Company Announcements

1st Half-year and 2nd Quarter Financial Results

Source: RNS
RNS Number : 2281V
Ros Agro PLC
08 August 2022
 

 

 

8 August 2022

 

ROS AGRO financial results for 1H 2022 and 2Q 2022

 

8 August 2022 - Today ROS AGRO PLC (the Company), the holding company of Rusagro Group (Rusagro), a leading Russian diversified food producer with vertically integrated operations, has announced the financial results for the six months ended 30 June 2022.

 

 

1H 2022 HIGHLIGHTS

 

-     Sales amounted to RUB 127,230 million (US$ 1,668 million1), an increase of RUB 22,858 million (+22%) compared to 1H 2021;

-     Adjusted EBITDA2 amounted to RUB 30,158 million (US$ 395 million), an increase of RUB 8,039 million (+36%) compared to 1H 2021;

-     Adjusted EBITDA margin rose to 24% in 1H 2022 from 21% in 1H 2021;

-     Net profit for the period amounted to RUB 166 million (US$ 2 million), a decrease of RUB 17,434 million;

-     Net debt position3 as of 30 June 2022 amounted to RUB 98,973 million (US$ 1,935 million);

-     Net Debt/Adjusted EBITDA (LTM4) as of 30 June 2022 was 1.76.

 

Commenting on the results, Timur Lipatov, CEO of Rusagro, said:

 

"In 2Q 2022 sales and adjusted EBITDA of the Group improved, whereas net profit decreased due to forex losses. Net revenue increased by 21% supported by higher total sales volumes in Sugar and Meat segments. Adjusted EBITDA margin increased by 1 pp to the level of 21% because sales grew in the same proportion as costs of goods sold."

 

 

 

 

 

 




Key consolidated financial performance indicators

in RUB million

Six months ended

Variance

Three months ended

Variance

30 June 2022

30 June 2021

Units

%

30 June 2022

30 June 2021

Units

%

Sales

 127,230

 104,372

 22,858

 22

 65,724

 54,439

 11,285

 21

Gross profit

 32,586

 24,379

 8,207

 34

 17,428

 14,290

 3,138

 22

Gross margin, %

26%

23%

3 pp

 

27%

26%

1 pp

 

Adjusted EBITDA1

 30,158

 22,119

 8,039

 36

 13,645

 10,950

 2,695

 25

Adjusted EBITDA margin, %

24%

21%

3 pp

 

21%

20%

1 pp

 

Net profit for the period 1,2

 166

 17,600

(17,434)

(99)

(1,775)

 11,074

(12,849)

 -

Net profit margin %

0%

17%

(17) pp

 

(3%)

20%

(23) pp

 

 

 

Sales volume of Rusagro products in 6М and 2Q 2022

in thousand tonnes

Six months ended

Variance

Three months ended

Variance

30 June 2022

30 June 2021

Units

%

30 June 2022

30 June 2021

Units

%

Sugar

 437

 362

 76

21

 260

 160

 100

62

Pork products

 133

 121

 12

 10

 73

 62

 10

 16

Agriculture crops, incl.

 501

 573

(72)

(12)

 145

 300

(155)

(52)

     wheat

 194

 360

(166)

(46)

 115

 218

(102)

(47)

     soybean

 116

 143

(26)

(18)

 15

 71

(56)

(80)

     corn

 111

 58

 53

 91

 10

 8

 2

 31

     sugar beet

 59

 -

 59

 100

 -

 -

 -

 -

     sunflower seeds

 21

 8

 13

 166

 5

 -

 5

100

     barley

 0

 4

(4)

(96)

 0

 4

(4)

(96)

Oil and fat products, incl.

