In 2024, IMC Agro Holding will invest $12 million in grain carriers, Chairman of the Board of Directors Alex Lissitsa said in an interview with German radio deutschlandfunk.de.
“Things are much better now, especially because we have finally returned (to the de-occupied territories where the agricultural holding operates – IF-U). We are able to export. It is a huge advantage for us to export across the western border by rail. It used to be very difficult and expensive for us. Now everything is going well,” he said.
According to Lissitsa, the normalization of IMC’s operations after the de-occupation of the territories and the resumption of exports allowed the agricultural holding to resume investments in 2024.
“Now we have $12 million in investments in grain carriers (Pfeidewagen). We also have a number of other investments planned. Therefore, things are much better now than two years ago,” said the Chairman of the Board of Directors of IMC.
Commenting on the publication of his book “My Wild Nation. Ukraine on the Road to Freedom”, Mr. Lissitsa explained that the agricultural holding is currently working with the government to identify priorities for the economic recovery of Ukraine in the next few years.
He noted that only half of the decisions made under the Ukraine Facility program have been implemented. The issue is the need to take advantage of the opportunities in the agricultural sector during Ukraine’s integration into the European Union.
“There are many things that are a bit painful for us. For example, the use of all kinds of pesticides, the use of drones, and so on, where Ukrainian agriculture has already had a significant advantage. I think that for many people in Ukraine, this (integration – IF-U) will be painful, but nothing more. It is feasible. After all, we want it,” Lissitsa assured.
According to him, Ukraine’s “savagery” is not chaos or uncontrollability.
It is the unwavering will of the Ukrainian people to freedom and self-determination on the path to EU membership.
Speaking about the upcoming Independence Day, which will be celebrated for the third time during Russia’s full-scale invasion of Ukraine, Lissitsa clarified that there will be no celebrations in the country. However, Ukrainian President Volodymyr Zelenskyy has already initiated a meeting with farmers next week to discuss the current situation in the agricultural sector.
IMC Agro Holding has formed its own fleet of 150 grain carriers and intends to double it by the end of the year.
According to the agricultural holding’s website, IMC purchased 140 railcars manufactured by Kryukiv Carriage Works, and another 10 grain cars manufactured by Karpaty DMZ were received from the USAID Economic Support for Ukraine project aimed at supporting export logistics and modernizing Ukraine’s border crossing points for efficient agricultural exports.
“The emergence of our own railcar fleet in our company is a significant event. As IMC is an export-oriented company, two of the three crops we grow (winter wheat and corn) are actually fully sold to foreign markets, and the optimal export sales channel for us is rail transportation to seaports with further transportation by sea to the end consumer. Accordingly, we need to transport an average of 60-70 thousand tons of grain to the ports by rail every month. Having its own railcar fleet will allow the agricultural holding to significantly save on the cost of rail logistics,” explained IMC CEO Oleksandr Verzhykhovsky.
According to him, IMC plans to add another 150 grain carriers to its railcar fleet by the end of 2024, so that next year up to 80% of the company’s grain will be exported using its own railcar fleet.
In early August, the agricultural holding sent grain from its elevators to ports in its own grain wagons for the first time, the company said.
“IMC is an integrated group of companies operating in Sumy, Poltava and Chernihiv regions (north and center of Ukraine) in the crop production, elevators and warehouses segments.
The Group’s land bank is about 120 thousand hectares, with storage capacity of 554 thousand tons and a 2023 harvest of 1.002 million tons.
In 2023, IMC posted a net loss of $21.03 million compared to $1.12 million a year earlier, and its EBITDA decreased 11.3 times to $3.22 million. The holding’s revenue increased by 22.3% to $139.45 million, while the share of exports decreased to 68% from 73% a year earlier.
IMC Agro Holding has completed harvesting winter wheat from 20.2 thousand hectares and harvested 139.8 thousand tons with an average yield of 6.9 t/ha, which is the second best result in the history of the company and 60% higher than the average wheat yield in Ukraine, the company’s press service reported on its Facebook page.
