A/S Trigon Agri: January – September 2010 Interim Report

Despite extreme weather conditions right through the harvesting season this year, Trigon Agri (the ‘Group’) collected a total tonnage harvest for 2010 of 177 thousand tonnes (195 thousand tonnes in 2009). The final harvested area of the Group for 2010 stood at circa 85 thousand hectares (82 thousand hectares in 2009). The Group’s management feels this is a good result, especially given that a substantially higher share of crops harvested in 2010 were oil-crops (47% from total area in 2010 compared to only 21% in 2009). Oil-crops carry a lower production yield per hectare but due to their higher market value are typically substantially higher profit margin crops.

All cereals production clusters of the Group showed an EBITDA positive result for 9m 2010 with the exception of Penza and Samara regions which were hit the worst drought in recorded history. The rainfall during the main growing period from April to July in Penza stood at 26mm against a 10-year average of 217mm. The comparable number in Samara stood at 60mm against a 10-year average of 171mm. Temperatures in these regions, meanwhile, stood well over 30 degrees celcius for long time periods. Milk production operations of the Group were strongly EBITDA positive, with continued significant increases in milk productivity per cow and higher milk prices achieved.

Total revenue and fair value adjustments in 9m 2010 amounted to EUR 47,313 thousand (EUR 44,265 thousand in 9m 2009) constituting a 7% increase year-on-year. This total figure consisted of Total revenue for the reporting period of EUR 42,749 thousand (EUR 39,542 thousand in 9m 2009); Other income of EUR 3,921 thousand (EUR 3,589 thousand in 9m 2009) and Gains arising from changes in fair value less estimated point-of-sale costs of biological assets of EUR 643 thousand (EUR 1,134 thousand in 9m 2009).

EBITDA in 9m 2010 amounted to a profit of EUR 1,352 thousand (loss of EUR 2,046 thousand in 9m 2009). The Ukrainian and Stavropol (Russia) cereals production clusters showed an EBITDA positive result for 9m 2010 of EUR 3,101 thousand (loss of EUR 57 thousand in 9m 2009). The Penza and Samara production clusters in Russia which were severely hit by drought showed an EBITDA loss for 9m 2010 of EUR 3,525 thousand (loss of EUR 3,105 thousand in 9m 2009). Milk production operations of the Group in Estonia and next to St Petersburg (Russia) showed an EBITDA positive result for 9m 2010 of EUR 1,480 thousand (loss of EUR 94 thousand in 9m 2009). Sales and trading and storage operations of the Group clusters showed an EBITDA positive result for 9m 2010 of EUR 296 thousand (profit of EUR 1,210 thousand in 9m 2009), explained by lower volumes of commodities handled.

The net profit for the period was influenced by higher depreciation charges due to the ongoing investment program in the Group’s production locations in the amount of EUR 5,028 (EUR 3,609 in 9m 2009), a one-off write-down of the Group’s Ukrainian government treasury notes (received in exchange of the Group’s VAT receivable in Ukraine) in the amount of EUR 944 thousand and an income tax provision. Significant part of this provision is the result of an unrelated Danish Court ruling, it is precautionary and it is not final. The management of the Group is currently working with tax advisors in order to find a structure that would avoid such income tax uncertainty in the future reporting periods.

The consolidated assets of the Group as of September 30, 2010 amounted to EUR 162,429 thousand (EUR 155,392 thousand at December 31, 2009), with the increase driven by the sale of treasury shares by the Group during the reporting period and positive currency translation differences (both the Russian rouble and Ukrainian hryvna in which most of the Group’s fixed assets are recorded appreciated against the Euro during the reporting period). The net debt of the Group as of September 30, 2010 amounted to EUR 2,824 thousand (EUR 61 thousand at December 31, 2009) excluding Ukrainian government treasury notes. Together with these treasury notes, the net debt of the Group as of September 30, 2010 amounted to EUR-3,735 thousand (negative net debt means that cash and liquid securities in books are larger than outstanding borrowings).

Trigon Agri 3Q Interim Report


Investor enquiries:
Mr Ülo Adamson, President of Trigon Agri A/S
Tel: +3726679200
E-mail: mail@trigonagri.com

The Company’s Certified Advisor is SEB Enskilda.


About Trigon Agri
Trigon Agri is a leading integrated soft commodities production, storage and trading company with operations in Ukraine, Russia and Estonia. Trigon Agri’s shares are traded on the First North stock exchange in Stockholm, an alternative market place of the OMX Nordic Exchange. Trigon Agri 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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