RNS Number : 9833R
Ros Agro PLC
06 March 2023
 

 

 

06 March 2023

 

ROS AGRO financial results for 12M 2022 and 4Q 2022

 

6 March 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
year ended 31 December 2022.

 

 

12M 2022 HIGHLIGHTS

 

-     Sales amounted to RUB 240,230 million (US$ 3,504 million1), an increase of RUB 17,298 million (+8%) compared to 12M 2021;

-     Adjusted EBITDA2 amounted to RUB 45,015 million (US$ 657 million), a decrease of RUB 3,044 million (-6%) compared to 12M 2021;

-     Adjusted EBITDA margin decreased to 19% in 12M 2022 from 22% in 12M 2021;

-     Net profit for the period amounted to RUB 6,787 million (US$ 99 million), a decrease of RUB 34,647 million (-84%);

-     Net debt position3 as of 31 December 2022 amounted to RUB 99,723 million (US$ 1,418 million);

-     Net Debt/Adjusted EBITDA (LTM4) as of 31 December 2022 was 2.22.

 

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

 

"In 2022 sales of the Group improved by 8%. Revenue increased in all business segments except Agriculture. Sales growth was supported by the launch of operations in Primorie, start of the wheat export trading activities and positive market dynamic on the Russian sugar and oil&fats markets. Revenue of Agriculture segment decreased as the result of lower sales prices and complex harvesting season caused by weather conditions. In terms of Adjusted EBITDA the Group showed good results in Sugar and Oil and Fats segments following the prices growth while costs of goods sold did not rise as much. Meat and Agriculture segments showed a decrease of adjusted EBITDA mostly due to lower exchange rates and unfavorable market conditions in Agriculture. Net profit decreased by 84% due to the negative influence of forex losses caused by cash blocking by European banks and revaluation of biological assets on the back of dropping market prices and rising cost of sales."

 

 


 

Key consolidated financial performance indicators

in RR million

Year ended

Variance

Three months ended

Variance

31 December 2022

31 December 2021

Units

%

31 December 2022

31 December 2021

Units

%

Sales

 240,230

 222,932

 17,298

 8

 58,204

 65,356

(7,153)

(11)

Gross profit

 47,252

 57,093

(9,842)

(17)

 7,149

 11,491

(4,342)

(38)

Gross margin, %

20%

26%

(6) pp

 

12%

18%

(6) pp

 

Adjusted EBITDA

 45,015

 48,060

(3,044)

(6)

 9,645

 17,338

(7,693)

(44)

Adjusted EBITDA margin, %

19%

22%

(3) pp

 

17%

27%

(10) pp

 

Net profit for the period 1

 6,787

 41,434

(34,647)

(84)

 5,450

 6,012

(562)

(9)

Net profit margin %

3%

19%

(16) pp

 

9%

9%

0 pp

 

 

1 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

Year ended

Variance

Three months ended

Variance

31 December 2022

31 December 2021

Units

%

31 December 2022

31 December 2021

Units

%

 









Sales, incl.

240,230

222,932

17,298

8

58,204

65,356

(7,153)

(11)

Sugar

49,584

36,361

13,223

36

11,904

12,248

(344)

(3)

Meat

43,705

39,628

4,077

10

11,910

11,170

740

7

Agriculture

31,993

41,881

(9,888)

(24)

14,870

23,170

(8,300)

(36)

Oil and Fat

133,369

125,237

8,132

6

31,003

31,278

(275)

(1)

Other

1,408

719

689

96

495

180

315

174

Eliminations

(19,829)

(20,893)

1,064

5

(11,980)

(12,691)

711

6










Gross profit, incl.

47,252

57,093

(9,842)

(17)

7,149

11,491

(4,342)

(38)

Sugar

19,941

9,510

10,430

110

3,800

3,686

114

3

Meat

(2,539)

5,513

(8,051)

-

(2,519)

(826)

(1,693)

(205)

Agriculture

7,195

25,717

(18,522)

(72)

(2,447)

5,615

(8,062)

-

Oil and Fat

23,418

16,381

7,037

43

8,720

3,543

5,178

146

Other

447

348

99

29

250

162

87

54

Eliminations

(1,211)

(375)

(836)

(223)

(655)

(689)

34

5










Adjusted EBITDA, incl.

45,015

48,060

(3,044)

(6)

9,645

17,338

(7,693)

(44)

Sugar

15,695

8,962

6,733

75

1,640

3,134

(1,494)

(48)

Meat

1,622

5,895

(4,273)

(72)

612

860

(248)

(29)

Agriculture

9,755

23,251

(13,496)

(58)

3,010

13,780

(10,770)

(78)

Oil and Fat

15,950

12,786

3,164

25

5,239

2,719

2,520

93

Other

(1,331)

(2,092)

761

36

(255)

(337)

82

24

Eliminations

3,325

(743)

4,068

-

(600)

(2,817)

2,216

79










Adjusted EBITDA margin, %

19%

22%

(3) pp

 

17%

27%

(10) pp

 

Sugar

32%

25%

7 pp

 

14%

26%

(12) pp

 

