Total revenues have been stable vs. 9m 2014, as decrease of realization prices for agricultural commodities was offset by higher volumes in natural terms. Profitability was supported by UAH devaluation, along with it, main part of bank loans of the company are in USD, so that generally Balance Sheet structure worsened (because of devaluation). On negative side for the company is also its concentration on agricultural production only (so absence of vertical integration) with corn accounting for 55-60% of total sown area (74% of sales in 9m2015, not very good diversification).
Increase in realization volumes in natural terms in 9m 2015 mainly resulted from higher total crops harvest in Y2014 vs. previous year by 28% (as main part of realized in 9m 2015 crops – harvest of Y2014). Total harvest grew in a view of 1) increased sown area (by close to 20% vs. MY2013/14, so it was main factor of realization in natural terms growth); 2) higher share of corn in total sown area; 3) slightly higher net yields. Prices for main types of realized production decreased vs. 9m 2014, following general market trend, namely, price for corn declined to USD 155 per ton (vs. USD 189) , for wheat – to USD 159 (vs. USD 193 in 9m 2014).
As for profitability, reported EBITDA for 9m 2015 made USD 57.0M (USD 55.3 in 9m 2014). As it was the case if previous years, because of rather aggressive revaluation of biological assets in first half of calendar year, the company showed high EBITDA value in 1H 2015, while value for Q3 has been slightly negative (in both FYs2013-14 EBITDA for 2H has been negative). In both Y2014 and 9m 2015 EBITDA margin was influenced by UAH devaluation, so can not be fully regarded as sustainable.
BS structure of the company worsened as a result of UAH devaluation (main part of debt burden is in USD, while debt burden itself is significant as for type of business and its riskiness, though mitigated by presence of good volume of storage facilities, so the company has flexibility in crops realization) and in a view of rather aggressive company development up to 2H2014. On the positive side is declared concentration on debt reduction – debt burden decreased by close to USD 15.0M in 9m2015, which should somewhat increase margin of safety of IMC for its future activity.