Italy-based Bio-on’s revenues took a nosedive in the first half of the year, reaching €917,000, compared to €6,123m a year earlier.
The beleaguered manufacturer of PHA bioplastic posted a negative earnings (EBITDA) of €4.9m, double the -€2.3m achieved in June 2018. The final result amounted to a loss of €10m, against a loss of €2.9m at 30 June 2018.
The bio-technology group's net assets stood at €47.5m at the end of June, €10.3m under the €57.8m reported at the end of December 2018.
The total net financial position on 30 June was negative €41m, against a negative net financial position at 31 Dec 2018 of €22.5m. During this period, construction of the Castel San Pietro production plant was completed, adding an extra cost of €18m, the company said.
After the end of the half-year, on 25 September 2019, Bio-on entered into an exclusive license agreement for the production and commercial exploitation rights of its PHA technology in the beverage sector, for a period of 30 years, against a consideration of €10m, which will be paid in two tranches. The contract also provides for a running royalty of 2% of the net sales of the products made with Bio-on’s technology that are sold worldwide.
According to the company, talks with other customers have been stalled by the negative impact of US-based Quintessential Capital Management’s (QCM) attack on its integrity and on the quality of its technology.
Gabriel Grego of QCM noted that Bio-On's announcement of its catastrophic fall in sales and profits for the first-half of 2019 was ‘not surprising to us and it further validates the in-depth research we did.’
Bio-on today released a statement in which it emphasised that the consolidated half-year report mentioned that the founding shareholders had signed two irrevocable shareholders' loan agreements for a total of €10m for a period of 12 months, signalling their further willingness to support the company.
Bio-on moreover pointed out that half-year financial report had been drawn up in conformity with the principles applied to the annual consolidated financial report for the year ended December 31, 2018, which was found to be correct and truthful according to the ‘reasoned opinion’ of two prominent independent experts.
Bio-on is listed in the AIM segment on the Italian Stock Exchange. The allegations have hit hard: the company’s share prices have fallen steeply since the publication of the QCM report and are now down 79% year to date. Bio-on closed yesterday at a record low of just under €10.
Despite the ‘slowdown in the business’, as Bio-on describes it, the company expects to close 2019 with at least €20m from external customers, compared to previous guidance for overall revenue of 78m. The company also expects earnings to reach of €8m, down from 11.8m reported last year.
The Bologna-based company has started a legal battle with QCM,seeking legal remedy for the injury to its reputation brought about by the “false and misleading” news spread by the US asset management firm.
The New York-based company published a damning report on19 July, stating that Bio-On was “a house of cards, a scheme conceived by management to enrich themselves on at the expense of shareholders”.