REG - Ros Agro PLC - 3rd Quarter IFRS Financial Results
15/11/2021 08:30
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RNS Number : 3714S Ros Agro PLC 15 November 2021
15 November 2021
ROS AGRO financial results for 9M 2021 and 3Q 2021
15 November 2021 - 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 nine months ended 30 September 2021.
9M 2021 HIGHLIGHTS
- Sales amounted to RUB 157,576 million (US$ 2,129 million(1)), an
increase of RUB 48,814 million (+45%) compared to 9M 2020;
- Adjusted EBITDA(2) amounted to RUB 30,722 million (US$
415 million), an increase of RUB 10,527 million
(+52%) compared to 9M 2020;
- Adjusted EBITDA margin remained at the same level 19% in 9M 2021 as
in 9M 2020;
- Net profit for the period amounted to RUB 35,422 million (US$
479 million), an increase of RUB 19,744 million (+126%);
- Net debt position(3) as of 30 September 2021 amounted to RUB 69,452
million (US$ 955 million);
- Net Debt/Adjusted EBITDA (LTM(4)) as of 30 September 2021 was 1.63x.
Commenting on the results, Maxim Basov, a member of the Board of Directors of
ROS AGRO PLC and CEO of Rusagro, said:
"In 3Q 2021 Rusagro Sales increased across all business segments. Revenue
growth was supported by positive trend in sales volume of Oil & Fats
segment as well as wheat in Agriculture segment.
In 3Q 2021 Rusagro adjusted EBITDA margin decreased by 7 p.p. following
negative influence of higher costs of feed and animal health protection as
well as additional expenses relating to the start of operations in Primorye
for Meat segment (-11 p.p.) and higher cost of raw materials in Oil & Fats
segment, particularly sunflower seeds, sunflower and tropical oil (-9 p.p.).
Adhering to its mission of making people's lives longer and better, Rusagro
continued to participate in the market initiative to provide Russians with
affordable food supplies and limited its sales price of sugar and bottled
sunflower oil to retail. Thus, sales price of sugar sales price to retail
chains in Russia did not exceed 36 RUB/kg incl. VAT for white sugar in 50 kg
bags at the plant and sales price for bottled sunflower oil at the plant
didn't exceed 95 roubles/litre including VAT.
Meanwhile, Rusagro improved adjusted EBITDA margin of Agriculture segment:
Revenue grew higher than corresponding increase in costs (+10 p.p.). EBITDA
margin of Sugar segment has not changed (0 p.p.)."
Key consolidated financial performance indicators
in RR million Nine months ended Variance Three months ended Variance
30 September 2021 30 September 2020 Units % 30 September 2021 30 September 2020 Units %
Sales (1) 157,576 108,762 48,814 45 53,204 36,601(1) 16,603 45
Gross profit(1) 44,885 30,443(1) 14,442 47 20,506 10,187(1) 10,319 101
Gross margin, % 28% 28% 0 pp 39% 28% 11 pp
Adjusted EBITDA (1) 30,722 20,195(1) 10,527 52 8,603 8,293(1) 310 4
Adjusted EBITDA margin, % 19% 19% 0 pp 16% 23% (7) pp
Net profit for the period (1,2) 35,422 15,678(1) 19,744 126 17,822 5,948(1) 11,873 200
Net profit margin % 22% 14% 8 pp 33% 16% 17 pp
(1) Several adjustments were made to the published 9M and 3Q 2020 indicators:
• Due to Revenue cut-off adjustment Sales for 3Q20 decreased by
RUB 925 million; Gross profit decreased by RUB 391 million; Adjusted EBITDA
and Net profit decreased by RUB 119 million;
• Adjusted EBITDA, Gross profit and Net profit for 9M20 was
decreased by RUB 545 million due to revaluation procedure, performed at the
year end, the same indicators for 3Q20 decreased by RUB 202 million;
• Revaluation of biological assets led to decrease of Gross
profit and Net profit for 3Q20 in amount of RUB 4,792 million;
• Net profit for 9M20 decreased by RUB 63 million because of
other reserves;
• Valuation difference for SolPro operations caused Net profit
to decrease by RUB 3,436 million for 9M20;
• Effect on income tax expense of adjustments above RUB +704
million for 9M20 and RUB +42 million for 3Q20.
(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.
