RNS Number : 4854I
Ros Agro PLC
07 August 2023
 

 

 

7 August 2023

 

ROS AGRO PLC financial results for 1H 2023 and 2Q 2023

 

7 August 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 six months ended 30 June 2023.

 

 

1H 2023 HIGHLIGHTS

 

-     Sales amounted to RUB 106,549 million (US$ 1,386 million1), a decrease of RUB 20,681 million (-16%, US$ -282 million) compared to 1H 2022;

-     Adjusted EBITDA2 amounted to RUB 15,606 million (US$ 203 million), a decrease of RUB 14,228 million (-48%, US$ -188 million) compared to 1H 2022;

-     Adjusted EBITDA margin decreased to 15% in 1H 2023 from 23% in 1H 2022;

-     Net profit for the period amounted to RUB 13,191 million (US$ 172 million), an increase of RUB 12,721 million (+2,706%, US$ +165 million);

-     Net debt position3 as of 30 June 2023 amounted to RUB 80,038 million (US$ 920 million);

-     Net Debt/Adjusted EBITDA (LTM4) as of 30 June 2023 was 2.60x.

 

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

 

"In 2Q 2023 Rusagro sales increased in Agriculture and Meat segments. Agriculture segment sales volume boosted as the result of realization of agricultural products transferred from prior periods in anticipation of prices and dollar exchange rate growth and due to late harvesting. Meat segment continues to show rise in sales as the result of production volumes increase both in Primorie after the launch of the pork production cluster, and due to the efficiency increase in the Central region. Sales in Oil & Fat and Sugar segments decreased following the drop in oil world prices, decrease of sugar production volumes as the result of lower sugar content in sugar beet of previous season, and the suspension of the Balakovo oil extraction plant for modernization until September 2023.

Adjusted EBITDA declined across all segments except Agriculture reflecting the pressure of lower selling prices, at the same time Rusagro showed a significant increase in net income and a considerable decrease in net debt by 20%.

At the end of 2Q 2023 Rusagro acquired 50% shares and control over the NMZHK oil and fats production group of companies. Following the acquisition, Rusagro strengthened its market position and became â„–1 mayonnaises and mayonnaise sauces manufacturer in Russia, and we expect to achieve significant synergies starting from 3Q 2023."

 

 

 

 

 

 

 

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

Six months ended

Variance

Three months ended

Variance

30 June 2023

30 June 2022

Units

%

30 June 2023

30 June 2022

Units

%

Sales

 106,549

 127,230

(20,681)

(16)

 59,154

 65,724

(6,570)

(10)

Gross profit  1

 20,948

 32,584

(11,637)

(36)

 12,317

 17,589

(5,272)

(30)

Gross margin, %

20%

26%

(6) pp

 

21%

27%

(6) pp

 

Adjusted EBITDA  1

 15,606

 29,833

(14,228)

(48)

 8,466

 13,644

(5,178)

(38)

Adjusted EBITDA margin, %

15%

23%

(8) pp

 

14%

21%

(7) pp

 

Net profit for the period 1,2

 13,191

 470

 12,721

 2,706

 7,774

(1,493)

 9,268

 -

Net profit margin %

12%

0%

12 pp

 

13%

(2%)

15 pp

 

 

1 Several adjustments were made to the published 1H and 2Q 2022 key financial indicators:

•     Gross profit for 1H 2022 was increased by RUB 706 million, Net profit by RUB 565 million to reflect the distribution of depreciation expenses between the quarters of 2022 in Oil and Fat segment, the same indicators for 2Q 2022 increased by RUB 352 million and RUB 282 million correspondingly;

•     Gross profit for 1H 2022 was decreased by RUB 383 million, gross profit for 2Q 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 1H 2022 were decreased by RUB 325 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 2Q 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.

 

 



 

Key financial performance indicators by segments

in RUB million

Six months ended

Variance

Three months ended

Variance

30 June 2023

30 June 2022

Units

%

30 June 2023

30 June 2022

Units

%

 









Sales, incl.

106,549

127,230

(20,681)

(16)

59,154

65,724

(6,570)

(10)

Sugar

23,974

27,102

(3,129)

(12)

14,563

15,770

(1,207)

(8)

Meat

22,649

20,624

2,024

10

11,923

11,366

557

5

Agriculture

11,559

11,105

454

4

5,663

2,919

2,744

94

Oil and Fat

51,399

72,012

(20,613)

(29)

28,042

36,901

(8,859)

(24)

Other

1,005

450

555

123

541

242

298

123

Eliminations

(4,036)

(4,063)

27

1

(1,578)

(1,474)

(105)

(7)










Gross profit, incl.

