1st Quarter Financial Results

Ros Agro PLC
22 May 2023
 

 

 

22 May 2023

 

ROS AGRO PLC financial results for 1Q 2023

 

22 May 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 three months ended 31 March 2023.

 

 

1Q 2023 HIGHLIGHTS

 

-     Sales amounted to RUB 47,395 million (US$ 651 million1), a decrease of RUB 14,111 million (-23%, US$ -63 million) compared to 1Q 2022;

-     Adjusted EBITDA2 amounted to RUB 7,139 million (US$ 98 million), a decrease of RUB 9,050 million (-56%, US$ -90 million) compared to 1Q 2022;

-     Adjusted EBITDA margin decreased to 15% in 1Q 2023 from 26% in 1Q 2022;

-     Net profit for the period amounted to RUB 5,417 million (US$ 74 million), an increase of RUB 3,454 million (+176%, US$ +52 million);

-     Net debt position3 as of 31 March 2023 amounted to RUB 83,585 million (US$ 1,084 million);

-     Net Debt/Adjusted EBITDA (LTM4) as of 31 March 2023 was 2.32x.

 

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

 

"In 1Q 2023 sales of the Group decreased in all business segments except Meat, mainly due to a decrease in sales prices triggered by a drop in world prices and USD/RUB exchange rate from a high level in 1Q 2022, as well as the postponement of sales of agricultural products due to late harvesting.

Adjusted EBITDA declined in line with revenue across all business segments due to the pressure of lower selling prices. This drop was compensated by the growth in production volumes both in Primorie after the launch of the pork production cluster, and due to the efficiency increase in the Central region.

Despite the decline in adjusted EBITDA, Rusagro showed a 176% increase in net income and a significant decrease in net debt by 16%."

 

 

 

 

 

 

 

 

 

 

 

 

 

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 consolidated financial performance indicators

in RUB million

Three months ended

Variance

31 March 2023

31 March 2022

Units

%

Sales

 47,395

 61,506

(14,111)

(23)

Gross profit  1

 8,630

 14,995

(6,365)

(42)

Gross margin, %

18%

24%

(6) pp

 

Adjusted EBITDA  1

 7,139

 16,189

(9,050)

(56)

Adjusted EBITDA margin, %

15%

26%

(11) pp

 

Net profit for the period 1,2

 5,417

 1,963

 3,454

 176

Net profit margin %

11%

3%

8 pp

 

 

1 Several adjustments were made to the published key financial indicators for 1Q 2022:

•     Gross profit for 1Q 2022 was increased by RUB 352 million, Net profit by RUB 282 million to reflect the distribution of depreciation expenses between the quarters of 2022 in Oil and Fat segment;

•     Gross profit for 1Q 2022 was decreased by RUB 190 million to reflect the distribution of depreciation costs between lines of financial statements for Meat segment;

•     Gross profit and adjusted EBITDA for 1Q 2022 were decreased by RUB 698 million, Net profit by RUB 559 million in order to reflect the distribution of costs of Far East project in Meat segment.

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 RUB million

Three months ended

Variance

31 March 2023

31 March 2022

Units

%

 





Sales, incl.

47,395

61,506

(14,111)

(23)

Sugar

9,411

11,333

(1,922)

(17)

Meat

10,725

9,258

1,467

16

Agriculture

5,896

8,185

(2,289)

(28)

Oil and Fat

23,357

35,111

(11,754)

(33)

Other

464

208

256

123

Eliminations

(2,457)

(2,589)

132

5






Gross profit, incl.

8,630

14,995

(6,365)

(42)

Sugar

2,815

5,552

(2,736)

(49)

Meat

1,143

1,151

(8)

(1)

Agriculture

(774)

1,736

(2,510)

-

Oil and Fat

5,641

6,787

(1,146)

(17)

Other

167

(49)

215

-

Eliminations

(362)

(183)

(179)

(98)






Adjusted EBITDA, incl.

