RNS Number : 1842Z
Ros Agro PLC
05 August 2024
 

 

 

5 August 2024

 

ROS AGRO PLC financial results for 6M and 2Q 2024

 

5 August 2024 - 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 second quarter and the six months ended 30 June 2024.

 

 

6M 2024 HIGHLIGHTS:

 

-     Sales amounted to RUB 139,043 million (US$ 1,533 million1), an increase of RUB 32,494 million (+30%) compared to 6M 2023;

-     Adjusted EBITDA2 amounted to RUB 13,802 million (US$ 152 million), a decrease of RUB 1,804 million (-12%) compared to 6M 2023;

-     Adjusted EBITDA margin decreased to 10% in 6M 2024 from 15% in 6M 2023;

-     Net profit for the period amounted to RUB 3,485 million (US$ 38 million), a decrease of RUB 9,70 million (-74%) compared to 6M 2023;

-     Net debt position3 as of 30 June 2024 amounted to RUB 61,23 million (US$ 719 million);

-     Net Debt/Adjusted EBITDA (LTM4) as of 30 June 2024 was 1.13x.

 

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

 

"In 6M 2024 Rusagro's revenue increased mainly following the growth in production of crude oil and meal in Oil and Fat business and due to consolidation of NMGK Group results starting from the second half of 2023. The dynamics of pork market prices positively impacted the revenue. The decrease in Sugar segment revenue was the result of lower sales volumes due to lower carryover stocks and reserving volumes of sugar for future deliveries under long-term and high margin contracts. The decrease in Agriculture segment revenue was due to a prolonged harvest in 2022 caused by adverse weather conditions, which shifted sales to the first half of 2023.

Oil and Fat and Meat business demonstrated cumulative increase of adjusted EBITDA by 92% following market conditions and growth in overall business efficiency. In Sugar business we saw the decrease in adjusted EBITDA in the period due to the sales of sugar produced in the winter months at a higher cost of sales (due to high sugar prices in the autumn of 2023 as per accounting policy). Agricultural business demonstrated the decrease of adjusted EBITDA following the differences of carryover stocks in 2023 due to prolonged harvesting.

Rusagro continues to demonstrate positive dynamics in net debt which decreased by 7%. The ratio of net debt to adjusted EBITDA has also improved. Net profit decrease is mainly due to the dynamics of exchange differences."

 

Key consolidated financial performance indicators

in RUB million

Six months ended

Variance

Three months ended

Variance

30 June 2024

30 June 2023

Units

%

30 June 2024

30 June 2023

Units

%

Sales

 139,043

 106,549

 32,494

 30

 70,734

 59,154

 11,580

 20

Gross profit

 28,752

 20,948

 7,804

 37

 14,928

 12,317

 2,611

 21

Gross margin, %

21%

20%

1 pp

 

21%

21%

0 pp

 

Adjusted EBITDA

 13,802

 15,606

(1,804)

(12)

 6,499

 8,466

(1,968)

(23)

Adjusted EBITDA margin, %

10%

15%

(5) pp

 

9%

14%

(5) pp

 

Net profit for the
period 1

 3,485

 13,191

(9,706)

(74)

 1,745

 7,774

(6,029)

(78)

Net profit margin %

3%

12%

(9) pp

 

2%

13%

(11) 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.

 

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

Six months ended

Variance

Three months ended

Variance

30 June 2024

30 June 2023

Units

%

30 June 2024

30 June 2023

Units

%

 









Sales, incl.

139,043

106,549

32,494

30

70,734

59,154

11,580

20

Sugar

21,378

23,974

(2,595)

(11)

8,949

14,563

(5,613)

(39)

Meat

22,615

22,649

(33)

(0)

12,009

11,923

86

1

Agriculture

8,616

11,559

(2,943)

(25)

4,310

5,663

(1,353)

(24)

Oil and Fat

90,107

51,399

38,708

75

46,995

28,042

18,953

68

Other

1,205

1,005

201

20

701

541

160

30

Eliminations

(4,879)

(4,036)

(843)

(21)

(2,230)

(1,578)

(651)

(41)










Gross profit, incl.

