied on a KCl price of US$250, instead of US$1,025 per tonne currently negotiated (as per the market intelligence firm Acerto Limited weekly price for March 17, 2022).

Initiate the construction of Plant 2, with the completion of the necessary infrastructure for its development, such as the plant’s power grid connection, access routes improvement and preliminary civil construction:

As disclosed in the press release published on November 16, 2020, the construction of Plant 2 was scheduled to begin in the second half of 2021. Groundbreaking took place in August 2021, and Plant 2 is expected to reach commercial production by Q3 2022.

Verde’s Key Objectives for 2022:

• Reach Plant 2’s commercial production by Q3 2022.
• Expand Plant 2’s operational capacity from 1,200,000 to 2,400,000 tpy by Q4 2022, raising Verde’s overall production capacity to 3,000,000 tpy.
• Upgrade local infrastructure to sustain Plant 2’s logistics with added capacity to enable a future Plant 3.
• Finish the New Pre-Feasibility Study (“PFS”), which is currently under elaboration. In addition to the potash market, the New PFS has the objective to assess sulfur and micronutrients’ potential market in Brazil, based on the technologies MicroS and 3D Alliance developed by the Company. The New PFS will revamp the information disclosed in the Old Pre-Feasibility Study. The New PFS will contemplate a scenario of total annual production of 50,000,000 tonnes of Verde’s Product, equivalent to 63% of the total Brazilian potash consumption in 2021.
• Launch a new technology in Q2 2022.
• Reach 100 cities with Cultivando Amor, Verde’s flagship social engagement program that in 2021 raised over R$270,000 for charities across 16 cities in Brazil. The program donates part of Verde’s sales proceeds to charities chosen by the Company’s clients in their municipalities.

Environmental

Verde’s production process is sustainable. The processing does not require tailings dams, nor does it generate any waste by products. In sum, the ore recovery rate is 100%.

The mined area is mainly composed of degraded pasturelands that, once mined, Verde transforms into tropical forest. To that end, the Company planted 4,300 trees in 2019, 5,000 trees in 2020, and 9,888 trees in 2021. All planted species are originally native to the region, many of which are today deemed endangered species.

Selected Annual Financial Information

The table below summarizes Q4 and FY 2021 financial results compared to Q4 and FY 2021:

⁽¹⁾ – Included in General and Administrative expenses in financial statements

⁽²⁾ – Please see Income Tax notes.

Q4 and FY 2021 compared with Q4 and FY 2020

Q4 2021

The Company generated a net profit of $1,878,000 for Q4 2021, an increase of $2,070,000 compared to a net loss of $192,000 for Q4 2020. The profit per share was $0.037 for Q4 2021, compared to loss per share of $0.003 for Q4 2020.

FY 2021

The Company generated a net profit of $3,522,000 in FY 2021, an increase of 540% compared to a net profit of $550,000 in FY 2021. The increase was due to the continued growth of the Company. The earnings per share was $0.070 for FY 2021, compared to $0.012 for FY 2020.

Product Sales

Q4 2021

Sales by volume increased by 137% in Q4 2021, to 134,350 tonnes sold compared to 56,585 tonnes sold in Q4 2020.

FY 2021

Sales increased by 64% in FY 2021, to 400,133 tonnes sold, compared to 243,707 tonnes FY 2020, as the Company’s Product continues to grow in the market.

Revenue

Q4 2021

Revenue from sales increased by 391% in Q4 2021, to $10,851,000 from the sale of 134,350 tonnes of the Product, at $81 per tonne sold; compared to $2,209,000 in Q4 2020 from the sale of 56,585 tonnes of the Product, at $39 per tonne sold.

Revenue per tonne excluding freight expenses (FOB price) improved by 24% in Q4 2021, to $53 compared to $31 in Q4 2020.

The KCl price increased by 165% in Q4 2021, compared to Q4 2020. Verde did not, however, see a proportional increase in its pricing for Q4 2021 sales because it had sold most of its Q4 production earlier in the year.

Despite the 7% Brazilian Real devaluation against the Canadian Dollar, revenue per tonne in Q4 2021 was higher than Q4 2020 mainly due to:

1. Product volume sold as CIF (Cost Insurance and Freight) increased from 23% of total sales in Q4 2020 to 63% in Q4 2021.
2. Potassium Chloride CIF (Minas Gerais) price increased from US$315-US$320 per tonne in Q4 2020 to US$760-850 per tonne in Q4 2021 (as reported by Acerto Limited, a market intelligence firm).
3. BAKS^® has a higher sales price per tonne than K Forte^®. BAKS^® was launched in December 2020 and in Q4 2021 it accounted for 7,2% of the total volume sold by the Company.

FY 2021

Revenue from sales increased by 202% in FY 2021, to $27,709,000 from the sale of 400,133 tonnes of the Product, at $69 per tonne sold; compared to $9,167,000 in FY 2020 from the sale of 243,707 tonnes of the Product, at $38 per tonne sold.

Revenue per tonne excluding freight expenses (FOB price) improved by 42% in FY 2021, to $47 compared to $33 in FY 2020.

The KCl price increased by 136% in FY 2021, compared to FY 2020. Verde did not, however, see a proportional average increase in its pricing for FY 2021 sales because it had sold most of its Q4 production earlier in the year.