7,139

16,189

(9,050)

(56)

Sugar

2,010

4,679

(2,668)

(57)

Meat

447

589

(142)

(24)

Agriculture

(116)

4,173

(4,290)

-

Oil and Fat

4,161

5,303

(1,141)

(22)

Other

(297)

(6)

(291)

(5,082)

Eliminations

934

1,451

(517)

(36)






Adjusted EBITDA margin, %

15%

26%

(11) pp

 

Sugar

21%

41%

(20) pp

 

Meat

4%

6%

(2) pp

 

Agriculture

(2%)

51%

(53) pp

 

Oil and Fat

18%

15%

3 pp

 

 



SUGAR SEGMENT

In 1Q 2023 Sugar segment earned RUB 2,010 million of adjusted EBITDA (-57% y-o-y) with 21% margin (-20 pp y-o-y). The financial results of the Sugar Segment of 1Q 2023 compared to 1Q 2022 are presented in the table below:

Sugar segment 1Q 2023 Financial Results

in RUB million

Three months ended

Variance

31 March 2023

31 March 2022

Units

%

Sales

9,411

11,333

(1,922)

(17)

Cost of sales

(6,595)

(5,781)

(814)

(14)

Gross profit/ (loss)

2,815

5,552

(2,736)

(49)

Gross profit margin

30%

49%

(19) pp

 

Distribution and selling expenses

(945)

(1,080)

136

13

General and administrative expenses

(394)

(408)

14

3

Other operating income/ (expenses), net

(3)

(206)

203

99

incl. other adjustments to

EBITDA (non-recurring items)

22

(216)

238

-

Operating profit

1,473

3,857

(2,384)

(62)

 





Adjusted EBITDA

2,010

4,679

(2,668)

(57)

Adjusted EBITDA margin

21%

41%

(20) pp

 

 

In 1Q 2023 compared to 1Q 2022 Sales of Sugar segment decreased by 17% mainly due to the decrease in sugar sales volume by 17% down to 148 thousand tons. The reduction in sales volumes is caused by the decrease in production volumes in season 2022/2023 compared to season 2021/2022 due to lower sugar content in sugar beet attributable to bad weather conditions that affected the quality of sugar beet.

Revenue from sale of beet pulp decreased by RUB 419 million on the back of lower sales prices, which was partially offset by the increase in sales volumes due to the extension of the sugar beet processing season to January and February 2023.

Revenue from sales of molasses, betaine, buckwheat and rice decreased by RUB 183 million.

Production and sales volume of sugar in 1Q 2023

 

Three months ended

Variance

31 March 2023

31 March 2022

Units

%

Sugar production volume, thousand tonnes

69

56

13

23

Sales volume,

thousand tonnes

148

177

(29)

(17)

 

Cost of sales in 1Q 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.

Distribution and selling expenses in 1Q 2023 decreased mainly due to the decrease in sugar transportation costs as the result of lower sugar sales volumes.

Other operating expenses in 1Q 2023 decreased mainly due to the positive dynamics of operating exchange differences.



 

MEAT SEGMENT

In 1Q 2023 Meat segment earned RUB 447 million of adjusted EBITDA (-24% y-o-y) with 4% margin (-2 pp y-o-y). The financial results of the Meat Segment of 1Q 2023 compared to 1Q 2022 respectively are presented in the table below.

Meat segment 1Q 2023 Financial Results

in RUB million

Three months ended

Variance

31 March 2023

31 March 2022

Units

%

Sales

10,725

9,258

1,467

16

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

1,327

360

37

Cost of sales

(10,909)

(9,075)

(1,834)

(20)

Gross profit/ (loss)

1,143

1,151

(8)

(1)

Gross profit margin

11%

12%

(1) pp

 

Gross profit excl. effect of biological assets revaluation

(184)

183

(367)

-

Adjusted gross profit margin

-2%

2%

(4) pp

 

Distribution and selling expenses

(315)

(430)

115

27

General and administrative expenses

(601)

