Business news from Ukraine

MAJOR OWNER OF KSG AGRO SELLS ONE MLN SHARES TO POLISH COMPANIES

The major shareholder and the head of the board of directors of KSG Agro agricultural holding, Serhiy Kasyanov, who owns it through Olbis Investments Ltd. (Panama), on August 2 sold one 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 press service of the agricultural holding told Interfax-Ukraine about this transaction on August 4.
“The buyers were Polish companies together with beneficiaries in the European Union. Within a few days we will agree on all the formalities and will be ready to jointly inform the market about our future plans,” the press service quoted Kasyanov as commenting on the deal.
He explained that prior to the conclusion of the agreement, Olbis Investments Ltd. owned 9.7 million shares of KSG Agro S.A (Switzerland), the parent company of the Ukrainian agricultural holding, which accounted for 64.62% of its charter capital. Following the transaction, the Panamanian company owns 8.7 million shares of KSG Agro S.A (57.96%).
The press service of the agricultural holding emphasized that through this transaction, KSG Agro intends to attract investors to the development of meat processing facilities and to enter the markets for finished livestock products.
“The selling price of the shares has not been disclosed, but it is not lower than the market price and corresponds to the weighted average price of the holding’s shares on the Warsaw Stock Exchange (WSE) over the past few months. The buyers of the shares were two companies with Polish jurisdiction, whose names have not yet been disclosed,” the press service said.
Thus, according to the three-month dynamics of the value of shares of the agricultural holding presented on the WSE website, the investments attracted by it can roughly range from PLN 3.21 million ($ 834,000 at the current exchange rate) to PLN 4.49 million ($ 1.17 million).

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9% OF AGRICULTURAL LAND IN UKRAINE CULTIVATED BY 25 LARGEST AGRICULTURAL HOLDINGS – ANALYSIS

The share of land plots cultivated by the 25 largest agricultural holdings is 9% (3.88 million hectares) of the total area of ​​agricultural land in Ukraine, the investment company Concorde Capital (Kyiv) said during the presentation of the agricultural online platform KupiPai.
According to it, the land bank of Kernel agricultural holding (the main beneficiary is Andriy Verevsky) is 510,000 hectares, Ukrlandfarming (Oleh Bakhmatiuk) 475,000 hectares, MHP (Yuriy Kosiuk) 370,000 hectares, Agroprosperis (George Rohr and Maurice Tabasinik) 300,000 hectares, Astarta (Viktor Ivanchik) 243,000 hectares.
Continental Farmers cultivates 195,000 hectares, Epicentr Agro 160,000 hectares, Harveast 127,000 hectares, Ukrprominvest-Agro 120,000 hectares, Agroton and Agrain 110,000 hectares, Vitagro and Privat-agro 85,000 hectares.
Concorde Capital said the land bank TAS-Agro and Nibulon are 83,000 hectares each, Agrovisty, Svitanka and LNZ ​​80,000 hectares each, Agrotrade 71,000 hectares, Ristone Holdings 67,000 hectares, Grain Alliance 57,000 hectares, AgroGeneration 56,000 hectares.
The investment company said the total area of ​​Ukraine is 60.3 million hectares, including 42,700 hectares are suitable for agriculture (of which 31.1 million hectares are privately owned, 10.4 million hectares are state-owned, 1.2 million hectares of another form of ownership). At the same time, 89% of the 31.1 million hectares of land plots in private ownership are private shares of citizens.
Concorde Capital said that according to data for 2019, 56% of land plots were cultivated by individual tenants, 29% were individual owners, 8% of the land was leased from the state, and 7% were not cultivated at all.

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OLEKSANDR PETROV FROM IMC BUILDS UP 79.86% STAKE IN AGRICULTURAL HOLDING

Board Chairman of IMC agricultural holding Oleksandr Petrov on May 24 bought 60,000 shares of the company at a price of PLN 27.99 per share for a total of PLN 1.68 million ($458,470 at the rate of the National Bank of Poland as of May 26), thereby increasing his share in the charter capital to 79.86%.
According to the report of IMC on the website of the Warsaw Stock Exchange on Wednesday, Petrov personally and through his companies Richmarket Investments Ltd and Agrovalley Limited owns 26,437,463 shares of IMC.
According to the Warsaw Stock Exchange, since the beginning of the year, the IMC share price has increased by 51.2%, from PLN 18.25 to PLN 27.60, and by 2.4 times over the year (on May 24, 2020, the IMC share price was PLN 11.50).
Agroholding IMC specializes in the cultivation of grain, oilseeds and milk production in Ukraine. It processes about 123,300 hectares of land in Poltava, Chernihiv and Sumy regions. It owns facilities for storing 554,000 tonnes of grain and oilseeds.