Key financial performance indicators by segments
in RR million Nine months ended Variance Three months ended Variance
30 September 2021 30 September 2020 Units % 30 September 2021 30 September 2020 Units %
Sales, incl. 157,576 108,762 48,814 45 53,204 36,601 16,603 45
Sugar 24,112 21,078 3,034 14 7,727 6,809 917 13
Meat 28,458 22,847 5,611 25 10,276 8,767 1,509 17
Agriculture 18,711 14,751 3,959 27 6,824 6,750 74 1
Oil and Fat 93,959 54,554 39,405 72 32,390 17,822 14,568 82
Other 539 397 142 36 143 109 34 31
Eliminations (8,202) (4,865) (3,337) (69) (4,155) (3,657) (499) (14)
Gross profit, incl. 44,885 30,443 14,442 47 20,506 10,187 10,319 101
Sugar 5,825 5,373 452 8 1,424 1,491 (67) (4)
Meat 6,339 4,749 1,589 33 2,368 2,301 68 3
Agriculture 20,102 9,256 10,846 117 13,507 2,896 10,611 366
Oil and Fat 12,121 11,369 752 7 2,429 3,930 (1,501) (38)
Other 185 76 109 143 77 33 44 134
Eliminations 313 (381) 694 - 701 (463) 1,164 -
Adjusted EBITDA, incl. 30,722 20,195 10,527 52 8,603 8,293 310 4
Sugar 5,829 5,005 823 16 1,589 1,451 138 9
Meat 5,035 4,935 100 2 1,941 2,588 (647) (25)
Agriculture 9,472 5,016 4,456 89 3,609 2,882 727 25
Oil and Fat 10,067 7,367 2,700 37 2,591 2,946 (355) (12)
Other (1,755) (1,094) (661) (60) (1,103) (479) (625) (130)
Eliminations 2,074 (1,035) 3,109 - (24) (1,096) 1,072 98
Adjusted EBITDA margin, % 19% 19% 0 pp 16% 23% (7) pp
Sugar 24% 24% 0 pp 21% 21% 0 pp
Meat 18% 22% (4) pp 19% 30% (11) pp
Agriculture 51% 34% 17 pp 53% 43% 10 pp
Oil and Fat 11% 14% (3) pp 8% 17% (9) pp
SUGAR SEGMENT
In 9M21 Sugar segment earned RUB 5,829 million of adjusted EBITDA (+16% y-o-y)
with 24% margin (+0 pp y-o-y). The financial results of the Sugar Segment of
9M21 and 3Q21 compared to 9M20 and 3Q20 respectively are presented in the
table below:
Sugar segment 9M and 3Q 2021 Financial Results
in RR million Nine months ended Variance Three months ended Variance
30 September 2021 30 September 2020 Units % 30 September 2021 30 September 2021 Units %
Sales 24,112 21,078 3,034 14 7,727 6,809 917 13
Cost of sales (18,288) (15,716) (2,572) (16) (6,302) (5,318) (984) (19)
Net gain/ (loss) from trading derivatives - 11 (11) - - - - -
Gross profit 5,825 5,373 452 8 1,424 1,491 (67) (4)
Gross profit margin 24% 25% (1) pp 18% 22% (4) pp
Distribution and selling expenses (1,460) (1,485) 26 2 (495) (395) (100) (25)
General and administrative expenses (1,129) (1,047) (81) (8) (370) (361) (9) (2)
Other operating income/ (expenses), net 496 619 (123) (20) 447 71 376 526
incl. other adjustments to 71 476 (405) (85) 108 23 85 373
EBITDA (non-recurring items)
Operating profit 3,733 3,459 274 8 1,006 806 200 25
Adjusted EBITDA 5,829 5,005 823 16 1,589 1,451 138 9
Adjusted EBITDA margin 24% 24% 0 pp 21% 21% 0 pp
In 9M21 in comparison to 9M20 Sales of Sugar segment improved by 14% - to RUB
24,112 million. Sugar market showed positive trend in comparison to 9M20.
During the 9M21 Rusagro's sugar sales price to retail chains in Russia did not
exceed 36 RUB/kg incl. VAT for white sugar in 50 kg bags at the plant. Rusagro
decreased sugar sales volume by 19% y-o-y to 541 thousand tonnes due to
reduction of brought forward sugar stocks driven by production volumes
decrease as the result of lower sugar beet harvest in Russia in season
2020/2021 in comparison to the season 2019/2020. In 3Q21 sugar sales also
increased.
Sugar revenue growth for 9M21 was partially offset by the decrease in sales of
beet pulp of RUB 518 million.
Cost of sales in 9M21 increased in line with Sales y-o-y due to higher sugar
beet price.
Production and sales volume of sugar in 9M and 3Q 2021
Nine months ended Variance Three months ended Variance
30 September 2021 30 September 2020 Units % 30 September 2021 30 September 2020 Units %
Sugar production volume, thousand tonnes 208 280 (72) (26) 169 171 (2) (1)
Sales volume, 541 670 (130) (19) 179 205 (26) (12)
thousand tonnes
MEAT SEGMENT
In 9M21 Meat segment earned RUB 5,035 million of adjusted EBITDA (+2% y-o-y)
with 18% margin (-4 pp y-o-y). The financial results of the Meat Segment of
9M21 and 3Q21 compared to 9M20 and 3Q20 respectively are presented in the
table below.