(447)

(154)

(34)

Other operating income/ (expenses), net

314

147

167

114

incl. reimbursement of operating costs (government grants)

19

6

14

237

incl. other adjustments to EBITDA (non-recurring items)

98

89

10

11

Operating profit

541

420

121

29

 





Adjusted EBITDA

447

589

(142)

(24)

Adjusted EBITDA margin

4%

6%

(2) pp

 

 

Sales of the Meat segment increased by 16% in 1Q 2023 compared to the respective period of 2022. Sales volume increase was caused mainly by the production outputs growth. Positive 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 1Q 2023

 

Three months ended

Variance

31 March 2023

31 March 2022

Units

%

Pigs production,

thousand tonnes in live weight

 

 

89

77

11

14

Sales volume,

thousand tonnes

72

60

11

19

 

 

 

Cost of sales increased by 20% in 1Q 2023 compared to the respective period of 2022. Despite the reduction of feed costs (mainly grain and protein ingredients), the growth of other components of cost of sales had a negative effect.

Net gain on revaluation of biological assets and agricultural produce in 1Q 2023 resulted from an increase in fair value for consumable livestock pigs and decrease in costs during the reporting period compared to the respective figures at the end of 2022.

General and administrative expenses increased in 1Q 2023 compared to the respective period in 2022 as a result of gradual increase in production capacities to the planned level in the Primorsky Krai.

An increase in Other operating income in 1Q 2023 in comparison to 1Q 2022 is mainly attributed to the increase in income from grain elevator services.

 

 



 

AGRICULTURAL SEGMENT

As at 31 March 2022 Rusagro's area of controlled land stands at 668 thousand hectares
(31 December 2022: 660 thousand hectares). In 1Q 2023 Agriculture segment earned RUB -116 million of adjusted EBITDA (RUB -4,290 million in comparison with 1Q 2022) with -2% margin (in comparison with 51% in 1Q 2022). The financial results of the Agricultural Segment of
1Q 2023 compared to 1Q 2022 respectively are presented below.

Agriculture segment 1Q 2023 Financial Results

in RR million

Three months ended

Variance

31 March 2023

31 March 2022

Units

%

Sales

5,896

8,185

(2,289)

(28)

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

(1,415)

(2,845)

1,430

50

Cost of sales

(5,254)

(3,604)

(1,651)

(46)

Gross profit/ (loss)

(774)

1,736

(2,510)

-

Gross profit margin

-13%

21%

(34) pp

 

Gross profit excl. effect of biological assets and agricultural produce revaluation

641

4,582

(3,940)

(86)

Adjusted gross profit margin

11%

56%

(45) pp

 

Distribution and selling expenses

(1,049)

(660)

(389)

(59)

General and administrative expenses

(352)

(336)

(16)

(5)

Other operating income/ (expenses), net

96

433

(337)

(78)

  incl. reimbursement of   

  operating costs (government grants)

31

1

30

2,625

 incl. other adjustments to EBITDA (non-recurring items)

19

379

(360)

(95)

Operating profit

(2,079)

1,173

(3,252)

-

 





Adjusted EBITDA

(116)

4,173

(4,290)

-

Adjusted EBITDA margin

-2%

51%

(53) pp

 

In 1Q 2023 in comparison to 1Q 2022 Sales of the Agriculture segment decreased by 28% to RUB 5,896 million mainly because of the fall in prices for all crops except corn. Lower volume of wheat, soybean and corn sold was compensated by higher sales volumes of sugar beet and sunflower.

Sales prices for wheat decreased due to the fall in global wheat prices because of high grain stocks, as well as the priority sale of feed grains in 1Q 2023. Prices decrease for sunflower and soybean is attributed to the sale of products of lower class in 1Q 2023 as well the decrease of USD/RUB exchange rate. The drop in the selling price of sugar beet is caused by the poor quality of the crop caused by weather conditions during the harvest gathering period.