28,752

20,948

7,804

37

14,928

12,317

2,611

21

Sugar

3,081

8,114

(5,033)

(62)

1,490

5,298

(3,808)

(72)

Meat

3,096

2,547

549

22

1,084

1,403

(319)

(23)

Agriculture

3,866

218

3,648

1,673

3,948

992

2,957

298

Oil and Fat

19,572

11,043

8,529

77

10,121

5,402

4,719

87

Other

146

435

(289)

(66)

86

269

(183)

(68)

Eliminations

(1,010)

(1,409)

399

28

(1,801)

(1,047)

(755)

(72)










Adjusted EBITDA, incl.

13,802

15,606

(1,804)

(12)

6,499

8,466

(1,968)

(23)

Sugar

1,126

6,714

(5,588)

(83)

342

4,704

(4,362)

(93)

Meat

2,565

734

1,831

250

1,412

287

1,125

392

Agriculture

(2,192)

1,116

(3,308)

-

(401)

1,233

(1,633)

-

Oil and Fat

10,719

6,192

4,528

73

5,817

2,030

3,787

186

Other

(1,383)

(655)

(727)

(111)

(783)

(358)

(426)

(119)

Eliminations

2,966

1,504

1,462

97

112

570

(458)

(80)










Adjusted EBITDA margin, %

10%

15%

(5) pp

 

9%

14%

(5) pp

 

Sugar

5%

28%

(23) pp

 

4%

32%

(28) pp

 

Meat

11%

3%

8 pp

 

12%

2%

9 pp

 

Agriculture

(25%)

10%

(35) pp

 

(9%)

22%

(31) pp

 

Oil and Fat

12%

12%

(0) pp

 

12%

7%

5 pp

 

 

SUGAR SEGMENT

In 6M 2024 Sugar segment adjusted EBITDA comprised RUB 1,126 million (-83% y-o-y) with 5% margin (-23 pp y-o-y).

The financial results of the Sugar segment of 6M 2024 and 2Q 2024 compared to the respective periods of 2023 are presented in the table below:

Sugar segment 6M and 2Q 2024 Financial Results






in RUB million

Six months ended

Variance

Three months ended

Variance

30 June 2024

30 June 2023

Units

%

30 June 2024

30 June 2023

Units

%

Sales

21,378

23,974

(2,595)

(11)

8,949

14,563

(5,613)

(39)

Cost of sales

(18,298)

(15,860)

(2,438)

(15)

(7,459)

(9,265)

1,805

19

Gross profit

3,081

8,114

(5,033)

(62)

1,490

5,298

(3,808)

(72)

Gross profit margin

14%

34%

(20) pp

 

17%

36%

(19) pp

 

Distribution and selling expenses

(2,232)

(1,876)

(356)

(19)

(1,271)

(931)

(340)

(36)

General and administrative expenses

(951)

(768)

(183)

(24)

(446)

(373)

(72)

(19)

Other operating income/ (expenses), net

(8)

221

(230)

-

39

224

(185)

(83)

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

(9)

62

(72)

-

(30)

41

(71)

-

Operating profit

(111)

5,691

(5,802)

-

(188)

4,218

(4,405)

-

 









Adjusted EBITDA

1,126

6,714

(5,588)

(83)

342

4,704

(4,362)

(93)

Adjusted EBITDA margin

5%

28%

(23) pp

 

4%

32%

(28) pp

 

In 2Q 2024 compared to the respective period of 2023 Sales of Sugar segment decreased by 39% mainly due to the decrease of sugar sales volume by 50% to 117 thousand tonnes. Sales volumes reduced in 2Q 2024 due to lower carryover stocks and reserving volumes of sugar for future deliveries under long-term and high margin contracts.

In 6M 2024 compared to the respective period of 2023 Sales of Sugar segment decreased by 11% mainly due to the decrease of sugar sales volume by 20%.

 

Production and sales volume of sugar in 6M and 2Q 2024






Six months ended

Variance

Three months ended

Variance


30 June 2024

30 June 2023

Units

%

30 June 2024

30 June 2023

Units

%

Sugar production volume,
thousand tonnes

183

104

79

76

54

35

19

54

Sales volume,
thousand tonnes

304

381

(77)

(20)

117

233

(116)

(50)

The Сost of sales in 6M 2024 increased compared to the respective period in 2023 following an increase in prices for sugar beet and increase in processing and delivery costs.

