REG - Ros Agro PLC - 1st Quarter Financial Results
11/05/2022 08:00
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RNS Number : 0732L Ros Agro PLC 11 May 2022
11 May 2022
ROS AGRO financial results for 1Q 2022
11 May 2022 - Today ROS AGRO PLC (the "Company"), the holding company
of Rusagro Group (the "Rusagro"), a leading Russian diversified food producer
with vertically integrated operations, has announced the financial results for
the three months ended 31 March 2022.
1Q 2022 HIGHLIGHTS
- Sales amounted to RUB 61,506 million (US$ 715 million(1)), an
increase of RUB 11,573 million (+23%) compared to 1Q 2021;
- Adjusted EBITDA(2) amounted to RUB 16,887 million (US$ 196 million),
an increase of RUB 5,718 million (+51%) compared to 1Q 2021;
- Adjusted EBITDA margin rose from 22% in 1Q 2021 to 27% in 1Q 2022;
- Net profit for the period amounted to RUB 2,240 million (US$ 26
million), a decrease of RUB 4,286 million (-66%);
- Net debt position(3) as of 31 March 2022 amounted to RUB 91,681
million (US$ 1,090 million);
- Net Debt/Adjusted EBITDA (LTM(4)) as of 31 March 2022 was 1.70.
Commenting on the results, Timur Lipatov, CEO of Rusagro, said:
"In 1Q 2022 Rusagro continued to demonstrate growth of its revenue and
adjusted EBITDA, but net profit decreased due to forex losses caused by money
blocking by European banks. Supported by higher total sales volumes across all
business segments except Sugar segment, net revenue increased by 23%.
Moreover, as sales grew more than corresponding rise in costs of goods,
adjusted EBITDA margin had a 5 pp improvement, which pushed EBITDA by 51% up
in comparison to the same quarter of the previous year."
Key consolidated financial performance indicators
in RUB million Three months ended Variance
31 March 2022 31 March 2021 Units %
Sales 61,506 49,933 11,573 23
Gross profit 15,531 10,089 5,442 54
Gross margin, % 25% 20% 5 pp
Adjusted EBITDA 16,887 11,169 5,718 51
Adjusted EBITDA margin, % 27% 22% 5 pp
Net profit for the period (1) 2,240 6,526 (4,286) (66)
Net profit margin % 4% 13% (9) pp
(1 )Net profit for the period is affected by non-cash income/(loss) on
revaluation of biological assets and agricultural produce.
Sales volume of Rusagro products in 1Q 2022
in thousand tonnes Three months ended Variance
31 March 2022 31 March 2021 Units %
Sugar 177 202 (24) (12)
Pork products 60 58 2 3
Agriculture crops, incl. 356 272 84 31
soybean 102 72 30 42
corn 101 50 50 100
wheat 79 143 (63) (44)
sugar beet 59 - 59 100
sunflower seeds 16 8 8 100
Oil and fat products, incl. 400 385 14 4
meal 149 118 31 26
crude oil 92 103 (10) (10)
industrial fats 79 83 (4) (4)
dry whey mixes 4 3 1 27
consumer oil & fat products 72 75 (4) (5)
consumer dairy products 3 3 0 1
KEY CONSOLIDATED CASH FLOW INDICATORS (NOT IFRS PRESENTATION*)
The key consolidated cash flow indicators presented according to management
accounts methodology
in RUB million Three months ended Variance
31 March 2022 31 March 2021 Units %
Net cash from operating activities, incl. (5,130) 8,417 (13,547) -
Operating cash flow before working capital changes 17,146 11,430 5,716 50
Working capital changes (21,946) (2,854) (19,092) (669)
Net cash from investing activities, incl. (2,267) (1,999) (268) (13)
Purchases of property plant and equipment and inventories intended for (3,088) (2,040) (1,049) (51)
construction
Net cash from financing activities 8,925 2,967 5,958 201
Net effect of exchange rate changes on cash and cash equivalents (7,960) (30) (7,930) (26,338)
Net increase / (decrease) in cash and cash equivalents (6,432) 9,356 (15,787) -
(*) See Appendix 3
The key investments in property, plant and equipment and inventories intended
for construction during 1Q 2022 were made in the Meat segment in the amount of
RUB 1,277 million (1Q 2021: RUB 1,251 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 830 million (1Q 2021: RUB 258
million), Oil and Fat segment in the amount of RUB 815 million (1Q 2021 : RUB
405 million), and Sugar segment in the amount of RUB 166 million (1Q 2021: RUB
126 million) mainly relate to purchases of machinery and equipment for
production facilities renewal and maintenance.