Higher sales volume of sugar beet is associated with a shift in the schedule for harvesting and selling of sugar beets to the beginning of 2023 due to adverse weather conditions. Drop in soybean sales is caused by the postponement of harvesting to 2023 due to weather conditions and a shift in the sales schedule to the next quarters of 2023. Decline in wheat sales volume is connected with a decrease in demand on domestic market, as well as the expectation of an increase in the dollar exchange rate and a reduction in duty or a revision of the mechanism for determining it. Sales volume of corn decreased, as the entire volume of corn for the 2022/2023 season was contracted for sale in the 2nd and 3rd quarters of 2023 on more favorable terms, including for export in connection with the receipt of export quotas. Sunflower seeds were actively sold in 1Q 2023 in anticipation of lower prices.



 

Sales volume of crops in 1Q 2023

Thousand tonnes

Three months ended

Variance

31 March 2023

31 March 2022

Units

%

sugar beet

494

59

435

741

soybean

86

102

(16)

(15)

wheat

59

79

(20)

(26)

sunflower seeds

40

16

25

159

corn

29

101

(72)

(71)

 

The main reason for the increase in Cost of sales is growth of costs caused by macroeconomic situation during 2022.

The increase in Distribution and selling expenses for 1Q 2023 is caused by additional storage and processing costs due to the low quality of the harvested crops.

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. Loss in the 1st quarter of the year is mainly associated with the sale of the previous year's harvest, and the amount of the loss is higher if the revaluation gain recognized in the previous period at the time of harvest was higher.

Net gain/(loss) on revaluation of crops and its subsequent realisation do not affect the Adjusted EBITDA figure.

A decrease in Other operating income in 1Q 2023 in comparison to 1Q 2022 is mainly due to the one-off gain from the sale of fixed assets during 1Q 2022.

 



 

OIL AND FAT SEGMENT

In 1Q 2023 Oil and Fat segment earned RUB 4,161 million of adjusted EBITDA (-22 %
y-o-y) with 1
8% margin (+3 pp y-o-y). The financial results of the Oil and Fat Segment for
1Q 2023 compared to 1Q 2022 respectively are presented below.

Oil and Fat segment 1Q 2023 Financial Results

in RUBl million

 

Three months ended

Variance

31 March 2023

31 March 2022

Units

%

Sales

23,357

35,111

(11,754)

(33)

Cost of sales

(17,716)

(28,324)

10,608

37

Gross profit/ (loss)

5,641

6,787

(1,146)

(17)

Gross profit margin

24%

19%

5 pp

 

Distribution and selling expenses

(1,907)

(1,804)

(102)

(6)

General and administrative expenses

(820)

(683)

(138)

(20)

Other operating income/ (expenses), net

(578)

(986)

408

41

incl. reimbursement of   

  operating costs (government grants)

1

6

(4)

(74)

incl. Other adjustments to EBITDA (non-recurring items)

(702)

(898)

196

22

Operating profit/ (loss)

2,336

3,314

(979)

(30)

 





Adjusted EBITDA

4,161

5,303

(1,141)

(22)

Adjusted EBITDA margin

18%

15%

3 pp

 

Sales of the Oil and Fat segment in 1Q 2023 in comparison to 1Q 2022 decreased by 33% as a result of the decrease in sales volumes of all product categories, as well as sales prices for oil and fat products, with the exception of mayonnaise and margarine.

Cost of sales in 1Q 2023 in comparison to 1Q 2022 decreased due to the decline in sales volumes of oil and fat and dairy products and prices for sunflower seeds. Cost of sales decreased more than Sales mainly due to the fall in the cost of sunflower seeds outpacing the decline in the selling price of sunflower oil.

The growth of General and administrative expenses in 1Q 2023 compared to 1Q 2022 is mainly attributable to higher costs of information and consulting services.

The decrease in Other operating expenses is due to lower charity expenses in 1Q 2023 compared to the same period in 2022.