The Cost of sales in 2Q 2024 compared to the respective period in 2023 decreased mainly due to the decrease of sugar sales volumes.



MEAT SEGMENT

In 6M 2024 Meat segment earned RUB 2,565 million of adjusted EBITDA (+250% y-o-y) with 11% margin (+8 pp y-o-y).

The financial results of the Meat segment of 6M 2024 and 2Q 2024 compared to 6M 2023 and 2Q 2023 are presented in the table below:

Meat segment 6M and 2Q 2024 Financial Results






in RUB million

Six months ended

Variance

Three months ended

Variance

30 June 2024

30 June 2023

Units

%

30 June 2024

30 June 2023

Units

%

Sales

22,615

22,649

(33)

(0)

12,009

11,923

86

1

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

17

2,272

(2,255)

(99)

(939)

945

(1,884)

-

Cost of sales

(19,536)

(22,375)

2,839

13

(9,986)

(11,465)

1,479

13

Gross profit

3,096

2,547

549

22

1,084

1,403

(319)

(23)

Gross profit margin

14%

11%

3 pp

 

9%

12%

(3) pp

 

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

3,079

273

2,806

1,027

2,023

458

1,565

342

Adjusted gross profit margin

14%

1%

13 pp

 

17%

4%

13 pp

 

Distribution and selling expenses

(1,019)

(766)

(253)

(33)

(587)

(451)

(136)

(30)

General and administrative expenses

(1,146)

(1,216)

70

6

(576)

(616)

40

7

Other operating income/ (expenses), net

124

182

(57)

(32)

6

(133)

138

-

incl. Reimbursement of operating costs (government grants)

3

23

(20)

(86)

3

4

(1)

(16)

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

83

215

(132)

(61)

89

117

(28)

(24)

Operating profit

1,055

746

309

41

(73)

204

(277)

-

 









Adjusted EBITDA

2,565

734

1,831

250

1,412

287

1,125

392

Adjusted EBITDA margin

11%

3%

8 pp

 

12%

2%

9 pp

 

 

Sales of the Meat segment in 6M 2024 and 2Q 2024 stay at the same level as in 6M 2023 and 2Q 2023. The increase in prices for both meat products and livestock pigs was offset by a decrease in sales volumes following lower production volumes.

 


Production and sales volume of pork products in 6M and 2Q 2024




Six months ended

Variance

Three months ended

Variance


30 June 2024

30 June 2023

Units

%

30 June 2024

30 June 2023

Units

%

Pigs production,
thousand tonnes in live weight

153

175

(22)

(13)

79

86

(7)

(8)

Sales volume,
thousand tonnes

121

146

(25)

(17)

63

74

(11)

(15)

 

Cost of sales in 2Q 2024 and 6M 2024 decreased by 13% compared to the respective periods of 2023 following lower sales volumes.

Net loss on revaluation of biological assets and agricultural produce in 2Q 2024 resulted from the decrease in fair value of consumable livestock pigs and at the same time the increase of costs for consumable livestock pigs increased by the reporting date compared to the respective figures at the beginning of 2Q 2024. The increase of the fair value in 1Q 2024 was partly compensated by its decrease in 2Q 2024 which affected Net gain on revaluation of biological assets and agricultural produce in 6M 2024.


AGRICULTURAL SEGMENT

As at 30 June 2024 Rusagro's area of controlled land stands at 696 thousand hectares
(31 December 2023: 685 thousand hectares).

In 6M 2024 Agriculture segment amounted to RUB -2,192 million of adjusted EBITDA (in comparison with RUB 1,116 million in 6M 2023) with -25% margin (in comparison with 10% in 6M 2023).

The financial results of the Agricultural segment of 6M and 2Q 2024 compared to 6M and 2Q 2023 respectively are presented below.