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AGRICULTURAL HOLDING UKRLANDFARMING CUTS LIVESTOCK POPULATION FROM 52,000 TO 15,700

Due to a shortage of working capital caused by pressure from law enforcement agencies, the agricultural holding Ukrlandfarming has reduced the livestock population from 52,000 to 15,700, the owner of the agricultural holding Oleh Bakhmatiuk has said.
“It also requires working capital, which, unfortunately, we do not have, because credit lines are being closed. Let’s be reasonable, it is unlikely that animal husbandry will recover,” he said in an interview with Interfax-Ukraine. Bakhmatiuk said that the number of employees in animal husbandry decreased by 7,000, while in the Avangard sub-holding, which produces eggs and egg products by 5,500.
“At the peak there were 32,200 [employees], and now it is 17,300-17,500. For a year and a half, we laid off about 13,000-13,500 people in two main areas – poultry farming and animal husbandry, because they needed borrowing. This situation was due to the reputational terror that has been waged against the company and personally me as a shareholder over the past year and a half,” the businessman said.
He said that Ukrlandfarming is trying to preserve the agricultural business, in particular, the land bank, after previously falling by 170,000 hectares, has recently stabilized at about 470,000-475,000 hectares: almost 200,000 lease agreements and 600 near settlements.
“Now we must sow, carry out the sowing campaign correctly, with no crediting at all. We have prepared for this. It is twice as difficult for us as for everyone, but we will try to pass it,” Bakhmatiuk said.
According to him, the company failed to take advantage of the rise in prices for grain and corn, because it had to sell goods quickly due to lack of working capital.
The owner of the agricultural holding said that he would try to keep the company at its current size, but if pressure continues, it is likely that it will continue to decline. “Any defense, eventually, retreats. Even if not so sharply, but if in a year and a half we lost 35% of the company, then, for sure, this year we can lose another 15% or 10%,” he said.
Bakhmatiuk said that he remains in dialogue with creditors. However, the latter negatively perceive the events around the company. “They do not support me out of great love, probably. If to take it reasonably, they do it forcibly. But they understand that if there is a loss of the company, then there will be total losses for them. I am fighting for my own, and for them,” the businessman said.
According to him, the conversion of debt into shares in this situation will not fundamentally solve the problem. “The question is not about the shareholders. They are, in fact, shareholders at the expense of loans… It is not a problem with the share capital. But the problem is that an agricultural enterprise cannot live without borrowing, because you have a cycle of six to eight months,” Bakhmatiuk said.
In his opinion, creditors will so far refrain from filing a lawsuit against the company, as this will entail a “domino effect” and the loss of 95% of invested resources. “While these constraining factors are important for them, I maintain some kind of dialog with them. But the arguments are getting smaller. You perfectly understand that the time frame is not eternal: in six months or a year the issue must be resolved,” the businessman said.
He said that Ukraine today is in the “agrarian trend” and has good opportunities to increase the export of raw materials in the coming years.

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KSG AGRO AGRICULTURAL HOLDING INCREASES LAND BANK BY 6.7%

KSG Agro agricultural holding increased its land bank by 6.7%, to 23,900 hectares, the company’s press service said on Wednesday.
According to the report, the agricultural holding has increased its land bank due to 1,500 hectares of land shares in village Strilkove (Henichesk district, Kherson region), where it plans to grow crops.
The exact names of the products are not indicated.
The vertically integrated holding KSG Agro is engaged in pig breeding and production, storage, processing and sale of grain and oilseeds.
Over the nine months of 2020, the agricultural holding posted $4.77 million in net profit, which is 52% less than in the same period in 2019, revenue decreased by 17%, to $14.67 million.

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KSG AGRO CUTS NET PROFIT

The KSG Agro agricultural holding saw $4.77 million in net profit in January-September 2020, which is 52% less than in the same period in 2019.
According to an unaudited report of the holding, published on the Warsaw Stock Exchange, its revenue in the first nine months of 2020 decreased 17%, to $14.67 million.
In January-September of this year, KSG increased its gross profit 3.6 times compared to the same period in 2019, to $6.77 million, operating profit – 5.4 times, to $13.61 million. EBITDA in the reporting period grew 3.8 times, to $14.71 million.
Revenue and cost of sales are both lower by 17% and 36%, respectively, and primarily in the crop production segment, which is more affected by seasonality and weather conditions. Total revenue in the crop segment in the first nine months of 2020 was $6.9 million, compared to $9.7 million for the same period in 2019.
In January-September 2020, KSG’s revenue in the livestock segment decreased 0.5%, to $7.4 million, As part of the “other operations” segment revenue grew 1.7 times, to $0.4 million. Total pig sales in the first nine months of 2020 year amounted to 80,000 heads.
“The Board of Directors of the company does not currently provide for the significant adverse effects of the coronavirus COVID-19 epidemic on the group’s financial results in 2020,” the company said in its report.
The vertically integrated holding KSG Agro is engaged in pig breeding and production, storage, processing and sale of grain and oilseeds.

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