 792

 835

(43)

(5)

 392

 449

(57)

(13)

     meal

 299

 306

(7)

(2)

 149

 188

(38)

(20)

     crude oil

 200

 198

 2

 1

 108

 95

 12

 13

     industrial fats

 141

 156

(14)

(9)

 62

 73

(11)

(15)

     dry whey mixes

 8

 7

 1

 19

 4

 4

 0

 11

     consumer oil & fat products

 136

 162

(26)

(16)

 64

 87

(22)

(26)

     consumer dairy products

 7

 7

 1

 12

 4

 3

 1

 23

 




KEY CONSOLIDATED CASH FLOW INDICATORS (NOT IFRS PRESENTATION*)

 

The key consolidated cash flow indicators presented according to management accounts methodology

RUB million

Six months ended

Variance

Three months ended

Variance

 30 June 2022

 30 June 2021

Units

%

 30 June 2022

 30 June 2021

Units

%

(706)

 21,348

(22,054)

 -

 4,424

 12,931

(8,507)

(66)

 28,771

 22,742

 6,028

 27

 11,625

 11,312

 313

 3

(28,252)

(758)

(27,494)

(3,627)

(6,305)

 2,096

(8,401)

 -

(3,962)

(17,411)

 13,448

 77

(1,696)

(15,412)

 13,716

 89

(4,627)

(6,222)

 1,595

 26

(1,538)

(4,183)

 2,644

 63

 -

(11,689)

 11,689

 -

 -

(11,689)

 11,689

 -

 39,140

 36,373

 2,767

 8

 30,214

 33,406

(3,191)

(10)

(18,995)

(102)

(18,893)

(18,528)

(11,035)

(72)

(10,963)

(15,255)

 15,476

 40,208

(24,732)

(62)

 21,908

 30,852

(8,945)

(29)

 

(*) See Appendix 3

The key investments in property, plant and equipment and inventories intended for construction during 1H 2022 were made in the Meat segment in the amount of RUB 2,233 million (1H 2021: RUB 2,846 million) mainly due to the purchases related to the construction project in the Russian Far East. Investments in the Agriculture segment in the amount of RUB 1,431 million (1H 2021 : RUB 911 million), Oil and Fat segment in the amount of RUB 770 million (1H 2021 : RUB 2,110 million excluding acquisition of SolPro assets), and Sugar segment in the amount of RUB 193 million (1H 2021 : RUB 355 million) mainly relate to purchases of machinery and equipment for production facilities renewal and maintenance.



 

Debt position and liquidity management

in RUB million

31 June 2022

31 December 2021

Variance

Units

%

Gross debt

196,641

172,724

23,917

14

Short-term borrowings

133,256

108,749

24,507

23

Long-term borrowings

63,385

63,975

(590)

(1)

Cash and cash equivalents, bank deposits and bonds

(97,668)

(99,315)

1,647

2

Short-term cash, deposits and bonds

(63,697)

(65,344)

1,647

3

Long-term cash, deposits and bonds

(33,971)

(33,971)

-

-

Net debt

98,973

73,409

25,564

35

Short-term borrowings, net

69,559

43,405

26,154

60

Long-term borrowings, net

29,414

30,004

(590)

(2)

Adjusted EBITDA (LTM4)

56,099

48,060

8,039

17

Net debt/ Adjusted EBITDA (LTM)

1.76

1.53

0.2 pp

 

 

Net finance income/ (expense)

in RUB million

Three months ended

Variance

Six months ended

Variance

30 June 2022

30 June 2021

Units

%

30 June 2022

30 June 2021

Units

%

Net interest expense

(3,317)

(2,507)

(810)

(32)

(1,803)

(1,213)

(590)

(49)

Gross interest    expense

(8,428)

(3,774)

(4,654)

(123)

(3,873)

(1,989)

(1,884)

(95)

Reimbursement of interest expense

 5,111

 1,267

 3,844

 303

 2,070

 776

 1,294

 167

Interest income

 4,348

 3,723

 625

 17

 2,040

 1,903

 136

 7

Net gain/ (loss) from bonds held for trading

 -

(1)

 1

 -

 -

(1)

 1

 -

Other financial expenses, net

(19,682)

(163)

(19,519)

(11,945)

(11,797)

(143)

(11,654)

(8,139)

Net foreign exchange gain/ (loss)

(19,551)

 28

(19,579)

 -

(11,723)

 60

(11,783)

 -

Other financial income / (expenses), net

(131)

(192)

 60

 32

(74)

(203)

 129

 63

Total net finance income/ (expenses)

(18,651)

 1,051

(19,702)

 -

(11,560)

 546

(12,106)

 -

Net debt increased at 30 June 2022 compared at 31 December 2021 as a result of an increase in short-term borrowings.

