Commercial business

Overall sales in 2023 were $11.2 million, a decrease of 5% compared with 2022 ($11.8 million). In the first four months of 2024, revenue was approximately $4.3m, up 72% versus the same period in 2023 (2023: $2.5m). Sales by region are listed in the table below:

Sales of core Harpinαβ products were down 19% in 2023, mainly driven by poor market conditions in the US market. The global compound annual growth rate (CAGR) of Harpinαβ between 2020 and 2023 is 20%, which is a good indicator of the continued growth of Harpinαβ.

Sales in North America decreased 45% in 2023 to $2.6m, due to delays in distributor purchases of Harpinαβ to manage their inventory levels to reduce the impact of price volatility in an uncertain market and the affects of interest rate levels. Harpinαβ sales decreased 58% to $2.0m. Obrona was launched in June of 2023 through our distribution partner, Wilbur-Ellis, as a foliar fungicide for fruits, nuts, vegetables, and row crops which generated $0.6 million.

Employ® (Harpinαβ) sales in the USA specialty crop market to growers continued in 2023. Wilbur-Ellis has over 600 field employees who are focused on selling differentiated biostimulant product offerings into the specialty crop markets. Employ® helps the plant improve its own natural ability to defend against abiotic and biotic stress factors, including nematodes, which improves overall crop yield.

The Brazil business increased 42% in 2023, to $3.2m. Sales of H2Copla (Harpinαβ) for use in sugarcane increased 45% to $2.1m due to continued adoption by sugar mills and processors. Sales of Saori® in soybeans via our partnership with Nutrien, as a seed treatment for control of Asian soybean rust and other diseases increased 36% to $1.1m due to continued adoption by soybean farmers. Saori is the Group’s first product from its PREtec platform to be commercialised and is the first PREtec peptide approved in Brazil.

PREtec peptides represent a novel class of technology which stimulates the plant to defend itself. Nutrien has a goal to build a differentiated biological portfolio and the addition of Saori™ is a major step in that direction. Derived from natural proteins, PREtec is an environmentally friendly approach to protecting crops and is compatible with mainstream agricultural practices. Brazil is the world’s leading soybean producer with more than 42 million hectares (104 million acres) planted in the 2022/23 season. Asian soybean rust, caused by the fungus Phakopsora pachyrhizi, is a devastating disease which can lead to crop yield loss of up to 90%. Brazilian soybean farmers spent $2.85 billion on disease control in the 2019/20 season.

Prospects for 2024 are very positive with the launch of the Company's second PREtec peptide, Teikko in H2 2024, continued growth of Saori, and continued adoption of Harpinαβ in sugar cane and soybeans.

2023 sales in the EMEAA region increased 41% to $1.9m due to the launch of PREzym for use in fruit, vegetable and cereals crop production in Portugal and Spain and first sales of Innocul8 into the potato market and other crops in the UK. PREzym and Innocul8 generated $0.1 million and $0.2m of sales in 2023, respectively. Sales of Harpinαβ increased 16% to $1.5m due to further adoption of the technology in Southern Europe and larger consumption of inventories in the channel in Southern Africa driven by a favourable rainy season and "boots on the ground" support from the PHC technical team.

Plant Health Care Mexico has a broad biological product line for farmers in Mexico including third-party products. Revenue from the Mexican business increased 4% in 2023 to $3.5m. This was primarily due to increased sales into the specialty crop market and continued expansion into the agave and avocado markets.

Revenue in Mexico includes sales of Harpinαβ and third-party products. The gross margin in Mexico for Harpinαβ and third-party products are 68%+ and 39%+, respectively. Sales of Harpinαβ increased by 55% in 2023 from 2022.

With the recent registration approval of PHC279 for disease control and PHC949 for nematode control we expect a significant shift in revenue to the proprietary products resulting in greater revenue and higher margins.