Debt position and liquidity management
in RUB million 31 March 2022 31 December 2021 Variance
Units %
Gross debt 180,015 172,724 7,291 4
Short-term borrowings 115,856 108,749 7,107 7
Long-term borrowings 64,159 63,975 184 0
Cash and cash equivalents, bank deposits and bonds (88,334) (99,315) 10,981 11
Short-term cash, deposits and bonds (53,923) (65,344) 11,421 17
Long-term cash, deposits and bonds (34,411) (33,971) (440) (1)
Net debt 91,681 73,409 18,272 25
Short-term borrowings, net 61,933 43,405 18,528 43
Long-term borrowings, net 29,748 30,004 (256) (1)
Adjusted EBITDA (LTM(4)) 53,777 48,060 5,717 12
Net debt/ Adjusted EBITDA (LTM) 1.70 1.53 0.2 pp
Adjusted EBITDA (LTM)(5) without other operating income/expenses 54,202 48,314 5,888 12
Net debt/ Adjusted EBITDA (LTM)(5) without other operating income/expenses 1.69 1.52 0.2 pp
Net finance income/ (expense)
in RUB million Three months ended Variance
31 March 2022 31 March 2021 Units %
Net interest expense (1,515) (1,294) (221) (17)
Gross interest expense (4,555) (1,785) (2,770) (155)
Reimbursement of interest expense 3,040 491 2,550 520
Interest income 2,308 1,819 489 27
Net gain/ (loss) from bonds held for trading 0 (0) 0 -
Other financial income, net (7,885) (20) (7,865) (38,902)
Net foreign exchange gain/ (loss) (7,829) (32) (7,797) (24,397)
Other financial income / (expenses), net (57) 12 (68) -
Total net finance income/ (expenses) (7,092) 505 (7,596) -
Net debt increased at 31 March 2022 compared at 31 December 2021 as a result
of an increase in short-term borrowings.
In 1Q 2022 Rusagro continued to enjoy benefits from the state agriculture
subsidies programme. The 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 credits with decreased interest rates,
given by the banks to agricultural producers. In 1Q 2022 IFRS accounts these
credits 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 1Q 2021 in the sum of RUB 505 million changed to net
finance expense in the amount of RUB 7,092 million in 1Q 2022 as the result of
negative dynamics in forex losses in 1Q 2022 and increase in interest income
on bank deposits in 1Q 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".
(5) Starting from the beginning of 2020 part of other operating income and
expensed (recurring items) was included in Adjusted EBITDA calculation.
Figures of 2022 and 2021 calculated using prior periods' logic (excluding
other operating income/expenses) are shown in table Debt position and
liquidity management above and in the diagram with Net debt/ LTM EBITDA trend
analysis for comparative purposes
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 643 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 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 1Q 2022
financial results for investors and analysts.
