1H 2018 Highlights
- 1H 2018 net loss amounted to EUR 2.8 million (profit of EUR 9.5 million in 1H 2017)
- EBITDA loss of EUR 1.8 million in 1H 2018 compared to EBITDA profit of EUR 9.4 million in 1H 2017
- Currency translation losses from disposal of subsidiaries amounting to EUR 10.0 million recycled from Other Comprehensive Income to Income Statement in 1H 2018
- Disposal of part of elevator business for USD 2.6 million, EUR 0.3 million gain from disposal recorded in 1H 2018. The total storage capacity decreased to 85,000 tonnes (195,000 tonnes at 1H 2017).
- Disposal of 10 thousand ha Russian land plots for EUR 171 thousand (17 EUR/ha). Total land under control as of June 30, 2018, declined to 48 thousand hectares (58 thousand hectares at December 31, 2017).
- Lower financial costs by EUR 0.2 million in comparison with 1H 2017
- Early crop harvest completed and the sowing of 2019 winter crops underway. Due to lack of precipitation, early crops yields are lower than 5Y average.
- The group result for wheat on 20,987 ha is 3.17 brutto t/ha which is 72.6 % of the planned budget (4.36 t/ha). Recent rains have postponed the wheat harvest in both Kharkiv clusters and negatively influenced the quality of grain.
- Harvest of oilseed rape (1,822 ha) was also finished and the group result is 1.17 t/ha brutto which is 58 % of the planned budget (2.00 t/ha).
- Harvest of peas (1,947 ha) finished with the group result 2.68 t/ha brutto which is 85 % of the planned budget (3.16 t/ha).
- Harvest of linseed (1,069 ha) finished with the group result 0.67 t/ha brutto which is 49 % of the planned budget (1.37 t/ha).
- All four mentioned commodities accounted for 62.8 % of budgeted crop revenues.
The year so far is looking weaker than last year. Our end results will almost certainly be affected by spring drought across all of our Ukrainian clusters and problems caused by former management which start to accumulate and we anticipate additional legal and consultancy costs.
Last five years of Agromino A/S are characterized by continuous loss of land and dropping net yields, combination of which results in steady fall of overall net production. Net production decreased steadily from 168 thousand tonnes in 2014 to 114 thousand tonnes forecasted for 2018.
Reasons can be found in bad weather, unsuitable machinery, lack of knowhow and lack of capital restricting necessary investments and expenditures on seeds and fertilizing.
After the drought of 2017, which decreased the production value by 16 % in the last year, the company´s winter crops suffered even more this year. Yields were significantly lower than planned (wheat: 72 % of the budget, oil seed rape: 58 %, peas: 85 %, linseed: 49 %).
All four mentioned commodities accounted for 62.8 % of budgeted crop revenues. Their results of minus 28 to minus 51 % below the budget were significantly worse than the expectations made in May (minus 6 to minus 27 %).
Rainfall during the harvest delayed its completion and the wet conditions led to significantly lower wheat quality, e. g. due to pre-harvest sprouting. Part of harvested wheat cannot even be sold as the worst class 6, i.e. feed grain.
Crop prices show positive signals which could compensate smaller part of the yield losses. However, the quality is in question.
Unfortunately, no additional rains followed for the rest of July and whole August. This limited sowing of 2019 crops and there is a risk that already sown oil seed rape might be lost in dry areas.
After short time of better prices Agromino experienced 22 % average price decrease during 1H 2018 compared to 1H 2017. Milk yield in Russia is rising by 15 % seasonally but the price we are paying for that is too high. Operational expenditures per kg are far above the selling price. Our subsidiary investment in Trigon Dairy Farming Estonia is showing a negative contribution too.
The land ownership of Agromino has fallen sharply from 13 thousand to 3 thousand hectares after the sale of 10 thousand owned hectares in Russia by the former management for almost zero consideration.
The rental land base in Ukraine is more stable with a 2 % loss of its land bank year on year.
Agromino increased rental payments and hired more employees to take care of the landbank in order to slow down the landbank decrease.
Telephone conference details
A telephone conference will be held today, on 31 August, 2017 at 9:00 CEST
Petr Toman, CEO 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:
CZ: +420 225 850 284
DK: +45 7 8768490
EE: +372 63 46101
LU: +352 20 301626
RU: +7 499 6091200
SE: +46 8 1241 0952
UA: +380 94 7101299
UK: +44 203 7696819
Conference code is: 665756
The Interim Report will be available on www.agromino.com before the telephone conference starts.
Agromino 1H 2018 Interim Report
Mr. Petr Toman, CEO of Agromino A/S
Tel: +38 044 586 4445, e-mail: email@example.com
Agromino is an integrated soft commodities production, storage and trading company with operations in Ukraine, Russia and Estonia. Agromino 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 08:00 CEST on 31 August 2018.
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