20,948

32,584

(11,637)

(36)

12,317

17,589

(5,272)

(30)

Sugar

8,114

12,802

(4,688)

(37)

5,298

7,250

(1,951)

(27)

Meat

2,547

(386)

2,933

-

1,403

(1,537)

2,941

-

Agriculture

218

7,706

(7,488)

(97)

992

5,970

(4,978)

(83)

Oil and Fat

11,043

12,796

(1,754)

(14)

5,402

6,010

(608)

(10)

Other

435

49

386

786

269

98

171

175

Eliminations

(1,409)

(383)

(1,026)

(268)

(1,047)

(200)

(846)

(422)










Adjusted EBITDA, incl.

15,606

29,833

(14,228)

(48)

8,466

13,644

(5,178)

(38)

Sugar

6,714

11,328

(4,613)

(41)

4,704

6,649

(1,945)

(29)

Meat

734

1,037

(303)

(29)

287

448

(161)

(36)

Agriculture

1,116

5,319

(4,203)

(79)

1,233

1,145

87

8

Oil and Fat

6,192

9,473

(3,282)

(35)

2,030

4,171

(2,140)

(51)

Other

(655)

(387)

(267)

(69)

(358)

(383)

25

7

Eliminations

1,504

3,064

(1,560)

(51)

570

1,614

(1,044)

(65)










Adjusted EBITDA margin, %

15%

23%

(8) pp

 

14%

21%

(7) pp

 

Sugar

28%

42%

(14) pp

 

32%

42%

(10) pp

 

Meat

3%

5%

(2) pp

 

2%

4%

(2) pp

 

Agriculture

10%

48%

(38) pp

 

22%

39%

(17) pp

 

Oil and Fat

12%

13%

(1) pp

 

7%

11%

(4) pp

 

 



SUGAR SEGMENT

In 1H 2023 Sugar segment earned RUB 6,714 million of adjusted EBITDA (-41% y-o-y) with 28% margin (-14 pp y-o-y). The financial results of the Sugar Segment of 1H 2023 compared to 1H 2022 are presented in the table below:

Sugar segment 1H and 2Q 2023 Financial Results

in RUB million

Six months ended

Variance

Three months ended

Variance

30 June 2023

30 June 2022

Units

%

30 June 2023

30 June 2022

Units

%

Sales

23,974

27,102

(3,129)

(12)

14,563

15,770

(1,207)

(8)

Cost of sales

(15,860)

(14,301)

(1,559)

(11)

(9,265)

(8,520)

(745)

(9)

Gross profit/ (loss)

8,114

12,802

(4,688)

(37)

5,298

7,250

(1,951)

(27)

Gross profit margin

34%

47%

(13) pp

 

36%

46%

(10) pp

 

Distribution and selling expenses

(1,876)

(1,976)

100

5

(931)

(896)

(36)

(4)

General and administrative expenses

(768)

(802)

34

4

(373)

(394)

20

5

Other operating income/ (expenses), net

221

(314)

535

-

224

(108)

332

-

incl.Reimbursement of operating costs

(government grants)

88

138

(50)

(36)

88

138

(50)

(36)

incl. other adjustments to EBITDA

(non-recurring items)

62

(410)

473

-

41

(195)

235

-

Operating profit

5,691

9,710

(4,019)

(41)

4,218

5,853

(1,635)

(28)

 









Adjusted EBITDA

6,714

11,328

(4,613)

(41)

4,704

6,649

(1,945)

(29)

Adjusted EBITDA margin

28%

42%

(14) pp

 

32%

42%

(10) pp

 

 

In 2Q 2023 compared to 2Q 2022 Sales of Sugar segment decreased by 8% mainly due to the decrease in sugar sales volume by 11% down to 233 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.

In 6M 2023 compared to the same period last year Sales of Sugar segment decreased by 12% mainly due to the decrease in sugar sales volume by 13%. Revenue from sale of beet pulp in 6M 2023 decreased by RUB 247 million, revenue from sales of buckwheat and molasses also decreased by RUB 312 million.

 Production and sales volume of sugar in 1H and 2Q 2023

 

Six months ended

Variance

Three months ended

Variance

30 June 2023

30 June 2022

Units

%

30 June 2023

30 June 2022

Units

%

Sugar production volume,

thousand tonnes

104

104

(0)

(0)

35

49

(13)

(28)

Sales volume,

thousand tonnes

381

437

(57)

(13)

233

260

(27)

(11)

 

Cost of sales in 2Q and 6M 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.

Other operating income/ (expenses), net in 2Q and 6 M 2023 increased mainly due to the positive dynamics of operating forex differences.

MEAT SEGMENT

In 1H 2023 Meat segment earned RUB 734 million of adjusted EBITDA (-29% y-o-y) with 3% margin (-2 pp y-o-y). The financial results of the Meat Segment of 1H 2023 and 2Q 2023 compared to 1H 2022 and 2Q 2022 respectively are presented in the table below.