Agriculture segment 6M and 2Q 2024 Financial Results





 

in RUB million

Six months ended

Variance

Three months ended

Variance

30 June 2024

30 June 2023

Units

%

30 June 2024

30 June 2023

Units

%

Sales

8,616

11,559

(2,943)

(25)

4,310

5,663

(1,353)

(24)

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

2,964

(2,092)

5,056

-

3,643

(677)

4,320

-

Cost of sales

(7,714)

(9,249)

1,535

17

(4,005)

(3,994)

(11)

(0)

Gross profit

3,866

218

3,648

1,673

3,948

992

2,957

298

Gross profit margin

45%

2%

43 pp

 

92%

18%

74 pp

 

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

902

2,310

(1,408)

(61)

305

1,669

(1,364)

(82)

Adjusted gross profit margin

10%

20%

(10) pp

 

7%

29%

(22) pp

 

Distribution and selling expenses

(2,373)

(2,068)

(305)

(15)

(890)

(1,019)

130

13

General and administrative expenses

(889)

(780)

(109)

(14)

(409)

(428)

19

4

Other operating income/ (expenses), net

(203)

457

(659)

-

268

361

(92)

(26)

incl. Reimbursement of operating costs (government grants)

434

457

(23)

(5)

210

425

(216)

(51)

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

(102)

(125)

23

18

(155)

(145)

(10)

(7)

Operating profit

401

(2,174)

2,575

-

2,918

(95)

3,013

-

 









Adjusted EBITDA

(2,192)

1,116

(3,308)

-

(401)

1,233

(1,633)

-

Adjusted EBITDA margin

-25%

10%

(35) pp

 

(9%)

22%

(31) pp

 













 

In 6M and 2Q 2024 compared to 6M and 2Q 2023 Sales of the Agriculture segment decreased by 25% and 24% correspondingly mainly due to a decrease in sales volumes for all crops except for wheat (for 2Q 2024) and barley (for 2Q and 6M 2024).

 

The decrease in sales of soybean and sunflower in 6M 2024 compared to 6M 2023 is due to the difference in stocks at the beginning of the reporting periods caused by adverse weather conditions in 4Q 2022 and prolonged harvesting in 1Q 2023.

There were no sales of sugar beet during 6M 2024. Sugar beet sales in 6M 2023 were the result of the shift of harvesting to 1Q 2023 due to adverse weather conditions in 4Q 2022.

The dynamics of wheat sales in 6M 2024 compared to the same period in 2023 is due to higher sales in 1Q 2024 in order to release the storage for the new year's harvest.

Sales volumes of crops in 6M and 2Q 2024






Thousand tonnes

Six months ended

Variance

Three months ended

Variance

 

30 June 2024

30 June 2023

Units

%

30 June 2024

30 June 2023

Units

%

 

wheat

278

194

84

43

123

135

(12)

(9)

 

soybean

85

180

(96)

(53)

39

94

(55)

(59)

 

corn

72

92

(20)

(22)

53

63

(10)

(16)

 

barley

28

-

28

100

15

-

15

100

 

sunflower seeds

19

56

(37)

(66)

14

16

(2)

(11)

 

sugar beet

-

494

(494)

(100)

-

-

-

-

 
















 

The main reason for the decrease in Cost of sales is the decrease in sales volumes.

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.

Net gain in 6M 2024 and 2Q 2024 was caused by the revaluation of growing crops during the positive dynamics of market prices. Net loss in 6M 2023 and 2Q 2023 resulted from the realization of gain on revaluation of agricultural produce to fair value less costs to sell recognized in 2022.

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 1H 2024 Oil and Fat segment earned RUB 10,719 million of adjusted EBITDA (+73 %
y-o-y) with 12% margin (+0% y-o-y).

The financial results of the Oil and Fat segment of 6M 2024 and 2Q 2024 compared to 6M 2023 and 2Q 2023 are presented below.