Meat

4%

15%

(11) pp

 

5%

8%

(3) pp

 

Agriculture

30%

56%

(26) pp

 

20%

59%

(39) pp

 

Oil and Fat

12%

10%

2 pp

 

17%

9%

8 pp

 

 



SUGAR SEGMENT

In 12M22 Sugar segment earned RUB 15,695 million of adjusted EBITDA (+75% y-o-y) with 32% margin (+7 pp y-o-y). The financial results of the Sugar Segment of 12M22 and 4Q22 compared to 12M21 and 4Q21 respectively are presented in the table below:

Sugar segment 12M and 4Q 2022 Financial Results

in RR million

Year ended

Variance

Three months ended

Variance

31 December 2022

31 December 2021

Units

%

31 December 2022

31 December 2021

Units

%

Sales

 49,584

 36,361

 13,223

 36

 11,904

 12,248

(344)

(3)

Cost of sales

(29,643)

(26,850)

(2,793)

(10)

(8,104)

(8,562)

 458

 5

Gross profit/ (loss)

19,941

9,510

10,430

110

3,800

3,686

114

3

Gross profit margin

40%

26%

14 pp

 

32%

30%

2 pp

 

Distribution and selling expenses

(4,833)

(2,476)

(2,356)

(95)

(2,151)

(1,017)

(1,135)

(112)

General and administrative expenses

(1,757)

(1,482)

(275)

(19)

(498)

(353)

(144)

(41)

Other operating income/ (expenses), net

(294)

 677

(972)

 -

 31

 181

(150)

(83)

incl. reimbursement of operating costs (government grants)

 158

 577

(419)

(73)

 14

 150

(136)

(91)

incl. other adjustments to

EBITDA (non-recurring items)

(305)

 106

(410)

 -

 74

 35

 38

 108

Operating profit

 13,056

 6,229

 6,827

 110

 1,182

 2,496

(1,315)

(53)

 

 

 







Adjusted EBITDA

15,695

8,962

6,733

75

1,640

3,134

(1,494)

(48)

Adjusted EBITDA margin

32%

25%

7 pp

 

14%

26%

(12) pp

 

 

In 12M22 in comparison to 12M21 Sales of Sugar segment improved by 36% by RUB 13,223 million. The events in the 1st half of 2022 created an increased demand, and sugar market showed positive market trend. During the first 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.

Sales volumes increased by 11% y-o-y to 853 thousand mainly because of the higher sugar beet yield per hectare in the season 2021/2022.

In addition, Sugar segment Sales for 12M22 increased due to the growth in sales of beet pulp by RUB 490 million mainly due to the extension of sugar beet processing period to January 2022 as well as higher sugar beet harvest, which was partially offset by the shift in sales in 4Q 2022 to 1H 2023. Packing and sugar beet processing services offered to customers by sugar plants decreased by RUB 433 million. Sales of molasses, betaine, buckwheat and rice decreased by RUB 322 million.

Revenue of Sugar segment decreased in 4Q22 in comparison with 4Q21 by 3% mainly due to transfer of sugar beet pulp sales to 1H 2023 while lengthening of the logistics route for the sale of pulp due to sanctions restrictions and a change in the geography of sales.



 

 

Production and sales volume of sugar in 12M and 4Q 2022

 

Year ended

Variance

Three months ended

Variance

31 December 2022

31 December 2021

Units

%

31 December 2022

31 December 2021

Units

%

Sugar production volume, thousand tonnes

770

791

(20)

(3)

492

583

(91)

(16)

Sales volume,

thousand tonnes

853

769

84

11

217

228

(11)

(5)
















 

Cost of sales in 12M22 increased y-o-y lower than revenues because it was mainly formed out of sugar beet purchased in the 2H21, but overall sugar beet costs in 12M22 were higher than in 12M21.

Distribution and selling expenses increased because of the general rise in transportation costs as well as extension of some logistics routes.

Other operating income in 12M21 changed to other operating expense in 12M22 mainly due to the absence of one-off 2021 government support and negative dynamics in operating forex losses.

 

 

 



 

MEAT SEGMENT

In 12M22 Meat segment earned RUB 1,622 million of adjusted EBITDA (-72% y-o-y) with 4% margin (-11 pp y-o-y). The financial results of the Meat Segment of 12M22 and 4Q22 compared to 12M21 and 4Q21 respectively are presented in the table below.

