Libourne – 15 September 2016 – Fermentalg, an industrial biotechnology company that specializes in the production of oils and proteins derived from microalgae, has published its results for the first half of 2016. Fermentalg's Board of Directors, which met on 13 September 2016, has approved the FINANCIAL statements as at 30 June 2016. A limited review was carried out by the company's statutory auditors, and the half-yearly financial report will be available to the public no later than 30 September 2016.
Andrew Echatti, Chief Executive Officer, said: "The first half of 2016 marks an important stage in Fermentalg's development. The industrialization of our flagship product, DHA, was successfully launched in record time, and is clear proof of our ability as a company to rapidly goûto-market with a major new innovation. We have also prepared for the future, with the implementation of our roadmap for the 4 other programmes linked to our portfolio of products. All of this work has been carried out whilst respecting a strict policy of cost control and in close collaboration with the Board of Directors chaired by Philippe Lavielle."
Major headway for Fermentalg's 1st product: DHA
The strategic plan set in place last March defined the roadmap for the first 5 products to be developed by Fermentalg, with priority given to the commercialization of DHA before the end of the year.
DHA is a highly sought-after essential fatty acid (Omega 3) known for its role in the prevention of numerous illnesses. It is recognized for its beneficial effects on the brain (tissue, healthy development and increase in intellectual capacity) and the heart (reduction in triglycerides, cholesterol and the risk of cardiovascular disease).
Between March and September 2016, several key milestones were achieved:
- the signing of an industrial agreement for the large-scale production of DHA with ARD, a company specializing in bio-refining, industrial biotechnologies and bio-based chemistry;
- the completion of the DHA process book which is the last stage in pre-industrialization at the company's scientific facilities in Libourne and opens the way for large-scale production;
- the negotiations currently underway for a refining and logistics services contract with an expert from the edible oils industry which is expected to be finalized during the third quarter of 2016.
As a result, Fermentalg should be able to begin the production and commercialization of DHA as of the second half of 2016, once the test and scale-up phases have been completed (production using fermenters with a capacity of 150 m3) by its partner, ARD. Fermentalg's industrial investments for the first half of 2016 are estimated at €2 million (including materials and labor).
Definition of a roadmap for the portfolio of products
Alongside DHA, which is currently its most advanced product, Fermentalg has confirmed its calendar for the development of 4 additional products between now and 2020 (DHA+, BM Bastille, Phycocyanin and Astaxanthin).
End to construction for the IDU scheduled for the third quarter of 2016
In line with the industrial plan presented at the start of the year, Fermentalg intends to produce BM Bastille and Phycocyanin at its Industrial Development Unit (IDU) in Libourne (Gironde). The commissioning of the unit, which represents an estimated investment in the process of €23 million, is still scheduled for 2018.
The delivery of the building (excluding equipment) is expected at the end of the third quarter of 2016 and has so far represented an investment of €6.2 million.
Strict financial management and cash assets that are consistent with the needs of the plan
The strict financial management that has gone hand-in-hand with the implementation of this roadmap has enabled Fermentalg to maintain an adequate level of cash flow.
The company has notably reduced the budget allocated to research and development (€1.2 million for the first half of 2016 as against a figure of €1.7 million for the same period in 2015) given the maturity of its different programs, whilst upping its administrative and commercial expenditure (€1.9 million compared with €1.8 million) in order to strengthen its structure and prepare for the industrial and commercial deployment of its products. Since the end of its financial year, the company has recruited a full-time HR Director (1 July 2016) and Industrial Director (1 August 2016).
Fermentalg's current operating income amounted to -€2.5 million for the first half of 2016 (vs. -€2.8 million for the first half of 2015). Excluding other income and expenses, net income amounted to -€2.6 million which is in line with the figure reported for the first six months of 2015.
Aside from the operating loss reported, Fermentalg's cash assets were also impacted by the investment for its IDU booked over the period (€3.0 million). At 30 June 2016, Fermentalg reported a gross cash position of €22.3 million (€28.5 million on 31 December 2015), a net cash position of €19.3 million (€25.6 million) and €41.7 million in equity (€44.4 million).
Fermentalg also reinforced its governance with the co-option of Philippe Lavielle as an independent director in May 2016 and his appointment as Chairman of the Board of Directors in September 2016.
An expert in the management of innovative companies primarily specializing in biotechnologies, Philippe Lavielle has lived and worked in San Francisco for more than 10 years. He also spent more than 20 years with Genencor, one of the leading architects in industrial enzymes acquired by DuPont, where he worked as Vice President and BU Manager before being named Executive Vice President in charge of Business Development.
Based in Libourne (Gironde), Fermentalg is an industrial biotechnology company and a global leader in the production of oils and proteins derived from the fermentation of microalgae. Its primary markets are the human nutrition and animal feed sectors and the green chemistry industry. Fermentalg shares are listed on Euronext in Paris (FR0011271600 - FALG). For more information, visit the Fermentalg website at: www.fermentalg.com.
