Trigon Agri A/S 3Q 2016 Interim Report

CEO Statement

Production Highlights

  • Both Winter and Spring Crops have performed above expectations in 2016.
  • Despite high rainfall during July, by reacting quickly to the conditions and bringing in additional harvesting resource, we have achieved 76% of the Wheat harvest at an export quality.
  • We have achieved higher yields of Spring crops from the Kharkov and Kirovograd farms than in 2015.
  • Nikolaev Spring crop yields were more in line with the average due to a prolonged summer drought, with Sugar Beet being irrigated achieving a group record of 75 tonnes / hectare.

We entered 2016 having endured the driest autumn conditions in 2015 for over 50 years, this resulted in our Winter crops being very weak or in some cases non-existent. Spring 2016 was relatively wet and most importantly cool, this allowed even the weakest of winter crops to develop. The harvest results from these crops although nowhere near record levels were far higher than we would have predicted in the early spring. A reasonable quality was preserved and a combination of this, the better yields and some sensible forward wheat contracts for export, resulted in averting what could have been a total financial disaster.

Higher than average summer rainfall in Kharkov has ensured that the hard work and high level of attention to detail applied by the farming team on the ground, was repaid by some very respectable record regional net yields, with Sunflower at 2.7 tonnes / hectare and Soya at 2.7 tonnes per hectare.

Kirovograd yields were certainly reduced by a combination of low rainfall and high temperatures in August but still produced net results of Maize at 8.38 tonnes / ha, Soya 2 tonnes / hectare and Sunflower 2.7 tonnes per hectare. Although these yields not all records they are a reflection on the quality of growing and techniques used in production.

Nikolaev this year has been drier than the more central areas. Although not the top Group performer in yield terms, the results have been acceptable and in summary the region had a good Winter crop harvest and an average summer crop, with Sunflower at 1.5 tonnes / hectare and Sugar Beet (irrigated) at 75 tonnes / hectare.

Cereal and Oilseed commodity prices have remained at low levels due to high Global harvests and market oversupply.

The 2017 Winter Crops are in reasonable condition with 21,700 hectares of Winter Wheat and 9,900 hectares of Oilseed Rape having been sown in Ukraine.

The Dobruchi dairy business has had a relatively level milk yield through the year to date and is today selling circa 8000 litres per cow. There is much room for improvement and this will only be achieved by getting the basics of nutrition, fertility and herd health absolutely correct. This is an ongoing process and the management in Dobruchi is very aware of the challenge and continues to work towards achieving better than average results.

Financial Highlights

  • The Rostov farms were sold in early June at a sales price of Euro 13.3 million.
  • Total revenue, other income, fair value adjustments and net changes in inventory from continuing operations amounted to EUR 32.9 million (EUR 34.8 million in 9m 2015).
  • EBITDA from continuing operations stood at EUR 7.3 million (EUR 7.5 million in 9m 2015).
  • The Net profit from continuing operations was EUR 0.3 million (loss of EUR 2.4 million in 9m 2015).
  • The Net Loss from all activities (Continued and discontinued) for the period was Euro -23.3 million (Loss EUR 34.2 million in 9m 2015).
  • The consolidated assets as of September 30, 2016 amounted to EUR 52.9 million (EUR 67.8 million at December 31, 2015).

The business has continued with its restructuring program and part of this process has been to look carefully at the balance sheet values of all assets and to determine whether they are shown at a realistic level. Therefore, it is important at this point in time to separate operational performance from asset ownership, if the true underlying value of the business is to be understood.

Our core Ukrainian business EBITDA has increased by €3.8m from 2015 to €12.4m at the 9 month point, this as a direct result of a reasonable harvest and further driven by cost reductions in production and administrative expenses. This part of the business continues to deliver good results, even when commodity prices have been at such low levels

The Russian Dairy business shows an EBITDA loss of -€5.1m, but this includes both a revaluation loss of – €5.2m and additional costs of operating the Assets held for sale (Land plots) of around – €0.127m, so in reality good progress is being made in that the operating EBITDA would be in the region of +€0.347m without these costs.

Looking at the Investment Activities part of the picture (Asset Ownership) the following changes have been made to reflect more realistic market valuation.

  • 13,180 hectares of land in Pskov Oblast has been revalued at a loss of €5.2m
  • majority of this land area has been reclassified as `Land Held for Sale`

Although much of the major restructuring has already been actioned, it should be appreciated that it is an on-going process, the end goal being a profitable and transparent business, focused on delivering value to its stakeholders. To that end there have been and will be further difficult decisions to take, but we are certain though that these steps must to be taken to turn the business around.


Update on the restructuring of the Bonds

This is an event that strictly speaking has occurred in the 4th Quarter but being significant deserves mention. As has been reported recently, the Shareholders offered the existing Bondholders to swap the Bond Debt for equity in Trigon Agri. Terms were agreed in early November between Bond Holders and Shareholders, this to allow a full Bond debt for Equity swap. This was confirmed by a unanimous shareholder vote at the recent EGM- The legal implementation is now in progress and it is anticipated that the new shares will be issued at the beginning of December this year. The full terms can be viewed in detail on the Trigon Agri website.

This has many positive effects on the business:

  • The negative Equity position at the 9 month position of -€5.2 can be truly viewed as temporary as the Bond Debt of SEK350m will be converted to shares in early December.
  • The business no longer has an annual interest cost related to the bonds of some €4m plus the scheduled repayment of the SEK350m in August 2017.
  • Our banking partners in Ukraine are now much more comfortable to either renewing or prolonging the working capital and investment loans that are required to enable the business to operate.

This event has truly allowed Trigon Agri to move forward with its team now concentrating on what it does best which is managing Grains, Oilseeds and Milk production.


Telephone conference details

A telephone conference will be held today, on November 30, 2016 at 10.00 CET.


Simon Boughton, CEO and Konstantin Kotivnenko, Executive Board member, will present and comment upon the results. There will also be an opportunity to ask questions.

To participate in the telephone conference, please call one of the following numbers:

DK: +45 35 445 575
FI: +358 981 710 493
UK: +44 2030 089 808
NO: +47 23 500 254
SE: +46 856 642 690

The presentation material will be available on before the telephone conference starts. A recording of the telephone conference will be available afterwards on

Interim report 3Q 2016

Investor enquiries:

Mr. Simon Boughton, CEO of Trigon Agri A/S, Tel: +372 6191 500, E-mail:

About Trigon Agri:

Trigon Agri is an integrated soft commodities production, storage and trading company with operations in Ukraine, Russia and Estonia. Trigon Agri’s shares are traded on the main market of Nasdaq Stockholm.

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This information is information that Trigon Agri A/S is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 8:00 CET on 30 November 2016.


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