Sales volumes of oil and fat and dairy products in 1Q 2023

Thousand tonnes

 

Three months ended

Variance

31 March 2023

31 March 2022

Units

%

meal

133

149

(16)

(11)

crude oil

54

92

(38)

(42)

industrial fats

76

79

(3)

(4)

dry whey mixes

3

4

(1)

(30)

consumer oil&fat products

64

72

(8)

(11)

consumer dairy products

3

3

(0)

(2)



 

 

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 2023

31 March 2022

Units

%

Net cash from operating activities, incl.

 16,004

(5,130)

 21,134

 -

Operating cash flow before working capital changes

 6,992

 16,448

(9,457)

(57)

Working capital changes

 9,304

(21,249)

 30,553

 -

Net cash from investing activities, incl.

(2,289)

(2,267)

(23)

(1)

Purchases of property plant and equipment and inventories intended for construction

(2,089)

(3,088)

 999

 32

Net cash from financing activities

(6,729)

 8,925

(15,654)

 -

Net effect of exchange rate changes on cash and cash equivalents

 1,933

(7,960)

 9,893

 -

Net increase / (decrease) in cash and cash equivalents

 8,919

(6,432)

 15,350

 -

 

(*) See Appendix 4

The key investments in property, plant and equipment and inventories intended for construction during 1Q 2023 were made in the Meat segment in the amount of RUB 665 million (1Q 2022: RUB 1,277 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 769 million (1Q 2022: RUB 830 million), Oil and Fat segment in the amount of RUB 520 million (1Q 2022: RUB 815 million), and Sugar segment in the amount of RUB 135 million (1Q 2022: RUB 166 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 2023

31 December 2022

Variance

Units

%

Gross debt

210,701

233,390

(22,689)

(10)

Short-term borrowings

150,002

172,352

(22,350)

(13)

Long-term borrowings

60,699

61,038

(339)

(1)

Cash and cash equivalents, bank deposits and bonds

(127,116)

(133,668)

6,552

5

Short-term cash, deposits and bonds

(92,705)

(99,697)

6,992

7

Long-term cash, deposits and bonds

(34,411)

(33,971)

(440)

(1)

Net debt

83,585

99,723

(16,138)

(16)

Short-term borrowings, net

57,297

72,655

(15,358)

(21)

Long-term borrowings, net

26,288

27,067

(779)

(3)

Adjusted EBITDA (LTM4)

35,965

45,015

(9,050)

(20)

Net debt/ Adjusted EBITDA (LTM)

2.32

2.22

0.1 pp

 

 

Net finance income/ (expense)

in RUB million

Three months ended

Variance

31 March 2023

31 March 2022

Units

%

Net interest expense

(1,925)

(1,515)

(411)

(27)

Gross interest expense

(4,643)

(4,555)

(88)

(2)

Reimbursement of interest expense

 2,718

 3,040

(322)

(11)

Interest income

 2,441

 2,308

 133

 6

Other financial income, net

 2,981

(7,885)

 10,867

 -

Net foreign exchange gain/ (loss)

 3,098

(7,829)

 10,927

 -

Other financial income / (expenses), net

(117)

(57)

(60)

(107)

Total net finance income/ (expenses)

3,497

(7,092)

10,589

-

Net debt decreased at 31 December 2022 compared at 31 December 2021 as a result of a decrease in short-term borrowings.

In 1Q 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 1Q 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 1Q 2022 in the sum of RUB 7,092 million changed to net finance income in the amount of RUB 3,497 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 668 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 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 1Q 2023 financial results for investors and analysts.