Meat segment 9M and 3Q 2021 Financial Results
in RR million Nine months ended Variance Three months ended Variance
30 September 2021 30 September 2020 Units % 30 September 2021 30 September 2020 Units %
Sales 28,458 22,847 5,611 25 10,276 8,767 1,509 17
Net gain/ (loss) on revaluation of biological assets and agricultural produce 1,333 823 510 62 66 229 (163) (71)
Cost of sales (23,453) (18,920) (4,532) (24) (7,974) (6,696) (1,278) (19)
Gross profit 6,339 4,749 1,589 33 2,368 2,301 68 3
Gross profit margin 22% 21% 1 pp 23% 26% (3) pp
Gross profit excl. effect of biological assets revaluation 5,005 3,926 1,079 27 2,302 2,072 231 11
Adjusted gross profit margin 18% 17% 1 pp 22% 24% (2) pp
Distribution and selling expenses (1,102) (863) (239) (28) (351) (304) (47) (15)
General and administrative expenses (3,117) (960) (2,157) (225) (1,447) (179) (1,268) (707)
Other operating income/ (expenses), net 1,070 396 674 170 350 142 208 147
incl. reimbursement of operating costs (government grants) 459 63 396 628 204 64 140 220
incl. other adjustments to EBITDA (non-recurring items) 480 279 201 72 144 75 69 91
Operating profit 3,190 3,323 (133) (4) 920 1,959 (1,039) (53)
Adjusted EBITDA 5,035 4,935 100 2 1,941 2,588 (647) (25)
Adjusted EBITDA margin 18% 22% (4) pp 19% 30% (11) pp
Sales of the Meat segment increased by 25% in 9M21 and by 17% in 3Q21 compared
to the respective periods of the prior year mainly due to positive market
dynamics of all meat products. The growth of total sales volume by 3% in 9M21
compared to 9M20 triggered by 3% pigs production increase achieved as new pig
farms in Tambov Region reached full capacity.
Production and sales volume of pork products in 9M and 3Q 2021
Nine months ended Variance Three months ended Variance
30 September 2021 30 September 2020 Units % 30 September 2021 30 September 2020 Units %
Pigs production, 226 222 4 2 75 76 (1) (1)
thousand tonnes in live weight
Sales volume, 182 177 5 3 61 61 0 1
thousand tonnes
Cost of sales increased by 24% in 9M21 and by 19% in 3Q21 compared to the
respective periods of the prior year mainly due to higher costs of feed and
animals health protection.
Net gain on revaluation of biological assets and agricultural produce in 9M21
resulted mainly from an increase in fair value for both bearer and consumable
livestock pigs during the reporting period compared to fair value at the end
2020. Gain on revaluation of biological assets in 3Q20 is higher than in 3Q21
due to significant increase fair value in 3Q20 compared to 2Q20 and gradual
growth during 9M21.
An increase in Distribution and selling expenses in 9M21 in comparison to 9M20
is mainly due to the rise in the costs of marketing activities.
General and administrative expenses in 9M21 compared to prior year period
increased mainly due realization of pork production cluster project in the
Primorie Territory.
An increase in Other operating income in 9M21 in comparison to 9M20 is mainly
due to partial reimbursement of feed purchase costs and insurance costs.
AGRICULTURAL SEGMENT
As at 30 September 2021 Rusagro's area of controlled land stands at 691
thousand hectares (30 September 2020: 642 thousand hectares). In 9M21
Agriculture segment earned RUB 9,472 million of adjusted EBITDA (+89 % y-o-y)
with 51% margin (+17 pp y-o-y). The financial results of the Agricultural
Segment of 9M21 and 3Q21 compared to 9M20 and 3Q20 respectively are presented
below.
Agriculture segment 9M and 3Q 2021 Financial Results
in RR million Nine months ended Variance Three months ended Variance
30 September 2021 30 September 2020 Units % 30 September 2021 30 September 2020 Units %
Sales 18,711 14,751 3,959 27 6,824 6,750 74 1
Net gain/ (loss) on revaluation of biological assets and agricultural produce 10,514 3,638 6,876 189 10,266 127 10,139 7,993
Cost of sales (9,123) (9,133) 11 0 (3,583) (3,981) 398 10
Gross profit 20,102 9,256 10,846 117 13,507 2,896 10,611 366
Gross profit margin 107% 63% 44 pp 198% 43% 155 pp
Gross profit excl. effect of biological assets and agricultural produce 9,588 5,618 3,970 71 3,241 2,769 472 17
revaluation
Adjusted gross profit margin 51% 38% 13 pp 47% 41% 6 pp
Distribution and selling expenses (1,079) (1,452) 372 26 (119) (474) 355 75
General and administrative expenses (1,023) (949) (74) (8) (388) (330) (58) (18)
Other operating income/ (expenses), net 104 2 102 4,827 17 83 (65) (79)
incl. reimbursement of 241 111 130 118 108 50 58 117
operating costs (government
grants)
incl. other adjustments to EBITDA (non-recurring items) (167) (38) (129) (340) (252) (33) (219) (661)
Operating profit 18,105 6,858 11,247 164 13,017 2,174 10,843 499
Adjusted EBITDA 9,472 5,016 4,456 89 3,609 2,882 727 25
Adjusted EBITDA margin 51% 34% 17 pp 53% 43% 10 pp
In 9M21 in comparison to 9M20 Sales of the Agriculture segment increased by
27% to RUB 18,711 million which was partially due to significantly higher
sales volume of wheat compensated by sales volume decrease of all other crops,
especially soybean. Meanwhile, Cost of sales, General and administrative
expenses remained relatively stable.