Meat segment 1H and 2Q 2023 Financial Results

in RUB million

Six months ended

Variance

Three months ended

Variance

30 June 2023

30 June 2022

Units

%

30 June 2023

30 June 2022

Units

%

Sales

22,649

20,624

2,024

10

11,923

11,366

557

5

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

2,272

(700)

2,972

-

945

(1,667)

2,612

-

Cost of sales

(22,374)

(20,312)

(2,063)

(10)

(11,465)

(11,237)

(228)

(2)

Gross profit/ (loss)

2,547

(386)

2,932

-

1,403

(1,537)

2,939

-

Gross profit margin

11%

(2%)

13 pp

 

12%

(14%)

26 pp

 

Gross profit excl. effect of biological assets revaluation

274

313

(38)

(12)

458

129

329

255

Adjusted gross profit margin

1%

2%

(1) pp

 

4%

1%

3 pp

 

Distribution and selling expenses

(766)

(889)

123

14

(451)

(459)

8

2

General and administrative expenses

(1,217)

(1,029)

(188)

(18)

(616)

(582)

(34)

(6)

Other operating income/ (expenses), net

182

618

(436)

(71)

(133)

471

(603)

-

incl. reimbursement of operating costs (government grants)

23

14

9

64

4

9

(5)

(54)

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

215

496

(281)

(57)

117

407

(291)

(71)

Operating profit

745

(1,686)

2,431

-

204

(2,106)

2,311

-

 









Adjusted EBITDA

734

1,037

(303)

(29)

287

448

(161)

(36)

Adjusted EBITDA margin

3%

5%

(2) pp

 

2%

4%

(2) pp

 

Sales of the Meat segment increased by 5% in 2Q 2023 compared to the respective period of 2022 and by 10% in 1H 2023 compared to the respective period of 2022 mainly due to sales volume increase which was caused 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 1H and 2Q 2023

 

Six months ended

Variance

Three months ended

Variance

30 June 2023

30 June 2022

Units

%

30 June 2023

30 June 2022

Units

%

Pigs production,

thousand tonnes in live weight

 

 

175

160

15

9

86

83

4

4

Sales volume,

thousand tonnes

146

133

13

10

74

73

1

2

 

 

 

Cost of sales increased by 2% in 2Q 2023 compared to the respective period of 2022, and by 10% in 1H 2023 compared to the 1H 2022. is mainly because of higher sales volumes.

Net gain on revaluation of biological assets and agricultural produce in 2Q 2023 and in 1H 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 beginning of respective periods.

Other operating expenses in 2Q 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 June 2023 Rusagro's area of controlled land stands at 674 thousand hectares
(31 December 2022: 660 thousand hectares). In 1H 2023 Agriculture segment earned RUB
 1,116 million of adjusted EBITDA (-79% y-o-y) with 10% margin (-38 pp y-o-y). The financial results of the Agricultural Segment of 1H 2023 and 2Q 2023 compared to 1H 2022 and 2Q 2022 respectively are presented below.

Agriculture segment 1H and 2Q 2023 Financial Results

in RR million

Six months ended

Variance

Three months ended

Variance

30 June 2023

30 June 2022

Units

%

30 June 2023

30 June 2022

Units

%

Sales

11,559

11,105

454

4

5,663

2,919

2,744

94

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

(2,092)

1,651

(3,743)

-

(677)

4,496

(5,173)

Cost of sales

(9,249)

(5,049)

(4,200)

(83)

(3,994)

(1,445)

(2,549)

(176)

Gross profit/ (loss)

218

7,706

(7,488)

(97)

992

5,970

(4,978)

(83)

Gross profit margin

2%

69%

(67) pp

 

18%

204%

(186) pp

 

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

2,310

6,056

(3,745)

(62)

1,669

1,474

195

13

Adjusted gross profit margin

20%

55%

(35) pp

 

29%

50%

(21) pp

 

Distribution and selling expenses

(2,068)

(1,013)

(1,055)

(104)

(1,019)

(353)

(667)

(189)

General and administrative expenses

(780)

(766)

(14)

(2)

(428)

(430)

1

0

Other operating income/ (expenses), net

457

597

(141)

(24)

361

164

197

120

  incl. reimbursement of operating costs (government grants)

457

42

414

975

425

41

384

929

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

(125)

325

(451)

-

(145)

(54)

(91)

(169)

Operating profit

(2,174)

6,525

(8,699)

-

(95)

5,352

(5,447)

-

 









Adjusted EBITDA

1,116

5,319

(4,203)

(79)

1,233

1,145

87

8

Adjusted EBITDA margin

10%

48%

(38) pp

 

22%

39%

(17) pp

 

 

In 2Q 2023 in comparison to 2Q 2022 Sales of the Agriculture segment increased by 94% to RUB 5,663 million due to higher sales volume of all crops.

