Welcome to our webcast of the Genus Interim Results for the first half of our 2022 fiscal year. Thank you for joining Alison Henriksen and me today. As well as our recorded webcast, there's gonna be a live Q&A held later today, and details of how to join that are in our results release. Now, I'm gonna be covering our business and strategic progress, and Alison will outline the financial performance. First, let me start with the headlines for Genus in our first half of 2022. As anticipated, the porcine market in China proved very challenging in the first half. As you can see from the headline numbers, this had a significant impact on our performance, resulting in lower adjusted profit and earnings per share against the very strong prior year comparisons.
However, outside PIC China, Genus has performed strongly, and we continue to make good strategic progress while investing for growth. Our progress was underpinned by market share gains with key customers globally, who are recognizing the strength of our genetics. We've also been investing significantly in our supply chain to support future growth and resilience. And I wanna highlight as we go through this presentation, the depth of those changes today. Our R&D programs continue to make good progress, including the PRRSv Resistance Program, which is progressing well, and it remains on track. Despite the challenges in the short term in China, we are strengthening our position strategically in the market. We've continued to make good strategic progress in the first half, and we've declared an interim dividend of 10.3 pence per share, unchanged from last year. Turning to volumes.
China had a significant impact on our porcine volumes with robust 7% growth excluding China, but a 2% decline including it. In bovine, we achieved record volume growth last year with a particularly strong first half. Against this tough compare, we performed well to achieve 4% growth in the first half of this year. Once again, this was led by beef and sexed genetics. From a regional perspective, Asia's growth led the way. As China had such a significant effect on the half, let's start by looking at what is happening in the market there. Prices remain depressed. After a brief rally at the end of last year, they've now fallen below RMB 13 per kilogram. That's down from RMB 35 a kilogram a year ago.
That puts producers well into loss-making territory, and with higher input costs also adding to the pressure on them. Now, solid data on what's happening to the sow herd across the country is hard to find. We have a better picture of the top producers, many of whom are our customers. Among the top 50, we estimate that the sow herd has seen a reduction of around about 20% during the second half of 2021 calendar year. The timing and extent of market recovery is still uncertain, and it's further compounded by disease challenges in the industry, which are still widespread, and lower demand due to a softer economy and the COVID lockdowns, which are periodically being implemented.
We expect the market to remain challenging in the second half of FY 2022, but with a lower year-to-year impact than experienced in the first half. Our focus is very much on serving the top producers, and to date, we serve around 1/3 of them. Our products are performing well with producers, and despite the disappointing financial results, we're actually strengthening our position with them, and we have an encouraging pipeline of opportunities for growth when the market recovers. With our strong local team, we have a clear strategy to make China a home market, and you can see four elements to it as you look at the right-hand side of this chart. I think these truly differentiate us within the market. I'll pick just one example. It's on the bottom right of this chart. It's our reach through social media.
We ran a series of four online technical seminars a few months ago, and we had 50,000 unique logins to those seminars, showing just how broadly the PIC brand is being recognized as a leader across the industry. We've spoken many times about the importance of building a supply chain in China to be able to meet the market demand for high-health elite genetics. I can tell you, we've been very busy through the last year to ensure that we're very well positioned to seize the opportunity as the market recovers. The core of our supply chain is our own farms and those with our JV partners. You can see on the chart, Benxi up in Liaoning Province. We've, there, completed a full refurbishment and expansion by 80%.
We're constructing a brand-new farm in Chongqing to be stocked over the summer with leading environmental standards in a biosecure location, and that's replacing a smaller aged facility that over time had become less biosecure. Then up in Inner Mongolia, we're in the process of stocking another brand-new JV farm with over 3,000 sows. These elite owned and JV farms, they then support a wide third-party multiplication network, and that's just as we do it elsewhere in the world. In total, this has enabled us to increase our supply fivefold over three years. As you can see, we're using the downturn to fundamentally reposition and strengthen our supply chain so that by the end of this year, we'll be in a uniquely capable and differentiated position to seize the substantial opportunity in China.
Well, let's turn from China to look at the rest of PIC business, where we continue to grow volumes, royalties, profits, and market share. In North America, we've been seeing momentum building for a couple of reporting periods. In this half, we saw a further step up in growth, as you can see on the right-hand side of this chart. That was driven by our product portfolio strength, our customer relationships, and our technical service. I can illustrate this really with a specific customer example from one of the top 10 producers in the U.S. Over the past three years, we've grown our share of their maternal genetics from 60% to 72% with the world-leading Camborough sow. On the terminal genetics, the customer conducted a trial of our PIC 800 boar, which incorporates the Malavan genetics.
