GHENT, Belgium, 25 August 2010 - Devgen nv [Euronext Brussels: DEVG], announced today its results for the six month period ending 30 June 2010, which have been prepared in accordance with the IAS 34 'Interim Financial Reporting'.
Financial highlights
€ million
H1 2010 H1 2009
Revenues 12.3 8.6
Gross profit 6.6 4.5
R&D expenditure 4.1 4.6
Net loss from cont'd operations -2.3 -5.1
June 30, 2010 December 31, 2009

Cash Position(1) 32.7 45.8

(1) Including restricted cash for an amount of € 5.5 million as per June 30, 2010 and € 5.6 million as per December 31, 2009.

Business highlights

Seed business India
Devgen is active in hybrid seeds of 4 crops in India. The 2010 sales season for rice, sorghum and pearl millet hybrid seeds is essentially completed to date. For Sunflower, the main sales season starts in Q4.

Rice:
Devgen has grown its sales volume and revenues by 25%, despite poor market conditions. Both the 2009 and 2010 Kharif[1] seasons witnessed late arrival and shortfalls of rains. Under these conditions farmers tend to switch to a different crop to minimize their financial exposure and/or tend to plant varietal seed requiring less upfront investments. As a consequence the overall hybrid rice market has remained at approximately 16,000 ton, unchanged from 2009. The top 3 players (Devgen is nr 3), gained market share from the smaller players and increased their combined market share from an estimated 54% in 2009, to 60 % in 2010. Assuming normal weather patterns in 2011, the hybrid rice market is expected to resume growing.
· Devgen maintained its sales prices, based on the quality of its products, while the overall trend in the market was price reduction.

· Devgen launched Frontline Gold, a new premium seed product. A large number of demo trials during the 2009 season in addition to excellent results achieved in the 2009 government trials allowed for a successful launch this year. Frontline gold is a high yielding, premium quality, medium duration hybrid rice product..

· Devgen expanded its introduction of direct seeded rice in Northern India. In collaboration with CIMMYT India[2], Devgen developed and widely promoted an agronomy package for direct seeding of rice. Direct seeded rice results in savings in labor, time to harvest and on average reduces water usage by 30% (3,000 m³ per hectare per season).

Sorghum:
· Devgen strengthened its number one position in volume and value with a 26% increase in sorghum sales over the previous year. This achievement occurred in a hybrid sorghum market that shrunk 40% compared to last year due to adverse weather and unfavorable crop economics[3].

· Devgen launched, Sorghum 296 Gold, a hybrid delivering higher yield than DJ60, launched last year by Devgen. Until now DJ60 was the most premium product in the market.

· The hybrid sorghum sales in India are mainly for the Kharif season and represent 45% of the addressable market (2.4 million hectares). Devgen targets future growth in the remainder sorghum market by developing specialized products:

- The 5 million hectare market for the Rabi season[4] is nearly exclusively supplied with cheap varietal seed. This Rabi season, Devgen is launching a new sorghum hybrid with the same grain quality but offering a considerable yield advantage.

- Today only 10% of the fodder sorghum market consists of branded, commercial seeds. This market is expected to grow as the milk industry in India increasingly encourages the farmer to move to quality fodder sorghum to feed his cattle. Devgen's SX17 sorghum fodder hybrid, is in its second year in the market and already obtained a 15% market share of the branded seed market segment. The total sorghum fodder market represents 1 million hectares or 50 K tons of seed.

Pearl millet:
· Devgen today sells pearl millet mainly in Central India (Maharashtra and Karnataka states). Devgen maintained its volume and value in this market, which overall was down by 28% compared to 2009, due to adverse weather conditions.

· To enter markets which are not served by the existing product portfolio, such as the large Northern India market, Devgen launched two new hybrids in 2010:

- Mahalaxmi DB5000 a premium product for the warm and dry North-west region of India.

- "Tilak" a high yielding product with wide adaptability across India.

Sunflower:

- The 2009 Rabi market was significantly lower than normal: an estimated 4,500 tons compared to 6,500 tons in normal years and 7,000 tons in peak years. The currently depressed sunflower oil prices make growing other crops for farmers more profitable. Sunflower prices typically follow a multi-year cycle influenced by import of edible oil by the government. This trend continued in 2010, resulting in unexpected sales returns in H1 2010 which impacts 2010 sales.