1H 2023 in comparison to 1H 2022 Sales of the Agriculture segment increased by 4% to RUB 11,559 million mainly because of higher sales volume of sugar beet, soybean and sunflower and higher corn sales price, partially compensated by lower sales prices of soybean, wheat and sunflower.

Increase in oil crops sales volume in 1H 2023 and 2Q 2023 as well as increase in sugar beet sales volume in 1H 2023 was caused by sales volume transfer to 1H 2023 due to adverse climate conditions, leading to prolongation of harvesting period to 2023.

Increase in sales of corn in 2Q 2023 in comparison with the same period of prior year is caused by the conclusion of contract in 1Q 2023, with the condition of delivery until the end of August. In 2022, the main sales took place during 1Q.

Sales prices for wheat decreased due to the fall in global wheat prices because of high grain stocks. Prices decrease for oil crops (sunflower and soybean) as well as sugar beet is attributed to the quality of harvest following adverse weather conditions during the prolonged harvest gathering period.

Sales volume of crops in 1H and 2Q 2023

Thousand tonnes

Six months ended

Variance

Three months ended

Variance

30 June 2023

30 June 2022

Units

%

30 June 2023

30 June 2022

Units

%

sugar beet

494

59

435

741

-

-

-

-

wheat

194

194

(1)

(0)

135

115

20

17

soybean

180

116

64

55

94

15

80

549

corn

92

111

(19)

(17)

63

10

53

526

sunflower seeds

56

21

35

170

16

5

10

202

 

The main reason for the increase in Cost of sales is the growth of quantity of goods sold.

The increase in Distribution and selling expenses for 1H 2023 and 2Q 2023 in comparison with the same periods of the previous year is caused by additional storage and processing costs due to the adverse weather conditions and prolonged harvest period.

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 1H and 2Q 2023 is associated with the sale of the previous year's harvest. Gain in 1H and 2Q 2022 was caused by the revaluation of growing crops of the new harvest considering higher sales prices anticipated in 2022.

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

Reimbursement of operating costs (government grants) was received in higher amount in 1H and 2Q 2023 as the company received subsidies for grain crops sales, support of elite seed, ameliorants usage.

Change in Other operating income except government grants in 1H and 2Q 2023 in comparison with the same periods of 2022 is connected mainly due to the differences relating to one-off gain from the sale of fixed assets and inventories as well as changes in foreign exchange gains/(losses) amount.

 



 

OIL AND FAT SEGMENT

In 1H 2023 Oil and Fat segment earned RUB 6,192 million of adjusted EBITDA (-35 %
y-o-y) with 1
2% margin (-1 pp y-o-y). The financial results of the Oil and Fat Segment for 1H 2023 and 2Q 2023 compared to 1H 2022 and 2Q 2022 respectively are presented below.

 Oil and Fat segment 1H and 2Q 2023 Financial Results

in RUBl million

 

Six months ended

Variance

Three months ended

Variance

30 June 2023

30 June 2022

Units

%

30 June 2023

30 June 2022

Units

%

Sales

51,399

72,012

(20,613)

(29)

28,042

36,901

(8,859)

(24)

Cost of sales

(40,356)

(59,216)

18,859

32

(22,640)

(30,891)

8,251

27

Gross profit/ (loss)

11,043

12,796

(1,754)

(14)

5,402

6,010

(608)

(10)

Gross profit margin

21%

18%

3 pp

 

19%

16%

3 pp

 

Distribution and selling expenses

(4,078)

(3,970)

(109)

(3)

(2,172)

(2.166)

(6)

(0)

General and administrative expenses

(1,917)

(1,369)

(548)

(40)

(1,096)

(686)

(410)

(60)

Other operating income/ (expenses), net

(1,950)

(4,125)

2,175

53

(1,372)

(3,139)

1,767

56

incl. reimbursement of  operating costs (government grants)

126

216

(90)

(41)

125

210

(85)

(41)

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

(805)

(3,988)

3,183

80

(103)

(3,090)

2,987

97

Operating profit/ (loss)

3,098

3,333

(235)

(7)

762

18

744

4,025

 









Adjusted EBITDA

6,192

9,473

(3,282)

(35)

2,030

4,171

(2,140)

(51)

Adjusted EBITDA margin

12%

13%

(1) pp

 

7%

11%

(4) pp

 

In 2Q 2023 in comparison to 2Q 2022 Sales of the Oil and fat segment decreased by 24% to RUB 28,042 million due to the decrease in prices on the world market and in sales volume of meal, crude oil, margarine and dry mixes, which was partially compensated by the increase in sales volumes of industrial fats, bottled oil and mayonnaise.