Higher sales volume of wheat in 9M21 compared to 9M20 were affected by
management decision in 2020 to push sales timing towards 2021, whereas 2019
wheat harvest was mainly sold in 2019.
Opposite situation with soybean, lower sales volume in 9M21 compared to 9M20
were affected by management decision in 2019 to push sales timing towards
2020, whereas 2020 soybean harvest was partially realized in 2020.
Sugar beet sales volume decrease in 9M21 compared to 9M20 was caused by the
shift in launch dates of sugar plants in 3Q 2021, also by sale of remaining
2019 stock balances in 1Q 2020.
In 3Q21 in comparison to 3Q20 Sales of the Agriculture segment increased by 1%
to RUB 6,824 million because of the same reasons mentioned above.
Sales volume of crops in 9M and 3Q 2021
Thousand tonnes Nine months ended Variance Three months ended Variance
30 September 2021 30 September 2020 Units % 30 September 2021 30 September 2020 Units %
sugar beet 720 832 (112) (13) 720 769 (49) (6)
wheat 583 268 315 118 223 186 37 20
soybean 161 234 (73) (31) 19 46 (27) (59)
corn 58 92 (34) (37) - 20 (20) (100)
sunflower seeds 8 18 (10) (57) 0 0 (0) (69)
barley 7 92 (85) (93) 2 41 (39) (96)
Net loss/gain on revaluation of biological assets and agricultural produce in
9M21 and 9M20 changes mainly caused by two opposite-directed factors. Gain
from current year harvested and unharvested crops revaluation to fair value
less estimated point-of-sale costs equals to RUB 15,714 million in 9M21
against RUB 5,339 million in 9M20. The second factor is the realisation of
gain from crops revaluation, recognised in the previous year financial
statements and remained unrealised as at the year-end, equals to RUB 5,143
million loss recognised in 9M21 against RUB 1,773 million loss in 9M20,
significant loss increase caused by higher revaluation amounts in 2020.
Net gain/(loss) on revaluation of crops and its subsequent realisation do not
affect the Adjusted EBITDA figure.
Distribution and selling expenses decreased despite overall sales volumes
remaining at the same level, which is caused mainly by changes in sales
channels of soybean, export in 9M2020 vs. domestic in 9M2021.
OIL AND FAT SEGMENT
In 9M21 Oil and Fat segment earned RUB 10,067 million of adjusted EBITDA (+37
% y-o-y) with 11% margin (-3 pp y-o-y). The financial results of the Oil and
Fat Segment for 9M21 and 3Q21 compared to 9M20 and 3Q20 respectively are
presented below.
Oil and Fat segment 9M and 3Q 2021 Financial Results
in RR million Nine months ended Variance Three months ended Variance
30 September 2021 30 September 2020 Units % 30 September 2021 30 September 2020 Units %
Sales 93,959 54,554 39,405 72 32,390 17,822 14,568 82
Cost of sales (81,837) (43,184) (38,653) (90) (29,961) (13,892) (16,068) (116)
Gross profit 12,121 11,369 752 7 2,429 3,930 (1,501) (38)
Gross profit margin 13% 21% (8) pp 7% 23% (16) pp
Distribution and selling expenses (2,674) (3,079) 405 13 (511) (872) 360 41
General and administrative expenses (1,423) (1,495) 72 5 (409) (432) 24 5
Other operating income/ (expenses), net (377) (199) (178) (89) (519) (28) (491) (1,735)
incl. Other adjustments to EBITDA (non-recurring items) (612) (288) (324) (113) (636) (181) (455) (251)
Operating profit/ (loss) 7,648 6,597 1,051 16 990 2,598 (1,607) (62)
Adjusted EBITDA 10,067 7,367 2,700 37 2,591 2,946 (355) (12)
Adjusted EBITDA margin 11% 14% (3) pp 8% 17% (9) pp
In 2021 results of Dairy Products segment are included in Oil and Fat segment
due to consolidation of these two businesses. For comparison purpose financial
results of the previous years were corrected accordingly.
Sales volumes to third parties in 9M and 3Q 2021
Thousand tonnes Nine months ended Variance Three months ended Variance
30 September 2021 30 September 2020 Units % 30 September 2021 30 September 2020 Units %
meal 443 443 - - 138 126 12 9
crude oil 319 287 32 11 121 60 62 103
industrial fats 243 221 22 10 85 88 (3) (4)
dry whey mixes 11 11 - - 4 4 0 9
consumer oil&fat products 234 247 (13) (5) 72 80 (8) (10)
consumer dairy products 11 10 1 12 4 3 1 17
In 9M21 in comparison to 9M20 Sales of the Oil and Fat segment increased by
72% to RUB 39,405 partially due to rise of sales volume of crude oil,
industrial fats and consumer dairy products. Sales price of bottled sunflower
oil to retail in Russia did not exceed established by Russian Government limit
of 95 RUB/l incl. VAT at the plant.