Despite the 12% Brazilian Real devaluation against the Canadian Dollar, revenue per tonne in FY 2021 was higher than FY 2020 mainly due to:

1. Product volume sold as CIF (Cost Insurance and Freight) increased from 13% of total sales in FY 2020 to 52% in FY 2021.
2. Potassium Chloride CIF (Minas Gerais) price increased from US$280-US$360 per tonne in FY 2020 to US$315-850 per tonne in FY 2021 (as reported by Acerto Limited).
3. BAKS^® has a higher sales price per tonne than K Forte^®. BAKS^® was launched in December 2020 and in FY 2021 it accounted for 9.8% of the total volume sold by the Company.

Production costs

Production costs include all direct costs from mining, processing, and the addition of the other nutrients to the Product, such as Sulfur and Boron. They also include the logistics costs from the mine to the factory and related salaries.

Q4 2021

Production costs increased by 195% in Q4 2021, to $2,691,000 compared to $912,000 in Q4 2020. This was due to a 135% increase in volume sold, from 57,000 tonnes in Q4 2020 to 134,000 tonnes in Q4 2021, and due to local inflation. Cost per tonne increased by 24% in Q4 2021, to $20 compared to $16 in Q4 2020. This increase was due in large part to higher fuel prices, which increased by 45% in Q4 2021 compared to Q4 2020.

FY 2021

Production costs increased by 103% in FY 2021, to $7,131,000 compared to $3,515,000 in FY 2020. This was due to a 64% increase in volume sold, from 244,000 tonnes in FY 2020 to 400,000 tonnes in FY 2021, and due to local inflation. Cost per tonne increased by 24% in FY 2021, to $18 compared to $14 in FY 2020. This increase was due in large part to higher fuel prices, which increased by 37% in FY 2021 compared to FY 2020. The production costs increase are also due to the larger production of BAKS^®, which has a higher cost per tonne because its feedstock includes other nutrients that Verde purchases from third parties.

Sales Expenses

Sales and marketing expenses

Sales and marketing expenses include employees’ salaries, car rentals, travel within Brazil, hotel expenses, customer relationship management (CRM) software licenses, and the promotion of the Product in marketing events.

Q4 2021

Expenses increased by 222% in Q4 2021, to $577,000 compared to $179,000 in Q4 2020, mainly due to a further expansion of Verde’s sales and marketing team, with professional headcount increasing from an average of 35 in Q4 2020 to 54 in Q4 2021. This increase is in line with the Company’s accelerated growth strategy.

FY 2021

Expenses increased by 86% in FY 2021, with a total of $1,818,000, compared to $975,000 in FY 2020, also mainly due to a further expansion of Verde’s sales and marketing team, with professional headcount increasing from an average of 32 in FY 2020 to 46 in FY 2021. Such as for Q4 2021, this increase is in line with the Company’s accelerated growth strategy.

Fees paid to independent sales agents

As part of Verde’s marketing and sales strategy, the Company pays out commissions to its independent sales agents.

Q4 2021

Fees paid to sales independent agents increased by 1150% in Q4 2021, to $203,000 compared to $16,000 in Q4 2020, as a direct result of increased sales.

FY 2021

Fees paid to sales independent agents increased by 185% in FY 2021, to $464,000 compared to $162,000 in FY 2020, for the same reason as in the quarter.

Product delivery freight expenses

Q4 2021

Product delivery freight expenses increased by 671% in Q4 2021, to $3,682,000 compared to $478,000 in Q4 2020, as the Company has significantly increased the volume sold as CIF (Cost Insurance and Freight), up from 23% of total sales in Q4 2020 to 63% in Q4 2021 and due to higher fuel prices, which increased 45% in Q4 2021 compared to Q4 2020.

FY 2021

Expenses increased by 692% in FY 2021, to $8,970,000 compared to $1,133,000 in FY 2020, as the Company has significantly increased the volume sold as CIF (Cost Insurance and Freight), up from 13% of total sales in FY 2020 to 52% in FY 2021 and due to higher fuel prices, which increased 37% in FY 2021 compared to FY 2020.

General and Administrative Expenses

General administrative expenses

These costs include general office expenses, rent, bank fees, insurance, foreign exchange variances and remuneration of executive and administrative staff in Brazil.

Q4 2021

Expenses increased by 24% in Q4 2021, to $612,000 compared to $494,000 in Q4 2020, as they include additional administrative employees, with professional headcount increasing from an average of 20 in Q4 2020 to 51 in Q4 2021 to help support the Company’s growth and incentive compensation.

FY 2021

Expenses increased by 41% in FY 2021, to $1,621,000 compared to $1,149,000 in FY 2020, as they include additional administrative employees, with professional headcount increasing from an average of 18 in FY 2020 to 43 in FY 2021.

Legal, professional, consultancy and audit costs

Legal and professional fees include legal, professional, consultancy fees along with accountancy, audit and regulatory costs. Consultancy fees are consultants employed in Brazil, such as accounting services, patent process, lawyer’s fees and regulatory consultants.

Q4 2021

Expenses increased by 584% in Q4 2021, to $516,000 compared to $75,000 in Q4 2020. The increase is largely due to a $347,000 provision in Q4 2021, set aside for a contested claim made by a consultant retained by the Company in 2012. The consultancy services were for an environmental report, the quality of which was disputed by Verde and payments withheld.  A court decision in Q4 2021 was partially favourable to the consultant and requested an adjusted payment, the Company has appealed the decision.

FY 2021

Expenses increased by 76% in FY 2021, to $915,000 compared to $520,000 in FY 2020, mainly due to the provision in Q4 2021.

IT/Software expenses

IT/Software expenses include software licenses such as Microsoft Office, Customer Relationship Management (CRM) software and enterprise resource planning (ERP).

Q4 2021

Expenses increased by 350% in Q4 2021, to $103,000 compared to $23,000 in Q4 2020.