In 1H 2023 in comparison to 1H 2022 Sales of the Oil and fat segment decreased by 29% to RUB 51,399 million due to lower global prices and overall sales volumes decrease. Lower sales volumes of crude oil and meal due to 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 starting from May 2023.

Sales volumes of oil and fat and dairy products in 1H and 2Q 2023

Thousand tonnes

 

Six months ended

Variance

Three months ended

Variance

30 June 2023

30 June 2022

Units

%

30 June 2023

30 June 2022

Units

%

meal

257

299

(42)

(14)

124

149

(25)

(17)

crude oil

156

200

(43)

(22)

102

108

(5)

(5)

industrial fats

152

141

11

7

76

62

14

22

dry whey mixes

6

8

(2)

(29)

3

4

(1)

(28)

consumer oil&fat products

136

136

(0)

(0)

72

64

8

12

consumer dairy products

8

7

0

6

4

4

1

13

 

 

 

Cost of sales in 1H 2023 in comparison to 1H 2022 decreased due to the decline in sales volumes of products. Cost of sales decreased more than Sales mainly due to reduction of world prices for raw materials.

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

The decrease in Other operating expenses is due to lower charity expenses and foreign exchange differences in 1H 2023 compared to the same period in 2022, which was partially compensated by accrual of provision for bad debts.



 

 

KEY CONSOLIDATED CASH FLOW INDICATORS (NOT IFRS PRESENTATION*)

 

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

in RUB million

Six months ended

Variance

Three months ended

Variance

30 June 2023

30 June 2022

Units

%

30 June 2023

30 June 2022

Units

%

Net cash from operating activities, incl.

 32,576

(706)

 33,283

 -

 16,572

 4,424

 12,148

 275

Operating cash flow before working capital changes

 15,047

 28,447

(13,401)

(47)

 8,055

 11,302

(3,247)

(29)

Working capital changes

 18,140

(27,928)

 46,069

 -

 8,837

(5,982)

 14,818

 -

Net cash from investing activities, incl.

(11,974)

(3,962)

(8,011)

(202)

(9,684)

(1,696)

(7,989)

(471)

Purchases of property plant and equipment and inventories intended for construction

(11,818)

(4,627)

(7,191)

(155)

(9,729)

(1,538)

(8,190)

(532)

Net cash from financing activities

 5,341

 39,140

(33,799)

(86)

 12,070

 30,214

(18,145)

(60)

Net effect of exchange rate changes on cash and cash equivalents

 4,228

(18,995)

 23,223

 -

 2,295

(11,035)

 13,330

 -

Net increase / (decrease) in cash and cash equivalents

 30,172

 15,476

 14,696

 95

 21,253

 21,908

(655)

(3)

 

(*) See Appendix 4

 

 



 

Debt position and liquidity management

in RUB million

30 June 2023

31 December 2022

Variance

Units

%

Gross debt

232,517

233,390

(873)

(0)

Short-term borrowings

172,001

172,352

(351)

(0)

Long-term borrowings

60,516

61,038

(522)

(1)

Cash and cash equivalents, bank deposits and bonds

(152,479)

(133,668)

(18,811)

(14)

Short-term cash, deposits and bonds

(118,507)

(99,697)

(18,810)

(19)

Long-term cash, deposits and bonds

(33,971)

(33,971)

(0)

(0)

Net debt

80,038

99,723

(19,685)

(20)

Short-term borrowings, net

53,494

72,655

(19,161)

(26)

Long-term borrowings, net

26,545

27,067

(522)

(2)

Adjusted EBITDA (LTM4)

30,788

45,015

(14,227)

(32)

Net debt/ Adjusted EBITDA (LTM)

2.60

2.22

0.4 pp

 

 

Net finance income/ (expense)

in RUB million

Six months ended

Variance

Three months ended

Variance

30 June 2023

30 June 2022

Units

%

30 June 2023

30 June 2022

Units

Net interest expense

(3,693)

(3,317)

(376)

(11)

(1,768)

(1,803)

 35

 2

Gross interest expense

(9,264)

(8,428)

(835)

(10)

(4,620)

(3,873)

(747)

(19)

Reimbursement of interest expense

 5,570

 5,111

 459

 9

 2,852

 2,070

 782

 38

Interest income

 4,954

 4,348

 606

 14

 2,512

 2,040

 473

 23

Other financial income, net

 6,179

(19,682)

 25,861

 -

 3,197

(11,797)

 14,994

 -

Net foreign exchange gain/ (loss)

 6,484

(19,551)

 26,035

 -

 3,385

(11,723)

 15,108

 -

Other financial income / (expenses), net

(305)

(131)

(174)

(133)

(188)

(74)

(114)

(153)

Total net finance income/ (expenses)

 7,439

(18,652)

 26,091

 -

 3,941

(11,560)

 15,501

 -

 

Net debt decreased at 30 June 2023 compared at 31 December 2022 as a result of an increase in bank balances and bank deposits.