Meat segment 12M and 4Q 2022 Financial Results

in RR million

Year ended

Variance

Three months ended

Variance

31 December 2022

31 December 2021

Units

%

31 December 2022

31 December 2021

Units

%

Sales

43,705

39,628

4,077

10

11,910

11,170

740

7

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

(2,094)

(370)

(1,724)

(465)

(1,764)

(1,704)

(60)

(4)

Cost of sales

(44,149)

(33,745)

(10,404)

(31)

(12,665)

(10,292)

(2,373)

(23)

Gross profit/ (loss)

(2,539)

5,513

(8,051)

-

(2,519)

(826)

(1,693)

(205)

Gross profit margin

-6%

14%

(20) pp

 

(21%)

(7%)

(14) pp

 

Gross profit excl. effect of biological assets revaluation

(444)

5,883

(6,327)

-

(755)

878

(1,633)

-

Adjusted gross profit margin

-1%

15%

(16) pp

 

-6%

8%

(14) pp

 

Distribution and selling expenses

(1,716)

(1,670)

(45)

(3)

(442)

(569)

127

22

General and administrative expenses

(1,923)

(4,058)

2,135

53

(220)

(941)

721

77

Other operating income/ (expenses), net

1,389

1,353

35

3

693

284

409

144

incl. reimbursement of operating costs (government grants)

418

517

(99)

(19)

403

58

345

599

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

676

490

186

38

133

9

124

1,317

Operating profit

(4,789)

1,137

(5,926)

-

(2,489)

(2,052)

(436)

(21)

 

 

 







Adjusted EBITDA

1,622

5,895

(4,273)

(72)

612

860

(248)

(29)

Adjusted EBITDA margin

4%

15%

(11) pp

 

5%

8%

(3) pp

 











Sales of the Meat segment increased by 10% in 12M22 and by 7% in 4Q22 compared to the respective periods of the prior year. Sales volumes increase was caused mainly by outputs growth attributed to the launch of pork production in Primorie.         

 

Production and sales volume of pork products in 12M and 4Q 2022

 

Year ended

Variance

Three months ended

Variance

31 December 2022

31 December 2021

Units

%

31 December 2022

31 December 2021

Units

%

Pigs production,

thousand tonnes in live weight

 

 

336

309

28

9

91

82

9

11

Sales volume,

thousand tonnes

281

249

32

13

77

67

10

15


















 

Cost of sales increased by 31% in 12M22 compared to the prior year mainly due to higher costs of feed and animals health protection.

Net loss on revaluation of biological assets and agricultural produce in 12M22 resulted from higher growth of costs than an increase in fair value for both bearer and consumable livestock pigs during the reporting period compared to the respective figures at the end of 2021.

General and administrative expenses in 12M2021 include mainly costs related to realisation of Primorie project. In 12M22 General and administrative expenses decreased compared to prior year period due to start of production in Primorie.

An increase in Other operating income in 4Q22 in comparison to 4Q21 is mainly attributed to partial reimbursement of feed purchase costs by government.

 



 

AGRICULTURAL SEGMENT

As at 31 December 2022 Rusagro's area of controlled land stands at 660 thousand hectares (31 December 2021: 688 thousand hectares). In 12M22 Agriculture segment earned RUB 9,755 million of adjusted EBITDA (-58 % y-o-y) with 30% margin (-26 pp y-o-y). The financial results of the Agricultural Segment of 12M22 and 4Q22 compared to 12M21 and 4Q21 respectively are presented below.

Agriculture segment 12M and 4Q 2022 Financial Results

in RR million

Year ended

Three months ended

Variance

31 December 2022

31 December 2021

Units

%

31 December 2022

31 December 2021

Units

%

Sales

31,993

41,881

(9,888)

(24)

14,870

23,170

(8,300)

(36)

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

(4,312)

2,610

(6,922)

-

(5,697)

(7,904)

2,207

28

Cost of sales

(20,485)

(18,774)

(1,712)

(9)

(11,620)

(9,651)

(1,969)

(20)

Gross profit/ (loss)

7,195

25,717

(18,522)

(72)

(2,447)

5,615

(8,062)

-

Gross profit margin

22%

61%

(39) pp

 

-16%

24%

(40) pp

 

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

11,508

23,107

(11,599)

(50)

3,250

13,519

(10,269)

(76)

Adjusted gross profit margin

36%

55%

(19) pp

 

22%

58%

(36) pp

 

Distribution and selling expenses

(2,788)

(1,935)

(853)

(44)

(1,017)

(856)

(161)

(19)

General and administrative expenses

(1,852)

(1,461)

(391)

(27)

(693)

(439)

(254)

(58)

Other operating income/ (expenses), net

1,246

598

648

108

647

494

153

31

  incl. reimbursement of   

  operating costs (government grants)

446

546

(100)

(18)

384

305

78

26

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

550

(38)

588

-

219

129

90

70

Operating profit

3,801

22,919

(19,118)

(83)

(3,510)

4,814

(8,324)

-

 

 

 







Adjusted EBITDA

9,755

23,251

(13,496)

(58)

3,010

13,780

(10,770)

(78)

Adjusted EBITDA margin

30%

56%

(26) pp

 

20%

59%

(39) pp

 

In 12M22 in comparison to 12M21 Sales of the Agriculture segment decreased by 24% to RUB 31,993 million. Lower volume of sugar beet, soybean, sunflower and barley sold was partially compensated by higher sales volumes of wheat and corn.

Higher sales volume of wheat in 12M22 compared to 12M21 was achieved thanks to the launch of trading business.

Negative change in sugar beet sales volumes was attributable to the transfer of sales to the beginning of 2023 as the result of adverse climate conditions, which led to delays in harvest delivery from the fields.

Lower sales volumes of oil crops (soybean, sunflower) was also the result of sales transfer to 2023, following prolongation of harvesting period due to weather conditions as well as anticipation of favourable market conditions.

