Avangard agricultural holding, the largest egg producer in Ukraine, in January-June 2019 saw $110.89 million in net loss, which is 3.1 times more than a year ago.
According to a company report posted on the London Stock Exchange (LSE) on Friday, consolidated revenue grew by 24.6%, to $84.78 million, and gross loss – 14 times, to $65.1 million.
Export revenue for the reporting period increased 1.6 time, to $44.8 million, and its share amounted to 53% of the company’s consolidated revenue.
In the first half of the year, egg production amounted to 1.78 billion pieces, which is 44% more than in the same period in 2018, their sales grew 1.9 times, to 1.59 billion pieces, exports – 2.6 times, to 785 million pieces.
The average selling price of eggs was UAH 1.23 per piece, excluding VAT, which is 24% lower than the level of the first half of last year, in U.S. dollars – $0.046 per piece, excluding VAT (25% less).
The production of dry egg products during the reporting period amounted to 2,380 tonnes (34% less), their sales also decreased 34%, to 2,280 tonnes. Export of dry egg products amounted to 1,590 tonnes and decreased by 46%.
The average selling price of dried egg products was $3.84 per kg, an increase of 4% from January-June 2018.
As of June 30, the total number of birds was 16 million, which is 15% more compared to the same date last year. The number of laying hens amounted to 11.2 million (35% more).
According to the report, negotiations with creditors on restructuring are ongoing.
Net cash used in investing activities increased to $14.2 million from $1.2 million in the first half of 2018 as a result of an increase in investment. In general, the net cash outflow in the reporting period amounted to $20.9 million compared to a net cash inflow of $4.1 million as of June 30, 2018.
As of June 30, 2019, the total debt of the company increased slightly compared to December 31, 2018 and amounted to $391.5 million. Net debt increased 6.5%, to $390.9 million. Issue of the company’s eurobonds maturing on October 29, 2018 amounted to 60% of total debt.
KSG Agro agroholding saw $0.895 million of net profit in 2017, which is almost 77.4% less than in 2016. According to an unaudited report of the company posted on the website of the Warsaw Stock Exchange (WSE), revenue last year grew by 10.8%, to $23.19 million. Gross profit fell by 10.6%, to $11.64 million, and operating profit – by 29.6%, to $11.24 million.
Earnings before interest, taxes, depreciation and amortization (EBITDA) fell by 26.4%, to $12.73 million.
In 2017, the company increased sales of pigs and young pigs by 5.6%, to 9,810 tonnes (in monetary terms by 38.8% – to $11.8 million). Last year, the holding collected a crop harvest which was 1.6% less than in 2015 – 50,600 tonnes. In particular, 18,400 tonnes of sunflower, 19,700 tonnes of wheat, 5,200 tonnes of barley, 1,700 tonnes of corn, and 800 tonnes of rapeseed were harvested.
In the structure of KSG Agro’s revenue for the last year, the share of the grain segment decreased to 36% from 37% in 2016, the pig-breeding segment grew to 33% from 26%, processing – to 22% from 20%. Net debt of the company as of December 31, 2017 was $47.8 million.
KSG Agro restructured $3.88 million of liabilities for 30 years. This loan was previously taken in Credit Agricole Bank. In January 2018, the bank conceded it along with property rights as a pledge to a third party that restructured the loan.
The company is negotiating with international creditors related to the restructuring of the total debt of $18 million. The agroholding in 2017 signed letters of intent, which agreed on the preliminary conditions for debt restructuring. In accordance with them, KSG Agro is obliged to repay the debt in ten years starting from 2018. In December 2017, the group made a final decision on the choice of a legal adviser and began the process of preparing the agreement.
Fields with spring crops of Mriya agroholding this year would expand by almost 21% compared with 2017, to 103,250 ha, the company said on Tuesday. The company said in a press release that this year the sowing campaign was started later than it was planned due to late spring.
“Due to weather, we will have to carry out the spring sowing campaign on a tight schedule. We have adjusted our plans and intentionally increased the share of early grain crops, spring barley and rapeseeds, to 14,200 hectares and 7,500 ha in the structure of the areas planted by Mriya. We also succeeded in promptly contracting additional tillage equipment and seeders, so we hope to complete the sowing of spring crops without falling behind the plan,” Mriya Chief Operation Officer Andriy Hryhorov said.