Cost of sales in 9M21 in comparison to 9M20 increased due to higher costs of
raw materials, including sunflower seeds, sunflower and tropical oil.
Decrease in Distribution and selling expenses in 9М21 compared to 9M20 was
caused by income from recognition of sunflower surplus on elevators.
Change in Other net operating expenses in 9M21 was due to negative dynamics in
forex losses in 9M20 and higher provisions for bad debts.
KEY CONSOLIDATED CASH FLOW INDICATORS (NOT IFRS PRESENTATION*)
The key consolidated cash flow indicators presented according to management
accounts methodology
in mln Roubles Nine months ended Variance Three months ended Variance
30 September 2021 30 September 2020 Units % 30 September 2021 30 September 2020 Units %
Net cash from operating activities, incl. 32,255 24,677 7,578 31 10,907 5,623 5,284 94
Operating cash flow before working capital changes 30,312 20,370 9,942 49 7,570 7,730 (160) (2)
Working capital changes 3,467 5,292 (1,825) (34) 4,225 (1,380) 5,605 -
Net cash from investing activities, incl. (37,078) (9,866) (27,212) (276) (19,667) (5,101) (14,566) (286)
Purchases of property plant and equipment and inventories intended for (8,816) (10,090) 1,275 13 (2,594) (5,266) 2,672 51
construction
Acquisition of SolPro assets (28,735) 0 (28,735) - (17,046) 0 (17,046) -
Net cash from financing activities 50,108 (7,620) 57,727 - 13,735 5,788 7,947 137
Net effect of exchange rate changes on cash and cash equivalents (187) 291 (478) - (85) 118 (203) -
Net increase / (decrease) in cash and cash equivalents 45,098 7,482 37,616 503 4,890 6,428 (1,538) (24)
(*) See Appendix 4
During 9M21 the Company started to acquire SolPro assets, cash inflow
corresponding to loans and interest repaid as the result of SolPro assets
acquisition is included in line Net cash from financing activities.
The key investments in property, plant and equipment and inventories intended
for construction during 9M21 were made in the Meat segment in the amount of
RUB 4,916 million (9M20: RUB 5,725 million) due to the purchases related to
the construction project in the Russian Far East. Investments in the Oil and
Fat segment in the amount of RUB 1,266 million (9M20: RUB 1,242 million),
Agriculture segment in the amount of RUB 1,885 million (9M20: RUB
1,755 million) and Sugar segment in the amount of RUB 749 million (9M20: RUB
1,368 million) mainly relate to purchases of machinery and equipment for
production facilities renewal and maintenance.
Debt position and liquidity management
in RUB million 30 September 2021 31 December 2020 Variance
Units %
Gross debt 190,236 114,929 75,307 66
Short-term borrowings 125,764 51,753 74,011 143
Long-term borrowings 64,471 63,176 1,295 2
Cash and cash equivalents, bank deposits and bonds (120,784) (46,029) (74,755) (162)
Short-term cash, deposits and bonds (86,363) (12,064) (74,299) (616)
Long-term cash, deposits and bonds (34,421) (33,965) (456) (1)
Net debt 69,452 68,900 552 1
Short-term borrowings, net 39,402 39,689 (287) (1)
Long-term borrowings, net 30,051 29,211 840 3
Adjusted EBITDA (LTM(4)) 42,511 31,984 10,527 33
Net debt/ Adjusted EBITDA (LTM) 1.63 2.15 (0.5) pp
Adjusted EBITDA (LTM)(5) without other operating income/expenses 42,855 32,435 10,420 32
Net debt/ Adjusted EBITDA (LTM)(5) without other operating income/expenses 1.62 2.12 (0.5) pp
Net finance income/ (expense)
in RR million Nine months ended Variance Three months ended Variance
30 September 2021 30 September 2020 Units % 30 September 2021 30 September 2020 Units %
Net interest expense (4,003) (3,720) (283) (8) (1,496) (1,138) (358) (31)
Gross interest expense (7,325) (4,891) (2,434) (50) (3,550) (1,534) (2,017) (132)
Reimbursement of interest expense 3,322 1,170 2,151 184 2,054 396 1,659 419
Interest income 6,308 4,579 1,729 38 2,585 1,058 1,527 144
Net gain/ (loss) from bonds held for trading (2) (16) 14 85 (1) 1 (2) -
Other financial income, net (490) (1,492) 1,002 67 (326) (140) (186) (133)
Net foreign exchange gain/ (loss) (50) (1,118) 1,068 96 (78) 97 (175) -
Other financial income / (expenses), net (440) (374) (66) (18) (248) (237) (11) (5)
Total net finance income/ (expenses) 1,813 (649) 2,461 - 762 (219) 980 -
Net debt increased at 30 September 2021 compared at 31 December 2020 as a
result of an increase in short-term borrowings.