FY 2021

Expenses increased by 213% in FY 2021, to $307,000 compared to $98,000 in FY 2020, due to an increase in third party computing services and number of software licenses used by the Company in Brazil.

Taxes and licences

Taxes and licence expenses include general taxes, product branding and licence costs.

Q4 2021

Expenses increased by 450% in Q4 2021, to $14,000 compared to a credit of $4,000 in Q4 2020. During Q4 2020, an amount of $15,000 was credited to licence costs for reversal expenses which should have been capitalised in Q1 and Q3 2020.

FY 2021

Expenses increased by 34% in FY 2021, to $33,000 compared to $24,000 in FY 2020.

Share Based and Bonus Payments (Non-Cash Event)

These costs represent the expense associated with stock options granted to employees and directors and non-cash bonuses paid to key management.

Q4 2021

Share Based Payments costs increased by 25% in Q4 2021, to $23,000 compared to $18,000 in Q4 2020, as they represent the expense associated with stock options granted to employees as part of the Company’s long-term incentive programme in Q4 2021. These are measured under the Black-Scholes Model.

FY 2021

Share Based Payments costs increased by 265% in FY 2021, to $1,551,000 compared to $425,000 in FY 2020.

Income tax

Brazilian corporations are subject to income taxes (IRPJ and CSLL) using an ‘Actual Profits’ method (i.e. APM – Lucro Real), which is based on taxable income (i.e. earnings before taxes or EBT), adjusted by certain additions and exclusions as determined by the legislation. The Actual Profit can be calculated annually or quarterly – for the annual calculation, the tax authorities collect anticipations during the year, as the taxpayer is obliged to calculate the income tax monthly.

Subject to certain restrictions (i.e. where gross income does not exceed R$78 million and depending on the activity), Brazilian taxpayers have the option to calculate IRPJ and CSLL using a ‘Assumed Profits’ method (i.e. PPM – Lucro Presumido). Under the PPM, the income is calculated on a quarterly basis on an amount equal to different percentages of gross revenue (i.e. based on the entity’s activities) and adjusted as determined by the prevailing legislation.

The Brazil subsidiaries are currently under ‘Assumed Profits’ method, which is the most efficient method at this time. Under ‘Assumed Profits’ method, it is not possible to utilise prior period losses to reduce income tax. When the Company switches to “Realized Profits” method, these losses can be utilised.

Cultivando Amor

Cultivando Amor is an initiative from Verde, in which there is a partner charity institution for each of the project’s member cities. For each hectare in the region that is cultivated with BAKS® or K Forte®, Verde donates part of the sales’ profits to the partner institution of that city. The initiative has the support of the cities’ Rural Union of Farmers (Sindicato Dos Produtores Rurais).

In 2020, Cultivando Amor’s pilot project was conducted in the city of Patrocínio, where the program’s funds contributed to the Cancer Hospital of Patrocínio, a regional reference in cancer treatment.

In 2021, Verde raised over R$270,000 for charities across 16 cities in Brazil.

Cultivando Amor’s goal for 2022 is to magnify its impacts to 100 cities.

Q4 and FY 2021 Results Conference Call

The Company will host a conference call on Wednesday, April 06, 2022, at 09:00 am Eastern Time, to discuss Q4 and FY 2021 results and provide an update. Subscribe using the link below and receive the conference details by email.

The questions can be submitted in advance through the following link up to 48 hours before the conference call:

The Company’s full year and fourth quarter financial statements and related notes for the period ended December 31, 2021 are available to the public on SEDAR at www.sedar.com and the Company’s website at www.investor.verde.ag/.

About Verde AgriTech

Verde is an agricultural technology company that produces fertilizers. Our purpose is to improve the health of all people and the planet. Rooting our solutions in nature, we make agriculture healthier, more productive, and profitable.

Corporate Presentation

For further information on the Company, please view shareholders’ deck: https://verde.docsend.com/view/vidm2xesz92yhyht

Investors Newsletter

Subscribe to receive the Company’s updates at:

http://cloud.marketing.verde.ag/InvestorsSubscription

The last edition of the newsletter can be accessed at:

Cautionary Language and Forward-Looking Statements

This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of the applicable Canadian securities legislation. The Cautionary Language and Forward-Looking Statements can be accessed at this link.

For additional information please contact:

Cristiano Veloso, President, Chairman & Chief Executive Officer

Tel: +55 (31) 3245 0205; Email: investor@verde.ag

www.investor.verde.ag | www.supergreensand.com | www.verde.ag

[1] Based on $2.607 billion NPV after tax divided by 50,398,619 shares outstanding as of March 21, 2022. Estimated Net Present Value after tax of US$1.99 billion, with 8% discount rate and Internal Rate of Return of 287% (see NI 43-101 Pre-Feasibility Technical Report Cerrado Verde Project, MG, Brazil, page 207). Currency exchange: US$1.00 = C$1.29.

The post Verde’s Q4 sales by volume grow 137% driving 2021 net profit growth to 540% appeared first on Verde AgriTech.

 2022 Guidance

The Company’s target is detailed on a quarterly basis, reflecting the market demand’s seasonality, as follows:

The 2022 guidance is underpinned by the following assumptions:

• Grant of mining concession
• Average Brazilian Real (“R$”) to Canadian dollar exchange rate: C$1.00 = R$4.40
• Average KCl CFR Brazil of US$500, compared to current price of US$760 per tonne (as per the market intelligence firm Acerto Limited weekly price as of December 3, 2021).
• Sales Incoterms: 50% CIF and 50% FOB
• Sales channels: 50% direct sales and 50% indirect sales

“Over the previous years, seeing that we were producing and selling a new product, our guidance was limited to volume and revenue. From 2022 onwards we are pleased to add EBITDA and EPS to Verde’s guidance”, said Cristiano Veloso, Verde’s Founder and CEO.

