ArborGen Holdings Limited Analysis

Overview

The shares were listed in March 2001 as part of a recapitalisation of Fletcher Challenge Forests, and to acquire certain assets from Fletcher Challenge Energy. These included 594,000 ordinary shares in NASDAQ listed Capstone Turbine Corporation and the Challenge retail service station network in NZ. All of these interests were later sold. Remaining assets were acquired from Fletcher Challenge Forests following its recapitalisation. These included a 50% interest in FTSA, an Argentinean joint venture and interests in established biotechnology businesses - ArborGen, Trees & Technology and listed Genesis Research & Development. The company also held a 19.9% stake in Fletcher Challenge Forests.

In March 2004 RBC and Carter Holt Harvey agreed to merge their forestry biotechnology and propagation operations into a new venture - Horizon2. In June 2004 it acquired 50.01% of listed wood products company Tenon.

Performance

The following information was extracted from ArborGen Holdings Limited's half year results, released 26 November 2025

ArborGen Holdings Interim Results to 30 September 2025

1H26 SUMMARY

• Record sales volume and revenue, driven by continued growth momentum in Brazil

• Ongoing headwinds in US South; focus on customer partnerships and advancing the adoption of value-added products ahead of key selling period in 2H26. Benefits of advanced genetics products being recognised by customers and reinforced in market data.

• Brazil market remains strong, with growing demand for both pine and eucalyptus; continuing strategic shift towards higher value protected clones.

The company has reported record half year sales volumes and revenue, driven predominantly by continued momentum in the Brazil market with the majority of US sales to be recognised in the second half of the year.

1H26 Financial Performance

Group sales revenue of $14.2m was a record half year result, increasing 11% on the prior comparative period (pcp 1H25). As mentioned above, sales are predominantly from Brazil with the majority of US sales to be recognised in the second half of the year.

The Brazil business has continued its positive trajectory, reporting record revenue and earnings. Revenue was up 16% on pcp, driven by higher volumes along with an uplift in average selling price. Cost of sales increased in line with the higher volumes and reflects sales mix, with an increased number of seedlings purchased from partners to meet customer demand.

Group adjusted US GAAP EBITDA1 of $(2.1)m was a 22% improvement on pcp (1H25: $(2.7)m).

Net loss after tax improved by $1.5m to $(0.6)m (1H25: $(2.1)m).

Cash was $3.6m as at 30 September 2025, with net debt of $30.4m compared to $20.9m as at 31 March 2025 (1H25: $19.9m), with the six month increase mainly due to timing of working capital requirements and strategic capex projects. Primary investments include the continued expansion of ArborGen’s containerised seedling offer, inventory build in the US, network upgrades and new systems.