The trial demonstrated a clear economic and animal welfare benefit for the PIC 800. As a result, we've grown our share on the terminal side within this customer from 38% to 64%. Continuing with North America, but moving from the U.S. up to Canada now. We announced this morning that we've purchased the internal AlphaGene genetic program of Olymel and signed a long-term exclusive genetic supply agreement with them. Now, Olymel is the largest pig producer in Canada. They have a slaughter capacity of 185,000 pigs per week in its owned and affiliated network. It's now decided to work exclusively with PIC so that, the internal genetics program, becomes managed by PIC, recognizing that we can deliver superior genetic progress and leverage our broader R&D capability.
From our perspective, Olymel becomes a strategically important and growing customer, and the deal is both financially attractive, and it fundamentally strengthens our market position in Canada. What underpins these successes that we've been talking about, I'd like to highlight two things. First, genetics. Secondly, the supply chain. I think as you know, we continually strive to drive genetic progress faster and better. In the last year, we've actually achieved our highest rate of genetic gain ever. That's been driven in part by our expansion of our elite pureline populations. In addition, though, we're continuing to innovate on technology. You can see now, in this chart and these videos of moving images of pigs, we've developed techniques using digital mapping and cameras to generate more objective measurement of hard to measure traits, such as behavior, leg strength, gait.
These will allow us to incorporate better data in our selection algorithms. That better data will end up leading to better genetics. I mentioned that expanding our elite genetic populations had helped to drive higher rates of genetic improvement. It also enables us to better distribute those genetics to our customers globally. Over a four-year period through to FY 2023, our supply chain of elite genetics will have grown by over 80%. Now, we talked earlier about the China element of this, but we're working in other parts of the world as well. In Brazil, through our Agroceres PIC joint venture, we're building a second elite nucleus. In the U.S., we're bringing on a new third-party site. In Canada, we're completing the build-out of the major investment in our second own site in Saskatchewan.
It's called the Atlas Farm, and it's actually just receiving its first pigs now. These investments are all there to support PIC in achieving substantial global growth over the next decade. I've covered now a lot of ground on PIC. It's time to turn to ABS. As many of you know, we historically work with our dairy customers, mainly through transactional relationships, selling semen on a per-straw basis. We've been working to move more of our customers onto 100% relationships, with contracts covering multi-year periods. We've also introduced new all-embracing contracts, such as our Key Account Partner program, we call it CAP, where we put together a genetic plan, genetic testing, semen supply, services.
We wrap it all into a single multi-year per-cow contract. We're making progress on introducing this into the market, and customers such as Brocks Holsteins, who you see illustrated here, really see the value of it. You can see that the proportion of our business under contracts is increasing. We're illustrating here EMEA, which is leading the way in this. Now, turning to genetic progress in bovine. Just as in porcine, we're making good genetic progress, whether that's through our proprietary NuEra beef genetics or our dairy genetics driven through DeNovo. In both cases, we enjoy leading positions in the industry. We've often spoken about the significant change taking place in the genetics dairy farmers choose to buy. You can see here in the U.S. that our mix has shifted substantially to beef and dairy and Sexcel semen.
In fact, our NuEra genetics are increasingly recognized for the superior value they're creating in the beef supply chain. A good example of how this is working is shown here, where we're working with a leading U.S. dairy, we've recently won 100% of their beef on dairy business, in addition to already having had their sexing genetics business. We were able to connect a leading U.S. beef feeder who'd already seen the value of our NuEra genetics coming through his system with the dairy so that the feeder could source an increased supply of NuEra beef on dairy calves, along with having complete end-to-end traceability and performance measurement. On the ABS supply chain, just as we've been investing in the porcine supply chain, we've been doing that also in our ABS business.
The picture that you can see here shows our new state-of-the-art facilities in De Forest, Wisconsin. You can see two barns complete along with a third in construction. In front of them, the smaller building you can see there is our combined conventional and sexed semen processing laboratory. What's interesting here is I think as you look at measuring over similar periods of production we've been getting from similar bulls, the number of salable straws of semen has more than doubled in the new facilities compared with the legacy barns from the past. You can see all of the quality metrics associated with that have increased very significantly. Happier bulls make for productive bulls, as well as helping the bottom line. Finally, in ABS, we continue to grow our sexed volumes, both for ABS customers and with third parties.