According to the report, the agricultural holding is satisfied with the results, as most of the harvested winter crops meet the quality parameters of milling wheat.
“Last fall’s weather conditions were favorable for timely sowing, good germination and tillering of winter wheat. This spring, we carried out fertilization and plant protection against weeds, diseases and pests in accordance with the technological map. All operations were completed on time according to the crop development stages and weather conditions,” said IMC Production Director Mykola Pylypenko.
He noted that the agroholding started wheat harvesting earlier than usual due to the lack of precipitation needed for optimal plant development in the Poltava cluster. This led to a slight decrease in yields and an early start of the harvest in Poltava region.
“In other regions of the company, Chernihiv and Sumy, weather conditions were more favorable, and we significantly exceeded our targets for yield and gross production of winter wheat,” summarized Pylypenko.
“IMC is an integrated group of companies operating in Sumy, Poltava and Chernihiv regions (north and center of Ukraine) in the crop production, elevators and warehouses segments. The land bank is about 120 thousand hectares, storage capacity is 554 thousand tons, with a 2023 harvest of 1.002 million tons.
In 2023, IMC posted a net loss of $21.03 million compared to $1.12 million a year earlier, and its EBITDA decreased 11.3 times to $3.22 million. The holding’s revenue increased by 22.3% to $139.45 million, while the share of exports decreased to 68% from 73% a year earlier.
IMC Agro Holding has completed the spring sowing campaign of 2024, for which it has allocated 90 thousand hectares, according to its website.
According to the report, a total of 24.2 thou hectares of sunflower and 65.8 thou hectares of corn were sown.
“This year, we started sowing spring crops as planned on April 10, but during the first week of the sowing campaign we had to stop for 10 days due to unfavorable weather conditions (precipitation, low temperatures). We were able to resume sowing in full only at the end of April,” said Oleksandr Verzhykhovsky, Chief Operating Officer of IMC.
According to him, the company managed to complete the 2024 sowing campaign in close to the optimal timeframe thanks to a fleet of high-speed seeders and other modern equipment, as well as the coordinated work of the entire production team. The majority of the sown areas have already shown good growth.
IMC noted that it expects to meet its yield targets as it uses highly efficient technology with an intensive power and protection system.
“IMC is an integrated group of companies operating in Sumy, Poltava and Chernihiv regions (north and center of Ukraine) in the crop production, elevators and warehouses segments. The Group’s land bank is about 120 thousand hectares, with storage capacity of 554 thousand tons and a 2023 harvest of 1.002 million tons.
In 2023, IMC posted a net loss of $21.03 million compared to $1.12 million a year earlier, and its EBITDA decreased 11.3 times to $3.22 million. The holding’s revenue increased by 22.3% to $139.45 million.
In January-March 2024, IMC Agro Holding posted a net loss of $3.81 million compared to $4.10 million in the same period of 2023, while its EBITDA increased 3.2 times to $4.43 million, according to the company’s report on the Warsaw Stock Exchange.
“The increase in normalized EBITDA in the first quarter of 2024, as well as the decrease in net loss for the period, was due to an increase in sales,” the company said.
According to the report, the holding’s revenue increased by 41% to $59.20 mln, while the share of exports decreased to 71.7% from 83.5% a year earlier.
The share of corn in the revenue decreased to 42.8% from 83.3%, while the share of wheat increased to 34.4% from 15.9%, and sunflower seeds to 22.3% from 0.3%.
IMC’s gross profit increased by 48% to $12.75 mln, and its operating loss decreased to $0.17 mln from $2.85 mln in the first quarter of 2023.
At the same time, due to the devaluation of the hryvnia in the first quarter of this year compared to its fixed exchange rate for the year, the company incurred a foreign exchange loss of $4.10 million, which resulted in the total loss of IMC for the reporting year increasing to $7.86 million from $4.08 million a year earlier.
Overall, the agroholding’s assets increased by 0.6% to $314.14 mln in the first quarter of 2024.
