RLF AgTech posts record FY2022, as demand continues growing for its crop nutrition technology
RLF AgTech closed out FY2022 with $2.2 million in forward orders for FY2023, indicating its growth is picking up pace.
Advanced crop nutrition technology developer RLF AgTech (ASX: RLF) has posted a record FY2022 with cash operating receipts of $10 million – driven by a strong performance in the June quarter (Q4 FY2022).
The $10 million in cash receipts was up 23% on FY2021, and included the $3.4 million received in Q4 FY2022.
RLF AgTech closed out the period with $2.2 million-worth of forward orders for FY2023, as it fast-tracks its expansion throughout Asia.
According to the company, its “excellent” financial results have been largely driven through organic growth and strong demand within key markets for its products.
RLF AgTech chief executive officer and managing director Ken Hancock said the company had seen increasing demand for its advanced crop nutrition products over the last 12 months.
“ give farmers the ability to reduce their use of traditional fertilisers, increase typical yields by 10-30%, and grow healthier, more nutritious food.”
“Our novel technology is supporting increased income for our valued growers, while making a bold contribution to the efficiency and sustainability of global agriculture too.”
Expansion plans
RLF AgTech debuted on the ASX in April after raising $8.5 million in its IPO.
Mr Hancock noted the company’s cash balance was $8 million at the end of June – meaning most of the funds raised remain available to finance RLF AgTech’s growth.
“These funds will be used to accelerate further expansion of our traditional sales networks; to continue our work with large-scale strategic conglomerates; and to increase our presence in new markets.”
As part of its strategy, RLF AgTech has increased the size of its internal sales team by more than 40% and is actively recruiting for more members.
The company anticipates it will start realising the results from the larger team in FY2023.
Forward orders
As it advances into FY2023, RLF AgTech has experienced an increase in forward orders from key customers looking to secure products and long-term supply arrangements.
Forward orders include a minimum $1 million order from China’s Hebei Veyong Bio-Chemical, which has been operating for more than 60 years in 80 countries worldwide.
Two other long-standing customers with forward orders comprise Sichuan Davofeng, which increased its purchase on last year by 100%, while Hainan Kangxifeng boosted its FY2023 order by 60% on previous years.
RLF AgTech said the larger forward orders demonstrated its customers’ confidence in its products to increase yield and provide a return on investment.
Product trials and new markets
Recently, a trial in Tunisia was completed where RLF AgTech’s products enhanced yields by up to 38% for a farmer and provided a 275 X return on investment.
RLF AgTech has now partnered with a French-based conglomerate to undertake trials on the Ivory Coast in West Africa.
Meanwhile, RLF AgTech’s plant proton delivery (PPD) technology foliar formulation Broadacre Plus Max was exported to a distributor in Turkey.
Turkey is the world’s 10th largest wheat producer and largest flour exporter globally.
RLF AgTech’s products are now available in Turkey for growers to purchase.
Over in Cambodia, RLF AgTech collared an agreement with a respected local distributor.
The first phase of the sales commitment for the deal is worth about $2.4 million.
Meanwhile, a stage one trial with one of China’s largest global integrated cotton operators produced successful results, with work now moving on to stage two.
RLF Carbon
Part of RLF AgTech’s strategy is to help the global agriculture sector reach net zero.
During Q4 FY2022, representatives from both the company and its RLF Carbon division met with senior figures connected to the US Department of Agriculture and large entities seeking to commercialise soil carbon initiatives.
It was expressed to RLF AgTech how “extremely active” the entities were looking to invest funds into worthwhile projects.
Also during the period, RLF AgTech filed a patent for the method it has developed for accumulating carbon in soils.
Market outlook
Globally, the crop nutrient market is worth about $300 billion a year and forecast to continue rising amid numerous events, including extreme weather and war, that have caused food security to “severely deteriorate”.
In 2019, it was estimated 193 million people were facing acute food security. Since then, the food price index has increased more than 39%.
Underpinning this is rapid inflationary pressures of key inputs for traditional agriculture including fertilisers and energy.
“We are seeing a unique confluence of new dynamic factors in the global agricultural supply chain, such as record fertiliser prices, escalating crop prices, increased energy costs and an awakening to the need for greater food security measures to address the emerging global food crisis,” Mr Hancock said.
“Combined with the appearance of more extreme weather events and changing climatic conditions, this has led to an exceptional increase in interest for RLF products,” he added.