REG - Ros Agro PLC - 3Q and 9M 2023 IFRS Financial Results
13/11/2023 07:00
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RNS Number : 1408T Ros Agro PLC 13 November 2023
13 November 2023
ROS AGRO PLC financial results for 9M 2023 and 3Q 2023
13 November 2023 - 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 third quarter and the nine months ended 30 September 2023.
3Q 2023 HIGHLIGHTS
- Sales amounted to RUB 71,674 million (US$ 762 million(1)), an
increase of RUB 16,878 million (+31%) compared to 3Q 2022;
- Adjusted EBITDA(2) amounted to RUB 15,027 million (US$ 160 million),
an increase of RUB 9,490 million (+171%) compared to 3Q 2022;
- Adjusted EBITDA margin increased to 21% in 3Q 2023 from 10% in 3Q
2022;
- Net profit for the period amounted to RUB 25,334 million (US$ 269
million), an increase of RUB 23,622 million (+1,380%);
- Net debt position(3) as of 30 September 2023 amounted to RUB 65,179
million (US$ 669 million);
- Net Debt/Adjusted EBITDA (LTM(4)) as of 30 September 2023 was 1.62x.
Commenting on the results, Timur Lipatov, CEO of Rusagro, said:
"Rusagro Group has demonstrated strong financial results in 3Q 2023: revenue
increased by 31%, adjusted EBITDA increased by 171%, net profit amounted to
RUB 25 billion and net debt decreased by 35%.
The consolidation of the financial results of NMGK had a significant impact on
the financial results for 3Q 2023. Following the acquisition of the
controlling share we started integrating the NMGK business, which is already
generating significant synergy effects.
Revenue of all business segments, except Oil and Fat, increased in 3Q 2023,
which is attributable both to the increase in sales volumes and more favorable
market environment. Oil and Fat segment's revenue decreased due to the fall of
world prices for oil and fat products and the suspension of the oil extraction
plant in Balakovo for modernization. The modernization project will result in
a 30% increase in the plant's production capacity.
Rusagro Group's adjusted EBITDA increased across all business segments because
of increased sales volume in Agriculture segment, positive dynamics of market
prices in Sugar and Meat segments, economy as the result of variable costs
decrease in Oil and Fats segment, as well as the realization of systematic
cost reduction initiatives on the Group level.
Net profit of the Group increased following the increase in Adjusted EBITDA
and positive exchange rate dynamics."
Key consolidated financial performance indicators
in RUB million Nine months ended Variance Three months ended Variance
30 September 2023 30 September 2022 Units % 30 September 2023 30 September 2022 Units %
Sales 178,224 182,027 (3,803) (2) 71,674 54,796 16,878 31
Gross profit (1) 49,660 40,587 9,072 22 28,712 8,003 20,709 259
Gross margin, % 28% 22% 6 pp 40% 15% 25 pp
Adjusted EBITDA (1) 30,633 35,371 (4,737) (13) 15,027 5,538 9,490 171
Adjusted EBITDA margin, % 17% 19% (2) pp 21% 10% 11 pp
Net profit for the 38,525 2,182 36,343 1,666 25,334 1,712 23,622 1,380
period (1,2)
Net profit 22% 1% 21 pp 35% 3% 32 pp
margin %
( )
(1) Several adjustments were made to the published 9M and 3Q 2022 key
financial indicators:
• Gross profit for 9M 2022 was increased by RUB 1,058 million, Net
profit by RUB 845 million to reflect the distribution of depreciation expenses
between the quarters of 2022 in Oil and Fat segment, the same indicators for
3Q 2022 increased by RUB 350 million and RUB 281 million correspondingly;
• Gross profit for 9M 2022 was decreased by RUB 574 million, gross
profit for 3Q 2022 was decreased by RUB 191 million to reflect the
distribution of depreciation costs between lines of financial statements for
Meat segment;
• Gross profit and adjusted EBITDA for 9M 2022 were decreased by RUB
327 million, Net profit by RUB 261 million in order to reflect the
distribution of costs of Far East project in Meat segment, the same indicators
for 9M 2022 has not changed.
(2) Net profit for the period is affected by non-cash income/(loss) on
revaluation of biological assets and agricultural produce. See details in
business sections below.
Note: since some indicators and percentages in the press release were rounded
to the nearest whole number, the sum of the rounded values may not fully match
the totals.