In 4Q22 in comparison to 4Q21 Sales of the Agriculture segment decreased by 36% to RUB 14,870 million for the same reasons as listed above for the 12M22.

Net gain/(loss) on revaluation of biological assets and agricultural produce depends on revaluation amounts in opening and closing inventory balances. Revaluation between opening and closing inventory balances fell down in 12M22 than in 12M21 due to the changes in fair value less point-of-sale costs at the point of harvest for the inventories remaining unsold at the year-end.

Net loss on revaluation of biological assets and agricultural produce in 4Q22 compared to 4Q21 is lower due to realisation of gain from current year harvest revaluation recognized in 3Q22 and 3Q21. Gain in 3Q21 was higher than in 3Q 22 which caused higher loss in 4Q21 when the sales took place.

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

Distribution and selling expenses increased despite overall sales volumes decrease because of the customs duties for the export sales.

An increase in Other operating income in 12M22 in comparison to 12M21 is mainly due to the changes in the one-off gain/loss from the disposal of non-current assets.

Sales volume of crops in 12M and 4Q 2022

Thousand tonnes

Year ended

Variance

Three months ended

Variance

31 December 2022

31 December 2021

Units

%

31 December 2022

31 December 2021

Units

%

sugar beet

3,247

3,589

(342)

(10)

2,458

2,869

(411)

(14)

wheat

817

768

49

6

524

184

340

184

corn

162

71

91

127

27

14

13

100

soybean

148

330

(182)

(55)

4

169

(165)

(98)

sunflower seeds

23

59

(37)

(62)

1

51

(50)

(97)

barley

5

10

(6)

(53)

5

4

1

22











 



 

OIL AND FAT SEGMENT

In 12M22 Oil and Fat segment earned RUB 15,950 million of adjusted EBITDA (+25 % y-o-y) with 12% margin (+2 pp y-o-y). The financial results of the Oil and Fat Segment for 12M22 and 4Q22 compared to 12M21 and 4Q21 respectively are presented below.

Oil and Fat segment 12M and 4Q 2022 Financial Results

in RR million

 

Year ended

Variance

Three months ended

Variance

31 December 2022

31 December 2021

Units

%

31 December 2022

31 December 2021

Units

%

 

Sales

133,369

125,237

8,132

6

31,003

31,278

(275)

(1)

Cost of sales

(109,951)

(108,856)

(1,095)

(1)

(22,283)

(27,735)

5,452

20

Gross profit/ (loss)

23,418

16,381

7,037

43

8,720

3,543

5,178

146

Gross profit margin

18%

13%

5 pp

 

28%

11%

17 pp

 

Distribution and selling expenses

(9,038)

(5,488)

(3,550)

(65)

(3,033)

(2,097)

(936)

(45)

General and administrative expenses

(3,080)

(1,975)

(1,105)

(56)

(885)

(553)

(332)

(60)

Other operating income/ (expenses), net

(2,158)

(726)

(1,432)

(197)

325

(349)

674

-

incl. reimbursement of   

  operating costs (government grants)

322

496

(174)

(35)

78

190

(113)

(59)

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

(2,266)

(1,368)

(898)

(66)

147

(756)

903

-

Operating profit/ (loss)

9,141

8,192

949

12

5,127

544

4,583

843

 

 

 







Adjusted EBITDA

15,950

12,786

3,164

25

5,239

2,719

2,520

93

Adjusted EBITDA margin

12%

10%

2 pp

 

17%

9%

8 pp

 

















In 12M22 in comparison to 12M21 Sales of the Oil and Fat segment increased by 6% to RUB 133,369 million mainly due to the positive dynamics of the oil and fats market. Lower sales volumes of crude oil are mainly attributed to the lower crude oil production output in 2022. Sales volumes of consumer products dropped because Rusagro reduced its sales of bottled oil focusing on more profitable products.

Cost of sales in 12M22 in comparison to 12M21 increased due to higher costs of raw materials, including sunflower seeds, sunflower and tropical oil. The growth rate of cost is lower than the growth rate of revenue due to part of volume of products sold during 2022 was made out of cheap previous season's raw materials and costs of palm oil purchased during 1H 2022 were fixed.

Distribution and selling expenses increased as the result of export duties on sunflower oil imposed by Russian Government from September 2021 to October 2022 and an increase of prices for transportation and storage services.

An increase in General and administrative expenses in 12M22 in comparison to 12M21 is mainly due to higher costs of information and consulting, as well as banking services.

Other operating expenses in 12M22 changed mainly due to negative dynamics in forex losses.

