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ArborGen Holdings Limited (NZX: ARB) Market Update

Wednesday 13th January 2021

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To keep the market updated in the current environment, ArborGen Holdings announced today that confirmed sales orders in its largest market, the United States, currently represent around 92% of forecast US seedling revenues for the year. While it is still part way through the US lifting season where sales are typically finalised in February/March, progress on remaining sales orders is slower this year compared to prior years. This is largely related to Covid-19 affecting calendar year 2020 harvest levels, and also delayed site preparation and planting activities brought about by restrictions on migrant labour into the US from Central America. Added to this, a number of hurricanes during the period (particularly Hurricane Laura) affected site preparation progress in certain regions.

In our Interim Results release in November 2020, we stated that we expected “US-GAAP underlying earnings [which is the equivalent of US-GAAP EBITDA adjusted for abnormal items, and before NZ public company costs] for fiscal year ending March 2021, to be higher than the $9.3 million reported for the prior March 2020 fiscal year, subject to any uncontrollable factors including any impact from Covid-19.”

Updating the Company’s earnings guidance today, ArborGen’s Chairman, David Knott said “This has been a difficult year for the entire industry due to the disruptions caused by Covid-19, and it is clear that things are still evolving on a daily basis in the US, particularly in relation to industry access to migrant labour for planting activities. The Company is now expecting to achieve ~95% of the previously forecast US$40 million sales revenue in the US. As a result, US GAAP EBITDA (inclusive of Covid-19 related government grant income of US$2.6 million) is currently forecast to be in the US$10 million - $11 million range for our fiscal year ending March 2021.”

See the link below for more details:

ArborGen Holdings’ Market Update

Source: ArborGen Holdings Limited

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