Trigon Agri A/S: Outperforms in exceptionally difficult market conditions. Report of Annual Earnings Figures

Copenhagen, March 31, 2009

With the following Trigon Agri A/S hereby announces that the annual results for the year ending December 31, 2008 of Trigon Agri A/S were approved by the Board of Directors on March 31, 2009. The report of annual earnings figures is enclosed to the current announcement below.


Financial Highlights 2008

The total revenue and fair value adjustments for A/S Trigon Agri (the’Group’, ’Trigon Agri’) in 2008 amounted to EUR 41,541 thousand (EUR 9,490 thousand in 2007), representing a close to 4.4 fold increase year-on-year. The largest part of the total revenue and fair value adjustments was generated from the Group’s operations in Ukraine, followed by Estonia and Russia. Total sales revenue amounted to EUR 29,984 thousand in 2008 (EUR 6,620 thousand in 2007), representing a more than 4.5 fold increase year-on-year. Other income amounted to EUR 4,413 thousand (EUR 1,111 thousand in 2007). Gains from fair value adjustments in 2008 amounted to EUR 7,144 thousand (EUR 1,759 thousand for 2007).

Despite the very challenging market conditions and significant fall in the crop prices during second half of 2008, earnings before interest, taxes, depreciation and amortisation (EBITDA) amounted to a positive results of EUR 1,680 thousand (respective figure in 2007 was negative by EUR 13 thousand). The main positive EBITDA contribution came from the production operations of the Group in Estonia and in Kharkov, Ukraine, where the Group has been operating for more than two years and where the investment programs carried out have started to show positive results, and the Group’s storage and trading activities in Ukraine, driven by the successful launch of the Group’s elevator management and trading joint venture Ramburs Trigon. In the newly set up production locations the EBITDA was negative for the year as the operations were only started up in 2008.

The net profit/loss of the Group in 2008 amounted to a net loss of EUR 2,435 thousand (loss of EUR 84 thousand in 2007). The net loss was significantly influenced by foreign exchange losses in the amount of EUR 3,133 thousand (EU 91 thousand in 2007), primarily driven by the dramatic depreciation of the Ukrainian hryvna during Q3 and Q4 2008.

The total assets of the Group as of year-end 2008 amounted to EUR 154,731 thousand (EUR 71,410 thousand in 2007). The non-current assets of the Group as of year-end 2008 amounted to EUR 69,744 thousand (EUR 26,890 thousand in 2007). The total investments of the Group in 2008 amounted to EUR 103,080 thousand (EUR 19,416 thousand in the same period 2007).

The total liabilities of the Group as of year-end 2008 amounted to EUR 20,149 thousand (EUR 7,130 thousand for 2007). The total borrowings of the Group as of year-end 2008 amounted to EUR 11,016 thousand (EUR 4,082 thousand in 2007). Out of the total borrowings, EUR 4,125 thousand was related to the borrowings of the Group’s subsidiaries in Estonian dairy production and EUR 73 thousand in Ukrainian cereals production, while EUR 6,818 thousand consisted of trade financing lines for the Ramburs Trigon trading joint venture. Due to its significant cash position, the net debt of the Group as of year-end 2008 amounted to EUR -38,570 thousand (EUR -31,620 thousand for 2007), providing it a very strong liquidity position.


Operational Highlights 2008

EUR 105 million secondary share issue

Despite the turbulent market conditions, the Group managed to successfully carry out a EUR 105 million equity capital raising on May 6, 2008. The issue was subscribed by over 60 investors, which included internationally well recognised institutional investors and private investors. The capital raising was a significant further step for the Group and provided the required financial platform on which to continue realising the Group’s expansion targets.

Three new cereal production clusters set up in the Black Earth region

2008 was a year of significant expansion of the cereals farming activities of the Group. Three new production clusters were set up during the first half of the year in Kirovograd (Ukraine), Samara (Russia) and Penza (Russia), which took the total fieldworks area close to 74,000 hectares during the year, including 65,000 hectares under cereals crops. In 2007 the respective total area where fieldworks were carried out stood at around 27,000 hectares, including around 23,000 hectares under cereals crops. Meanwhile, the total gross harvest in 2008 stood at 180,907 tonnes against the respective 2007 figure of 56,607 tonnes (a 3.2 fold increase year-on-year). As of year-end 2008, Trigon Agri had approximately 144,000 hectares of land under control in Russia, Ukraine and Estonia. Out of the total land area under control approximately 140,000 hectares was located in the Black Earth regions of Ukraine and Russia.