 

Oil and Fat segment 6M and 2Q 2024 Financial Results




in RUB million

Six months ended

Variance

Three months ended

Variance

30 June 2024

30 June 2023

Units

%

30 June 2024

30 June 2023

Units

%

Sales

90,107

51,399

38,708

75

46,995

28,042

18,953

68

Cost of sales

(70,535)

(40,356)

(30,179)

(75)

(36,874)

(22,640)

(14,234)

(63)

Gross profit

19,572

11,043

8,529

77

10,121

5,402

4,719

87

Gross profit margin

22%

21%

1 pp

 

22%

19%

3 pp

 

Distribution and selling expenses

(9,622)

(4,078)

(5,544)

(136)

(4,885)

(2.172)

(2,713)

(125)

General and administrative expenses

(2,309)

(1,917)

(393)

(20)

(1,055)

(1,096)

42

4

Other operating income/ (expenses), net

(1,051)

(1,950)

899

46

(1,147)

(1,372)

225

16

incl. Reimbursement of operating costs (government grants)

97

126

(29)

(23)

97

125

(27)

(22)

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

(935)

(805)

(130)

(16)

(1,150)

(103)

(1,048)

(1,020)

Operating profit

6,589

3,098

3,491

113

3,034

762

2,272

298

 









Adjusted EBITDA

10,719

6,192

4,528

73

5,817

2,030

3,787

186

12%

12%

(0) pp

 

12%

7%

5 pp

 

 

In 6M 2024 and 2Q 2024 Sales of Oil and Fat segment increased in comparison to 6M 2023 and 2Q 2023 mainly due to the consolidation of NMGK and also the increase in sales volumes of bulk oil and meal after the completion of modernization of oil extraction plant in Balakovo, which led to growth in production capacity and volumes, and increase in accident free operation time at other production sites.

 

Sales volumes of oil and fat and dairy products in 6M and 2Q 2024



Thousand tonnes

Six months ended

Variance

Three months ended

Variance

30 June 2024

30 June 2023

Units

%

30 June 2024

30 June 2023

Units

%

meal

483

257

225

88

219

124

95

76

crude oil

368

156

211

135

208

102

106

103

industrial fats

172

151

21

14

78

75

3

4

dry whey mixes

7

6

2

27

4

3

1

24

consumer oil&fat products

235

138

97

70

118

73

45

62

consumer dairy products

7

8

(0)

(6)

5

4

0

3

The growth of Cost of sales and Distribution and selling expenses in 6M 2024 and 2Q 2024 compared to the same periods of the previous year is mainly due to the consolidation of NMGK and the increase in sales volumes.

 

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 2024

 30 June 2023

Units

%

 30 June 2024

 30 June 2023

Units

%

Net cash from operating activities, incl.

 16,890

 32,576

(15,686)

(48)

 6,642

 16,572

(9,930)

(60)

Operating cash flow before working capital changes

 14,721

 15,678

(957)

(6)

 6,315

 8,686

(2,371)

(27)

Working capital changes

 4,823

 17,509

(12,686)

(72)

 1,400

 8,206

(6,805)

(83)

Net cash from investing activities, incl.

(11,038)

(11,974)

 935

 8

(4,717)

(9,684)

 4,967

 51

Purchases of property, plant and equipment and inventories intended for construction

(10,892)

(5,193)

(5,699)

(110)

(4,621)

(3,103)

(1,518)

(49)

Net cash from financing activities

(24,067)

 5,341

(29,408)

 -

(10,448)

 12,070

(22,517)

 -

Net effect of exchange rate changes on cash and cash equivalents

(245)

 4,228

(4,473)

 -

(146)

 2,295

(2,441)

 -

Net (decrease) / increase in cash and cash equivalents

(18,460)

 30,172

(48,632)

 -

(8,668)

 21,253

(29,921)

 -

 

(*) See Appendix 4

 

Debt position and liquidity management





in RUB million

30 June 2024

31 December 2023

Variance

Units

%

Gross debt

111,043

127,533

(16,490)

(13)

Short-term borrowings

45,510

68,035

(22,525)

(33)

Long-term borrowings

65,533

59,498

6,035

10

Cash and cash equivalents, bank deposits and bonds

(49,420)

(61,057)

11,637

19

Short-term cash, deposits and bonds

(15,449)

(27,086)

11,637

43

Long-term cash, deposits and bonds

(33,971)

(33,971)

(0)

(0)

Net debt

61,623

66,477

(4,854)

(7)

Short-term borrowings, net

30,061

40,949

(10,888)

(27)

Long-term borrowings, net

31,562

25,527

6,035

24

Adjusted EBITDA (LTM4)

54,756

56,560

(1,804)

(3)

Net debt/ Adjusted EBITDA (LTM)