2023 Guidance

For 2023, Verde’s sales volume target is 1.4 million tonnes. This target represents a potential 100% growth Year-on-Year (“YoY”).

Investors Newsletter

Subscribe to receive the Company’s monthly updates at:

http://cloud.marketing.verde.ag/InvestorsSubscription

The last edition of the newsletter can be accessed at:

About Verde AgriTech

Verde is an agricultural technology company that develops and produces fertilizers. Rooting our solutions in nature, we make agriculture healthier, more productive, and profitable for farmers. We work to improve the health of all people and the planet.

Cautionary Language and Forward-Looking Statements

This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of the applicable Canadian securities legislation. The Cautionary Language and Forward-Looking Statements can be accessed at this link.

For additional information please contact:

Cristiano Veloso, President, Founder & Chief Executive Officer

Tel: +55 (31) 3245 0205; Email: investor@verde.ag

www.investor.verde.ag | www.verde.ag | www.supergreensand.com

The post Verde announces 2022 guidance and two year outlook appeared first on Verde AgriTech.

Belo Horizonte, Brazil. Verde AgriTech Plc (TSX: “NPK”) (OTCQB: “AMHPF”) (“Verde” or the “Company”) is pleased to announce its financial results for the third quarter, ended on September 30, 2021 (“Q3 2021”).

Q3 2021 Financials

• Revenue increased by 169%, to $10,651,000 compared to $3,956,000 in the third quarter of 2020 (“Q3 2020”).
• Revenue in Brazilian Real (“R$”) increased by 206%, to R$45,409,000 compared to R$14,815,000 in Q3 2020.
• Gross margin increased to 77% in Q3 2021, compared to 67% in Q3 2020.
• Operating profit before non-cash events increased by 124%, to $3,665,000 compared to $1,635,000 in Q3 2020.
• Trade and other receivables increased by 141%, to $8,238,000 compared to $3,415,000 in Q3 2020.
• Sales by volume increased by 45%, to 153,674 tonnes sold compared to 105,769 tonnes sold in Q3 2020.
• Net profit increased by 192% in Q3 2021, to $3,183,000, compared to $1,090,000 in Q3 2020.

“Our hard work over the years is yielding consistent growth since production started in 2017. In Q3 2021 the effort was relentless as we sought to meet our heightened target, which was achieved thanks to the high quality and commitment of our team. We will endeavour to maintain an exponential growth expansion for the foreseeable future”, said Cristiano Veloso, Verde’s Founder and CEO.

Subsequent Events

• In October 2021, the Company has secured $3.75 million (R$16 million) in loan agreements to fully cover the capital expenditure for the construction of Plant 2. The first $1.17 million (R$5 million) was released to the Company by Santander. The remaining $2.58 million (R$11 million) was approved in the same month by Santander and Bradesco, to be drawn down according to the project requirements. The total construction cost of Plant 2 is expected to be $5.16 million (R$22 million) with $1.41 million (R$6 million) invested through internally generated cashflow.

“From September onwards, market demand has outstripped Plant 1’s operational capacity. Therefore, after having invested over C$66 million to reach our current rate of production, we are proud to finance the tripling of current capacity based on debt and cashflow alone. Many shareholders have continuously supported Verde over the years – it is therefore gratifying to reciprocate by growing through a shareholder-friendly dilution-free strategy”, declared Mr. Veloso.

2021 Guidance

The Company is pleased to announce another increase in its 2021 guidance. The new target is set at R$110 million of revenue for 2021, which would represent an increase of 120% to the Company’s original guidance of R$50 million. If achieved, this new target will represent a 212% growth Year-on-Year (“YoY”).

Selected Annual Financial Information

The table below summarizes Q3 2021 financial results compared to Q3 2020 and provides information about 2021 and 2020 year-to-date (“YTD”). All amounts in CAD $’000.

⁽¹⁾ – Included in General and Administrative expenses in financial statements.

Q3 2021 compared with Q3 2020

For Q3 2021 the Company generated a net profit of $3,182,000, an increase of $2,093,000 compared to Q3 2020. The earnings per share was $0.06, compared to $0.02 for Q3 2020.

Product Sales

In Q3 2021, the Company sold 153,674 tonnes, an increase of 45% in comparison to Q3 2020. BAKS® accounted for approximately 10% of Verde’s sales in Q3 2021.

Revenue

Revenue from sales for Q3 2021 was $10,651,000 from the sale of 153,674 tonnes of the Product, at $69 per tonne sold. Despite the 14% Brazilian Real devaluation against the Canadian Dollar, revenue per tonne was higher than Q3 2020 ($37 per tonne sold) mainly due to three factors:

1. Product volume sold as CIF (Cost Insurance and Freight) increased from 14% of total sales in Q3 2020 to 50% in Q3 2021.
2. Potassium Chloride CIF (Minas Gerais) price increased from US$290-US$310 per tonne in Q3 2020 to US$515-790 per tonne in Q3 2021 (as reported by Acerto Limited, a market intelligence firm).
3. BAKS has a higher sales price per tonne than the Product, it was launched in Q4 2020 and in Q3 2021 it accounted for 10.5% of the total volume sold.