Details of the call:
Date: 11 May 2022
Time: 16:00 PM (Moscow) / 14:00 PM (London)
Subject: ROS AGRO PLC 1Q 2022 Financial results
Password: 837093
Link: https://ib-translations.zoom.us/j/82282274964?pwd=R3c4ZEtzNVpGZ1I1Wmh1dDkxbms5UT09
(https://ib-translations.zoom.us/j/82282274964?pwd=R3c4ZEtzNVpGZ1I1Wmh1dDkxbms5UT09)
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 Kuznetsova
IR & ESG Director
Phone: +7 495 363 1661
E-mail: ir@rusagrogroup.ru
Appendix 1. Consolidated statement of comprehensive income for the Three
months ended 31 March 2022 (in RUB thousand)
Three months ended
31 March
2022 2021
Sales 61,506,160 49,932,967
Net gain/(loss) on revaluation of biological assets and agricultural produce (3,097,209) (2,025,822)
Cost of sales (42,877,789) (37,818,491)
Net gain/(loss) from trading derivatives - (5)
Gross profit 15,531,162 10,088,649
Distribution and selling expenses (3,629,180) (1,862,951)
General and administrative expenses (1,752,814) (2,064,024)
Other operating income/(expenses), net (617,294) 757,658
Operating profit / (loss) 9,531,874 6,919,332
Interest expense (1,514,712) (1,294,083)
Interest income 2,308,391 1,819,264
Net (loss)/gain from bonds 42 (239)
Other financial income/ (expenses), net (7,885,447) (20,218)
Profit before income tax 2,440,148 7,424,056
Income tax expense (200,235) (897,705)
Profit for the period 2,239,913 6,526,351
Other comprehensive income - -
Total comprehensive income for the period 2,239,913 6,526,351
Profit is attributable to:
Owners of ROS AGRO PLC 2,240,631 6,547,432
Non-controlling interest (718) (21,081)
Profit for the period 2,239,913 6,526,351
Total comprehensive income is attributable to:
Owners of ROS AGRO PLC 2,240,631 6,547,432
Non-controlling interest (718) (21,081)
Total comprehensive income for the period 2,239,913 6,526,351
Earnings per ordinary share for profit attributable to the owners of ROS AGRO 83.28 243.34
PLC, basic and diluted
(in RR per share)
Appendix 2. Consolidated statement of financial position as at 31 March 2022
(in RUB thousand)
31 March 2022 31 December 2021
ASSETS
Current assets
Cash and cash equivalents 40,030,538 46,462,179
Restricted cash 53 47
Short-term investments 18,732,460 21,001,760
Trade and other receivables 13,521,097 12,558,401
Prepayments 17,208,585 5,414,032
Current income tax receivable 1,222,295 1,532,726
Other taxes receivable 6,900,652 8,321,193
Inventories and short-term biological assets 79,946,087 77,509,033
Total current assets 177,561,767 119,201,673
Non-current assets
Property, plant and equipment 119,296,660 119,159,412
Inventories intended for construction 1,435,752 1,604,570
Right-of-use assets 7,238,242 7,346,538
Goodwill 2,364,942 2,364,942
Advances paid for non-current assets 7,195,395 7,355,467
Long-term biological assets 4,201,125 2,744,863
Long-term investments and receivables 42,958,586 42,527,657
Investments in associates 390,782 359,782
Deferred income tax assets 5,514,996 4,835,268
Other intangible assets 1,385,734 1,144,057
Other non-current assets 31,944 79,125
Total non-current assets 192,014,158 189,521,681
Total assets 369,575,925 362,321,052
LIABILITIES and EQUITY
Current liabilities
Short-term borrowings 115,855,843 108,748,840
Lease liabilities 1,063,827 1,130,831
Trade and other payables 15,416,701 15,440,635
Provisions 542,707 494,709
Current income tax payable 758,544 464,471
Other taxes payable 4,830,751 7,454,558
Total current liabilities 138,468,373 133,734,044
Non-current liabilities
Long-term borrowings 64,159,311 63,975,025
Government grants 9,864,403 9,325,530
Lease liabilities 5,146,583 5,535,014
Deferred income tax liability 1,821,978 1,876,244
Total non-current liabilities 80,992,275 80,711,813
Total liabilities 219,460,648 214,445,857
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 122,321,107 120,080,307