Key financial performance indicators by segments
in RUB million Nine months ended Variance Three months ended Variance
30 September 2023 30 September 2022 Units % 30 September 2023 30 September 2022 Units %
Sales, incl. 178,224 182,027 (3,803) (2) 71,674 54,796 16,878 31
Sugar 37,289 37,679 (391) (1) 13,315 10,577 2,738 26
Meat 35,563 31,795 3,768 12 12,914 11,171 1,744 16
Agriculture 23,789 17,123 6,666 39 12,230 6,018 6,212 103
Oil and Fat 76,144 102,366 (26,222) (26) 24,745 30,354 (5,609) (18)
NMGK 14,971 - 14,971 - 14,971 - 14,971 -
Other 1,461 913 549 60 457 463 (6) (1)
Eliminations (10,994) (7,849) (3,145) (40) (6,958) (3,786) (3,172) (84)
Gross profit, incl. 49,660 40,587 9,072 22 28,712 8,003 20,709 259
Sugar 13,077 16,140 (3,063) (19) 4,964 3,339 1,625 49
Meat 5,967 (591) 6,558 - 3,420 (205) 3,626 -
Agriculture 12,052 9,643 2,409 25 11,834 1,937 9,898 511
Oil and Fat 15,596 15,754 (159) (1) 4,553 2,958 1,595 54
NMGK 5,071 - 5,071 - 5,071 - 5,071 -
Other 483 197 286 145 48 148 (100) (68)
Eliminations (2,586) (556) (2,030) (365) (1,178) (173) (1,005) (581)
Adjusted EBITDA, incl. 30,633 35,371 (4,737) (13) 15,027 5,538 9,490 171
Sugar 11,381 14,055 (2,674) (19) 4,666 2,727 1,939 71
Meat 3,289 1,010 2,279 226 2,555 (27) 2,582 -
Agriculture 4,376 6,746 (2,369) (35) 3,260 1,427 1,833 128
Oil and Fat 9,559 10,710 (1,151) (11) 3,368 1,237 2,131 172
NMGK 2,746 - 2,746 - 2,746 - 2,746 -
Other (972) (1,076) 105 10 (317) (689) 372 54
Eliminations 255 3,926 (3,671) (94) (1,249) 863 (2,112) -
Adjusted EBITDA margin, % 17% 19% (2) pp 21% 10% 11 pp
Sugar 31% 37% (7) pp 35% 26% 9 pp
Meat 9% 3% 6 pp 20% 0% 20 pp
Agriculture 18% 39% (21) pp 27% 24% 3 pp
Oil and Fat 13% 10% 2 pp 14% 4% 10 pp
NMGK 18% - 18 pp 18% - 18 pp
SUGAR SEGMENT
In 9M 2023 Sugar segment earned RUB 11,381 million of adjusted EBITDA (-19%
y-o-y) with 31% margin (-7 pp y-o-y).
The financial results of the Sugar Segment of 9M 2023 compared to 9M 2022 are
presented in the table below:
Sugar segment 9M and 3Q 2023 Financial Results
in RUB million Nine months ended Variance Three months ended Variance
30 September 2023 30 September 2022 Units % 30 September 2023 30 September 2022 Units %
Sales 37,289 37,679 (391) (1) 13,315 10,577 2,738 26
Cost of sales (24,212) (21,539) (2,673) (12) (8,352) (7,238) (1,113) (15)
Gross profit 13,077 16,140 (3,063) (19) 4,964 3,339 1,625 49
Gross profit margin 35% 43% (8) pp 37% 32% 5 pp
Distribution and selling expenses (2,495) (2,681) 186 7 (619) (705) 86 12
General and administrative expenses (1,209) (1,260) 51 4 (441) (458) 17 4
Other operating income/ (expenses), net 470 (325) 795 - 248 (11) 260 -
incl. Reimbursement of operating costs (government grants) 92 144 (52) (36) 4 6 (2) (34)
incl. other adjustments to EBITDA (non-recurring items) 74 (378) 452 - 11 32 (21) (64)
Operating profit 9,843 11,874 (2,031) (17) 4,152 2,165 1,987 92
Adjusted EBITDA 11,381 14,055 (2,674) (19) 4,666 2,727 1,939 71
Adjusted EBITDA margin 31% 37% (7) pp 35% 26% 9 pp
In 3Q 2023 compared to 3Q 2022 Sales of Sugar segment increased by 26% mainly
due to the growth of market prices, changes in sales structure and sales
efficiency increase. Sales volume increased due to shift the sales volume from
2Q 2023 to 3Q 2023.
In 9M 2023 compared to the same period last year Sales of Sugar segment
decreased by 1% mainly due to the decrease in sales of other products (beet
pulp, buckwheat). Decrease in sugar sales volumes is caused by the decrease in
production volumes in season 2022/2023 due to lower sugar content in sugar
beet attributable to bad weather conditions that affected the quality of sugar
beet.
Production and sales volume of sugar in 9M and 3Q 2023
Nine months ended Variance Three months ended Variance
30 September 2023 30 September 2022 Units % 30 September 2023 30 September 2022 Units %
Sugar production 327 278 49 18 224 174 50 28
volume, thousand tonnes
Sales volume, 589 636 (47) (7) 208 199 9 5
thousand tonnes
Cost of sales in 3Q and 9M 2023 increased y-o-y because of the increase in
sugar beet and its processing costs per unit of sugar as the result of
decrease in sugar beet quality and sugar content of season 2022-2023.
Other operating income/ (expenses), net in 3Q and 9M 2023 increased mainly due
to the positive dynamics of the operating forex differences and the gain from
forward contracts for the purchase of foreing currency.
MEAT SEGMENT
In 9M 2023 Meat segment earned RUB 3,289 million of adjusted EBITDA (+226%
y-o-y) with 9% margin (+6 pp y-o-y).
The financial results of the Meat Segment of 9M 2023 and 3Q 2023 compared to
9M 2022 and 3Q 2022 respectively are presented in the table below.