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Comprehensive income statement
|Other income from operations||466||1,185||705|
|Research and Development expenses||-1,196||-3,096||-1,698|
|Administrative and sales expenses||-1,949||-4,236||-1,758|
|Other operating income and expenses||0||0||0|
|Operating income before share-based payments||-2,507||-5,668||-2,751|
|Payroll expenses linked to share-based payments||-8||-117||-38|
|Other non-current operating income and expenses||-284||-50||-50|
|Operating income after share-based payments||-2,799||-5,836||-2,839|
|Income from cash and cash equivalents||209||581||312|
|Cost of gross financial debt||-32||-56||-27|
|Cost of net financial debt||177||525||285|
|Other financial income and expenses||-2||16||5|
|Net tax expense||0||0||0|
|Consolidated net income||-2,624||-5,295||-2,549|
|Consolidated net income (Group share)||-2,624||-5,288||-2,551|
|Other consolidated income||0||0||0|
|Global consolidated net income||-2,624||-5,295||-2,549|
|Global consolidated net income (Group share)||-2,624||-5,288||-2,550|
|Consolidated net earnings per share (in euros)||-0.22||-0.44||-0.21|
|Consolidated diluted net earnings per share (in euros)||-0.22||-0.43||-0.21|
|Non-current financial assets||132||351||342|
|Deferred tax assets||3,302||3,302||3,303|
|TOTAL NON-CURRENT ASSETS||23,244||20,349||16,685|
|Corporate income tax receivables||0||15||19|
|Other non-financial current assets||0||0||0|
|Cash and cash equivalents||22,273||28,506||32,521|
|TOTAL CURRENT ASSETS||25,952||33,006||35,526|
|Reserves and retained earnings||-6,449||-7,466||-7,552|
|Global net income||-2,623||-5,287||-2,550|
|Shareholders' equity (Group share)||41,701||44,362||47,013|
|TOTAL SHAREHOLDERS' EQUITY||41,718||44,380||46,989|
|Provisions for non-current risks||355||300||350|
|Other non-current liabilities||0||0||0|
|Deferred tax liabilities||0||0||0|
|TOTAL NON-CURRENT LIABILITIES||3,353||3,258||2,461|
|Other financial debt||0||0||0|
|Provisions for current risks||0||0||0|
|Corporate income tax liabilities||0||0||0|
|Other current liabilities||2,523||2,936||1,089|
|TOTAL CURRENT LIABILITIES||4,125||5,717||2,761|
cash flow statement
|Global net income||-2,624||-5,295||-2,549|
|Depreciation, amortization and provisions (excluding provisions against current assets)||591||992||572|
|Expenses on share-based payments||2||117||38|
|Other computed expenses||0||0||0|
|Change in deferred tax||0||0||0|
|Share in income of companies accounted for by the equity method||0||0||0|
|Gains and losses on disposals||169||0||0|
|Share in subsidies||0||0||0|
|Cost of gross financial debt||31||56||27|
|Cash flow before cost of financial debt, net of tax||-1,831||-4,130||-1,912|
|Change in consumables||-61||12||-6|
|Change in client receivables||461||-486||29|
|Change in supplier payables||-197||1,078||829|
|Change in other current assets and liabilities (a)||8||-279||-980|
|Change in working capital requirement linked to operations||226||325||-128|
|Net cash flow linked to operations||-1,605||-3,805||-2,040|
|Production of fixed assets (capitalized R&D)||-867||-2,039||-1,029|
|Acquisitions of other tangible and intangible assets||-3,047||-8,407||-4,908|
|Change in fixed asset liabilities||-114||-264||-448|
|Acquisitions of financial fixed assets||0||-1||0|
|Disposals of other tangible and intangible assets||0||5||0|
|Disposals of financial assets||50||4||6|
|Cash linked to the acquisition and disposal of subsidiaries||0||0||0|
|Net cash flow linked to investments||-3,679||-9,963||-6,003|
|Capital increase linked to parent company||0||727||727|
|Capital increase reserved for employees||0||49||-17|
|Acquisitions and disposals of own shares||-49||-8||0|
|New borrowings and other financial debt||0||889||0|
|Repayments of borrowings and other financial debt||0||0||0|
|Change in current accounts||0||-54||1|
|Interest on borrowings and financial debt||0||0||-1|
|Net cash flow linked to financing||-49||1,603||710|
|Change in cash||-5,333||-12,165||-7,333|
|Opening cash (1)||27,607||39,772||39,772|
|Closing cash (1)||22,274||27,607||32,439|
|(a) o/w change in research tax credit:||242||-1,347||-737|
(1) Available cash less bank overdrafts.
 Operating income before share-based payments
 Co-option ratified by the General Meeting of Shareholders of 28 June 2016