In 9M21 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 9M21 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 expenses of 9M20 in the sum of RUB 649 million changed to net
finance income in the amount of RUB 1,813 million in 9M21 as the result of
negative dynamics in forex losses in 9M20 and increase in interest income on
bank deposits in 9M21.
________________________________
(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 2021 and 2020 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 691 thousand hectares of land under control
located in the highly fertile Black Earth region of Russia (in the Belgorod,
Tambov, Voronezh, Kursk, Orel regions), in Saratov regionand 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
barley, sunflower seeds and soybeans. These products are partially consumed by
the Meat segment, 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 (№2 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 №3 largest pork producer in Russia 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 2021
financial results for investors and analysts.
Details of the call:
Date: 15 November 2021
Time: 4:00 PM (Moscow) / 1:00 PM (London)
Subject: ROS AGRO PLC 9M and 3Q 2021 Financial results
Password: 066909
Link:
https://ib-translations.zoom.us/j/89195110472?pwd=eThuZTZ0ajc5NDF2b3FJK0RjeEF0Zz09
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 Nine and
Three months ended 30 September 2021 (in RUB thousand)
Nine months ended Three months ended
30 September 30 September
2021 2020 2021 2020
Sales 157,576,090 108,762,200 53,204,321 36,600,754
Net gain/(loss) on revaluation of biological assets and agricultural produce 10,570,007 5,428,963 11,004,819 1,018,637
Cost of sales (123,260,634) (83,758,239) (43,702,667) (27,432,074)
Net gain/(loss) from trading derivatives (5) 10,552 - (3)
Gross profit 44,885,458 30,443,476 20,506,473 10,187,314
Distribution and selling expenses (5,704,363) (6,507,851) (1,386,012) (1,919,802)
General and administrative expenses (8,322,598) (5,485,493) (3,681,761) (1,803,461)
Reversal of provision/(provision) for impairment of loans issued 3,649,567 (3,256,721) 1,797,273 -
Other operating income/(expenses), net 1,201,562 1,182,563 168,752 (61,056)
Operating profit / (loss) 35,709,626 16,375,974 17,404,725 6,402,995
Interest expense (4,002,929) (3,720,172) (1,495,908) (1,137,894)
Interest income 6,307,773 4,578,972 2,585,169 1,058,041
Net (loss)/gain from bonds (2,362) (15,977) (1,000) 1,025
Other financial income/ (expenses), net (489,739) (1,491,563) (326,330) (140,318)
Profit before income tax 37,522,369 15,727,234 18,166,656 6,183,849
Income tax expense (2,100,271) (48,913) (345,043) (235,565)
Profit for the period 35,422,098 15,678,321 17,821,613 5,948,284
Other comprehensive income
Total comprehensive income for the period 35,422,098 15,678,321 17,821,613 5,948,284
Profit is attributable to:
Owners of ROS AGRO PLC 35,441,460 15,718,297 17,811,214 5,943,141
Non-controlling interest (19,362) (39,976) 10,399 5,143
Profit for the period 35,422,098 15,678,321 17,821,613 5,948,284
Total comprehensive income is attributable to:
Owners of ROS AGRO PLC 35,441,460 15,718,297 17,811,214 5,943,141
Non-controlling interest (19,362) (39,976) 10,399 5,143
Total comprehensive income for the period 35,422,098 15,678,321 17,821,613 5,948,284
Earnings per ordinary share for profit attributable to the owners of ROS AGRO 1,317.22 584.22 661.97 220.88
PLC, basic and diluted
(in RR per share)
Appendix 2. Segment information for the Nine months ended 30 September 2021
(in RUB thousand)
9M 2021 Sugar Meat Agriculture Oil and Fat Other Eliminations Total
Sales 24,112,366 28,457,927 18,710,584 93,958,669 539,010 (8,202,466) 157,576,090
Net gain/ (loss) on revaluation of biological assets and agricultural produce - 1,333,291 10,514,328 - - (1,277,612) 10,570,007
Cost of sales (18,287,704) (23,452,588) (9,122,627) (81,837,276) (353,887) 9,793,448 (123,260,634)
incl. Depreciation (2,112,959) (2,959,106) (1,540,086) (1,576,825) (6,929) (14,242) (8,210,147)
Net gain/ (loss) from trading derivatives - (5) - - - - (5)
Gross profit 5,824,662 6,338,625 20,102,285 12,121,393 185,123 313,370 44,885,458
Distribution and Selling, General and administrative expenses (2,588,217) (4,218,594) (2,102,186) (4,096,259) (2,098,613) 1,076,908 (14,026,961)
incl. Depreciation (53,597) (699,441) (175,144) (229,359) (80,853) 14,242 (1,224,152)
Other operating income/(expenses), net 496,365 1,069,839 104,406 (376,784) 19,425,136 (19,517,400) 1,201,562