Meat segment 9M and 3Q 2023 Financial Results
in RUB million Nine months ended Variance Three months ended Variance
30 September 2023 30 September 2022 Units % 30 September 2023 30 September 2022 Units %
Sales 35,563 31,795 3,768 12 12,914 11,171 1,744 16
Net gain/ (loss) on revaluation of biological assets and agricultural produce 3,337 (330) 3,667 - 1,064 369 695 188
Cost of sales (32,933) (32,057) (876) (3) (10,559) (11,746) 1,187 10
Gross profit 5,967 (591) 6,558 - 3,420 (205) 3,626 -
Gross profit margin 17% (2%) 19 pp 26% (2%) 28 pp
Gross profit excl. effect of biological assets and agricultural produce 2,630 (262) 2,892 - 2,356 (575) 2,931 -
revaluation
Adjusted gross profit margin 7% (1%) 8 pp 18% (5%) 23 pp
Distribution and selling expenses (1,207) (1,274) 67 5 (441) (385) (56) (15)
General and administrative expenses (1,767) (1,130) (636) (56) (550) (101) (448) (442)
Other operating income/ (expenses), net 323 696 (373) (54) 141 78 63 80
incl. Reimbursement of operating costs (government grants) 27 15 12 78 4 1 3 302
incl. Other adjustments to EBITDA (non-recurring items) 294 543 (248) (46) 79 47 33 70
Operating profit 3,316 (2,299) 5,615 - 2,571 (613) 3,184 -
Adjusted EBITDA 3,289 1,010 2,279 226 2,555 (27) 2,582 -
Adjusted EBITDA margin 9% 3% 6 pp 20% 0% 20 pp
Sales of the Meat segment increased by 16% in 3Q 2023 compared to the
respective period of 2022 mainly due to increase of sales prices for both meat
products and livestock.
In 9M 2023 compared to the same period last year Sales of Meat segment
increased by 12% supported by both the higher sales prices for cut products
and increased volumes of all meat products. Positive volume dynamics was
achieved by gradual increase in production capacities to the planned level in
the Far East and by growth in production efficiency in the Central Federal
District, including the expansion of deboning capacity.
Production and sales volume of pork products in 9M and 3Q 2023
Nine months ended Variance Three months ended Variance
30 September 2023 30 September 2022 Units % 30 September 2023 30 September 2022 Units %
Pigs production, 254 245 9 4 79 85 (6) (7)
thousand tonnes in live weight
Sales volume, 214 205 9 4 68 72 (4) (5)
thousand tonnes
Cost of sales decreased by 10% in 3Q 2023 compared to the respective period of
2022 due to lower sales volume and significant reduction of feed costs. In 9M
2023 compares to the 9M 2022 Cost of sales increased by 3% mainly because of
higher sales volumes.
Net gain on revaluation of biological assets and agricultural produce in 3Q
2023 and in 9M 2023 resulted from an increase in fair value and decrease in
costs for consumable livestock pigs during the reporting period compared to
the respective figures at the beginning of respective periods.
Other operating expenses in 9M 2023 showed negative dynamics mainly due to
additional costs caused by the outbreak of African swine fever and one-off
gain for the reversal of provision for legal claims in 2022.
AGRICULTURAL SEGMENT
As at 30 September 2023 Rusagro's area of controlled land stands at 681
thousand hectares
(31 December 2022: 660 thousand hectares).
In 9M 2023 Agriculture segment earned RUB 4,376 million of adjusted EBITDA
(-35% y-o-y) with 18% margin (-21 pp y-o-y).
The financial results of the Agricultural Segment of 9M 2023 and 3Q 2023
compared to 9M 2022 and 3Q 2022 respectively are presented below.
Agriculture segment 9M and 3Q 2023 Financial Results
in RUB million Nine months ended Variance Three months ended Variance
30 September 2023 30 September 2022 Units % 30 September 2023 30 September 2022 Units %
Sales 23,789 17,123 6,666 39 12,230 6,018 6,212 103
Net gain/ (loss) on revaluation of biological assets and agricultural produce 5,546 1,385 4,161 300 7,638 (266) 7,904 -
Cost of sales (17,283) (8,865) (8,418) (95) (8,034) (3,816) (4,218) (111)
Gross profit 12,052 9,643 2,409 25 11,834 1,937 9,898 511
Gross profit margin 51% 56% (5) pp 97% 32% 65 pp
Gross profit excl. effect of biological assets and agricultural produce 6,507 8,258 (1,751) (21) 4,196 2,202 1,994 91
revaluation
Adjusted gross profit margin 27% 48% (21) pp 34% 37% (3) pp
Distribution and selling expenses (3,109) (1,771) (1,338) (76) (1,041) (759) (282) (37)
General and administrative expenses (1,229) (1,160) (70) (6) (449) (394) (55) (14)
Share-based remuneration - - - - - - - -
Other operating income/ (expenses), net 696 599 97 16 239 2 237 13,830
incl. Reimbursement of operating costs (government grants) 555 62 492 789 98 20 78 392
incl. Other adjustments to EBITDA (non-recurring items) 27 331 (303) (92) 153 5 148 2,893
Operating profit 8,410 7,311 1,099 15 10,583 786 9,797 1,247
Adjusted EBITDA 4,376 6,746 (2,369) (35) 3,260 1,427 1,833 128
Adjusted EBITDA margin 18% 39% (21) pp 27% 24% 3 pp
In 3Q 2023 in comparison to 3Q 2022 Sales of the Agriculture segment increased
by 103% to RUB 12,230 million due to higher sales volume of all crops.
