In January-June 2021, the KSG Agro agricultural holding increased its net profit 48 times, year-over-year, to $13.7 million, of which the group of companies received $12.86 million through the sale of a number of its assets.
According to the holding’s statement on the website of the Warsaw Stock Exchange on Sunday, its revenue for the specified period decreased by 12%, to $6.81 million.
“In May 2021, the group sold its subsidiaries Soyuz-3 LLC, Agrofirma Vesna LLC, UAIH Trading House LLC. Agrofirma Vesna LLC and UAIH Trading House LLC are inactive organizations. Soyuz-3 LLC is a production organization engaged in crop production, but acquired with large commitments and remains outside the group’s ownership structure until such obligations are settled,” the company said in a statement.
It is specified that proceeds from the disposal of the subsidiary company Soyuz-3 LLC (Novopokrovka, Dnipropetrovsk region) from the agricultural holding amounted to $6.5 million, UAIH Trading House LLC some $4.27 million, Agrofirma Vesna LLC some $2.01 million.
KSG Agro for the reporting period reduced gross profit by 27%, to $2.48 million, operating profit by 28%, to $1.89 million, its EBITDA decreased by 22%, to $2.69 million.
According to the statement, the company in the first half of the year reduced profit in the crop segment by 37%, to $1.46 million, in the livestock segment by 19.4%, to $ 700,000, while in the segment “other operations” (production of fuel pellets and heat energy) increased by almost 44.5%, to $310,000.
“In 2021, the group started a project to gradually renew the sow population in Ukraine to increase the birth rate of piglets. To this end, the group is negotiating with Suisag, a Swiss pig genetics company, and Genesus, a Canadian genetic company. As of the date of these financial statements, the group expects to receive first batches of sows from Genesus,” the company said in the statement.
The agricultural holding said in the report that it is considering an international investment project with several partners to build a breeding pig farm in Kazakhstan for 50,000 pigs with an estimated total cost of EUR 30 million.
At the same time, KSG Agro said the total debt of the group of companies in U.S. dollars as of June 30, 2021 decreased by almost 44.5%, year-over-year, to $15.3 million, while it increased from UAH 82,000 to UAH 14.8 million
“In 2020, the group has already managed to increase its net current assets from negative $23.5 million as of January 1, 2020 to negative $6.3 million as of December 31, 2020. The group plans to complete the second phase of the process by the end of 2021, bringing net current assets to a positive value. As of June 30, 2021, the total balance of ‘other financial liabilities’ compared to December 31, 2020 decreased even more,” the group said.
According to the report, the majority shareholder and head of the board of directors of the agricultural holding KSG Agro Serhiy Kasianov, who owns it through Olbis Investments Ltd. (Panama), on August 2, sold 1 million shares (6.66%) of the group of companies to two legal entities with Polish jurisdiction, after the transaction, the share of Olbis Investments Ltd. amounted to 57.96% of the charter capital.
The vertically integrated holding KSG Agro is engaged in pig breeding, as well as in the production, storage, processing and sale of grain and oilseeds. Its land bank is about 21,000 hectares.
According to the agricultural holding itself, it is one of the top five pork producers in Ukraine.