22 April 2016
The company reported average operating and financial performance for the last year, while balance sheet quality remains mediocre. On positive side is the fact that the company secured its working capital financing sources for current season, so its risks for short-term period are relatively low.
As yields for main crops in last season were somewhat lower than in previous one, average realization prices also decreased, sales of the company declined vs. previous year by 9% and made EUR 58.9M. Thereof EUR 55.1M made realization of current year harvest, EUR 2.1M – last year’s crops, the rest – other realization and services. In Y2015 main Agrogeneration crops were wheat (46k ha of total 106k ha planted area, yield – 4.1 tons per 1 ha (vs. 5.2 tons a year ago)) and sunflower seeds (19k ha with yield 2.6 tons (on the level of previous year)).
The company demonstrated generally good EBITDA (EUR 18.4M with margin of 31%), but one should note that it was partially driven by positive effect from UAH devaluation (disregarding effect from UAH devaluation we would expect EBITDA margin to be in range 15-20%), on the other side as of 31.12.15 the company used more aggressive vs. previous year assumptions regarding future realization prices of crops to revaluate its biological assets: if assumptions would be the same as a year ago, amount of profit from revaluation would be by EUR 1.5M lower. Bottom-line of the company (net loss at EUR 7.9M was reported) was negatively affected by FX loss in total amount of EUR 13.3M.
Balance sheet structure of the company remains mediocre – largely following to negative results of Y2013 and subsequent UAH devaluation. As a result, after realized at the beginning of current year restructuring of obligations (fully described here) and Fixed Assets revaluation (so they increased from EUR 63.6M as of 31.12.14 up to EUR 81.4M, thereof EUR 34M goodwill), as of 31.12.15 Equity of Agrogeneration made EUR 69.4M, not sufficient to cover Fixed Assets, which means that operations of the company are fully financed by debt, trade payables and prepayments from suppliers, which means additional risks for the company. On positive side is the fact that with Alfa Bank loan of USD 35M and agreement on USD 10M prepayment with Quadra Commodities the company seems to secure its working capital needs financing for new season operations.