 



 

Sales volumes to third parties in 12M and 4Q 2022

Thousand tonnes

 

  Year ended

              Variance

Three months ended

Variance

31 December 2022

31 December 2021

Units

%

31 December 2022

31 December 2021

Units

%

Meal

601

582

19

3

131

139

(8)

(6)

crude oil

369

391

(22)

(6)

84

71

13

19

industrial fats

298

337

(39)

(12)

84

96

(12)

(13)

dry whey mixes

16

15

1

6

4

4

(1)

(13)

consumer oil&fat products

301

325

(24)

(7)

94

91

3

3

consumer dairy products

15

15

-

-

4

4

(0)

(7)















 

 

KEY CONSOLIDATED CASH FLOW INDICATORS (NOT IFRS PRESENTATION*)

 

The key consolidated cash flow indicators presented according to management accounts methodology

in mln Roubles

Year ended

Variance

Three months ended

Variance

31 December 2022

31 December 2021

Units

%

31 December 2022

31 December 2021

Units

%

Net cash from operating activities, incl.

 4,423

 30,874

(26,451)

(86)

(3,495)

(1,381)

(2,114)

(153)

Operating cash flow before working capital changes

 41,074

 46,821

(5,747)

(12)

 8,647

 16,509

(7,862)

(48)

Working capital changes

(34,205)

(12,268)

(21,937)

(179)

(11,209)

(15,735)

 4,526

 29

Net cash from investing activities, incl.

(11,967)

(41,417)

 29,450

 71

(5,214)

(4,339)

(876)

(20)

Purchases of property plant and equipment and inventories intended for construction

(11,973)

(13,770)

 1,797

 13

(4,331)

(4,955)

 623

 13

Acquisition of SolPro assets

 -

(28,735)

 28,735

 -

 -

 -

 -

 -

Net cash from financing activities

(6,572)

 45,387

(51,959)

 -

(35,320)

(4,721)

(30,600)

(648)

Net effect of exchange rate changes on cash and cash equivalents

(10,873)

(248)

(10,625)

(4,276)

 6,303

(62)

 6,365

 -

Net increase / (decrease) in cash and cash equivalents

(24,989)

 34,595

(59,585)

 -

(37,727)

(10,502)

(27,224)

(259)

 

(*) See Appendix 4

The key investments in property, plant and equipment and inventories intended for construction during 12M 2022 were made in the Meat segment in the amount of RUB 4,097 million (12M 2021: RUB 8,052 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 3,448 million (12M 2021 : RUB 2,660 million), Oil and Fat segment in the amount of RUB 3,216 million (12M 2021 : RUB 2,058 million excluding acquisition of SolPro assets), and Sugar segment in the amount of RUB 1,212 million (12M 2021 : RUB 1,000 million) mainly relate to purchases of machinery and equipment for production facilities renewal and maintenance.

 

 

 

 



 

Debt position and liquidity management

in RUB million

31 December 2022

31 December 2021

Variance

Units

%

233,390

172,724

60,666

35

172,352

108,749

63,603

58

Long-term borrowings

61,038

63,975

(2,937)

(5)

Cash and cash equivalents, bank deposits and bonds

(133,668)

(99,315)

(34,353)

(35)

(99,697)

(65,344)

(34,353)

(53)

Long-term cash, deposits and bonds

(33,971)

(33,971)

-

-

Net debt

99,723

73,409

26,314

36

72,655

43,405

29,250

67

27,067

30,004

(2,937)

(10)

Adjusted EBITDA (LTM4)

45,015

48,060

(3,045)

(6)

Net debt/ Adjusted EBITDA (LTM)

2.22

1.53

0.7 pp

 

 

Net finance income/ (expense)

in RR million

Year ended

Variance

Three months ended

Variance

31 December 2022

31 December 2021

Units

%

31 December 2022

31 December 2021

Units

%

Net interest expense

(7,865)

(5,499)

(2,366)

(43)

(2,090)

(1,496)

(593)

(40)

Gross interest expense

(20,784)

(10,567)

(10,217)

(97)

(5,851)

(3,242)

(2,609)

(80)

Reimbursement of interest expense

 12,919

 5,068

 7,851

 155

 3,762

 1,746

 2,016

 115

Interest income

 9,398

 8,611

 787

 9

 2,848

 2,303

 545

 24

Net gain/ (loss) from bonds held for trading

 1

(2)

 3

 -

 1

 1

 0

 39

Other financial income, net

(12,188)

(705)

(11,483)

(1,628)

 5,964

(216)

 6,180

 -

Net foreign exchange gain/ (loss)

(11,510)

(111)

(11,399)

(10,269)

 6,213

(61)

 6,274

 -

Other financial income / (expenses), net

(678)

(594)

(84)

(14)

(249)

(155)

(94)

(61)

Total net finance income/ (expenses)

(10,654)

 2,405

(13,059)

 -

 6,724

 592

 6,132

 1,035

Net debt increased at 31 December 2022 compared at 31 December 2021 as a result of an increase in short-term borrowings.

In 12M 2022 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 12M 2022 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 income of 12M 2021 in the sum of RUB 2,405 million changed to net finance expense in the amount of RUB 10,654 million in 12M 2022 mainly as the result of negative dynamics in forex losses in 12M 2022.

________________________________

(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".



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 660 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 (), 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 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 12M and 4Q 2022 financial results for investors and analysts.