Details of the call:

Date:

22 May 2023

Time:

4:00 PM (Moscow) / 2:00 PM (London)

 

Subject:

ROS AGRO PLC 1Q 2023 Financial results

 

 

 

Registration:

available up to 3:00 PM Moscow time / 1:00 PM London time on 22 May  

 

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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 Three months ended 31 March 2023 (in RUB thousand)


Three months ended

31 March


2023

2022

Sales

47,395,456

61,506,160

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

(546,548)

(3,097,209)

Cost of sales

(38,218,586)

(43,414,068)

Gross profit

8,630,322

14,994,883




Distribution and selling expenses

(3,580,492)

(3,629,180)

General and administrative expenses

(2,179,714)

(1,562,124)

Other operating income/(expenses), net

791,263

(617,294)

Operating profit / (loss)

3,661,379

9,186,285


 

 

Interest expense

(1,925,246)

(1,514,712)

Interest income

2,441,235

2,308,391

Net gain/(loss) from bonds held for trading

-

42

Other financial income/ (expenses), net

2,981,894

(7,885,447)

Profit before income tax

7,159,262

2,094,559




Income tax expense

(1,742,313)

(131,118)

Profit for the period

5,416,949

1,963,441

 

 

 

Other comprehensive income

-

-

Total comprehensive income for the period

5,416,949

1,963,441

 



Profit is attributable to:

 

 

Owners of ROS AGRO PLC

 5,423,741

 1,964,159

Non-controlling interest

(6,792)

(718)

Profit for the period

 5,416,949

 1,963,441

 



Total comprehensive income is attributable to:



Owners of ROS AGRO PLC

 5,423,741

 1,964,159

Non-controlling interest

(6,792)

(718)

Total comprehensive income for the period

 5,416,949

 1,963,441




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

201.58

73.00

 


Appendix 2. Segment information for the Three months ended 31 March 2023 (in RUB thousand)

 

 

3M 2023

Sugar

Meat

Agriculture

Oil and Fat

Other

Eliminations

Total

Sales

 9,410,732

 10,725,385

 5,895,911

 23,356,939

 463,877

(2,457,388)

 47,395,456

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

 -

 1,327,245

(1,415,057)

 -

 -

(458,736)

(546,548)

Cost of sales

(6,595,274)

(10,909,413)

(5,254,481)

(17,716,136)

(297,337)

 2,554,055

(38,218,586)

incl. Depreciation

(547,479)

(1,294,785)

(524,103)

(954,996)

(4,405)

(7,412)

(3,333,180)

Gross profit

 2,815,458

 1,143,217

(773,627)

 5,640,803

 166,540

(362,069)

 8,630,322

Distribution and Selling, General and administrative expenses

(1,339,210)

(916,154)

(1,400,871)

(2,727,121)

(466,388)

 1,089,538

(5,760,206)

incl. Depreciation

(11,259)

(36,387)

(42,554)

(168,472)

(39,995)

 7,412

(291,255)

Other operating income/(expenses), net

(2,794)

 314,170

 95,860

(578,016)

 951,082

 10,961

 791,263

incl. Reimbursement of operating costs (government grants)

 -

 19,453

 31,333

 1,441

 -

 -

 52,227

incl. Other adjustments to EBITDA (non-recurring items)

 21,873

 98,353

 19,356

(702,271)

 992,587

 263,130

 693,028

Operating profit / (loss)

 1,473,454

 541,233

(2,078,638)

 2,335,666

 651,234

 738,430

 3,661,379

Adjustments:

 







Depreciation included in Operating Profit

 558,738

 1,331,172

 566,657

 1,123,468

 44,400

 -

 3,624,435

Other adjustments to EBITDA (non-recurring items)

(21,873)

(98,353)

(19,356)

 702,271

(992,587)

(263,130)

(693,028)

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

 -

(1,327,245)

 1,415,057

 -

 -

 458,736

 546,548

Adjusted EBITDA*

 2,010,319

 446,807

(116,280)

 4,161,405

(296,953)

 934,036

 7,139,334

 

* Non-IFRS measure



 

Appendix 2 (continued). Segment information for the Three months ended 31 March 2022 (in RUB thousand)

 

 

3M 2022

Sugar

Meat

Agriculture

Oil and Fat

Other

Eliminations

Total

Sales

 11,332,860

 9,258,465

 8,185,373

 35,110,977

 207,692

(2,589,207)