In 9M 2023 in comparison to 9M 2022 Sales of the Agriculture segment increased
by 39% to RUB 23,789 million due to higher sales volume of all crops, with a
decrease in wheat and soybean price and an increase in corm sales price.
Increase in oil crops sales volume in 9M 2023 and 3Q 2023 as well as increase
in sugar beet sales volume in 1Q 2023 was caused by sales volume transfer due
to adverse climate conditions at the time of harvest, leading to prolongation
of harvesting period to 2023. Growth in sales volume of new sugar beet harvest
in 3Q 2023 compared to 3Q 2022 is associated with improved yields and early
launch of sugar plants following the harvesting schedule.
Increase in sales of corn in 3Q 2023 in comparison with the same period of
prior year is caused by the execution of contract concluded in 1Q 2023, with
the condition of delivery until the end of 2023. Contract price was fixed in
USD, which caused positive dynamic taking into account the growth of USD/RUB
exchange rate.
Sales prices for wheat decreased due to the fall in global wheat prices
because of high grain stocks. Prices decrease for oil crops is attributed to
the quality of harvest following adverse weather conditions during the
prolonged harvesting period.
Sales volumes of crops in 9M and 3Q 2023
Thousand tonnes Nine months ended Variance Three months ended Variance
30 September 2023 30 September 2022 Units % 30 September 2023 30 September 2022 Units %
sugar beet 1,597 788 809 103 1,103 730 373 51
wheat 575 292 283 97 381 98 284 290
soybean 248 145 103 71 67 28 39 140
corn 145 135 10 7 54 25 29 118
sunflower seeds 58 21 37 174 3 1 2 348
The main reason for the increase in Cost of sales and Distribution and selling
expenses is the growth of volumes of goods sold.
Reimbursement of operating costs (government grants) was received in higher
amount in 9M 2023 as the company received subsidies for grain crops sales,
support of elite seed and ameliorants usage.
Change in Other operating income except government grants in 9M 2023 in
comparison with the same period of 2022 is connected mainly due to the
differences relating to one-off gain from the sale of fixed assets in 1Q 2022
as well as changes in foreign exchange gains/(losses) amount.
Net gain/(loss) on revaluation of biological assets and agricultural produce
depends on revaluation amounts in opening and closing inventory balances. As
agricultural produce matures and at the point of harvest, a gain on
revaluation of agricultural produce to fair value less costs to sell is
recognized. During subsequent sale, a loss from the revaluation of
agricultural products sold in the reporting period is recognized in the amount
of the previously recognized gain.
Gain in 9M and 3Q 2023 was caused by the revaluation of harvested and growing
crops to a greater extent than the realization of revaluation in the opening
balance when goods were sold. Loss in 3Q 2022 and lower profit in 9M 2022 is
associated with the sale of 2021 harvest, opening balance of revaluation was
higher at the beginning of 2022 than at the beginning of 2023.
Net gain/ (loss) on revaluation of biological assets and agricultural produce
and its subsequent realisation do not affect the Adjusted EBITDA figure.
OIL AND FAT SEGMENT
In 9M 2023 Oil and Fat segment earned RUB 9,559 million of adjusted EBITDA
(-11 %
y-o-y) with 13% margin (+2 pp y-o-y).
The financial results of the Oil and Fat Segment for 9M 2023 and 3Q 2023
compared to 9M 2022 and 3Q 2022 respectively are presented below.
Oil and Fat segment 9M and 3Q 2023 Financial Results
in RUB million Nine months ended Variance Three months ended Variance
30 September 2023 30 September 2022 Units % 30 September 2023 30 September 2022 Units %
Sales 76,144 102,366 (26,222) (26) 24,745 30,354 (5,609) (18)
Cost of sales (60,548) (86,611) 26,063 30 (20,192) (27,396) 7,204 26
Gross profit 15,596 15,754 (159) (1) 4,553 2,958 1,595 54
Gross profit margin 20% 15% 5 pp 18% 10% 8 pp
Distribution and selling expenses (5,710) (6,005) 295 5 (1,631) (2.035) 404 20
General and administrative expenses (2,747) (2,195) (552) (25) (831) (826) (4) (1)
Other operating income/ (expenses), net (1,214) (2,483) 1,269 51 736 1,641 (906) (55)
incl. Reimbursement of operating costs (government grants) 240 245 (5) (2) 113 29 85 295
incl. Other adjustments to EBITDA (non-recurring items) (413) (2,414) 2,001 83 392 1,574 (1,182) (75)
Operating profit 5,925 5,071 854 17 2,827 1,738 1,089 63
Adjusted EBITDA 9,559 10,710 (1,151) (11) 3,368 1,237 2,131 172
Adjusted EBITDA margin 13% 10% 2 pp 14% 4% 10 pp
In 3Q 2023 and 9M 2023 in comparison to 3Q 2022 and 9M 2022 Sales of the Oil
and fat segment decreased (by 18% to RUB 24,745 million in 3Q 2023 and by 26%
to RUB 76 144 million in 9M 2023) due to the decrease of world prices for oil
and fat products and of sales volumes of crude oil and meal, which was
partially compensated by the increase in sales volumes of industrial fats.