Production costs

Production costs in R$ include all direct costs from mining, processing, and the addition of the other nutrients such as Sulfur and Boron, the logistics from the mine to the factory and related salaries. Production costs for Q3 2021 were $2,452,000, an increase of $1,136,000 compared to Q3 2020. Cost per tonne for the quarter was $16 compared to $12 for the same period in 2020. This increase was due in large part to higher fuel prices, which increased 80% in Q3 2021 compared to Q3 2020, and due to the production of BAKS, which has a higher cost per tonne because its feedstock includes other nutrients that Verde purchases from third parties.

Sales Expenses

Sales and marketing expenses

Sales and marketing expenses include employees’ salaries, car rentals, travel within Brazil, hotel expenses, customer relationship management (CRM) software licenses, and the promotion of the Product in marketing events. Expenses increased by $483,000 in Q3 2021 compared to Q3 2020 mainly due to a further expansion of Verde’s sales and marketing team, with professional headcount increasing from 32 in Q3 2020 to 57 in Q3 2021. This increase is in line with the Company’s accelerated growth strategy. The Company’s sales and marketing team had 50 employees in Q2 2021.

Fees paid to independent sales agents

As part of Verde’s marketing and sales strategy, the Company pays out commissions to its independent sales agents. Fees paid to sales independent agents increased by $176,000 in Q3 2021 compared to Q3 2020. This was mainly due to an overestimated provision of $80,000 for Q1 and Q2 2020, which left a surplus that was therefore deducted from the Q3 2020 costs. Taking into account the surplus, the expenses increased by $96,000 for Q3 2021, due to increased sales success.

Product delivery freight expenses

Product delivery freight expenses were $2,969,000 higher in Q3 2021 compared to Q3 2020 as the Company has significantly increased the volume sold as CIF (Cost Insurance and Freight), up from 14% of total sales in 2020 to 50% in 2021 and due to higher fuel prices, which increased 80% in Q32021 compared to Q3 2020.

General and Administrative Expenses

General administrative expenses

These costs include general office expenses, rent, bank fees, insurance, foreign exchange variances and remuneration of executive and administrative staff in Brazil. The costs have increased by $51,000 in Q3 2021 compared to Q3 2020 as they include an additional 36 administrative employees, with professional headcount increasing from 20 in Q3 2020 to 56 in Q3 2021 to support the Company’s growth and due to incentive compensation. The Company had 47 administrative employees in Q2 2021.

Legal, professional, consultancy and audit costs

Legal and professional fees include legal, professional, consultancy fees along with accountancy, audit and regulatory costs. Consultancy fees are consultants employed in Brazil, such as accounting services, patent process, lawyer’s fees and regulatory consultants. The costs in Q3 2021 are $26,000 lower than Q3 2020 mainly due to audit cost reduction and Brazilian Real devaluation against Canadian dollar.

IT/Software expenses

IT/Software expenses include software licenses such as Microsoft Office, CRM and enterprise resource planning (ERP). In Q3 2021 expenses were $82,000, an increase of $56,000 on Q3 2020 due to an increase in the number of software licenses used by the Company.

Taxes and licences

Taxes and licence expenses include general taxes, product branding and licence costs. In Q3 2021, expenses were $5,000 compared to $9,000 in Q3 2020.

Share Based and Bonus Payments (Non-Cash Event)

These costs represent the expense associated with stock options granted to employees and directors and non-cash bonuses paid to key management.

Share Based Payments costs in Q3 2021 represent the expense associated with stock options granted to employees as part of the Company’s long-term incentive programme. These are measured under the Black-Scholes Model.

Q3 2021 Results Conference Call

The Company will host a conference call on Wednesday, November 24, 2021 at 09:00 am Eastern Time, to discuss Q3 2021 results and provide an update. Subscribe using the link below and receive the conference details by email.

The questions can be submitted in advance through the following link: https://bit.ly/Q3-2021-QuestionForm

The Company’s first quarter financial statements and related notes for the period September 30, 2021
are available to the public on SEDAR at www.sedar.com and the Company’s website at www.investor.verde.ag/.

Investors Newsletter

Subscribe to receive the Company’s monthly updates at:

http://cloud.marketing.verde.ag/InvestorsSubscription

The most recent edition of the newsletter can be accessed at: https://bit.ly/InvestorNL-October2021

About Verde AgriTech

Verde is an agricultural technology company that develops and produces fertilizers. Rooting our solutions in nature, we make agriculture healthier, more productive, and profitable for farmers. We work to improve the health of all people and the planet.

Cautionary Language and Forward-Looking Statements

This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of the applicable Canadian securities legislation. The Cautionary Language and Forward-Looking Statements can be accessed at this link.

For additional information please contact:

Cristiano Veloso, President & Chief Executive Officer

Tel: +55 (31) 3245 0205; Email: investor@verde.ag

www.investor.verde.ag | www.supergreensand.com | www.verde.ag

The post Verde announces 169% increase in revenue in Q3 2021 and revises upwards its target for the year appeared first on Verde AgriTech.

As disclosed in the press release published on November 16, 2020, the construction of Plant 2 was scheduled to begin in the second half of 2021. Groundbreaking took place in August 2021, and Plant 2 is expected to reach commercial production by Q3 2022.   

Plant 2 will have an operational capacity of 1,200,000 tonnes per year (“tpy”). The new plant will raise Verde’s overall production capacity to 1,800,000 tpy. 

“The Company is sold out until mid-November 2021, with new orders being pushed for delivery thereafter. Plant 2 will ensure a 200% increase in production and will be essential to help meet the market’s growing demand for Verde’s products. We are proud to be able to fund its construction through cash flow and debt, therefore avoiding the issuance of new shares”, declared Cristiano Veloso, Verde’s Founder and CEO. 