You can see just how transformative this has been since we were able to launch Sexcel in FY 2018 and the dramatic growth we've achieved. We've continued to win new third-party customers for IntelliGen, and we've been able to expand existing relationships, including our first contract for our Gen 2 technology, which was signed in December. In addition, in India, we secured in the last month a major win in a national government of India tender for sexed semen, which will underpin further growth in our India business. In our PRRSv program, we remain firmly on track with hundreds of what we call the E2 generation of animals now born. We have a clear set of requirements for regulatory approval in the U.S., and we're gonna be making the next of our set of submissions as planned in the summer of 2022.
Our overall program timeline is illustrated in the appendix, but it remains the same. In addition, we've seen the environment for market acceptance continue to evolve over time. In the last half year, Japan has approved two third-party gene-edited fish products. Earlier this week, we were a founder member of the Coalition for the Responsible Use of Gene Editing, which was launched just at the start of this week. That aims to build trust and confidence in gene editing. Other members who participated in founding this include Costco, PepsiCo, and the World Wildlife Fund. Now, my final slide before I hand over to Alison is on ESG. We perhaps don't talk enough about the importance for our business of having motivated and engaged employees. Our people are essential for everything we achieve for our customers, animals, and shareholders.
A biennial survey of employees was conducted in November 2021, and we had 83% of our employees participated in it. The results show further improvement and very strong absolute scores across a very wide range of questions. Two key questions that perhaps best measure engagement are shown here. I'm grateful for the commitment shown to our company by our colleagues in the company, particularly during the last two difficult years of COVID. Meanwhile, on the environmental dimension of ESG, I just want to repeat that the most important thing we do is drive genetic improvement because that drives sustainability throughout the protein industry. We're continuing to make great progress on that, as you've seen earlier. In addition, at COP26, we announced our participation as a founder member of the Greener Cattle Initiative, which is gonna conduct research in how to reduce methane emissions from cattle.
In addition to that, we also continue to take positive steps reducing our own carbon footprint to meet our commitment of a 30% reduction by 2030. Now let me hand over to Alison to take you through the numbers.
Thank you, Stephen. This half has certainly been a contrast to the past two years, but there's actually quite a lot of good news in the numbers, which I'll explain. Let's get into it. As you heard from Stephen, our first half results have been impacted by PIC China's performance, but the performance across the rest of the group was strong. In actual currency, adjusted profit before tax of GBP 37 million was down 21%, and the graph to the right very clearly shows the decreasing trend of adjusted operating profit and profit margin. However, what you can also see is that despite the downturn in PIC China, our results were still stronger than the profit and margin achieved in the first half of FY 2020. I'll talk more about the different regional performances in a moment.
This half, there was a minor adverse impact of around GBP 600 thousand due to unfavorable exchange rates on translation from a stronger sterling against other currencies. For the full year, we estimate at today's spot rates, the impact will be around GBP 1 million. In constant currency, adjusted profit before tax was also down 19% on last year. The work of our R&D team is incredibly important to the success of Genus, and as you heard, they're making great progress with the PRRS program and other opportunities. Thus, we invested GBP 31.4 million in R&D, which is up 8% on prior year. Central costs were 10% lower than prior year, which reflects prudent cost management given the challenges for PIC China.
An adjusted operating profit excluding gene editing costs was down GBP 10 million or 17% in constant currency. I've talked previously about our target being 10% CAGR growth over the medium term, and we remain committed to that target, noting that we did achieve 37% growth in this profit measure in FY 2021. For the rest of the presentation, I'll refer to constant currency growth as I believe that's a better indicator of our underlying trading performance. Now, what I wanna do here is pull the numbers apart to show you what happened in PIC China versus the rest of the group. In the graph on the left, you can see the adjusted operating profit trend of Genus excluding PIC China. 23% growth was achieved in the half, which is similar to the growth we achieved in the first half of FY 2021.
At the same time, there has been growth and profitability, with margin improving by over 220 basis points in each of the past two years. On the right-hand side of this slide, you can see what's happened to PIC China's performance. The graph in the top right shows the volume trends, where you can see there's been a considerable drop in volume, down 51% year-on-year. We've seen a volume decrease in both upfront sales as well as royalty volumes, with 27% of volumes now related to royalty contracts. As you heard from Steven, the Chinese sow herd has declined, and we have seen our customers reduce their breeding programs, which has meant there's been lower demand for PIC's genetics.
While the decrease has had a significant impact, as you can see, we still have a much larger business in volume terms than we did in FY 2019 when African swine fever first occurred in China. The graph on the bottom right shows the causes of year-on-year decline in PIC China's profit from circa GBP 18 million to a very modest profit. You can see the loss of profits from the reduction in upfront sales and royalty contracts. Higher supply chain costs were incurred due to the closure of an aging facility and expansion of another. We also made a GBP 2 million loss on by-product sales, while in FY 2021 we earned unusually high profits reflecting the high peak prices that were up at 35 RMB a kilo back in December 2020.