In 1H 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 1H 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 1H 2022 in the sum of RUB 18,652 million changed to net finance income in the amount of RUB 7,439 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 674 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 â„–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 1H and 2Q 2023 financial results for investors and analysts.

Details of the call:

Date:

7 August 2023

Time:

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

 

Subject:

ROS AGRO PLC 1H and 2Q 2023 Financial results

 

 

 

Registration:

available up to 3:00 PM Moscow time / 1:00 PM London time on 7 August

 

https://us06web.zoom.us/webinar/register/WN_nQXkjv0QSNSvWy42GOjg7w#/registration

 

 

 

 

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 Six and Three months ended 30 June 2023 (in RUB thousand)


Six months ended

30 June

Three months ended

30 June


2023

2022

2023

2022

Sales

106,549,362

127,230,280

59,153,906

65,724,120

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

(965,675)

(1,848,173)

(419,128)

1,249,037

Cost of sales

(84,635,964)

(92,797,796)

(46,417,377)

(49,383,727)

Gross profit

20,947,723

32,584,311

12,317,401

17,589,430






Distribution and selling expenses

(7,354,540)

(7,360,741)

(3,774,048)

(3,731,561)

General and administrative expenses

(4,862,514)

(3,888,980)

(2,682,800)

(2,326,856)

Other operating income/(expenses), net

278,489

(3,503,330)

(512,774)

(2,886,036)

Operating profit / (loss)

9,009,158

17,831,260

5,347,779

8,644,977


 

 

 

 

Interest expense

(3,693,364)

(3,317,386)

(1,768,118)

(1,802,674)

Interest income

4,953,569

4,348,186

2,512,334

2,039,794

Net gain/(loss) from bonds held for trading

-

42

-

-

Other financial income/ (expenses), net

6,178,811

(19,682,492)

3,196,917

(11,797,046)

Profit before income tax

16,448,174

(820,390)

9,288,912

(2,914,949)






Income tax expense

(3,256,871)

1,290,456

(1,514,557)

1,421,574

Profit for the period

13,191,303

470,066

7,774,355

(1,493,375)

 

 

 

 

 

Other comprehensive income

-

-

-

-

Total comprehensive income for the period

 13,191,303

 470,066

 7,774,355

(1,493,375)

 





Profit is attributable to:

 

 

 

 

Owners of ROS AGRO PLC

 13,194,402

 419,901

 7,770,662

(1,544,258)

Non-controlling interest

(3,099)

 50,165

 3,693

 50,883

Profit for the period

 13,191,303

 470,066

 7,774,355

(1,493,375)

 





Total comprehensive income is attributable to:





Owners of ROS AGRO PLC

 13,194,402

 419,901

 7,770,662

(1,544,258)

Non-controlling interest

(3,099)

 50,165

 3,693

 50,883

Total comprehensive income for the period

 13,191,303

 470,066

 7,774,355

(1,493,375)






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

490.38

15.61

288.80

(57.39)

 


Appendix 2. Segment information for the Six months ended 30 June 2023 (in RUB thousand)

 

 

6M 2023

Sugar

Meat

Agriculture

Oil and Fat

Other

Eliminations

Total

Sales

 23,973,640

 22,648,603

 11,559,185

 51,399,022

 1,004,700

(4,035,788)

 106,549,362

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

 -

 2,272,491

(2,092,419)

 -

 -

(1,145,747)

(965,675)

Cost of sales

(15,860,003)

(22,374,393)

(9,248,747)

(40,356,197)

(569,399)

 3,772,775

(84,635,964)

incl. Depreciation

(1,052,138)

(2,413,367)

(959,561)

(1,851,417)

(8,811)

(19,051)

(6,304,345)

Gross profit

 8,113,637

 2,546,701

 218,019

 11,042,825

 435,301

(1,408,760)

 20,947,723

Distribution and Selling, General and administrative expenses

(2,643,930)

(1,982,738)

(2,848,308)

(5,995,076)

(1,050,411)

 2,303,409

(12,217,054)

incl. Depreciation

(33,778)

(62,539)

(112,643)

(437,660)

(71,488)

 19,051

(699,057)

Other operating income/(expenses), net

 221,266

 181,526

 456,647

(1,950,089)

 1,841,712

(472,573)

 278,489

incl. Reimbursement of operating costs (government grants)