- Devgen's currently estimates that the 2010 sunflower market (which starts in Q4) will decrease by approximately 30% compared to last year and only reach 3100 tons. Prices are expected to be under pressure due to high stock levels in the market (2009 returns).

- As a consequence of these market conditions, Devgen does not expect value growth in this crop but expects to retain its nr 3 position in this market.

- Devgen's strong product portfolio and pipeline places it in a good position to grow again as markets return to pre-2008 levels over the next 2 years.


Hybrid rice Philippines
As Devgen is gaining experience in Philippines, the production capability, the trained staff and the upgraded infrastructure are gradually put in place.

Devgen's hybrid rice product, Masuwerte, was introduced in the dry season market (November 09 to April 10) and was sold for the first time during the wet season (June 10 to October 10). Sales of this hybrid were expanded to the three main rice growing islands (Luzon, Visayas and Mindanao), and stocks, albeit limited, were fully liquidated. The wet season gives more challenging weather and disease pressure than the dry season. To date this crop is in flowering stage. Early farmer's feedback is positive.

The research team in Philippines is now operational and has evaluated new hybrids for different market segments in Philippines and S.E. Asia. Several potential candidates for launch in 2011 and 2012 have been identified.

Hybrid rice Indonesia
Awaiting import clearance by Indonesian authorities, Devgen is still expecting to launch DG-1-SHS in the course of 2010.

Devgen strengthened its relationship with PT (Persero) Sang Hyang Seri. A memorandum of understanding was signed between both companies on the introduction of biotech rice in Indonesia.

Research
Devgen management is confident that the pipeline in its four crops is delivering the products that will fuel growth. While Devgen is further expanding its sunflower, sorghum and pearl millet pipelines, the main research investment targets the development of a new generation of superior hybrid rice seeds. Such products will be essential to convince farmers to convert from traditional rice to hybrid rice. Devgen targets to launch several new hybrid rice products in 2011 and 2012.

Devgen is on track with implementing its strategy of bottom-up redesign of hybrid rice. Devgen expects to reach important milestones following the completion of product trials currently ongoing in India and to be initiated shortly in Philippines. The results of these trials will be analyzed in Q1 2011. Launch of such new products is targeted for 2013.

With yields increasingly affected by drought, heat, and irrigation shortages, the development of a-biotic stress tolerant rice is increasingly critical. Devgen has both a biotech as well as a non-biotech research program towards this goal:

- In Q1 2010, Devgen and IRRI formed a partnership for the development of drought-tolerant hybrid rice.

- In parallel, several promising biotech traits for a-biotic tolerance and biotic stress resistance (pest and diseases) are being tested in the laboratory and the greenhouse.



Nematicides

Devgen remains on track for obtaining efficacy, registration and commercialization of its nematicide in a wide range of crops and countries. As expected and considered normal when launching new products for use in an agriculture environment, volumes sold remain on the low side to date.

Turkey is an important producer of high value crops with substantial exports into the EU. In 2009, Devgen successfully launched its nematicide under the brand name Devguard® in Turkey for use in tomatoes and cucumbers, peppers and eggplant. Experience was accumulated during the first season and allowed to build and enhance the pest management strategy which is being implemented in this year's main season. The new and enhanced protocols allow for broadening the potential of the product.

In H1 2010, Devgen launched its nematicide in the US under the brand name Enclosure® for use in peanut production. A focused market introduction in key peanut growing states in the US enables Devgen to gain experience and achieve further optimization of its product. To date customer feedback is positive.

In Europe, progress has been made with the next steps for the registration of Devguard® as a nematicide on selected crops. In Italy the finalization of the review is now expected before end 2011. In Spain Devgen has submitted in Q2 its registration dossier for the use of Devguard® on tomatoes, peppers, cucumbers and melons.

In South-Africa, the registration review process is ongoing. Large scale demonstration trials on tomatoes and potatoes are now planned for the upcoming season. A distribution agreement is being finalized and further crop and label expansion is being progressed.

In Morocco, registration trials for the use of Devguard® on tomatoes are ongoing. The trials are performed in close cooperation with the Moroccan Ministry of Agriculture and Devgen's commercial partner in Morocco. Tomato is the most important vegetable crop grown under protective cover in Morocco.