1.13

1.18

(0.05)

-

 

Net finance income / (expense):

 






in RUB million

Six months ended

Variance

Three months ended

Variance

30 June 2024

30 June 2023

Units

%

30 June 2024

30 June 2023

Units

%

Net interest expense

(3,310)

(3,693)

 383

 10

(1,890)

(1,768)

(122)

(7)

Gross interest expense

(9,119)

(9,263)

 145

 2

(5,723)

(4,620)

(1,102)

(24)

Reimbursement of interest expense

 5,808

 5,570

 238

 4

 3,833

 2,852

 981

 34

Interest income

 4,337

 4,954

(617)

(12)

 2,067

 2,512

(445)

(18)

Other financial expenses, net

(1,450)

 6,179

(7,629)

 -

(1,417)

 3,197

(4,614)

 -

Net foreign exchange gains / (losses)

(995)

 6,484

(7,479)

 -

(984)

 3,385

(4,370)

 -

Other financial income/ (expenses), net

(455)

(305)

(150)

(49)

(433)

(188)

(244)

(130)

Total net finance income / (expense)

(423)

 7,439

(7,862)

 -

(1,239)

 3,941

(5,181)

 -

 

Net debt decreased at 30 June 2024 compared at 31 December 2023 by 7%.

In 6M 2024 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 6M 2024 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 6M 2023 in the sum of RUB 7,439 million changed to net finance expense in the amount of RUB 423 million mainly as the result of negative 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 689 thousand hectares of land under control located in the highly fertile Black Earth regions of Russia (in the Belgorod, Tambov, Voronezh, Kursk, Saratov, Tula and 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, barley and corn, sunflower seeds and soybeans. These products are partially consumed by the Sugar, 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 and mayonnaise 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% and control over NMGK Group in 2023. NMGK Group owns an oil and fat plant in Nizhny Novgorod, a fat plant in Samara, 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", Slivochnik, spread "Kremlevskoe", coconut oil "Delicato", soap "Moy malysh" and "Retsepty chistoty".

 

Sugar:

Rusagro is one of the leading Russian sugar producers (№2 in Russia and №1 on cube white sugar market), producing sugar from sugar beet at nine production sites in four regions. Group produces white and brown sugar sold under the brands Russkii Sakhar, Chaikofsky, Mon 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 №2 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).

 

LIVE BROADCAST

Rusagro management is organizing a live broadcast on Company's 6M and 2Q 2024 financial results for investors and analysts.

Details:

Date:               5 August 2024

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

Subject:           ROS AGRO PLC 6M and 2Q 2024 IFRS Financial results

 

https://www.youtube.com/live/hrhZnbhVFzU

 

Simultaneous translation for English-speaking participants will be available at the link below:

 

https://us06web.zoom.us/j/87521084078?pwd=mrX8au9Z2V9PKJPaCJxea6bpSoP7VE.1

 

 

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 2024 (in RUB thousand)

 


Six months ended

Three months ended

 

30 June

30 June

 

2024

2023

2024

2023

 





Sales

139,042,969

106,549,362

70,734,043

59,153,906

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

(335,965)

(965,675)

1,633,517

(419,128)

Cost of sales

(109,955,503)

(84,635,964)

(57,439,265)

(46,417,378)

Gross profit

28,751,501

20,947,723

14,928,295

12,317,400

 





Distribution and selling expenses

(14,123,413)

(7,354,540)

(6,716,674)

(3,774,048)

General and administrative expenses

(5,822,658)

(4,862,514)

(2,923,363)

(2,682,800)

Other operating income/(expenses), net

(3,169,761)

278,489

(1,947,430)

(512,774)

Operating profit

5,635,669

9,009,158

3,340,828

5,347,778

 





Interest expense

(3,310,064)

(3,693,364)

(1,889,884)

(1,768,118)

Interest income

4,337,267

4,953,569

2,067,458

2,512,334

Other financial income/ (expenses), net

(1,450,405)

6,178,811

(1,417,018)

3,196,917

Profit / (loss) before taxation

5,212,467

16,448,174

2,101,384

9,288,911

 





Income tax expense

(1,726,970)

(3,256,873)

(355,915)

