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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