 87,768

 23,413

 456,578

 126,345

 -

 -

 694,104

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

 62,433

 214,983

(125,301)

(804,995)

 1,961,579

 63,723

 1,372,422

Operating profit / (loss)

 5,690,973

 745,489

(2,173,642)

 3,097,660

 1,226,602

 422,076

 9,009,158

Adjustments:

 







Depreciation included in Operating Profit

 1,085,916

 2,475,906

 1,072,204

 2,289,077

 80,299

 -

 7,003,402

Other adjustments to EBITDA (non-recurring items)

(62,433)

(214,983)

 125,301

 804,995

(1,961,579)

(63,723)

(1,372,422)

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

 -

(2,272,491)

 2,092,419

 -

 -

 1,145,747

 965,675

Adjusted EBITDA*

 6,714,456

 733,921

 1,116,282

 6,191,732

(654,678)

 1,504,100

 15,605,813

 

* Non-IFRS measure



 

Appendix 2 (continued). Segment information for the Three months ended 30 June 2022 (in RUB thousand)

 

 

6M 2022

Sugar

Meat

Agriculture

Oil and Fat

Other

Eliminations

Total

Sales

 27,102,430

 20,624,192

 11,104,731

 72,011,911

 450,110

(4,063,094)

 127,230,280

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

 -

(699,569)

 1,650,641

 -

 -

(2,799,245)

(1,848,173)

Cost of sales

(14,300,846)

(20,310,679)

(5,049,076)

(59,215,582)

(400,989)

 6,479,376

(92,797,796)

incl. Depreciation

(1,181,997)

(2,455,940)

(640,730)

(1,867,096)

(5,008)

(2,294)

(6,153,065)

Gross profit

 12,801,584

(386,056)

 7,706,296

 12,796,329

 49,121

(382,963)

 32,584,311

Distribution and Selling, General and administrative expenses

(2,778,005)

(1,918,243)

(1,778,577)

(5,338,741)

(564,112)

 1,127,957

(11,249,721)

incl. Depreciation

(25,488)

(64,349)

(129,044)

(285,588)

(57,924)

 2,294

(560,099)

Other operating income/(expenses), net

(313,811)

 617,567

 597,377

(4,124,909)

(473,926)

 194,372

(3,503,330)

incl. Reimbursement of operating costs (government grants)

 137,891

 14,309

 42,463

 215,964

 -

 -

 410,627

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

(410,433)

 496,143

 325,440

(3,988,030)

(538,999)

 675,011

(3,440,868)

Operating profit / (loss)

 9,709,768

(1,686,732)

 6,525,096

 3,332,679

(988,917)

 939,366

 17,831,260

Adjustments:








Depreciation included in Operating Profit

 1,207,485

 2,520,289

 769,774

 2,152,684

 62,932

 -

 6,713,164

Other adjustments to EBITDA (non-recurring items)

 410,433

(496,143)

(325,440)

 3,988,030

 538,999

(675,011)

 3,440,868

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

 -

 699,569

(1,650,641)

 -

 -

 2,799,245

 1,848,173

Adjusted EBITDA*

 11,327,686

 1,036,983

 5,318,789

 9,473,393

(386,986)

 3,063,600

 29,833,465

 

* Non-IFRS measure



 


Appendix 3. Consolidated statement of financial position as at 30 June 2023
(in RUB thousand)

 

 


30 June 2023

31 December 2022

ASSETS

 


Current assets

 


Cash and cash equivalents

51,644,566

21,473,030

Short-term investments

81,868,828

91,382,536

Trade and other receivables

17,713,189

24,176,680

Prepayments

4,317,825

13,435,149

Current income tax receivable

168,658

832,423

Other taxes receivable

8,349,532

8,360,935

Inventories and short-term biological assets

90,591,115

78,580,317

Other current assets

5,111,396

4,126,715

Total current assets

259,765,109

242,367,785

 



Non-current assets

 


Property, plant and equipment

136,391,641

121,165,803

Inventories intended for construction

434,082

864,550

Right-of-use assets

7,247,347

6,916,539

Goodwill

2,364,942

2,364,942

Advances paid for non-current assets

4,299,038

5,482,770

Long-term biological assets

2,737,556

3,240,959

Long-term investments and receivables

42,526,511

42,527,657

Investments in associates

488,916

455,916

Deferred income tax assets

4,942,113

5,964,527

Other intangible assets

1,930,510

1,284,263

Other non-current assets

91,350

190,978

Total non-current assets

203,454,006

190,458,904

Total assets

463,219,115

432,826,689

 

 

 

LIABILITIES and EQUITY

 


Current liabilities

 

 