Capital Expenditure  

Plant 2 capital expenditure totals 22 million Brazilian Reais (“R$”), with R$6 million to be invested through internally generated cash flow and R$16 million to be debt-financed. The Company is in advanced negotiations with a number of financial institutions and expects the loan agreements will be concluded by Q4 2021.   

2021 Guidance  

Verde is pleased to increase its 2021 revenue target to R$90 million. This represents an 80% increase to its original guidance of R$50 million revenue. If achieved, the new target will represent a 155 growth Year-on-Year (“YoY”).  

“Blitzscaling is never an easy endeavour, but I’m confident we have built the right team to continue succeeding at this challenge. It is still day 1 at Verde”, concluded Mr. Veloso. 

Investors Newsletter    

Subscribe to receive the Company’s monthly updates at:   

http://cloud.marketing.verde.ag/InvestorsSubscription      

The last edition of the newsletter can be accessed at:    

About Verde AgriTech   

Verde is an agricultural technology company that develops and produces fertilizers. Rooting our solutions in nature, we make agriculture healthier, more productive, and profitable for farmers. We work to improve the health of all people and the planet.  

Cautionary Language and Forward-Looking Statements

This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of the applicable Canadian securities legislation. The Cautionary Language and Forward-Looking Statements can be accessed at this link.  

For additional information please contact: 

Cristiano Veloso, President, Founder & Chief Executive Officer 

Tel: +55 (31) 3245 0205; Email: investor@verde.ag 

www.investor.verde.ag | www.verde.ag | www.supergreensand.com 

The post Verde revises upwards its 2021 revenue target, and provides update on sales and Plant 2 construction appeared first on Verde AgriTech.

Q2 2021 Financials  

• Revenue increased by 116%, to $5,376,000 compared to $2,492,000 in the second quarter of 2020 (“Q2 2020”).  
• Revenue in Brazilian Real (“R$”) increased by 159%, to R$23,215,000 compared to R$8,965,000 in Q2 2020. 
• Gross margin increased to 72% in Q2 2021, compared to 62% in Q2 2020. 

• Operating profit before non-cash events increased by 109%, to $1,220,000 compared to $584,000 in Q2 2020. 
• Trade and other receivables increased 259%, to $6,020,000 compared to $1,675,000 in Q2 2020. 
• Sales by volume increased by 35%, to 96,233 tonnes sold compared to 71,183 tonnes sold in Q2 2020. 
• Verde recorded a net profit of $79,000, compared to a net profit of $444,000 in Q2 2020. A $887,000 non-cash charge from Verde’s long-term incentive programme for 58 employees was the main reason for the reduction in net profit for the period. 
• Cash held by the Company increased by 214%, to $1,908,000, compared to $ 607,000 in Q2 2020. 

“We are proud to see that Verde achieved triple-digit growth in revenue for the second quarter, especially in light of the considerable improvement in gross margin. This consistent growth in the first half of the year made it possible for us to, once more, increase our revenue target for 2021”, said Cristiano Veloso, Verde’s Founder.   

2021 Guidance 

 Originally, the Company’s target for 2021 was to achieve R$50 million revenue, as announced in the press release disclosed on November 15, 2020. On May 17, 2021, however, Verde announced a 10% increase in its guidance, aiming for a new a revenue target of R$55 million for 2021.    In light of the results of Q2, the Company is pleased to announce a second 10% increase in its 2021 guidance, now aiming for a total revenue target of R$60.5 million, which if achieved would represent a 72% growth Year-on-Year (“YoY”).    “The pride we have in the Company’s achievements to date have only boosted our efforts to continue the hard work to meet our latest guidance. Beyond the next two quarters, the Verde team is also heavily engaged with the Company’s expansion plans to increase our production capacity for the year of 2022”, completed Mr. Veloso.   

Selected Annual Financial Information 

The table below summarizes Q2 2021 financial results compared to Q2 2020 and provides information about 2021 and 2020 year-to-date (“YTD”). All amounts in CAD $’000. 

1 – One time, non-cash charge from Verde’s long-term incentive programme regarding the vesting of stock options granted to 58 employees.  2 – Included in General and Administrative expenses in the Financial Statements.  3 – For further details please refer to Q2 2021 Management’s Discussion and Analysis. 

Q2 2021 compared with Q2 2020

For Q2 2021 the Company generated a net profit of $79,000, a decrease of $365,000 compared to Q2 2020. The earnings per share was $0.001, compared to $0.009 for Q2 2020. This reduction was due to a $887,000 non-cash charge from a long-term incentive programme regarding the vesting of stock options granted to 58 employees.   

Product Sales

In Q2 2021, the Company sold 96,233 tonnes, an increase of 35% in comparison to Q2 2020. BAKS® accounted for approximately 13% of Verde’s sales in Q2 2021.   

Revenue

Revenue from sales for Q2 2021 was $5,376,000 from the sale of 96,233 tonnes of the Product, at $56 per tonne sold. Despite the 20% Brazilian Real devaluation against the Canadian Dollar, revenue per tonne was higher than Q2 2020 ($35 per tonne sold) mainly due to three factors:  

1. Product volume sold as CIF (Cost Insurance and Freight) increased from 6% of total sales in Q2 2020 to 43% in Q2 2021.  
2. Potassium Chloride CIF (Minas Gerais) price increased from US$287-US$303 per tonne in Q2 2020 to US$395-535 per tonne in Q2 2021 (as per Acerto Limited report).  
3. BAKS® has a higher sales price per tonne than the Product, it was launched on Q4 2020 and in Q2 2021 it has accounted for 13% of the total volume sold. 