Details of the call:

Date:

6 March 2023

Time:

4:00 PM (Moscow) / 1:00 PM (London)

 

Subject:

ROS AGRO PLC 12M and 4Q 2022 Financial results

 

 

 

Registration:

(available up to 3:00 PM Moscow time / 12:00 AM London time on 6 March)        

 

https://us06web.zoom.us/webinar/register/WN_E1--ZisNRTu_j5p8_2APFw

 

 

 

 

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 Shakaryan (Kuznetsova)

IR & ESG Director

Phone:  +7 495 363 1661,

E-mail: ir@rusagrogroup.ru

 

 

Appendix 1. Consolidated statement of comprehensive income for the Year and Three months ended 31 December 2022 (in RUB thousand)


Year ended

31 December

Three months ended

31 December


2022

2021

2022

2021

Sales

240,230,251

222,932,439

58,203,644

65,356,350

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

(8,542,435)

3,409,309

(6,455,205)

(7,160,698)

Cost of sales

(184,436,046)

(169,248,281)

(44,599,720)

(46,704,627)

Net gain/(loss) from trading derivatives

-

(5)

-

-

Gross profit

47,251,770

57,093,462

7,148,719

11,491,025






Distribution and selling expenses

(16,851,961)

(10,475,137)

(5,883,086)

(4,053,794)

General and administrative expenses

(9,071,112)

(10,975,898)

(2,335,716)

(2,653,301)

Other operating income/(expenses), net

(2,194,559)

2,334,177

1,903,742

1,132,615

Reversal of provision/(provision) for impairment of loans issued

(74,356)

4,574,481

(74,356)

924,914

Operating profit / (loss)

19,059,782

42,551,085

759,303

6,841,459


 

 

 

 

Interest expense

(7,865,190)

(5,498,991)

(2,089,513)

(1,496,062)

Interest income

9,397,651

8,610,888

2,848,254

2,303,114

Net gain/(loss) from bonds

1,063

(1,630)

1,021

732

Other financial income/ (expenses), net

(12,187,973)

(705,356)

5,963,935

(215,617)

Profit before income tax

8,405,333

44,955,996

7,483,000

7,433,626






Income tax expense

(1,618,793)

(3,522,144)

(2,033,181)

(1,421,872)

Profit for the period

6,786,540

41,433,852

5,449,819

6,011,754

 

 

 

 

 

Other comprehensive income

-

-

-

-

Total comprehensive income for the period

 6,786,540

 41,433,852

 5,449,819

 6,011,754

 





Profit is attributable to:

 

 

 

 

Owners of ROS AGRO PLC

 6,763,338

 41,477,865

 5,466,818

 6,036,405

Non-controlling interest

 23,202

(44,013)

(16,999)

(24,651)

Profit for the period

 6,786,540

 41,433,852

 5,449,819

 6,011,754

 





Total comprehensive income is attributable to:





Owners of ROS AGRO PLC

 6,763,338

 41,477,865

 5,466,818

 6,036,405

Non-controlling interest

 23,202

(44,013)

(16,999)

(24,651)

Total comprehensive income for the period

 6,786,540

 41,433,852

 5,449,819

 6,011,754






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

251.37

1,541.57

203.18

224.35

 


Appendix 2. Segment information for the Year ended 31 December 2022 (in RUB thousand)

 

 

12M 2022

Sugar

Meat

Agriculture

Oil and Fat

Other

Eliminations

Total

Sales

 49,583,897

 43,705,021

 31,993,259

 133,369,020

 1,408,265

(19,829,211)

 240,230,251

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

 -

(2,094,398)

(4,312,350)

 -

 -

(2,135,687)

(8,542,435)

Cost of sales

(29,643,242)

(44,149,262)

(20,485,426)

(109,950,614)

(961,422)

 20,753,920

(184,436,046)

incl. Depreciation

(2,271,228)

(4,951,716)

(1,695,446)

(3,761,053)

(18,175)

(175,609)

(12,873,227)

Gross profit

 19,940,655

(2,538,639)

 7,195,483

 23,418,406

 446,843

(1,210,978)

 47,251,770

Distribution and Selling, General and administrative expenses

(6,590,185)

(3,638,654)

(4,640,663)

(12,118,669)

(2,001,255)

 3,066,353

(25,923,073)

incl. Depreciation

(62,973)

(39,905)

(496,419)

(781,207)

(83,424)

 175,609

(1,288,319)

Other operating income/(expenses), net

(294,339)

 1,388,504

 1,246,170

(2,158,484)

 15,093,839

(17,470,249)

(2,194,559)

incl. Reimbursement of operating costs (government grants)

 157,532

 417,824

 445,978

 322,154

 -

 -

 1,343,488

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

(304,560)

 675,718

 549,976

(2,266,102)

 14,972,443

(16,804,668)

(3,177,193)

Reversal of provision/(provision) for impairment of loans issued

 -

 -

 -

 -

(74,356)

 -

(74,356)

Operating profit / (loss)

 13,056,131

(4,788,789)

 3,800,990

 9,141,253

 13,465,071

(15,614,874)

 19,059,782

Adjustments:

 







Depreciation included in Operating Profit

 2,334,201

 4,991,621

 2,191,865

 4,542,260

 101,599

 -

 14,161,546

Other adjustments to EBITDA (non-recurring items)