 61,506,160

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

 -

 967,193

(2,845,241)

 -

 -

(1,219,161)

(3,097,209)

Cost of sales

(5,780,940)

(9,074,483)

(3,603,789)

(28,324,252)

(256,375)

 3,625,771

(43,414,068)

incl. Depreciation

(594,907)

(1,192,225)

(467,116)

(957,765)

(2,607)

(713)

(3,215,333)

Gross profit

 5,551,920

 1,151,175

 1,736,343

 6,786,725

(48,683)

(182,597)

 14,994,883

Distribution and Selling, General and administrative expenses

(1,488,735)

(877,620)

(996,267)

(2,486,756)

(11,566)

 669,640

(5,191,304)

incl. Depreciation

(10,962)

(32,123)

(66,972)

(132,324)

(7,897)

 713

(249,565)

Other operating income/(expenses), net

(206,119)

 147,008

 433,144

(985,764)

 218,592

(224,155)

(617,294)

incl. Reimbursement of operating costs (government grants)

 -

 5,772

 1,150

 5,650

 -

 -

 12,572

incl. Other adjustments to EBITDA (non-recurring items)

(215,804)

 88,790

 379,203

(898,432)

 174,578

 31,216

(440,449)

Operating profit / (loss)

 3,857,066

 420,563

 1,173,220

 3,314,205

 158,343

 262,888

 9,186,285

Adjustments:








Depreciation included in Operating Profit

 605,869

 1,224,348

 534,088

 1,090,089

 10,504

 -

 3,464,898

Other adjustments to EBITDA (non-recurring items)

 215,804

(88,790)

(379,203)

 898,432

(174,578)

(31,216)

 440,449

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

 -

(967,193)

 2,845,241

 -

 -

 1,219,161

 3,097,209

Adjusted EBITDA*

 4,678,739

 588,928

 4,173,346

 5,302,726

(5,731)

 1,450,833

 16,188,841

 

* Non-IFRS measure



 


Appendix 3. Consolidated statement of financial position as at 31 March 2023
(in RUB thousand)

 

 


31 March 2023

31 December 2022

ASSETS

 


Current assets

 


Cash and cash equivalents

30,391,698

21,473,030

Short-term investments

64,107,093

91,382,536

Trade and other receivables

21,197,132

24,176,680

Prepayments

7,376,175

13,435,149

Current income tax receivable

666,830

832,423

Other taxes receivable

5,681,590

8,360,935

Inventories and short-term biological assets

85,869,883

78,580,317

Other current assets

4,525,567

4,126,715

Total current assets

219,815,968

242,367,785

 



Non-current assets

 


Property, plant and equipment

121,070,108

121,165,803

Inventories intended for construction

856,905

864,550

Right-of-use assets

7,143,025

6,916,539

Goodwill

2,364,942

2,364,942

Advances paid for non-current assets

4,384,894

5,482,770

Long-term biological assets

3,066,060

3,240,959

Long-term investments and receivables

42,967,541

42,527,657

Investments in associates

488,916

455,916

Deferred income tax assets

5,382,984

5,964,527

Other intangible assets

1,376,662

1,284,263

Other non-current assets

303,156

190,978

Total non-current assets

189,405,193

190,458,904

Total assets

409,221,161

432,826,689

 

 


LIABILITIES and EQUITY

 

 

Current liabilities

 


Short-term borrowings

150,001,793

172,351,514

Lease liabilities

873,686

863,452

Trade and other payables

12,129,760

17,024,472

Provisions

161,754

137,542

Current income tax payable

496,010

76,061

Other taxes payable

5,554,367

8,149,780

Total current liabilities

169,217,370

198,602,821

 



Non-current liabilities

 


Long-term borrowings

60,699,106

61,038,393

Government grants

11,329,912

11,153,211

Lease liabilities

5,328,924

5,086,897

Deferred income tax liability

2,567,284

2,283,752

Total non-current liabilities

79,925,226

79,562,253

Total liabilities

249,142,596

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

132,267,267

126,843,525

Equity attributable to owners of ROS AGRO PLC

160,116,585

154,692,843

Non-controlling interest

(38,020)