Decrease in sales volumes of crude oil and meal was caused by difficulties
with the vessels shipment caused by ice situation in Astrakhan in January and
February 2023 and the suspension of Balakovo oil extraction plant for
modernization from 23 May 2023 till 28 August 2023.
Sales volumes of oil and fat and dairy products in 9M and 3Q 2023
Thousand tonnes Nine months ended Variance Three months ended Variance
30 September 2023 30 September 2022 Units % 30 September 2023 30 September 2022 Units %
meal 347 470 (123) (26) 89 171 (82) (48)
crude oil 207 284 (78) (27) 50 84 (34) (41)
industrial fats 236 213 23 11 85 72 13 18
dry whey mixes 10 13 (3) (24) 4 4 (1) (13)
consumer oil&fat products 208 210 (2) (1) 70 72 (2) (3)
consumer dairy products 12 11 1 8 5 4 1 12
Cost of sales in 3Q 2023 and 9M 2023 decreased due to the decline in sales
volumes of oil and fat products. Cost of sales decreased more
than Sales mainly due to reduction of prices for raw materials.
The growth of General and administrative expenses in 9M 2023 compared to
the same period of the previous year is mainly attributable to higher costs
of information and consulting services.
The decrease in Other operating expenses is due to lower charity expenses
and positive exchange dynamics in 9M 2023 compared to the same period in
2022, which was partially compensated by accrual of provision for bad debts.
NMGK
At the end of 2Q 2023 the Company acquired 50% of the shares and control over
the NMGK group of companies. The Company's financial results for 3Q 2023
include the financial results of the NMGK Group.
For 3Q 2023 the revenue of the NMGK Group of companies amounted to RUB 14,971
million, adjusted EBITDA amounted to RUB 2,746 million with a margin of 14%.
The financial results of NMGK as a part of Rusagro for 3Q 2023 are presented
in the table below.
NMGK 3Q 2023 Financial Results
in RUB million Three months ended Variance
30 September 2023 30 September 2022 Units %
Sales 14,971 - 14,971 -
Cost of sales (9,900) - (9,900) -
Gross profit 5,071 - 5,071 -
Gross profit margin 34% - 34% 0%
Distribution and selling expenses (2,047) - (2,047) -
General and administrative expenses (558) - (558) -
Other operating income/ (expenses), net 34 - 34 -
incl. Other adjustments to EBITDA (non-recurring items) 14 - 14 -
Operating profit 2,500 - 2,500 -
Adjusted EBITDA 2,746 - 2,746 -
Adjusted EBITDA margin 18% - 18% 0%
Thousand tonnes Variance
30 September 2023 30 September 2022 Units %
meal 65 - 65 -
crude oil 60 - 60 -
industrial fats 17 - 17 -
consumer oil&fat products 55 - 55 -
KEY CONSOLIDATED CASH FLOW INDICATORS (NOT IFRS PRESENTATION*)
The key consolidated cash flow indicators presented according to management
accounts methodology
in RUB million Nine months ended Variance Three months ended Variance
30 September 2023 30 September 2022 Units % 30 September 2023 30 September 2022 Units %
Net cash from operating activities, incl. 47,379 7,918 39,461 498 14,803 8,625 6,178 72
Operating cash flow before working capital changes 31,282 32,427 (1,145) (4) 15,604 3,980 11,624 292
Working capital changes 18,806 (22,995) 41,802 - 1,297 4,933 (3,636) (74)
Net cash from investing activities, incl. (15,620) (6,752) (8,868) (131) (3,647) (2,790) (857) (31)
Purchases of property, plant and equipment and inventories intended for (17,184) (7,642) (9,542) (125) (11,992) (3,015) (8,976) (298)
construction
Net cash from financing activities (35,367) 28,748 (64,116) - (40,708) (10,392) (30,317) (292)
Net effect of exchange rate changes on cash and cash equivalents 6,632 (17,177) 23,808 - 2,404 1,819 585 32
Net (decrease) / increase in cash and cash equivalents 3,023 12,738 (9,714) (76) (27,148) (2,738) (24,410) (891)
(*) See Appendix 4
Debt position and liquidity management
in RUB million 30 September 2023 31 December 2022 Variance
Units %
Gross debt 194,468 233,390 (38,922) (17)
Short-term borrowings 133,226 172,352 (39,126) (23)
Long-term borrowings 61,242 61,038 204 0
Cash and cash equivalents, bank deposits and bonds (129,289) (133,668) 4,379 3
Short-term cash, deposits and bonds (94,868) (99,697) 4,829 5
Long-term cash, deposits and bonds (34,421) (33,971) (450) (1)
Net debt 65,179 99,723 (34,544) (35)
Short-term borrowings, net 38,358 72,655 (34,297) (47)
Long-term borrowings, net 26,821 27,067 (246) (1)
Adjusted EBITDA (LTM(4)) 40,278 45,015 (4,737) (11)
Net debt/ Adjusted EBITDA (LTM) 1.62 2.22 (-0.6) pp
Net finance income / (expense):
in RUB million Nine months ended Variance Three months ended Variance
30 September 2023 30 September 2022 Units % 30 September 2023 30 September 2022 Units %
Net interest expense (5,566) (5,776) 210 4 (1,873) (2,458) 586 24
Gross interest expense (12,856) (14,933) 2,076 14 (3,593) (6,504) 2,912 45
Reimbursement of interest expense 7,290 9,157 (1,867) (20) 1,720 4,046 (2,326) (57)
Interest income 7,842 6,549 1,293 20 2,888 2,201 687 31
Other financial expenses, net 9,211 (18,152) 27,363 - 3,032 1,531 1,502 98
Net foreign exchange gains / (losses) 9,959 (17,723) 27,682 - 3,475 1,829 1,647 90
Other financial income/ (expenses), net (748) (429) (319) (74) (443) (298) (145) (49)
Total net finance income / (expense) 11,487 (17,378) 28,865 - 4,048 1,274 2,774 218
Net debt decreased at 30 September 2023 compared at 31 December 2022 as a
result of a decrease in short-term borrowings.