Equity attributable to owners of ROS AGRO PLC 150,170,425 147,929,625
Non-controlling interest (55,148) (54,430)
Total equity 150,115,277 147,875,195
Total liabilities and equity 369,575,925 362,321,052
Appendix 3. Consolidated statement of cash flows for the Three months ended 31
March 2022 (in RUB thousand) - NOT IFRS PRESENTATION (*)
Three months ended
31 March 2022 31 March 2021
Cash flows from operating activities
Profit before income tax 2,440,149 7,424,056
Adjustments for:
Depreciation and amortization 3,817,073 2,800,821
Interest expense 4,554,909 1,784,749
Government grants (3,230,880) (853,039)
Interest income (2,308,390) (1,819,264)
Loss/ (gain) on disposal of property, plant and equipment (438,032) 6,581
Net (gain) / loss on revaluation of biological assets and agricultural produce 3,097,209 2,025,822
Change in provision for impairment of loans issued (70) 31
Interest expense on leases 56,386 62,739
Realised deferred day-one gain - (212,803)
Change in provision for net realisable value of inventory 215,607 377,172
Change in provision for impairment of receivables and prepayments 47,807 27,658
Foreign exchange (gain) / loss, net 9,152,911 (69,897)
Net (gain) / loss from bonds held for trading (42) 239
Change in provision for impairment of advances paid for property, plant and (15,330) (1,490)
equipment
Change in other provisions 47,998 (83,243)
Loss on disposal of other assets 3,608 -
Gain on SolPro loans redemption (320,080) -
Other non-cash and non-operating expenses, net 25,125 (39,903)
Operating cash flow before working capital changes 17,145,958 11,430,229
Change in trade and other receivables and prepayments (14,124,633) (1,973,789)
Change in other taxes receivable 1,420,541 1,747,251
Change in inventories and biological assets (6,668,934) (3,709,768)
Change in trade and other payables 20,162 1,682,794
Change in other taxes payable (2,593,539) (600,821)
Cash generated from operations (4,800,445) 8,575,896
Income tax paid (329,946) (158,819)
Net cash from operating activities (5,130,391) 8,417,077
Appendix 3 (continued). Consolidated statement of cash flows the Three months
ended 31 March 2022 (in RUB thousand) - NOT IFRS PRESENTATION (*)
Three months ended
31 March 2022 31 March 2021
Cash flows from investing activities
Purchases of property, plant and equipment (2,981,847) (1,869,918)
Purchases of other intangible assets (360,947) (35,805)
Purchases of land lease rights (8,843) (11,421)
Proceeds from sales of property, plant and equipment 554,179 72,100
Purchases of inventories intended for construction (106,466) (169,706)
Purchases of associates (31,000) (56,600)
Movement in restricted cash - 37,839
Dividends received 377,269 -
Other investing activities 291,096 34,961
Net cash from investing activities (2,266,559) (1,998,550)
Cash flows from financing activities
Proceeds from borrowings 21,004,197 10,505,708
Repayment of borrowings (14,674,650) (5,981,704)
Interest paid (937,229) (640,348)
Change in cash on bank deposits 5,308,072 (2,000,000)
Proceeds from sales of bonds with maturity over three months* 140,783 220,420
Loans given* (250,000) -
Loans repaid* (2,328,261) 492,857
Interest received* 1,132,611 152,146
Proceeds from government grants 32,198 268,131
Dividends paid to owners Ros Agro PLC (120) -
Repayment of lease liabilities (502,443) (50,118)
Other financial activities 290 -
Net cash from financing activities 8,925,448 2,967,092
Net effect of exchange rate changes on cash and cash equivalents (7,960,139) (30,109)
Net increase/ (decrease) in cash and cash equivalents (6,431,641) 9,355,510
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 40,030,538 21,222,308
(*) 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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