Roots’ strong quarter underpinned by expansion of its farming technology in global markets
Food & Agriculture
Food & Agriculture
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Roots recorded another strong quarter as the company’s technology is gradually being recognised in global markets such as the Middle East and Europe.
Roots Sustainable Agricultural Tech (ASX:ROO) continues to make strong progress during the quarter, consolidating its footprints in key markets.
The strong quarter means that for the full year of FY22, Roots delivered aggregate customer orders of $451k, up 132% on the pcp.
The company has been making rapid progress through international expansion, the strengthening of its intellectual property suite, as well as repeat orders coming from major customers.
One of those repeat orders came from United Arab Emirate (UAE)’s Elite Agro for a $160k purchase of Root’s HEP (Heat Exchange Probe) technology.
It was the second order from EliteAgro, increasing Root’s same-customer revenue to $300k during FY22.
EliteAgro is an established multi-channel agriculture business headquartered in the UAE, which serves a diversified client base across the Middle East and North Africa region, the EU, and other markets.
The company will be using the HEP technology to facilitate an expanded root-zone cooling solution for its commercial agriculture operations including the Coffee House Murmum project.
The Coffee House Murmum project comprises more than 9,000 coffee plants that need to be maintained in hot weather conditions outside of Dubai, and was established as a major coffee production hub to service the UAE and adjacent markets.
“Roots has continued to make very pleasing progress during the quarter, highlighted by a number of agreements, business development and marketing initiatives and purchase orders which will lay a strong foundation for FY23,” commented Roots CEO, Boaz Wachtel.
Another international expansion made during the quarter was the distribution agreement with Oman-based Unicorn-Farm Tech, the agricultural division of Unicorn International LLC.
Unicorn is an independent organisation of engineers, consultants and technical specialists with domain expertise in power, data centres, industrial services, water works and renewables.
Under the two-year deal, both Roots and Unicorn will work together to market, sell, install and service Roots’ proprietary technology systems in Oman.
Over in Europe, Roots secured a binding and exclusive strategic dealership agreement with ES Equipments Scientifiques France, unlocking more opportunities in the country.
Both Roots and ES France are currently working to submit the HEP system for recognition by French and EU regulators in order to receive formal qualification as ‘Energy Saving Agricultural Technologies’.
“Roots has continued to consolidate its footprint in key markets, evident from new agreements across the Middle East and Europe,” said Wachtel.
“This will allow us to continue to demonstrate the benefits of our technology to a range of major producers and growers, with an aim to further increase sales.”
In November, Roots’ co-founder and executive director, Dr Sharon Devir, presented at the COP27 event.
In his presentation, Dr Devir highlighted the increased recognition for the company’s innovative HEP technology.
The HEP technology allows farmers to reduce air heating and cooling expenditures, creating a sustainable solution for the agricultural industry, which also increases crop yield and shortens growing cycles.
The design of the system highlights Root’s continual innovation capabilities and considerable R&D, including field trials undertaken by the company to develop and commercialise the technology.
HEP was granted a certificate of design registration from the Israeli Patent Office in December, providing Roots with an initial protection period of five years, which can then be extended by four periods of five years each.
The company has now achieved intellectual property design registration in major markets including the US, China, EU, India, Canada and the UK.
During the quarter, Roots also strengthened its balance sheet, signing agreements with its two lenders to extend the repayment period of short term loans until an alternative arrangement could be negotiated with Roots.
“We look forward to providing additional updates on sales growth, new market entries and ongoing product development initiatives over the coming months,” said Wachtel.
This article was developed in collaboration with Roots Sustainable Agriculture Tech, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.