In 1H 2022 Rusagro continued to enjoy benefits from the state agriculture subsidies programme. Rusagro continued to receive bank loans with decreased preferential interest rates under the programme of government support. Under this programme, the government provides subsidies to the banks to compensate the loss of income on borrowings with decreased interest rates, given by the banks to agricultural producers. In 1H 2022 IFRS accounts these borrowings are accounted according to its face value with no adjustments to prevailing market rates. The differences between nominal and market interest rate is recognized as either government grants in a statement of financial position for borrowings received with the purpose to finance investment projects or interest expenses in a statement of comprehensive income for general purpose borrowings.

Net finance income of 1H 2021 in the sum of RUB 1,051 million changed to net finance expense in the amount of RUB 18,651 million in 1H 2022 as the result of negative dynamics in forex losses in 1H 2022 and increase in interest income on bank deposits in 1H 2022, partially compensated by lower interest income on SolPro loans.

________________________________

(1) The exchange rates used for translation of RUB amounts into USD represent average Central Bank official exchange rate for the respective reporting period for income, expenses and profits and the Central Bank official exchange rate as at the reporting date for balance figures.

(2) Adjusted EBITDA is defined as operating profit before taking into account (i) depreciation included in operating profit, (ii) net gain/ (loss) on revaluation of biological assets and agricultural produce, (iii) non-recurring components of other operating income/ (expenses), net, (iv) share-based remuneration, (v) provision for impairment of loans issued (see Appendix 2 for the detailed calculation of Adjusted EBITDA). Adjusted EBITDA is not a measure of financial performance under IFRS. It should not be considered as an alternative to profit for the period as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. Our calculation of Adjusted EBITDA may be different from the calculation used by other companies and therefore comparability may be limited. We believe that Adjusted EBITDA provides useful information to investors because it is an indicator of the strength and performance of our ongoing business operations, including our ability to fund discretionary spending such as capital expenditures, acquisitions of subsidiaries and other investments and our ability to incur and service debt.

(3) The Rusagro determines the net debt as short-term borrowings and long-term borrowings less cash and cash equivalents, bank deposits, bank promissory notes and bonds held for trading.

(4) LTM - The abbreviation for the "Last twelve months".



NOTE

ROS AGRO PLC (LSE, MOEX: AGRO) - a holding company of Rusagro Group, a leading Russian diversified food producer with vertically integrated operations in the following branches:

 

Agricultural:

Rusagro currently controls one of the largest land banks among Russian agriculture producers, with 642 thousand hectares of land under control located in the highly fertile Black Earth region of Russia (in the Belgorod, Tambov, Voronezh, Kursk, Orel regions) and in the Far East Primorye Region. Land and production sites are strategically located within
the same regions to optimize efficiency and minimize logistical costs. Rusagro is one
of the major sugar beet producers in Russia, but it also produces wheat and
corn, sunflower seeds and soybeans. These products are partially consumed by the Sugar, Meat and Oil and Fat segments, supporting a synergistic effect and lowering price change risk.

 

Oil and Fat:

Rusagro is the leading crude sunflower oil and consumer margarine producer, second largest industrial fats and mayonnaise producer in Russia with products sold under eleven key brands, such as EZhK, Schedroye Leto, Mechta Khozyaiki, umbrella brand Ya Lublu Gotovit (includes Moskovskiy Provansal, Novosibirskiy Provansal and Saratovskiy Provansal), Rossiyanka and Saratovskiy Slivochniy, Benefitto, Maslava and Leto Krasno (红色夏日), which is sold on the Chinese market. Rusagro also produces dry industrial mixes, cheeses, butter and cream sold under three brands: Milie, Syrnaya Kultura and Ya Lublu Gotovit. Rusagro owns four crushing and two oil & fats plants and leases two milk processing plants. Owning its sunflower and soy oil production allows Rusagro to control the source of the sunflower and soybean oil required to produce oil and fats products.

