Mriya: Updates on cash flow forecasts and landbank

Following the winter crop harvesting campaign and a more detailed analysis of the landbank, the new management appointed in the framework of the control take-over by the creditors have reviewed the operational assumptions for the short and medium-term cash flow forecasts.

Sown area starting from the season 2015/2016 is to make close to 165k ha, almost equally distributed between winter and spring crops. Operating costs per ha assume middle-cost model (for instance cost per 1 ha for wheat is to make USD 500, for corn – USD 833). Such model as seen as optimal under current conditions in Ukraine, as it allows to have higher than average yields but mitigates risk of negative market and/or weather conditions (which is highest for producers with high-cost model).

Basing on presented model average seasonal revenues are to reach USD 170M with EBITDA margin close to 40%.

Changes in land bank are to be relatively minor vs. current situation – the company is to dispose of close to 20kha of suboptimal land. Mriya`s management proposes: to replace suboptimal 9,6 Kha by selling mentioned those fields and purchasing 5-6 Kha in more suitable places (Q4 2015-Q2 2016); to terminate land lease agreements for 4,5 Kha controlled but not farmed land; to keep ~6 Kha of non-farmed land in the land bank, which can not be divested as it forms an integral part of the overall land bank of Mriya. Land bank under Mriya`s control as of 01.09.2015 - 180 Kha which is 16 Kha less than as of 01.04.2015.

Parameters for revised land bank clustering: number of clusters – 6-8 (vs. current 17), maximum cluster size – 35-40k ha (to ensure that clusters are manageable), administrative regions borders should be respected whenever possible.

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