incl. Reimbursement of operating costs (government grants) 427,047 459,224 241,097 305,395 - - 1,432,763
incl. Other adjustments to EBITDA (non-recurring items) 70,568 480,429 (166,546) (611,998) 19,354,119 (18,923,887) 202,685
Reversal of provision/(provision) for impairment of loans issued - - - - 3,649,567 - 3,649,567
Operating profit / (loss) 3,732,810 3,189,870 18,104,505 7,648,350 21,161,213 (18,127,122) 35,709,626
Adjustments:
Depreciation included in Operating Profit 2,166,556 3,658,547 1,715,230 1,806,184 87,782 - 9,434,299
Other adjustments to EBITDA (non-recurring items) (70,568) (480,429) 166,546 611,998 (19,354,119) 18,923,887 (202,685)
Net gain/ (loss) on revaluation of biological assets and agricultural produce - (1,333,291) (10,514,328) - - 1,277,612 (10,570,007)
Reversal of provision/(provision) for impairment of loans issued - - - - (3,649,567) - (3,649,567)
Adjusted EBITDA* 5,828,798 5,034,697 9,471,953 10,066,532 (1,754,691) 2,074,377 30,721,666
* Non-IFRS measure
Appendix 2 (continued). Segment information for the Nine months ended 30
September 2020 (in RUB thousand)
9M 2020 Sugar Meat Agriculture Oil and Fat Other Eliminations Total
Sales 21,078,432 22,846,644 14,751,307 54,553,615 397,453 (4,865,251) 108,762,200
Net gain/ (loss) on revaluation of biological assets and agricultural produce - 823,030 3,638,467 - - 967,466 5,428,963
Cost of sales (15,716,077) (18,920,291) (9,133,386) (43,184,229) (321,393) 3,517,137 (83,758,239)
incl. Depreciation (1,961,133) (2,552,374) (1,561,901) (354,210) (7,860) (15,048) (6,452,526)
Net gain/ (loss) from trading derivatives 10,552 - - - - - 10,552
Gross profit 5,372,907 4,749,383 9,256,388 11,369,386 76,060 (380,648) 30,443,476
Distribution and Selling, General and administrative expenses (2,532,701) (1,822,449) (2,400,957) (4,573,097) (1,318,468) 654,328 (11,993,344)
incl. Depreciation (60,979) (161,437) (197,050) (127,617) (131,521) 15,048 (663,556)
Other operating income/(expenses), net 619,005 396,263 2,119 (198,907) 9,003,368 (8,639,285) 1,182,563
incl. Reimbursement of operating costs (government grants) 72,170 63,118 110,709 240,315 - - 486,312
incl. Other adjustments to EBITDA (non-recurring items) 475,967 279,059 (37,893) (287,661) 8,994,118 (8,298,465) 1,125,125
Reversal of provision/(provision) for impairment of loans issued - - - - (3,256,721) - (3,256,721)
Operating profit / (loss) 3,459,211 3,323,197 6,857,550 6,597,382 4,504,239 (8,365,605) 16,375,974
Adjustments:
Depreciation included in Operating Profit 2,022,112 2,713,811 1,758,951 481,827 139,381 - 7,116,082
Other adjustments to EBITDA (non-recurring items) (475,967) (279,059) 37,893 287,661 (8,994,118) 8,298,465 (1,125,125)
Net gain/ (loss) on revaluation of biological assets and agricultural produce - (823,030) (3,638,467) - - (967,466) (5,428,963)
Reversal of provision/(provision) for impairment of loans issued - - - - 3,256,721 - 3,256,721
Adjusted EBITDA* 5,005,356 4,934,919 5,015,927 7,366,870 (1,093,777) (1,034,606) 20,194,689
* Non-IFRS measure
Appendix 3. Consolidated statement of financial position as at 30 September
2021
(in RUB thousand)
30 September 2021 31 December 2020
ASSETS
Current assets
Cash and cash equivalents 56,964,661 11,866,798
Restricted cash 48 143,637
Short-term investments 31,265,683 19,583,523
Trade and other receivables 12,107,283 9,512,286
Prepayments 7,248,779 2,941,224
Current income tax receivable 1,154,624 646,162
Other taxes receivable 9,555,667 5,506,675
Inventories and short-term biological assets 69,931,761 69,001,368
Total current assets 188,228,506 119,201,673
Non-current assets
Property, plant and equipment 117,931,797 87,519,088
Inventories intended for construction 2,175,721 3,353,330
Right-of-use assets 7,632,339 6,934,567
Goodwill 2,364,942 2,364,942
Advances paid for non-current assets 7,813,151 6,905,003
Long-term biological assets 3,383,996 2,528,128
Long-term investments and receivables 42,977,410 42,692,320
Investments in associates 359,782 257,782
Deferred income tax assets 4,219,139 3,566,168
Other intangible assets 641,508 619,793
Other non-current assets 606,865 205,793
Total non-current assets 190,106,650 156,946,914
Total assets 378,335,156 276,148,587
LIABILITIES and EQUITY
Current liabilities
Short-term borrowings 125,764,236 51,753,475
Lease liabilities 1,101,079 943,859
Trade and other payables 18,354,658 16,016,138
Provisions 801,867 179,796
Current income tax payable 267,017 69,546
Other taxes payable 9,227,332 4,096,199