PIC China's profits were also impacted by a charge of GBP 3.7 million, which was a one-off refund to a customer in relation to historic royalties. The customer in question had a unique royalty contract with us, and with the change in market circumstances, we decided to support this customer with a change in terms to more closely align the economic interests of both parties. Aside from this one instance, we have not changed any fundamental terms with our customers, and we have not had challenges with collection of receivables. Before I go any further, I do want to mention the PIC China team. They are such a strong team, and I've been very impressed with the way that they've managed the situation in China and continue to support our customers.
I have no doubt that they will seize the opportunity when the market undoubtedly turns. All right, let's have a look at PIC as a whole. As you can see, PIC's profit declined 15% in constant currency, but increased 13% if China is excluded. Royalty revenue is down 1% for the half year, but up 4% if China is excluded. The loss of profits in China meant PIC lost some leverage of its cost base, and its adjusted operating profit margin dropped to 36.4%. You heard from Steven how North America has achieved strong growth, taking market share, which led to very good growth in operating profit. Just terrific. Up 6% on prior year, the highest rate of growth they've achieved for more than five years.
Royalty revenue growth was also strong at 5%, and we expect more growth to come as we continue to gain share with key accounts. Latin America also performed well, with profit up 13%. As always, Brazil was a key contributor through our joint venture with Agroceres, which achieved profit growth of 11%. However, in the past month, pork prices have dropped 20% in Brazil due to the weakness in exports to China, and we anticipate this may have an impact on our customers in 2022. Europe's profit was almost flat in comparison to prior year when there was large key account expansion in Russia. Russia is an important market for PIC Europe. However, our customers supply to the local market and our supply chain is predominantly based in Russia, thus mitigating our exposure to logistics challenges.
European pig producers have experienced tough market conditions, with pig prices reaching a nine-year low due to the reduction in exports to China. However, royalty revenue growth was strong at 5%, and we are expecting growth in the second half, particularly in Spain, where we made the Sergal acquisition last year. Lastly, as you've heard, China overshadowed Asia's results, but I do want to mention that elsewhere in the region, there were positive signs of recovery from African Swine Fever, with the Philippines achieving profit growth of 144% and Asia franchises up 22%. Now, let's move on to ABS. ABS's revenue growth was 4% against a very strong comparative in the prior year.
However, strong growth in adjusted operating profit of 21% was achieved by the business, which in part was due to the good progress made in operating profit margin of 16.9%. That's up 240 basis points. As you heard from Steven, the ongoing shift to Sexcel and beef continues, with volumes growing 24% and 13% respectively. North America's Sexcel volumes grew 9%, and NuEra beef volumes were very strong, a record high increase of 37%. Overall, revenue decreased by 2%, and that's due to conventional volumes declining 31% as dairy customers continue to shift their mix and take advantage of the buoyant beef market. Embryo volumes also decreased due to a change in a large account's breeding strategy.
The mix effect of the change in revenues, combined with investments made in the technical services, a strategic account management team, as well as an increase in travel spend, as the team were able to move more freely, meant that North America's profit was down 20%. After record growth last year, Latin America continued to grow, delivering an 8% increase in revenue and a very impressive 22% increase in operating profit. They've continued to do very well with digital sales campaigns, and Brazil grew despite a temporary ban on beef exports to China, which has now been lifted. EMEA's revenue was down 1%, although there continued to be a strong take-up of Sexcel, with volumes up 22%. As you heard from Stephen, progress has been made in shifting customers to partnership-based contracts, particularly in the U.K.
However, overall profit did decrease 15% when compared with the strong first half last year, which included the benefit from the opening of a third intelligent production facility on the continent. ABS Europe operates in Russia and Ukraine. Our customers supply to the local markets, but we do rely on imports of semen and therefore we have brought forward deliveries where possible to reduce the exposure in the near term to potential logistics disruptions. Asia continues to achieve high growth in operating profit, up 35%. We've spoken a lot about PIC China, but I do want to recognize the great results achieved by ABS China. That team have achieved a growth, a profit of 37%, and that's backed off high growth last year.