Production costs

Production costs include all direct costs from mining, processing, and the addition of the other nutrients such as Sulfur and Boron, logistics from the mine to the factory and supply chain salaries, which are paid in R$. Production costs for Q2 2021 were $1,498,000, an increase of $543,000 compared to Q2 2020. Cost per tonne for the quarter was $16 compared to $13 for the same period in 2020. This increase was due in large part to higher fuel prices, which increased 45% in Q2 2021 compared to Q2 2020, and due to the production of BAKS, which has a higher cost per tonne due to the addition of other nutrients to the Product.    

Sales Expenses  

General and Administrative Expenses

General administrative expenses

These costs include general office expenses, rent, bank fees, insurance, foreign exchange variances and remuneration of the executives and administrative staff in Brazil. The costs have increased by $43,000 in Q2 2021 compared to Q2 2020 as they include an additional 29 administrative employees, with professional headcount increasing from 18 in Q2 2020 to 47 in Q2 2021 to support the Company’s growth and due to incentive compensation. The Company had 26 administrative employees in Q1 2021. 

Legal, professional, consultancy and audit costs 

Legal and professional fees include legal, professional, consultancy fees along with accountancy, audit and regulatory costs. Consultancy fees are consultants employed in Brazil, such as accounting services, patent process, lawyer’s fee and regulatory consultants. The costs in Q2 2021 are $15,000 lower than Q2 2020 mainly due to audit cost reduction and Brazilian Real devaluation against Canadian dollar. 

IT/Software expenses

IT/Software expenses include software licenses such as Microsoft Office, CRM and enterprise resource planning (ERP). In Q2 2021 expenses were $70,000, an increase of $43,000 on Q2 2020 due to an increase in the number of the software licenses used by the Company.    

Taxes and licences

  Taxes and licence expenses include general taxes, product branding and licence costs. In Q2 2021, expenses were $6,000 compared to $4,000 in Q2 2020.    

Share Based Payments (Non-Cash Event)  

The directors have not received any shares in lieu of compensation since Q3 2020.      Share Based Payments costs in Q2 2021 represent the expense associated with stock options granted to employees as part of the Company’s long-term incentive programme. These are measured under the Black-Scholes Model.    

Capital Expenditure   

In Q2 2021, the Company invested $515,000 in infrastructure improvements: the grounds of Plant 1 were paved to provide greater operational efficiency; access routes to the mine pits have been enhanced; project developments for Plant 2 were further advanced. 

Q2 2021 Results Conference Call  

The Company will host a conference call on Wednesday, August 25, 2021 at 11:00 am Eastern Time (4:00 pm Greenwich Mean Time), to discuss Q2 2021 results and provide an update. Subscribe using the link below and receive the conference details by email.       

  The Company’s first quarter financial statements and related notes for the period March 31, 2021  are available to the public on SEDAR at www.sedar.com and the Company’s website at www.investor.verde.ag/.    

Investors Newsletter   

Subscribe to receive the Company’s monthly updates at:   http://cloud.marketing.verde.ag/InvestorsSubscription The last edition of the newsletter can be accessed at: https://bit.ly/InvestorNL-July2021    

About Verde AgriTech

Verde is an agricultural technology company that develops and produces fertilizers. Rooting our solutions in nature, we make agriculture healthier, more productive, and profitable for farmers. We work to improve the health of all people and the planet.   

Cautionary Language and Forward-Looking Statements 

This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of the applicable Canadian securities legislation. The Cautionary Language and Forward-Looking Statements can be accessed at this link.    

For additional information please contact: 

 Cristiano Veloso, President & Chief Executive Officer 

Tel: +55 (31) 3245 0205; Email: investor@verde.ag 

 www.investor.verde.ag | www.supergreensand.com | www.verde.ag  

The post Verde increases revenue by 116% with a gross margin of 72% appeared first on Verde AgriTech.

Belo Horizonte, Brazil. Verde AgriTech Plc (TSX: “NPK”) (OTCQB: “AMHPF”) (“Verde” or the “Company”) is pleased to announce its financial results for the first quarter, ended on March 31, 2021 (“Q1 2021”).

Q1 2021 Financials

• Sales increased by 63% with 16,558 tonnes sold, compared to 10,170 tonnes sold in the first quarter of 2020 (“Q1 2020”).
• The Company recognised revenue of $831,000, an increase of 63% compared to $510,000 in Q1 2020.
• Brazilian Real (“R$”) revenue increased by 113%, to R$3,599,000 compared to R$1,690,000 in Q1 2020.
• Gross margin increased to 41% in Q1 2021, compared to 35% in Q1 2020.
• In line with the Company’s expectation for Brazil’s rainy season typical of the years’ first quarter, Verde recorded a Q1 2021 net loss of $1,008,000, compared to a net loss of $792,000 in Q1 2020.
• Cash held by the Company increased by 150%, to a total of $2,021,000 in Q1 2021, compared to $806,000 in Q1 2020.

“We are excited with another strong first quarter, especially in light of the triple-digit revenue growth in local currency. We are confident 2021 will be another successful year in our fast-growth trajectory”, said Cristiano Veloso, Verde’s Founder.

2021 Guidance

The Company’s target for 2021 was to achieve R$50 million revenue, as announced in the press release disclosed on November 15, 2020. Verde is pleased to announce a 10% increase in its guidance, totalling a revenue target of R$55 million for 2021, which will represent a 56% growth YoY.

