Ceres discusses progress with sorghum hybrids in quarterly report

By Erin Voegele | January 19, 2015

Ceres Inc. has released financial results for the first quarter of fiscal year 2015, reporting progress with its breeding and genetic technologies, including sorghum seed and biotech traits.

During an investor call, Richard Hamilton, president and CEO of Ceres, noted plantings of the company’s sorghum hybrids for the 2014’-15 season in Brazil is largely complete, with more than 4,000 hectares (9884.22 acres) planted. Last year, approximately 1,000 hectares of Ceres’ sorghum hybrids were planted in Brazil. Hamilton attributed the increase primarily to increased demand for high-biomass sorghum for power generation. “This is a reflection, in part, of the current macroeconomic environment in Brazil, where electricity prices are at historical highs relative to ethanol prices,” he said. According to Hamilton, Ceres is working with more than 50 customers this season, including ethanol mills and others that are responsible for more than 30 percent of the sugarcane crushed in Brazil.

While Ceres originally forecasted it would plant 5,000 hectares of its high-biomass sorghum in Brazil this season, Hamilton said the weather caused some delays at the beginning of the season, with resulted in less time to plant. The lower planted area resulted from the company’s decision not to plant outside its recommended timeframe. Although weather caused a delay in planting, growing conditions have been generally been favorable across most regions to date, including adequate rainfall.

In a statement announcing its third quarter results, Ceres announced it has received a permit to evaluate its biotech traits in sorghum from the National Technical Commission of Biosafety, the Brazilian government’s commission that regulates biotechnology crop traits. Field evaluations of those traits are planned for later this year.

During the call, Hamilton also addressed the company’s sales and marketing activities with regard to its forage sorghum hybrids in the U.S., noting Ceres is advancing its biotech traits in forage sorghum. He also indicated the company is evaluating its biotech traits and technologies in other crops, including corn and sugarcane.  

Ceres reported total revenues of $400,000 for the quarter ended Nov. 30, compared to $800,000 during the same period of last year. Collaborative research and government grant revenue decreased by $300,000 primarily due to the competition of work scheduled under various grants and collaborations. According to Ceres, it expects to recognize the majority of product revenues for the 2014-’15 season during the fiscal third and fourth quarters, when harvests are complete.

Overall, Ceres reported a net loss of $6 million, or 12 cents per share. During the same period of last year, the company reported a net loss of $8.2 million, or 33 cents per share.