The Aussies also did very well, up 71%, and it was great fun to meet all the characters Down Under in December. Now, taking a look at R&D. Overall, R&D increased as planned to GBP 31 million, and is comparable to the level of spend we had in the first half of FY 2020. If you recall, we had a decrease in spend in the first half of FY 2021, and that was due to the constraints on activity predominantly caused by the COVID pandemic. What we're now finding is that collaborations with academic institutions are becoming easier as the focus on COVID-19 research becomes less intensive. Porcine product development was stable, as was our spending on gene editing. As you heard from Steven, we're making great progress in both areas.
Bovine product development spend was up 13%, reflecting continued investment in our dairy and beef development programs, as well as expanded IntelliGen capacity at Leeds with our Gen2 technology. As planned, we increased our spend in other research and development costs, up 23% on prior year, and that primarily reflects the growth of the team and their activities in relation to the strategically important field of reproductive biology. In the second half, we expect R&D spend will increase as planned to a similar degree in comparison to prior year, and that will be driven by our investments in gene editing and product development. Now we'll move on to statutory income. I'm afraid I don't have a story about any of our animals this time, but I've got lots of trips planned, so I will next time.
If I move on to the numbers, what I would say is that we consistently measure and report adjusted results as we think these give a better view of the business's underlying performance. Our statutory results are affected by a number of non-cash items, and I'll talk you through these. Statutory profit before tax decreased to GBP 24.4 million, and profit after tax on a statutory basis was GBP 18.9 million. The adjusted tax rate was 25.1%, which is up 150 basis points on last year, and that's due to the reduced share of group profits arising from China, where there is a benefit from the availability of tax relief on agricultural-related activities.
The effective statutory tax rate was 22.5%, being the same as prior year, which is due to a lower tax rate on an exceptional item. Now those of you that are familiar with our accounts will know well that we are required in our statutory accounts to apply IAS 41, which is the accounting for biological assets. The effect in the half was a GBP 6.8 million decrease, and that compares with a GBP 3.5 million increase in the prior year, and that's due to the reduction in the fair value of bovine assets, driven primarily by the shift from dairy to beef. We've had to apply a higher discount rate due to the increase in the five-year U.S. bond rate. As you should also know, these fair value calculations can fluctuate and are non-cash in nature.
Now we did have an exceptional item of income of GBP 3.6 million, and this was from a non-refundable cash receipt for the assignment of rights to a legacy legal claim in Brazil, which was actually 30 years old and associated with a subsidiary that no longer operates in the group. Luckily, our treasurer has been with us for 25 years and did a great job of concluding this. Our share of post-tax profits of JVs was GBP 3.2 million, GBP 2.6 million down on prior year, reflecting the weaker performance of the JV in China. Finally, I want to talk about our financial position. As I've said in the past, our company has consistently generated cash and maintained a strong financial position to enable us to allocate capital to strategic opportunities.
Olymel is one of those, and we concluded that transaction on the 22nd of February for the equivalent of GBP 14. 5 Million. You can see on this chart, we ended the year with net debt of GBP 143 million, and that compares with just short of GBP 106 million at the end of June. Our leverage has increased to 1.4x EBITDA, and that's within our targeted range of 1x - 2 x. Cash generated by operations of GBP 22 million reflected cash conversion of 63%.
This conversion rate is lower than prior year, and that's due to less favorable movements in working capital, arising from China, where we received high cash advance from customers in FY 2021, and we paid high performance bonuses across the company that related to FY 2021, including the COVID-19 special bonus of GBP 500 for every Genus employee. I expect our cash conversion to be higher in the second half, and we remain committed to our stated target of 90% per annum. Capital expenditure of almost GBP 28 million was high, but that was what we planned. The largest areas of spend were in relation to our porcine and our bovine facilities, as you heard from Stephen. Our spend will be similar in the second half of the year.
I did want to remind you that we have a multi-currency facility of around GBP 242 million with maturity to August 2024, and we do have an option to extend that by a further year. At the end of the half, our headroom was GBP 91 million. Our proposed interim dividend is to remain flat compared with prior year, which is 2.8 x adjusted earnings cover, which is well within our targeted range of 2.5x-3x . Thank you for listening, and I'll now hand over to Stephen to conclude our presentation.
Thank you, Alison, for taking us all through the numbers. Well, we've covered a lot in this presentation, so I want to summarize very briefly. As you've seen, our performance has been strong outside porcine in China. We've been making some good strategic progress, and we're continuing to invest significantly for growth. Our outlook is that the porcine market in China will continue to present some challenges in the second half. However, we're increasingly well-positioned for the opportunity there when markets recover, and we have confidence in Genus' strategy and our ability to deliver our medium-term growth commitments, which remain unchanged. Thank you for joining us in this webcast.