In 9M 2023 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 9M 2023 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 expense of 9M 2022 in the sum of RUB 17,378 million changed to net
finance income in the amount of RUB 11,487 million as the result of positive
dynamics in forex differences.
________________________________
(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) 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 681 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.
Rusagro finalized the acquisition of 50% of NMGK Group in 2023. NMGK Group
owns an oil and fat plant in Nizhny Novgorod, oil extraction factories in
Uryupinsk and Sorochinsk, as well as elevators in the Volgograd, Orenburg,
Samara, Saratov regions and the Republic of Bashkortostan. The company
produces mayonnaise and sauces "Ryaba", "Sdobri", sauces and ketchups
"Astoria", margarine "Khozyayushka", spread "Kremlevskoe", baby soap "Moy
malysh".
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 Café and 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 №3 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 9M and 3Q 2023
financial results for investors and analysts.
Details of the call:
Date: 13 November 2023
Time: 4:00 PM (Moscow) / 2:00 PM (London)
Subject: ROS AGRO PLC 9M and 3Q 2023 Financial results
Registration: available up to 3:00 PM Moscow time / 1:00 PM London time on 13 November
https://us06web.zoom.us/webinar/register/WN_9kO3JUVWQTq5to1imWM0tg
(https://us06web.zoom.us/webinar/register/WN_9kO3JUVWQTq5to1imWM0tg)
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
Alexey Kulchitskiy
Director M&A, IR, ESG
Phone: +7 495 363 1661
E-mail: ir@rusagrogroup.ru
Appendix 1. Consolidated statement of comprehensive income for the Nine and
Three months ended 30 September 2023 (in RUB thousand)
Nine months ended Three months ended
30 September
30 September
2023 2022 2023 2022
Sales 178,223,533 182,026,606 71,674,171 54,796,326
Net gain / (loss) on revaluation of biological assets and agricultural produce 8,633,276 (2,087,230) 9,598,951 (239,057)
Cost of sales (137,197,070) (139,351,877) (52,561,106) (46,554,081)
Gross profit 49,659,534 40,587,499 28,711,811 8,003,188
Distribution and selling expenses (12,523,182) (10,968,875) (5,168,642) (3,608,134)
General and administrative expenses (7,619,303) (6,163,326) (2,756,789) (2,274,346)
Other operating income/(expenses), net 3,187,157 (4,098,301) 2,908,668 (594,972)
Operating profit 32,704,206 19,356,997 23,695,048 1,525,736
Interest expense (5,565,939) (5,775,676) (1,872,574) (2,458,290)
Interest income 7,841,611 6,549,397 2,888,042 2,201,212
Net gain / (loss) from bonds held for trading - 42 - -
Other financial income/ (expenses), net 9,210,970 (18,151,908) 3,032,159 1,530,584
Profit / (loss) before taxation 44,190,848 1,978,852 27,742,675 2,799,242
Income tax expense (5,665,860) 203,084 (2,408,987) (1,087,373)
Profit for the period 38,524,988 2,181,936 25,333,688 1,711,869
Other comprehensive income:
Total comprehensive income/ (loss) for the period 38,524,988 2,181,936 25,333,688 1,711,869
Profit / (loss) is attributable to:
Owners of ROS AGRO PLC 36,726,077 2,141,735 23,531,678 1,721,833
Non-controlling interest 1,798,911 40,201 1,802,010 (9,964)
Profit / (loss) for the period 38,524,988 2,181,936 25,333,688 1,711,869
Total comprehensive income/ (loss) is attributable to:
Owners of ROS AGRO PLC 36,726,077 2,141,735 23,531,678 1,721,833
Non-controlling interest 1,798,911 40,201 1,802,010 (9,964)
Total comprehensive income/ (loss) for the period 38,524,988 2,181,936 25,333,688 1,711,869
Earnings per ordinary share for profit attributable to the equity holders of 1,364.96 79.60 874.58 63.99
ROS AGRO PLC, basic and diluted (in RR per share)
Appendix 2. Segment information for the Nine months ended 30 September 2023
(in RUB thousand)
9М 2023 Sugar Meat Agriculture Oil and Fat NMGK Other Eliminations Total
Sales 37,288,831 35,563,015 23,789,316 76,143,906 14,971,207 1,461,481 (10,994,223) 178,223,533
Net gain/ (loss) on revaluation of biological assets and agricultural produce - 3,336,936 5,545,749 - - - (249,409) 8,633,276
Cost of sales (24,211,627) (32,932,963) (17,282,652) (60,547,961) (9,900,455) (978,617) 8,657,205 (137,197,070)
incl. Depreciation (1,562,577) (3,509,824) (1,388,851) (2,542,171) (193,971) (14,319) (25,433) (9,237,146)
Net loss from trading derivatives - - (205) - - - - (205)
Gross profit / (loss) 13,077,204 5,966,988 12,052,208 15,595,945 5,070,752 482,864 (2,586,427) 49,659,534
Distribution and Selling, General and administrative expenses (3,704,007) (2,973,623) (4,338,532) (8,456,871) (2,605,234) (1,514,285) 3,450,067 (20,142,485)