 304,560

(675,718)

(549,976)

 2,266,102

(14,972,443)

 16,804,668

 3,177,193

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

 -

 2,094,398

 4,312,350

 -

 -

 2,135,687

 8,542,435

Reversal of provision/(provision) for impairment of loans issued

 -

 -

 -

 -

 74,356

 -

 74,356

Adjusted EBITDA*

 15,694,892

 1,621,512

 9,755,229

 15,949,615

(1,331,417)

 3,325,481

 45,015,312

 

* Non-IFRS measure



 

Appendix 2 (continued). Segment information for the Year ended 31 December 2021 (in RUB thousand)

 

 

12M 2021

Sugar

Meat

Agriculture

Oil and Fat

Other

Eliminations

Total

Sales

 36,360,566

 39,628,064

 41,881,010

 125,236,601

 719,452

(20,893,254)

 222,932,439

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

 -

(370,486)

 2,609,949

 -

 -

 1,169,846

 3,409,309

Cost of sales

(26,850,141)

(33,744,934)

(18,773,771)

(108,855,523)

(371,867)

 19,347,955

(169,248,281)

incl. Depreciation

(2,766,162)

(3,965,508)

(2,547,072)

(2,877,234)

(9,186)

(85,607)

(12,250,769)

Net gain/ (loss) from trading derivatives

 -

(5)

 -

 -

 -

 -

(5)

Gross profit

 9,510,425

 5,512,639

 25,717,188

 16,381,078

 347,585

(375,453)

 57,093,462

Distribution and Selling, General and administrative expenses

(3,958,396)

(5,728,548)

(3,396,730)

(7,463,073)

(2,646,176)

 1,741,888

(21,451,035)

incl. Depreciation

(72,862)

(910,976)

(357,854)

(348,591)

(90,102)

 85,607

(1,694,778)

Other operating income/(expenses), net

 677,174

 1,353,391

 598,467

(726,058)

 27,175,376

(26,744,173)

 2,334,177

incl. Reimbursement of operating costs (government grants)

 576,559

 516,862

 546,424

 495,720

 -

 -

 2,135,565

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

 105,924

 489,812

(37,563)

(1,368,049)

 27,067,942

(25,805,013)

 453,053

Reversal of provision/(provision) for impairment of loans issued

 -

 -

 -

 -

 4,574,481

 -

 4,574,481

Operating profit / (loss)

 6,229,203

 1,137,482

 22,918,925

 8,191,947

 29,451,266

(25,377,738)

 42,551,085

Adjustments:








Depreciation included in Operating Profit

 2,839,024

 4,876,484

 2,904,926

 3,225,825

 99,288

 -

 13,945,547

Other adjustments to EBITDA (non-recurring items)

(105,924)

(489,812)

 37,563

 1,368,049

(27,067,942)

 25,805,013

(453,053)

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

 -

 370,486

(2,609,949)

 -

 -

(1,169,846)

(3,409,309)

Reversal of provision/(provision) for impairment of loans issued

 -

 -

 -

 -

(4,574,481)

 -

(4,574,481)

Adjusted EBITDA*

 8,962,303

 5,894,640

 23,251,465

 12,785,821

(2,091,869)

(742,571)

 48,059,789

 



 


Appendix 3. Consolidated statement of financial position as at 31 December 2022
(in RUB thousand)

 

 


31 December 2022

31 December 2021

ASSETS

 


Current assets

 


Cash and cash equivalents

21,473,030

46,462,179

Short-term investments

91,382,536

21,001,760

Trade and other receivables

24,176,680

12,558,401

Prepayments

13,435,149

5,414,032

Current income tax receivable

832,423

1,532,726

Other taxes receivable

8,360,935

8,321,193

Inventories and short-term biological assets

78,580,317

77,509,033

Other current assets

4,126,715

47

Total current assets

242,367,785

172,799,371

 



Non-current assets

 


Property, plant and equipment

121,165,803

119,159,412

Inventories intended for construction

864,550

1,604,570

Right-of-use assets

6,916,539

7,346,538

Goodwill

2,364,942

2,364,942

Advances paid for non-current assets

5,482,770

7,355,467

Long-term biological assets

3,240,959

2,744,863

Long-term investments and receivables

42,527,657

42,527,657

Investments in associates

455,916

359,782

Deferred income tax assets

5,964,527

4,835,268

Other intangible assets

1,284,263

1,144,057

Other non-current assets

190,978

79,125

Total non-current assets

190,458,904

189,521,681

Total assets

432,826,689

362,321,052

 

 


LIABILITIES and EQUITY

 

 

Current liabilities

 


Short-term borrowings

172,351,514

108,748,840

Lease liabilities

863,452

1,130,831

Trade and other payables

17,024,472

15,440,635

Provisions

137,542

494,709

Current income tax payable

76,061

464,471

Other taxes payable

8,149,780

7,454,558

Total current liabilities

198,602,821

133,734,044

 



Non-current liabilities

 