This spring, the strategic agricultural crops for the holding are sunflower, with 33,500 hectares, corn (14,800 hectares), soybean (24,700 hectares) and sugar beet, the areas under which are doubled compared with last year, to 7,200 ha. Traditionally, peas (356 hectares) and potatoes (660 ha) are also present in the structure of the areas planted by Mriya.
During the sowing campaign 2018 some of the areas the agroholding will be sowed with seeds of its own production, in particular, soybeans.
Net loss of Avangard agroholding, the largest egg producer in Ukraine, was 86.7% less in 2017, reaching $7.5 million, the holding reported on the London Stock Exchange on Thursday. Consolidated revenue fell by 335, to $127.9 million, including revenue from exports of shell eggs and dry egg products fell by 45%, to $36.7 million. Operating loss fell by 74.4%, to $3.8 million, and earnings before interest, taxes, depreciation and amortization (EBITDA) grew almost 7.9-fold, to $11.8 million.
The agroholding said that in October-December 2017, the company saw $13.1 million of net profit compared with $17.8 million of net loss a year ago. Consolidated revenue fell by 45%, to $43.7 million, while operating profit grew 1.77-fold, to $20.8 million and EBITDA – 1.08-fold, to $23.6 million.
Shell egg production fell by 4% in 2017, to 2.399 million, while sales grew by 23%, to 1.869 million. As at December 31, 2017, the total poultry flock amounted to 9.5 million hens, down by 30% year-over-year. Average price of eggs fell by 13% in 2017, to UAH 1.17 per egg (excluding VAT).
The production of dry egg products amounted to 6,368 tonnes, a decline of 48% year-over-year. Sales of dry egg products totaled 3,264 tonnes, down by 64% year-over-year. Exports of dry egg products amounted to 2,561 tonnes, a decline of 69% year-over-year. The average sales price of dry egg products was $4.3 per kg, 23% down year-over-year.
As reported, Ukrlandfarming agricultural holding in 2017 reduced the land bank by 5.8%. Ukraine’s largest producer of eggs Avangard agricultural holding, controlled by Ukrlandfarming, whose shares are traded on the London Stock Exchange, in October 2015 completed the restructuring of eurobonds for $200 million. Previously American Cargill has withdrawn from among the shareholders of Ukrainian-based UkrLandFarming (ULF) agrarian holding, according to a ULF financial report for 2016. Cargill’s subsidiary, Cargill Financial Services International Inc. by the end of 2015, had held 1,668,749 ULF shares, or 5% of the total number. By the end of 2016, the number of shares owned by Avonex Limited had not changed, whereas the package held by Cargill was transferred to Cyprus-based Quickcom Limited’s ownership. The report says that the sole owner of Avonex Limited and Quickcom Limited is Oleh Bakhmatiuk. Cargill acquired a 5% stake in ULF early in 2014 for $200 million. Based on the sum of the deal, the total value of the holding was assessed at $4 billion.
A deal to sell Mriya agroholding could take place only after the completion of restructuring of its old debt, the agroholding’s press service has reported. According to the report, there is the interest of potential investors to the company. In particular, in 2017, Kernel and several large agricultural market players offered creditors of Mriya to buy the company. In 2018, some offers from Ukrainian and international companies arrived.
“For our creditors, the current owners of Mriya, agriculture is not a core business, and servicing the working capital of Mriya is a compulsory measure. Therefore, as I have repeatedly said, the arrival of a strategic investor is an ideal option for the further development of Mriya,” the press service said, citing Mriya CEO Simon Cherniavsky. According to him, before the completion of debt restructuring, there is neither a subject of a potential transaction nor a legal mechanism for its implementation.
“We have completed the restructuring of the most of the secured debt and started implementing the agreements reached with unsecured creditors. At this stage we have faced a number of difficulties related to the novelty and uniqueness of the procedure for the Ukrainian legislation and the enforcement system, which delays the process. I would refrain from giving forecasts,” CEO said.
Mriya said that the working capital of the agroholding today is financed by its creditors, mainly – bondholders from the United States and Europe. “We have funds in the full amount for this season: we have enough funds for sowing and harvesting, paying rents, fulfilling social obligations and even replenishing the technical park and investing in technology development. Mriya is working in a usual mode and is confidently looking to the future,” said Cherniavsky said. Previously, the media reported that negotiations about the possible purchase of Mriya by Continental Farmers Group are being held.