Storage capacity in Ukraine taken to 322,200 tonnes

During first half-year 2008, the Group completed three additional rail-road connected elevator acquisitions in its Kirovograd cluster in the Ukraine taking the total elevator storage capacity of the Group in Ukraine to 322,200 tonnes. Despite storage being originally planned as a break-even operation supporting the production activities of the Group, the elevator business segment showed a positive EBITDA of EUR 1,945 thousand for the first half of the 2008 trade year.

Cereals harvest collected from 65,000 hectares in the Black Earth region

The Group successfully collected a cereals harvest in the Black Earth region from 65,000 hectares, a 2.8 fold increase from 2007. The productivity in the Group’s Kharkov, the only cluster during the year where the Group was able to fully control the cycle of crop preparation, was well in line with the Group’s targeted productivity improvement plan (the ’ramp-up’). The three newly acquired production clusters will enter the ramp-up schedule in 2009.

Winter crops seeded during Q3 2008 on 44,000 hectares in the Black Earth region and preparatory works completed for an 82,000 hectares cereals harvest in 2009

The Group successfully seeded 44,000 hectares of winter crops in its four cereals production clusters in the Black Earth region. The current conditions of the winter crops seeded by the Group have been satisfactory and there has been no significant winter damages on areas seeded, which gives management confidence in retaining its ramp-up targets for 2009. The Group has also carried out all other necessary preparatory works in order to take a cereals harvest from a total of 82,000 hectares in 2009.

Trading and elevator management JV successfully set up

On July 1, 2008, the Group successfully launched its trading and elevator management JV with Ramburs Group, a leading independent trading firm in the Ukraine. The step marked a significant further development mile-stone of the Group towards becoming an integrated company, which farms the fields in Ukraine and Russia and is capable of export deliveries of crops to clients globally. For the first half of the 2008 trading year the JV showed a positive EBITDA performance of EUR 1,672 thousand.


2009 Outlook

In the current financial market environment, the focus of the Group’s management is on conservation of liquidity. With the operational and investment budgets planned for 2009, the Group is expecting to finish the current production season in autumn with a remaining cash balance of around EUR 12 million plus the value of the full upcoming harvest which with currently prevailing prices can be estimated to be worth in excess of EUR 30 million (i.e. the total liquid assets of the Group would be in excess of EUR 42 million). This will easily be sufficient to take the Group through the 2010 production season.

With its current crop plan and the productivity targets, the Group is targeting a total gross production in 2009 of close to 350,000 tonnes of cereals. With an aim of handling close to a similar amount through its trading joint venture operations, the total targeted crop volume to be handled by Trigon Agri over the 2009 trade-year is close to 700,000 tonnes. Subject to achieving such production and trading through-put volumes, the Group is targeting annual turnover for the upcoming 2009 trade-year of around EUR 100million, assuming crop prices will stay at levels prevailing in the markets today.

Assuming no change in crop prices going forward and no extreme weather related unusual crop losses, the Group’s management expects a significant increase in Group profits for 2009. As the amount of land farmed increases and moves up the so-called ramp-up schedule the total yields, as well as the yields per hectare, are likely to rise equating to higher revenues, both absolutely and per hectare. At the same time the cost cutting and efficiency increasing measures being implemented by the Group should lead to lower costs per hectare.

The annual report and financial statements are available to the public on the website of Trigon Agri A/S:


Future Reporting Dates

Interim Report 30 June 2009 31 August 2009

Interim Report 30 September 2009 30 November 2009

Interim Report 31 December 2009 28 February 2010

Annual Report 2009 31 March 2010


Invitation to the Annual General Meeting

The shareholders of Trigon Agri are invited to attend the Annual General Meeting to be held on 24 April 2009 in Copenhagen, Sundkrogsgade 5, Denmark.


A/S Trigon Agri Annual Report 2008


For further information please contact:

Investor enquiries:
Mr. Ülo Adamson, Chairman of the Board of Directors of Trigon Agri A/S
Tel: +372 66 79 200


Media enquiries:
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.

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