3Q and 9M 2023 IFRS Financial Results

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 million1), an increase of RUB 16,878 million (+31%) compared to 3Q 2022;

-     Adjusted EBITDA2 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 position3 as of 30 September 2023 amounted to RUB 65,179 million (US$ 669 million);

-     Net Debt/Adjusted EBITDA (LTM4) 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
period 1,2

 38,525

 2,182

36,343

1,666

 25,334

 1,712

 23,622

1,380

Net profit
margin %

22%

1%

21 pp

 

35%

3%

32 pp

 

 

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
volume, thousand tonnes

327

278

49

18

224

174

50

28

Sales volume,
thousand tonnes

589

636

(47)

(7)

208

199

9

5

 

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 revaluation

2,630

(262)

2,892

-

2,356

(575)

2,931

-

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,
thousand tonnes in live weight

254

245

9

4

79

85

(6)

(7)

Sales volume,
thousand tonnes

214

205

9

4

68

72

(4)

(5)

 

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 revaluation

6,507

8,258

(1,751)

(21)

4,196

2,202

1,994

91

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 1
3% 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

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 construction

(17,184)

(7,642)

(9,542)

(125)

(11,992)

(3,015)

(8,976)

(298)

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 (LTM4)

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

 

 

 

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
30 September

Three months ended
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

 





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

1,364.96

79.60

874.58

63.99

 

 

 


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 equipment

 41,771

(14,205)

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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