“If we continue to see strong sales in the following months above initial expectations, it is natural that the yearly guidance may be further increased over the next quarterly results”, completed Mr. Veloso.

Selected Annual Financial Information

The following table provides information about three months ended March 31, 2021 as compared to the three months ended March 31, 2020. All amounts in CAD $’000.

* – Included in General and Administrative expenses in financial statements.

** For further details please refer to Q1 2021 Management’s Discussion and Analysis.

Q1 2021 compared with Q1 2020

For Q1 2021 the Company generated a net loss of $1,008,000, an increase of $216,000 compared to Q1 2020. The loss per share was $0.020, compared to $0.017 for Q1 2020. In line with Brazil’s rainy season typical of the years’ first quarter, sales are lower for Q1 and in 2021 Verde is making more investments than in 2020 in order to continue growing at an accelerated pace while upholding customer satisfaction.

Product Sales

In Q1 2021, the Group sold 16,558 tonnes, an increase of 63% in comparison to Q1 2020. BAKS® accounts for approximately 3.9% of Verde’s sales in Q1 2021, and accounts for 14% of Verde’s total sales orders for 2021 up to March 31, 2021.

Revenue

Revenue from sales for Q1 2021 was $831,000 from the sale of 16,558 tonnes of the Product, at $50 per tonne sold. Average revenue per tonne was consistent with Q1 2020 ($50 per tonne sold). The Product price is based on the current US$ Potassium Chloride price.

Production costs

Production costs include all direct costs from mining, processing, logistics from the mine to the factory and supply chain salaries, which are paid in R$. Production costs for Q1 2021 were $490,000, an increase of $158,000 compared to Q1 2020. Cost per tonne for the quarter was $30 compared to $32 for the same period in 2020. The reduction of 6% was due to the devaluation of the Brazilian Real against the Canadian Dollar in Q1 2021 as compared to Q1 2020.

Sales Expenses

Sales and marketing expenses

Sales and marketing expenses include sales and marketing salaries, the promotion of the Product such as fees paid to sales agents, marketing events, car rentals, travel within Brazil, hotel expenses and Customer Relationship Management (CRM) Software licenses. Expenses increased by $37,000 in Q1 2021 compared to Q1 2020 mainly due to a further expansion of Verde’s sales and marketing team, with professional headcount increased from 29 in Q1 2020 to 43 in Q1 2021. This growth is in line with the Company’s accelerated growth strategy.

Product delivery freight expenses

Product delivery freight expenses were $72,000 higher in Q1 2021 compared to Q1 2020 as the Company has significantly increased the volume sold as CIF (Cost Insurance and Freight), from 3% of total sales in 2020 to 34% in 2021.

General and Administrative Expenses

General administrative expenses

These costs include general office expenses, rent, bank fees, insurance, foreign exchange variances and remuneration of the executives and administrative staff in Brazil. The costs have increased by $259,000 in Q1 2021 compared to Q1 2020 as they include an additional 12 administrative employees, with professional headcount increasing from 14 in Q1 2020 to 26 in Q1 2021 to support the Company’s growth and due to incentive compensation.

Legal, professional, consultancy and audit costs

Legal and professional fees include legal, professional, consultancy fees along with accountancy, audit and regulatory costs. Consultancy fees are consultants employed in Brazil, such as accounting services, patent process, lawyer’s fee and regulatory consultants. The costs in Q1 2021 are comparable with Q1 2020.

IT/Software expenses

IT/Software expenses include software licenses such as Microsoft Office and enterprise resource planning (ERP). In Q1 2021 expenses were $52,000, an increase of $30,000 on Q1 2020 due to increased third party computing services provided in Brazil.

Taxes and licences

Taxes and licence expenses include general taxes, product branding and licence costs. In Q1 2021, expenses were $8,000 compared to $15,000 in Q1 2020.

Share Based Payments (Non-Cash Event)

These costs represent the expense associated with stock options granted to employees and directors.

In Q1 2021 expenses were $18,000, compared to $40,000 in Q1 2020. The decrease is a result of less options vesting in the period.

Q1 2021 Results Conference Call

The Company will host a conference call on Thursday, May 20, 2021 at 11:00 am Eastern Time (4:00 pm Greenwich Mean Time), to discuss Q1 2021 results and provide an update. Subscribe using the link below and receive the conference details by email.

The Company’s first quarter financial statements and related notes for the period March 31, 2021
are available to the public on SEDAR at www.sedar.com and the Company’s website at www.investor.verde.ag/.

Technology Launch:

The Company will introduce a new technology to the market on June 02, 2021 and host a Q&A session on June 09, 2021 in order to provide further details about it. Subscribe using the link below and receive the conference details by email.

Investors Newsletter

Subscribe to receive the Company’s monthly updates at:

http://cloud.marketing.verde.ag/InvestorsSubscription
The last edition of the newsletter can be accessed at: http://bit.ly/InvestorsNL-April2021

About Verde AgriTech

Verde AgriTech promotes sustainable and profitable agriculture through the development of its Cerrado Verde Project. Cerrado Verde, located in the heart of Brazil’s largest agricultural market, is the source of a potassium-rich deposit from which the Company intends to produce solutions for crop nutrition, crop protection, soil improvement and increased sustainability.

Cautionary Language and Forward-Looking Statements

This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of the applicable Canadian securities legislation. The Cautionary Language and Forward-Looking Statements can be accessed at this link.

For additional information please contact:

Cristiano Veloso, President & Chief Executive Officer

Tel: +55 (31) 3245 0205; Email: cv@verde.ag

www.investor.verde.ag | www.supergreensand.com | www.verde.ag

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