Long-term borrowings

61,038,393

63,975,025

Government grants

11,153,211

9,325,530

Lease liabilities

5,086,897

5,535,014

Deferred income tax liability

2,283,752

1,876,244

Total non-current liabilities

79,562,253

80,711,813

Total liabilities

278,165,074

214,445,857

 



Equity

 


Share capital

12,269

12,269

Treasury shares

(490,607)

(490,607)

Additional paid-in capital

26,964,479

26,964,479

Other reserves

1,363,177

1,363,177

Retained earnings

126,843,525

120,080,307

Equity attributable to owners of ROS AGRO PLC

154,692,843

147,929,625

Non-controlling interest

(31,228)

(54,430)

Total equity

154,661,615

147,875,195

Total liabilities and equity

432,826,689

362,321,052

 

 



Appendix 4. Consolidated statement of cash flows for the Year ended 31 December 2022 (in RUB thousand) - NOT IFRS PRESENTATION (*)


Year ended


31 December 2022

31 December 2021

Cash flows from operating activities



Profit before income tax

 8,405,333

 44,955,996

Adjustments for:

 

 

Depreciation and amortization

 14,161,546

 13,945,546

Interest expense

 20,783,744

 10,566,994

Government grants

(14,935,568)

(7,846,960)

Interest income

(9,397,651)

(8,610,888)

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

(340,308)

 4,424

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

 8,542,435

(3,409,309)

Change in provision for impairment of loans issued

 74,356

(4,574,481)

Interest expense on leases

 690,914

 591,558

Realised deferred day-one gain

 -

(552,748)

Change in provision for net realisable value of inventory

 657,857

 1,240,531

Change in provision for impairment of receivables and prepayments

 23,385

 824,151

Foreign exchange (gain) / loss, net

 13,066,836

(59,354)

Lost / (reversal of) harvest write-off

 598,041

 272,407

Net (gain) / loss from bonds held for trading

(1,063)

 1,630

Settlement of loans and accounts receivable previously written-off

 -

(1)

Change in provision for impairment of advances paid for property, plant and equipment

 32,076

 26,084

Change in other provisions

(357,167)

 314,918

Dividend income

(397,362)

(754,538)

(Gain)/loss on disposal of other assets

(21,698)

 256,144

Gain on SolPro loans redemption

(563,487)

(515,233)

Other non-cash and non-operating expenses, net

 51,701

 144,326

Operating cash flow before working capital changes

 41,073,920

 46,821,197

Change in trade and other receivables and prepayments

(21,003,370)

(6,377,712)

Change in other taxes receivable

(39,742)

(2,814,518)

Change in inventories and biological assets

(9,841,732)

(6,577,388)

Change in trade and other payables

 1,414,887

 82,068

Change in other taxes payable

 993,307

 3,278,845

Change in other current assets

(5,727,866)

 140,894

Cash generated from operations

 6,869,404

 34,553,386

Income tax paid

(2,446,340)

(3,679,541)

Net cash from operating activities

 4,423,064

 30,873,845

 

 

 



 

Appendix 4 (continued). Consolidated statement of cash flows the Year ended 31 December 2022 (in RUB thousand) - NOT IFRS PRESENTATION (*)

 



Year ended


31 December 2022

31 December 2021

Cash flows from investing activities

 

 

Purchases of property, plant and equipment including SolPro assets acquisition

(11,718,704)

(42,029,048)

Purchases of other intangible assets

(925,855)

(1,042,618)

Purchases of land lease rights

(358,879)

(68,772)

Proceeds from sales of property, plant and equipment

 486,542

 896,286

Purchases of inventories intended for construction

(254,665)

(476,322)

Purchases of associates

(96,134)

(102,000)

Purchases of other investments

 -

(19,083)

Dividends received

 722,768

 377,331

Proceeds from sales of other assets

 -

 217,591

Proceeds from sales of other investments

 -

 18,000

Other investing activities

 178,281

 811,901

Net cash from investing activities

(11,966,646)

(41,416,734)

Cash flows from financing activities



Proceeds from borrowings

 151,465,684

 107,856,022

Repayment of borrowings

(93,010,994)

(52,668,951)

Interest paid

(7,028,058)

(4,591,935)

Change in cash on bank deposits

(58,841,928)

(18,000,000)

Proceeds from sales of bonds with maturity over three months*

 141,804

 220,282

Loans given*

(24,866,023)

(2,256,313)

Loans repaid*

 15,504,119

 22,959,494

Interest received*

 8,692,280

 8,786,038

Proceeds from government grants

 1,837,714

 2,879,218

Purchases of non-controlling interest

 -

(66,000)

Dividends paid to owners Ros Agro PLC

 -

(19,417,565)

Repayment of lease liabilities

(466,795)

(335,167)

Other financial activities

(119)

 21,631

Net cash from  financing activities

(6,572,316)

 45,386,754

Net effect of exchange rate changes on cash and cash equivalents

(10,873,251)

(248,484)

Net increase/ (decrease) in cash and cash equivalents

(24,989,149)

 34,595,381

Cash and cash equivalents at the beginning of the period

 46,462,179

 11,866,798

Cash and cash equivalents at the end of the period

 21,473,030

 46,462,179

 

 

(*) 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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