A/S Trigon Agri Interim Report 1H 2009
Copenhagen, August 31, 2009
A/S Trigon Agri: Interim Report January – June 2009. ‘Steady progress despite very unfavourable weather conditions’
Despite very unfavourable weather conditions (the largest production cluster in Russia was declared an agricultural disaster zone due to extreme drought, both Ukrainian production clusters suffered from drought with the Kharkov cluster receiving less rainfall than in the drought year of 2007), Trigon Agri (the ‘Group’) shows significant increases in its cereals production. In terms of yields achieved Trigon Agri also significantly outperformed other commercial farms operating in the same geographic areas.
Land acquisition progress of the Group is well on track with effectively all of the land expected to be in registered ownership in Russia by year-end 2009 and all land already fully registered in long-term lease-hold in Ukraine as of the date of this report (of the total land under control of over 170 thousand hectares).
First rail-connected elevator (storage silo) site acquired through an acquisition of a brown-field project in the middle of the Group’s cereals fields in the production cluster in Penza (Russia). This adds to the already existing large elevator storage capacity of 322 thousand tonnes that Trigon Agri owns in Ukraine and to the 54 thousand tonnes of on-farm intermediary storage facilities of the Group.
Trading operations solidly profitable despite rapid and continuing expansion offering exciting potential for the future. With the continued development of the sales and trading operations the majority of the 1H 2009 sales of the commodities produced by the Group were made directly to export markets, as opposed to domestic sales same period last year. Prices achievable on export markets tend to be much higher than prices achievable in domestic sales.
Total revenue and fair value adjustment in 1H 2009 amounted to EUR 29,308 thousand representing a 46% year-on-year increase (EUR 20,132 thousand in 1H 2008). Gain arising from changes in fair value of biological assets amounted to 34% of total revenue and fair value adjustment compared to 67% last year. Both revenue and fair value adjustment were significantly adversely affected by commodity prices, which were 40-60% lower (depending on the type of crop) than during the same period last year, and by the severe droughts which affected three out of the four production locations of the Group by very significantly lowering the cereal production yields.
Total sales revenue in 1H 2009 amounted to EUR 17,684 thousand (EUR 5,794 thousand in 1H 2008), representing a threefold year-on-year increase. The largest revenue increase was in the sale of cereals, representing an increase of 4.1 times year-on-year.
Despite the 40-60% drop in the prices for the commodities versus the same period last year, and the severe droughts in three out of the four production areas of the Group, the Consolidated Earning before interest, taxes, depreciation and amortisation in 1H 2009 amounted to a negative result of EUR 1,025 thousand (1H 2008: net positive of EUR 4,513 thousand). This is a significant achievement given the pricing and weather conditions prevailing during the reporting period, and keeping in mind that the Group farmed a much larger area increasing the total operating expenses. The consolidated net loss of the Group in 1H 2009 was EUR 3,048 thousand compared to a profit of EUR 4,456 thousand during 1H 2008.
The consolidated assets of the Group as of period-end 1H 2009 amounted to EUR 150,284 thousand (EUR 154,731 thousand at year-end 2008), affected only by the devaluation of the Russian Rouble against the Euro and the net result for the reporting period. The net debt of the Group as of period-end 1H 2009 amounted to EUR -14,380 thousand (EUR -86,752 thousand for year-end 2008).
On the basis of the authority granted by the shareholder resolution on October 29, 2008, the Group continued buying back its shares from the market. As of period-end 1H 2009, the total number of treasury shares owned by the Group stood at 12,691,000 (9.79% of the total outstanding share capital), which the Group had acquired for a total consideration of EUR 5,593 thousand (i.e. EUR 0.44 per share).
For further information please contact:
Mr. Ülo Adamson, Chairman of the Board of Directors of Trigon Agri A/S
Tel: +372 66 79 200
Robin Walker/Matthew Newton, Finsbury Group
Tel: +44 207 251 3801
The Company’s Certified Advisor is SEB Enskilda.
About Trigon Agri A/S
Trigon Agri A/S is a leading integrated cereals and dairy commodities production, storage and trading company with operations in Ukraine, Russia and Estonia. Trigon Agri A/S shares are traded on the First North stock exchange in Stockholm, an alternative market place of the OMX Nordic Exchange. Trigon Agri A/S is managed under a management agreement by Trigon Capital, a leading Central and Eastern European operational management firm with around USD 1 billion of assets under management.