 

Sugar:

Rusagro is one of the leading Russian sugar producers (№3 in Russia and №1 on cube white sugar market), producing sugar from sugar beet at nine production sites in four regions. Group produces white and brown sugar sold under the brands Russkii Sakhar, Chaikofsky, Mon Cafeand Brauni. The Sugar segment is vertically integrated and sugar beets are supplied by Rusagro's Agriculture segment, which ensures a consistent supply. The sugar segment also operates a cereal plant and sells buckwheat and rice under the brand Tyoplye Traditsii.

 

Meat:

Rusagro is №4 largest pork producer in Russia. It operates large commercial pig breeding complexes adhering to best practices regarding biosecurity standards, nucleus farms, compound feed plants, slaughterhouses and meat processing plants in Tambov and Belgorod Regions and in the Russian Far East. Since 2016, Rusagro sells retail products under its own brand Slovo Myasnika (Butcher's word).

 

 

 

 

 

 

 

 

CONFERENCE CALL

Rusagro management is organizing a conference call on Company's 1H and 2Q 2022 financial results for investors and analysts.

Details of the call:

Date:

8 August 2022

Time:

16:00 PM (Moscow) / 14:00 PM (London)

Subject:

ROS AGRO PLC 2Q and 6M 2022 Financial results

 

 

 

Password:

701541

Link:

https://us06web.zoom.us/j/89970356497?pwd=WVBjdG5oSVQyTU8zYjJaUGlZeW1CUT09

 

 

 

 

FORWARD-LOOKING STATEMENTS

This announcement includes statements that are, or may be deemed to be, forward-looking statements. These forward-looking statements do not relate to historical or current events,
or to any future financial or operational activity of the Group.

 

By their nature, forward-looking statements involve risk and uncertainty because they relate
to future events and circumstances, a number of which are beyond the Rusagro Group's control. As a result, actual future results may differ materially from the plans and expectations set out
in these forward-looking statements.

 

The Group undertakes no obligation to release the results of any revisions to any forward-looking statements that may occur due to any change in its expectations or to reflect events
or circumstances after the date of this document.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONTACTS

 

Svetlana Shakaryan (Kuznetsova)

IR & ESG Director

Phone:  +7 495 363 1661

E-mail: ir@rusagrogroup.ru

 

 

Appendix 1. Consolidated statement of comprehensive income for the Six and Three months ended 30 June 2022 (in RUB thousand)

 


Six months ended
30 June

Three months ended
30 June

 

2022

2021

2022

2021

 





Sales

127,230,280

104,371,769

65,724,120

54,438,801

Net gain / (loss) on revaluation of biological assets and agricultural produce

(1,848,173)

(434,812)

1,249,037

1,591,010

Cost of sales

(92,796,000)

(79,557,967)

(49,545,210)

(41,739,476)

Net gain / (loss) from trading derivatives

-

(5)

-

-

Gross profit

32,586,107

24,378,985

17,427,947

14,290,335

 





Distribution and selling expenses

(7,360,741)

(4,318,350)

(3,731,561)

(2,455,399)

General and administrative expenses

(4,270,369)

(4,640,837)

(2,517,555)

(2,576,813)

Other operating income/(expenses), net

(3,504,772)

1,032,810

(2,887,479)

275,152

Reversal of provision/(provision) for impairment of loans issued

-

1,852,295

-

1,852,295

Operating profit

17,450,225

18,304,903

8,291,352

11,385,570

 





Interest expense

(3,317,386)

(2,507,021)

(1,802,674)

(1,212,937)

Interest income

4,348,186

3,722,605

2,039,794

1,903,340

Net gain / (loss) from bonds held for trading

42

(1,362)

-

(1,123)

Other financial income/ (expenses), net

(19,682,492)

(163,409)

(11,797,046)

(143,191)

Profit / (loss) before taxation

(1,201,425)

19,355,716

(3,268,574)

11,931,659

 





Income tax expense

1,367,826

(1,755,228)