incl. Depreciation (49,063) (93,714) (150,893) (679,557) (66,331) (119,331) 25,433 (1,133,456)
Other operating income/(expenses), net 469,746 322,955 695,833 (1,214,401) 34,170 10,416,387 (7,537,533) 3,187,157
incl. Reimbursement of operating costs (government grants) 91,578 27,028 554,518 239,695 - - - 912,819
incl. Other adjustments to EBITDA (non-recurring items) 73,896 294,262 27,362 (412,939) 14,358 10,490,541 (6,679,103) 3,808,377
(Provision)/reversal of provision for impairment of loans issued - - - - - - - -
Operating profit / (loss) 9,842,943 3,316,320 8,409,509 5,924,673 2,499,688 9,384,966 (6,673,893) 32,704,206
Adjustments:
Depreciation included in Operating profit 1,611,640 3,603,538 1,539,744 3,221,728 260,302 133,650 - 10,370,602
Other adjustments to EBITDA (non-recurring items) (73,896) (294,262) (27,362) 412,939 (14,358) (10,490,541) 6,679,103 (3,808,377)
Net gain/ (loss) on revaluation of biological assets and agricultural produce - (3,336,936) (5,545,749) - - - 249,409 (8,633,276)
Provision/(reversal of provision) for impairment of loans issued - - - - - - - -
Adjusted EBITDA* 11,380,687 3,288,660 4,376,142 9,559,340 2,745,632 (971,925) 254,619 30,633,155
Appendix 2 (continued). Segment information for the Nine months ended 30
September 2023 (in RUB thousand)
9M 2022 Sugar Meat Agriculture Oil and Fat Other Eliminations Total
Sales 37,679,456 31,795,070 17,122,958 102,365,639 912,968 (7,849,485) 182,026,606
Net gain/ (loss) on revaluation of biological assets and agricultural produce - (330,180) 1,384,987 - - (3,142,037) (2,087,230)
Cost of sales (21,539,049) (32,056,165) (8,865,139) (86,611,161) (715,882) 10,435,519 (139,351,877)
incl. Depreciation (1,757,961) (3,645,532) (1,034,742) (2,704,400) (13,558) (3,561) (9,159,754)
Net loss from trading derivatives - - - - - - -
Gross profit / (loss) 16,140,407 (591,275) 9,642,806 15,754,478 197,086 (556,003) 40,587,499
Distribution and Selling, General and administrative expenses (3,941,024) (2,404,769) (2,930,980) (8,200,243) (1,432,148) 1,776,963 (17,132,201)
incl. Depreciation (44,458) 123,085 (115,412) (521,583) (73,746) 3,561 (628,553)
Other operating income/(expenses), net (325,100) 695,928 599,093 (2,483,436) 14,491,148 (17,075,934) (4,098,301)
incl. Reimbursement of operating costs (government grants) 143,634 15,209 62,358 244,644 - - 465,845
incl. Other adjustments to EBITDA (non-recurring items) (378,202) 542,735 330,539 (2,413,538) 14,419,308 (16,638,880) (4,138,038)
Operating profit / (loss) 11,874,283 (2,300,116) 7,310,919 5,070,799 13,256,086 (15,854,974) 19,356,997
Adjustments:
Depreciation included in Operating Profit 1,802,419 3,522,447 1,150,154 3,225,983 87,304 - 9,788,307
Other adjustments to EBITDA (non-recurring items) 378,202 (542,735) (330,539) 2,413,538 (14,419,308) 16,638,880 4,138,038
Net gain/ (loss) on revaluation of biological assets and agricultural produce - 330,180 (1,384,987) - - 3,142,037 2,087,230
Adjusted EBITDA* 14,054,904 1,009,776 6,745,547 10,710,320 (1,075,918) 3,925,943 35,370,572
* Non-IFRS measure
Appendix 3. Consolidated statement of financial position as at 30 September
2023
(in RUB thousand)
30 September 2023 31 December 2022
ASSETS
Current assets
Cash and cash equivalents 24,496,334 21,473,030
Restricted cash 0 0
Short-term investments 85,686,937 91,382,536
Trade and other receivables 18,205,907 24,176,680
Prepayments 5,924,015 13,435,149
Current income tax receivable 439,324 832,423
Other taxes receivable 6,609,740 8,360,935
Inventories and short-term biological assets 100,774,682 78,580,317
Other current assets 5,709,824 4,126,715
Total current assets 247,846,763 242,367,785
Non-current assets
Property, plant and equipment 138,498,042 121,165,803
Inventories intended for construction 435,311 864,550
Right-of-use assets 6,935,586 6,916,539
Goodwill 2,364,942 2,364,942
Advances paid for non-current assets 3,104,365 5,482,770
Long-term biological assets 2,682,618 3,240,959
Long-term investments and receivables 43,476,257 42,527,657
Investments in associates 562,323 455,916
Deferred income tax assets 3,825,309 5,964,527
Other intangible assets 2,038,203 1,284,263
Other non-current assets 557,362 190,978
Total non-current assets 204,480,318 190,458,904
Total assets 452,327,081 432,826,689
Appendix 3 (continued). Consolidated statement of financial position as at 30
September 2023 (in RUB thousand)
30 September 2023 31 December 2022
LIABILITIES and EQUITY
Current liabilities
Short-term borrowings 133,225,875 172,351,514
Lease liabilities 824,283 863,452
