Carbios (PA:ALCRB) has reported H116 results showing solid progress on scaling up and industrialisation, with good cash management. As expected, losses continue to increase during this process. Although we expect this pattern to continue to the end of the Thanaplast project in mid-2017, we believe that, with €7m net cash at 30 June, Carbios is sufficiently funded until the project’s completion. We have updated our forecasts and our valuation range is unchanged at €23-37 per share.
Solid results; we update our forecasts
Carbios reported H1 revenues of €556k, an operating loss of €2.4m and net loss of €1.5m, all of which is a better run rate than our forecast for the full year. We had forecast a 2016 operating loss of €5.6m and a net loss of €4.2m, as the company continues to scale up. As previously reported, Carbios formed a joint venture (JV) with Limagrain and Bpifrance in June. We have now updated our forecasts to reflect the interim results and the impact of the JV. With €8m upfront non-cash payment for the licensing agreement accounted as revenues (under French accounting standards as advised by management), our FY16 net income forecast increases to €4.7m (from a loss of €4.2m). However, our net cash outflow increases to €5.4m (from €4.7m), leaving an estimated €3.5m net cash at the end of 2016 post the expected €1.5m cash injection into the JV.
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