1,493,461

(857,523)

Profit for the period

166,401

17,600,488

(1,775,113)

11,074,136

 





Other comprehensive income:

 




Total comprehensive income/ (loss) for the period

 166,401

 17,600,488

(1,775,113)

 11,074,136

 





Profit / (loss) is attributable to:

 




Owners of ROS AGRO PLC

 116,236

 17,630,249

(1,825,996)

 11,082,816

Non-controlling interest

 50,165

(29,761)

 50,883

(8,680)

Profit / (loss) for the period

 166,401

 17,600,488

(1,775,113)

 11,074,136

 





Total comprehensive income/ (loss) is attributable to:

 



Owners of ROS AGRO PLC

 116,236

 17,630,249

(1,825,996)

 11,082,816

Non-controlling interest

 50,165

(29,761)

 50,883

(8,680)

Total comprehensive income/ (loss) for the period

 166,401

 17,600,488

(1,775,113)

 11,074,136

 





Earnings per ordinary share for profit attributable to the equity holders of ROS AGRO PLC, basic and diluted (in RR per share)

4.32

655.25

(67.87)

411.90

 


Appendix 2. Consolidated statement of financial position as at 30 June 2022
(in RUB thousand)

 

 


30 June 2022

31 December 2021

ASSETS

 


Current assets

 


Cash and cash equivalents

61,938,206

46,462,179

Restricted cash

31

47

Short-term investments

5,751,719

21,001,760

Trade and other receivables

13,557,992

12,558,401

Prepayments

13,096,683

5,414,032

Current income tax receivable

1,166,166

1,532,726

Other taxes receivable

6,845,975

8,321,193

Inventories and short-term biological assets

84,923,576

77,509,033

Total current assets

187,280,348

172,799,371

 



Non-current assets

 


Property, plant and equipment

120,567,115

119,159,412

Inventories intended for construction

1,247,643

1,604,570

Right-of-use assets

7,100,092

7,346,538

Goodwill

2,364,942

2,364,942

Advances paid for non-current assets

5,718,584

7,355,467

Long-term biological assets

4,404,675

2,744,863

Long-term investments and receivables

42,519,911

42,527,657

Investments in associates

430,782

359,782

Deferred income tax assets

8,583,101

4,835,268

Other intangible assets

1,426,923

1,144,057

Other non-current assets

78,712

79,125

Total non-current assets

194,442,480

189,521,681

Total assets

381,722,828

362,321,052

 

 


LIABILITIES and EQUITY

 

 

Current liabilities

 


Short-term borrowings

133,255,929

108,748,840

Lease liabilities

1,113,914

1,130,831

Trade and other payables

11,988,286

15,440,635

Provisions

345,649

494,709

Current income tax payable

512,728

464,471

Other taxes payable

4,897,025

7,454,558

Total current liabilities

152,113,531

133,734,044

 



Non-current liabilities

 


Long-term borrowings

63,384,819

63,975,025

Government grants

10,388,375

9,325,530

Lease liabilities

5,178,688

5,535,014

Deferred income tax liability

2,615,641

1,876,244

Total non-current liabilities

81,567,523

80,711,813

Total liabilities

233,681,054

214,445,857

 



Equity

 


Share capital

12,269

12,269

Treasury shares

(490,607)

(490,607)

Additional paid-in capital

26,964,479

26,964,479

Other reserves

1,363,177

1,363,177

Retained earnings

120,196,722

120,080,307

Equity attributable to owners of ROS AGRO PLC

148,046,040

147,929,625

Non-controlling interest

(4,266)

(54,430)

Total equity

148,041,774

147,875,195

Total liabilities and equity

381,722,828

362,321,052

 

 



Appendix 3. Consolidated statement of cash flows the Six months ended 30 June 2022 (in RUB thousand) - NOT IFRS PRESENTATION (*)


Six months ended

 

30 June 2022

30 June 2021

Cash flows from operating activities

 


Profit/(loss) before income tax

(1,201,425)

 19,355,716

Adjustments for:

 