Total current liabilities 155,516,189 73,059,013
Non-current liabilities
Long-term borrowings 64,471,455 63,175,720
Government grants 8,885,948 8,536,899
Lease liabilities 5,714,502 4,855,508
Deferred income tax liability 1,817,451 487,049
Total non-current liabilities 80,889,356 77,055,176
Total liabilities 236,405,545 150,114,189
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 1,363,178 1,363,177
Retained earnings 114,099,612 98,185,038
Equity attributable to owners of ROS AGRO PLC 141,948,931 126,034,356
Non-controlling interest (19,320) 42
Total equity 141,929,611 126,034,398
Total liabilities and equity 378,335,156 276,148,587
Appendix 4. Consolidated statement of cash flows for the Nine months ended 30
September 2021 (in RUB thousand) - NOT IFRS PRESENTATION (*)
Nine months ended
30 September 2021 30 September 2020
Cash flows from operating activities
Profit before income tax 37,522,369 15,727,234
Adjustments for:
Depreciation and amortization 9,434,299 7,116,082
Interest expense 7,324,543 4,890,502
Government grants (5,238,990) (2,137,782)
Interest income (6,307,773) (4,578,972)
Loss/ (gain) on disposal of property, plant and equipment (66,677) (75,710)
Net (gain) / loss on revaluation of biological assets and agricultural produce (10,570,007) (5,428,963)
Change in provision for impairment of loans issued (3,649,739) 3,256,721
Lease financial expense 370,436 359,122
Realised deferred day-one gain (529,893) (780,723)
Change in provision for net realisable value of inventory 1,017,409 351,315
Change in provision for impairment of receivables and prepayments 577,580 31,234
Foreign exchange (gain) / loss, net (36,965) 1,525,153
Lost / (reversal of) harvest write-off 237,476 189,841
Net (gain) / loss from bonds held for trading 2,362 15,977
Settlement of loans and accounts receivable previously written-off (1) (2)
Change in provision for impairment of advances paid for property, plant and (38,260) (23,168)
equipment
Change in other provisions 622,072 199,882
Dividend income (377,269) (186,506)
Other non-cash and non-operating expenses, net 19,270 (80,855)
Operating cash flow before working capital changes 30,312,242 20,370,382
Change in trade and other receivables and prepayments (7,824,401) (481,067)
Change in other taxes receivable (4,048,993) 1,149,905
Change in inventories and biological assets 7,983,147 3,169,914
Change in trade and other payables 2,264,641 2,092,873
Change in other taxes payable 5,092,643 (639,320)
Cash generated from operations 33,779,279 25,662,687
Income tax paid (1,524,306) (986,154)
Net cash from operating activities 32,254,973 24,676,533
Appendix 4 (continued). Consolidated statement of cash flows the Nine months
ended 30 September 2021 (in RUB thousand) - NOT IFRS PRESENTATION (*)
Nine months ended
30 September 2021 30 September 2020
Cash flows from investing activities
Purchases of property, plant and equipment including SolPro assets acquisition (37,151,209) (8,707,154)
Purchases of other intangible assets (448,233) (335,686)
Purchases of land lease rights (36,933) -
Proceeds from sales of property, plant and equipment 260,298 375,220
Purchases of inventories intended for construction (399,645) (1,383,337)
Purchases of associates (102,000) (63,000)
Movement in restricted cash 140,895 -
Dividends received 377,331 186,506
Other investing activities 281,501 61,211
Net cash from investing activities (37,077,995) (9,866,240)
Cash flows from financing activities
Proceeds from borrowings 96,623,976 38,830,604
Repayment of borrowings (23,593,441) (43,477,527)
Interest paid (3,098,985) (2,960,414)
Change in cash on bank deposits (28,000,000) -
Proceeds from sales of bonds with maturity over three months* 220,282 -
Purchases of loans issued* (728,269) (8,191)
Loans repaid* 20,698,888 910,270
Interest received* 5,570,976 2,757,453
Proceeds from government grants 1,935,018 1,490,823
Dividends paid to owners Ros Agro PLC (19,417,565) (5,134,426)
Repayment of lease liabilities (58,706) (28,111)
Other financial activities (44,645) -
Net cash from financing activities 50,107,529 (7,619,519)
Net effect of exchange rate changes on cash and cash equivalents (186,644) 291,126
Net increase/ (decrease) in cash and cash equivalents 45,097,863 7,481,900
Cash and cash equivalents at the beginning of the period 11,866,798 2,170,779
Cash and cash equivalents at the end of the period 56,964,661 9,652,679
(*) 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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