(31,228)

Total equity

160,078,565

154,661,615

Total liabilities and equity

409,221,161

432,826,689

 

 



Appendix 4. Consolidated statement of cash flows for the Three months ended 31 March 2023 (in RUB thousand) - NOT IFRS PRESENTATION (*)


Three months ended


31 March 2023

31 March 2022

Cash flows from operating activities



Profit before income tax

 7,159,263

 2,094,559

Adjustments for:

 

 

Depreciation and amortization

 3,624,435

 3,464,898

Interest expense

 4,643,175

 4,554,909

Government grants

(2,922,447)

(3,230,880)

Interest income

(2,441,235)

(2,308,391)

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

(26,635)

(438,032)

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

 546,548

 3,097,209

Change in provision for impairment of loans issued

(50)

(70)

Interest expense on leases

 66,329

 56,386

Change in provision for net realisable value of inventory

 409,161

 215,607

Change in provision for impairment of receivables and prepayments

 64,192

 47,807

Foreign exchange (gain) / loss, net

(3,958,876)

 9,152,911

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 equipment

 37,597

(15,330)

Change in other provisions

 24,212

 47,998

(Gain)/loss on disposal of other assets

 -

 3,608

Gain on SolPro loans redemption

(237,768)

(320,080)

Other non-cash and non-operating expenses, net

 35,159

 25,128

Operating cash flow before working capital changes

 6,991,682

 16,448,195

Change in trade and other receivables and prepayments

(3,504,180)

(14,124,633)

Change in other taxes receivable

 2,679,345

 1,420,541

Change in inventories and biological assets

(7,695,258)

(5,971,171)

Change in trade and other payables

 20,241,772

 20,162

Change in other taxes payable

(2,417,819)

(2,593,539)

Cash generated from operations

 16,295,542

(4,800,445)

Income tax paid

(291,696)

(329,946)

Net cash from operating activities

 16,003,846

(5,130,391)

 

 

 



 

Appendix 4 (continued). Consolidated statement of cash flows the Three months ended 31 March 2023 (in RUB thousand) - NOT IFRS PRESENTATION (*)

 



Three months ended


31 March 2023

31 March 2022

Cash flows from investing activities

 

 

Purchases of property, plant and equipment

(1,999,800)

(2,981,847)

Purchases of other intangible assets

(289,137)

(360,947)

Purchases of land lease rights

(7,743)

(8,843)

Proceeds from sales of property, plant and equipment

 3,407

 554,179

Purchases of inventories intended for construction

(89,445)

(106,466)

Purchases of associates

(33,000)

(31,000)

Dividends received

 -

 377,269

Other investing activities

 126,307

 291,096

Net cash from investing activities

(2,289,411)

(2,266,559)

Cash flows from financing activities



Proceeds from borrowings

 4,283,066

 21,004,197

Repayment of borrowings

(27,907,485)

(14,674,650)

Interest paid

(1,273,985)

(937,229)

Change in cash on bank deposits

 16,450,000

 5,308,072

Proceeds from sales of bonds with maturity over three months*

 -

 140,783

Loans given*

(190,666)

(250,000)

Loans repaid*

 3,500

(2,328,261)

Interest received*

 1,883,193

 1,132,611

Proceeds from government grants

 47,624

 32,198

Dividends paid to owners Ros Agro PLC

 -

(120)

Repayment of lease liabilities - principal

(23,784)

(502,443)

Other financial activities

 -

 290

Net cash from  financing activities

(6,728,536)

 8,925,448

Net effect of exchange rate changes on cash and cash equivalents

 1,932,770

(7,960,139)

Net increase/ (decrease) in cash and cash equivalents

 8,918,668

(6,431,641)

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

 30,391,698

 40,030,538

 

 

(*) 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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