Short-term borrowings

172,000,955

172,351,514

Lease liabilities

875,658

863,452

Trade and other payables

18,956,944

17,024,472

Provisions

197,092

137,542

Current income tax payable

509,572

76,061

Other taxes payable

7,004,815

8,149,780

Total current liabilities

199,545,036

198,602,821

 

 

 

Non-current liabilities



Long-term borrowings

60,515,802

61,038,393

Government grants

11,528,551

11,153,211

Lease liabilities

5,637,017

5,086,897

Deferred income tax liability

3,218,929

2,283,752

Total non-current liabilities

80,900,299

79,562,253

Total liabilities

280,445,335

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

140,037,927

126,843,525

Equity attributable to owners of ROS AGRO PLC

167,887,245

154,692,843

Non-controlling interest

14,886,535

(31,228)

Total equity

182,773,780

154,661,615

Total liabilities and equity

463,219,115

432,826,689

 

 

 



Appendix 4. Consolidated statement of cash flows for the Six months ended 30 June 2023 (in RUB thousand) - NOT IFRS PRESENTATION (*)


Six months ended


30 June 2023

30 June 2022

Cash flows from operating activities



Profit before income tax

 15,817,190

(820,390)

Adjustments for:

 

 

Depreciation and amortization

 7,003,401

 6,713,162

Interest expense

 9,335,817

 8,427,977

Government grants

(6,536,472)

(5,863,671)

Interest income

(4,953,000)

(4,348,185)

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

(116,880)

(473,166)

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

 965,675

 1,848,173

Change in provision for impairment of loans issued

(123)

 3,028

Interest expense on leases

 133,630

 122,595

Change in provision for net realisable value of inventory

 591,994

 508,561

Change in provision for impairment of receivables and prepayments

 1,605,292

 35,050

Foreign exchange (gain) / loss, net

(8,171,930)

 22,932,796

Lost / (reversal of) harvest write-off

 -

 5,945

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

 29,613

(31,224)

Change in other provisions

 59,549

(149,060)

Dividend income

(345,499)

 -

(Gain)/loss on disposal of other assets

 456

 5,162

Gain on SolPro loans redemption

(260,587)

(400,307)

Other non-cash and non-operating expenses, net

(80,095)

(69,178)

Operating cash flow before working capital changes

 15,046,652

 28,447,226

Change in trade and other receivables and prepayments

 3,358,544

(12,932,703)

Change in other taxes receivable

 739,260

 1,475,217

Change in inventories and biological assets

(364,691)

(11,191,254)

Change in trade and other payables

 15,358,946

(2,991,723)

Change in other taxes payable

(951,606)

(2,287,788)

Cash generated from operations

 33,187,105

 518,975

Income tax paid

(610,788)

(1,225,243)

Net cash from operating activities

 32,576,317

(706,268)

 

 

 



 

Appendix 4 (continued). Consolidated statement of cash flows the Six months ended 30 June 2023 (in RUB thousand) - NOT IFRS PRESENTATION (*)

 



Six months ended


30 June 2023

30 June 2022

Cash flows from investing activities

 

 

Purchases of property, plant and equipment

(11,683,992)

(4,445,855)

Purchases of other intangible assets

(451,098)

(523,970)

Purchases of land lease rights

(15,486)

(16,906)

Proceeds from sales of property, plant and equipment

 12,165

 451,961

Purchases of inventories intended for construction

(134,198)

(180,927)

Purchases of associates

(33,000)

(71,000)

Dividends received

 345,499

 377,269

Proceeds from sales of other investments

 13,205

 -

Other investing activities

(26,672)

 447,203

Net cash from investing activities

(11,973,577)

(3,962,225)

Cash flows from financing activities



Proceeds from borrowings

 79,094,106

 43,447,215

Repayment of borrowings

(111,419,218)

(20,618,379)

Interest paid

(3,238,680)

(3,011,301)

Change in cash on bank deposits

 33,286,758

 16,108,072

Proceeds from sales of bonds with maturity over three months*

 -

 140,783

Loans given*

(3,500)

(1,250,617)

Loans repaid*

 527,164

(431,958)

Interest received*

 6,454,099

 4,686,213

Proceeds from government grants

 690,780

 581,096

Purchases of non-controlling interest

 -

(518)

Dividends paid to owners Ros Agro PLC

 -

(120)

Repayment of lease liabilities - principal

(50,492)

(511,339)

Other financial activities

 -

 711

Net cash from  financing activities

 5,341,017

 39,139,858

Net effect of exchange rate changes on cash and cash equivalents

 4,227,780

(18,995,338)

Net increase/ (decrease) in cash and cash equivalents

 30,171,537

 15,476,027

Cash and cash equivalents at the beginning of the period

 21,473,029

 46,462,179

Cash and cash equivalents at the end of the period

 51,644,566

 61,938,206




 

 

(*) 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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