Trade and other payables 23,947,133 17,024,472
Provisions 146,643 137,542
Current income tax payable 845,576 76,061
Other taxes payable 4,303,360 8,149,780
Total current liabilities 163,292,870 198,602,821
Non-current liabilities
Long-term borrowings 61,241,606 61,038,393
Government grants 11,831,115 11,153,211
Lease liabilities 5,503,679 5,086,897
Deferred income tax liability 2,350,345 2,283,752
Total non-current liabilities 80,926,745 79,562,253
Total liabilities 244,219,615 278,165,074
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 163,569,603 126,843,525
Equity attributable to owners of ROS AGRO PLC 191,418,921 154,692,843
Non-controlling interest 16,688,545 (31,228)
Total equity 208,107,466 154,661,615
Total liabilities and equity 452,327,081 432,826,689
Appendix 4. Consolidated statement of cash flows for the Nine months ended 30
September 2023 (in RUB thousand) - NOT IFRS PRESENTATION (*)
Nine months ended
30 September 2023 30 September 2022
Cash flows from operating activities
Profit/(loss) before income tax 44,190,848 1,978,852
Adjustments for:
Depreciation and amortization 10,370,602 9,788,305
Interest expense 12,855,702 14,932,517
Government grants (8,694,317) (10,131,758)
Interest income (7,841,611) (6,549,398)
Loss/ (gain) on disposal of property, plant and equipment (128,107) (467,203)
Net (gain) / loss on revaluation of biological assets and agricultural produce (8,633,276) 2,087,230
Change in provision for impairment of loans issued (137) (3,385)
Interest expense on leases 436,287 420,998
Change in provision for net realisable value of inventory 757,073 646,480
Change in provision for impairment of receivables and prepayments 1,672,117 52,771
Foreign exchange (gain) / loss, net (11,996,572) 20,856,051
Lost / (reversal of) harvest write-off 1,090,868 24,797
Net (gain) / loss from bonds held for trading - (42)
Settlement of loans and accounts receivable previously written-off (31,379) -
Change in provision for impairment of advances paid for property, plant and 41,771 (14,205)
equipment
Change in other provisions 9,101 (249,247)
Dividend income (2,009,374) (397,125)
Loss on disposal of other assets 456 (21,698)
Gain on SolPro loans redemption (290,597) (466,330)
Other non-cash and non-operating expenses, net (517,798) (60,856)
Operating cash flow before working capital changes 31,281,657 32,426,754
Change in trade and other receivables and prepayments (2,708,396) (19,210,644)
Change in other taxes receivable 2,292,896 (4,595,361)
Change in inventories and short-term biological assets (1,837,837) (5,424,747)
Change in trade and other payables 24,507,893 737,498
Change in other taxes payable (3,448,127) 5,497,785
Cash generated from operations 50,088,086 9,431,285
Income tax paid (2,708,701) (1,512,818)
Net cash from operating activities 47,379,385 7,918,467
Appendix 4. Consolidated statement of cash flows for the Nine months ended 30
September 2023 (in RUB thousand) - NOT IFRS PRESENTATION (*)
Nine months ended
30 September 2023 30 September 2022
Cash flows from investing activities
Purchases of property, plant and equipment (16,989,649) (7,433,806)
Purchases of other intangible assets (670,539) (690,318)
Purchases of land lease rights (23,229) (24,968)
Proceeds from sales of property, plant and equipment 547,677 479,519
Purchases of inventories intended for construction (194,573) (208,440)
Purchases of associates (106,407) (96,134)
Purchases of other investments (500,000) -
Dividends received 2,009,374 722,768
Other investing activities 307,164 499,129
Net cash from investing activities (15,620,182) (6,752,250)
Cash flows from financing activities
Proceeds from borrowings 87,870,377 99,630,403
Repayment of borrowings (159,841,772) (28,134,987)
Interest paid (4,353,398) (4,842,909)
Change in cash on bank deposits 32,810,140 (29,691,928)
Proceeds from sales of bonds with maturity over three months* - 140,783
Loans given* (3,500) (15,445,102)
Loans repaid* 743,500 1,377,321
Interest received* 6,683,330 5,512,854
Proceeds from government grants 1,007,803 636,607
Repayment of lease libilities - principal (255,584) (435,240)
Other financial activities (28,294) 312
Net cash from financing activities (35,367,398) 28,748,114
Net effect of exchange rate changes on cash and cash equivalents 6,631,499 (17,176,603)
Net increase/ (decrease) in cash and cash equivalents 3,023,304 12,737,728
Cash and cash equivalents at the beginning of the period 21,473,030 46,462,179
Cash and cash equivalents at the end of the period 24,496,334 59,199,907
(*) 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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