Depreciation and amortization

 7,417,511

 5,924,098

Interest expense

 8,427,977

 3,774,168

Government grants

(5,863,671)

(2,167,458)

Interest income

(4,348,184)

(3,722,605)

Loss/ (gain) on disposal of property, plant and equipment

(473,166)

(17,033)

Net (gain) / loss on revaluation of biological assets and agricultural produce

 1,848,173

 434,812

Change in provision for impairment of loans issued

 3,028

(1,852,295)

Interest expense on leases

 122,595

 122,168

Realised deferred day-one gain

 -

(395,146)

Change in provision for net realisable value of inventory

 508,561

 999,799

Change in provision for impairment of receivables and prepayments

 35,050

 72,545

Foreign exchange (gain) / loss, net

 22,932,796

(96,100)

Lost / (reversal of) harvest write-off

 5,945

 210,464

Net (gain) / loss from bonds held for trading

(42)

 1,362

Change in provision for impairment of advances paid for property, plant and equipment

(31,224)

(34,322)

Change in other provisions

(149,060)

 571,009

Dividend income

 -

(377,269)

Loss on disposal of other assets

 5,162

 -

Gain on SolPro loans redemption

(400,307)

 -

Other non-cash and non-operating expenses, net

(69,181)

(61,794)

Operating cash flow before working capital changes

 28,770,538

 22,742,119

Change in trade and other receivables and prepayments

(12,932,703)

(1,908,398)

Change in other taxes receivable

 1,475,217

(5,552,282)

Change in inventories and short-term biological assets

(11,514,566)

(1,607,811)

Change in trade and other payables

(2,991,723)

 2,213,800

Change in other taxes payable

(2,287,788)

 6,096,652

Cash generated from operations

 518,975

 21,984,080

Income tax paid

(1,225,243)

(636,256)

Net cash from operating activities

(706,268)

 21,347,824

 



 

Appendix 3 (continued). Consolidated statement of cash flows the Six months ended 30 June 2022 (in RUB thousand) - NOT IFRS PRESENTATION (*)


Six months ended

 

30 June 2022

30 June 2021

Cash flows from investing activities

 


Purchases of property, plant and equipment including SolPro assets acquisition

(4,445,855)

(17,682,805)

Purchases of other intangible assets

(523,970)

(201,571)

Purchases of land lease rights

(16,906)

(25,828)

Proceeds from sales of property, plant and equipment

 451,961

 175,297

Purchases of inventories intended for construction

(180,927)

(228,460)

Purchases of associates

(71,000)

(56,600)

Movement in restricted cash

 -

 104,163

Dividends received

 377,269

 377,331

Other investing activities

 447,203

 127,849

Net cash from investing activities

(3,962,225)

(17,410,624)

Cash flows from financing activities

 


Proceeds from borrowings

 43,447,215

 75,517,913

Repayment of borrowings

(20,618,379)

(10,206,491)

Interest paid

(3,011,301)

(2,042,736)

Change in cash on bank deposits

 16,108,072

(28,000,000)

Proceeds from sales of bonds with maturity over three months*

 140,783

 220,282

Loans given*

(1,250,617)

(281,445)

Loans repaid*

(431,958)

 7,807,779

Interest received*

 4,686,213

 3,255,728

Proceeds from government grants

 581,096

 869,393

Purchases of non-controlling interest

(518)

 -

Dividends paid to owners Ros Agro PLC

(120)

(10,666,996)

Repayment of lease libilities - principal

(511,339)

(55,068)

Other financial activities

 711

(45,633)

Net cash from  financing activities

 39,139,858

 36,372,726

Net effect of exchange rate changes on cash and cash equivalents

(18,995,338)

(101,974)

Net increase/ (decrease) in cash and cash equivalents

 15,476,027

 40,207,952

Cash and cash equivalents at the beginning of the period

 46,462,179

 11,866,798

Cash and cash equivalents at the end of the period

 61,938,206

 52,074,750

 

 

 (*) For the purpose of conformity with the methodology of the Group's net debt calculation investments in financial assets related to financial activities are presented in Cash flows from financing activities in the Group's management accounts.

 

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