At the same time, the company increased its investments in the reporting period to $4.9 mln, while in the first quarter of last year there were practically none ($0.02 mln), while the outflow from financing activities decreased to $0.9 mln from $6.4 mln, and the inflow from operating activities amounted to $16.4 mln against an outflow of $1.9 mln in the same period last year.
As a result, free cash flows at the end of March increased to $26.0 million from $16.20 million at the beginning of the year, while bank debt remained virtually unchanged at $45.9 million.
“IMC is an integrated group of companies operating in Sumy, Poltava and Chernihiv regions (north and center of Ukraine) in the crop production, elevators and warehouses segments. The land bank is about 120 thousand hectares, storage capacity is 554 thousand tons with a harvest of 1.002 million tons in 2023.
In 2023, IMC posted a net loss of $21.03 million compared to $1.12 million a year earlier, and its EBITDA decreased 11.3 times to $3.22 million. The holding’s revenue increased by 22.3% to $139.45 million, while the share of exports decreased to 68% from 73% a year earlier.
In 2024, IMC Agro Holding intends to expand corn crops and return to pre-war agricultural technology, and is also studying two projects to develop processing, the decision on which will be made in May-June, said Alex Lissitsa, SEO of the agricultural holding, at the Forbes Agrifood conference.
“During the two years of war, we have come a long way. We had 120 thousand hectares and 6 elevators. 100 thousand hectares and 5 elevators were under occupation. As a result of the de-occupation, we managed to enter our territory. However, some facilities were destroyed,” he said.
According to him, the new large dairy farm of the agricultural holding, located on the border with Belarus, had to be closed due to the poor condition of the cows after the occupation, as well as the almost completely destroyed logistics infrastructure around Chernihiv, where all bridges were destroyed.
In the first year, 30 thousand hectares of the agricultural holding’s land were in the war zone and were partially mined. The second year of the war was a stage of rethinking for IMC, and in the third year they managed to reach more or less the planned indicators, explained the SEO of the agricultural holding.
According to him, in 2022, IMC was unable to sow its land and grew mainly wheat. In 2024, the agroholding will return to traditional technological maps and expand the area under corn, as in 2023 it managed to get a record harvest of 20 tons per hectare. IMC was able to achieve such results thanks to favorable weather conditions that offset the problem of fertilizer and pesticide shortages. In addition, the agroholding has the necessary capacity to store corn.
Mr. Lissitsa also noted that IMC refused to cooperate with international traders who behaved incorrectly towards most Ukrainian customers. Currently, IMC prefers to cooperate with the domestic grain trader Nibulon, through which it sells about 70% of its products. IMC has also found new suppliers of sunflower seeds – Ukrainian regional companies in Chernihiv region.
“We used to build relationships with large foreign traders, and now we are establishing partnerships with those we have not communicated with before. We were beautiful, fashionable, and it was not very fun to work with them. And now we realized that we are basically still beautiful, but not so fashionable. And we need to work with local businesses. They offered us a helping hand and we started working again. Now we are really rethinking. Many contracts with international traders are still in court. I don’t know when they will end. Huge amounts of money are stuck there. It is really easier for us to drive up to our neighbors, negotiate and shake hands,” stated the IMC SEO.
Lissitsa also said that most agricultural holdings have not invested in machinery over the past two years, but have been living off the purchase of spare parts, and thus most of the agricultural machinery has been produced.
At the same time, the IMC is considering two processing projects in parallel – one with the EBRD and the other with the IFC.
“I can’t tell you yet, but we are looking at these projects very, very closely and will make a decision in May-June this year,” Lissitsa said.
The agroholding’s SEO emphasized that IMC has no problems with financing and has established partnerships with a number of banking institutions.
“Last year, we were probably one of the first in the agricultural sector to receive a new loan from the EBRD during the war. Raiffeisen financed us for the purchase of machinery. Credit Agricole is now adding more,” Lissitsa summarized and advised farmers to establish transparent relations with banks and be ready to provide them with all the information to get financing for new projects.