(1,514,559)

Profit for the period

3,485,497

13,191,301

1,745,469

7,774,352

 





Other comprehensive income:

 




Total comprehensive income/ (loss) for the period

 3,485,497

 13,191,301

 1,745,469

 7,774,352

 





Profit / (loss) is attributable to:

 




Owners of ROS AGRO PLC

 1,222,407

 13,194,400

 696,416

 7,770,659

Non-controlling interest

 2,263,090

(3,099)

 1,049,053

 3,693

Profit / (loss) for the period

 3,485,497

 13,191,301

 1,745,469

 7,774,352

 





Total comprehensive income/ (loss) is attributable to:

 



Owners of ROS AGRO PLC

 1,222,407

 13,194,400

 696,416

 7,770,659

Non-controlling interest

 2,263,090

(3,099)

 1,049,053

 3,693

Total comprehensive income/ (loss) for the period

 3,485,497

 13,191,301

 1,745,469

 7,774,352

 





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

45.43

490.38

25.88

288.80

Appendix 2. Segment information for the Six months ended 30 June 2024 (in RUB thousand)

 

6М 2024

Sugar

Meat

Agriculture

Oil and Fat

Other

Eliminations

Total

Sales

 21,378,288

 22,615,448

 8,615,958

 90,107,175

 1,205,311

(4,879,211)

 139,042,969

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

 -

 16,992

 2,964,029

 -

 -

(3,316,986)

(335,965)

Cost of sales

(18,297,653)

(19,536,327)

(7,713,792)

(70,535,188)

(1,059,125)

 7,186,582

(109,955,503)

incl. Depreciation

(1,196,354)

(1,574,565)

(189,421)

(2,557,605)

(12,141)

(20,439)

(5,550,525)

Gross profit / (loss)

 3,080,635

 3,096,113

 3,866,195

 19,571,987

(1,009,615)

 28,751,501

Distribution and Selling, General and administrative expenses

(3,183,154)

(2,164,851)

(3,262,725)

(11,931,411)

(1,344,427)

 1,940,497

(19,946,071)

incl. Depreciation

(31,558)

(35,066)

(79,238)

(637,249)

(31,279)

 20,439

(793,951)

Other operating income/(expenses), net

(8,393)

 124,136

(202,556)

(1,051,455)

 26,404,115

(28,435,608)

(3,169,761)

incl. Reimbursement of operating costs (government grants)

 792

 3,340

 434,032

 97,412

 -

 -

 535,576

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

(9,187)

 82,814

(102,288)

(935,434)

 26,632,416

(27,153,868)

(1,485,547)

Operating profit / (loss)

(110,912)

 1,055,398

 400,914

 6,589,121

 25,205,874

(27,504,726)

 5,635,669

Adjustments:

 




0

0

0

Depreciation included in Operating profit

 1,227,912

 1,609,631

 268,659

 3,194,854

 43,420

 -

 6,344,476

Other adjustments to EBITDA (non-recurring items)

 9,187

(82,814)

 102,288

 935,434

(26,632,416)

 27,153,868

 1,485,547

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

 -

(16,992)

(2,964,029)

 -

 -

 3,316,986

 335,965

Adjusted EBITDA*

 1,126,187

 2,565,223

(2,192,168)

 10,719,409

(1,383,122)

 2,966,128

 13,801,657

 

 

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

 

6М 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)

(9,248,748)

(40,356,197)

(569,399)

 3,772,776

(84,635,964)

incl. Depreciation

(1,052,138)

(2,413,367)

(959,561)

(1,851,417)

(8,811)

(19,050)

(6,304,344)

Gross profit / (loss)

 8,113,637

 2,546,701

 218,018

 11,042,825

 435,301

(1,408,759)

 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)

(71,487)

 19,050

(699,057)

Other operating income/(expenses), net

 221,266

 181,526

 456,648

(1,950,089)

 1,841,712

(472,574)

 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

(125,300)

(804,995)

 1,961,579

 63,722

 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

 80,298

 -

 7,003,401

Other adjustments to EBITDA (non-recurring items)

(62,433)

(214,983)

 125,300

 804,995

(1,961,579)

(63,722)

(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

 1,116,281

 6,191,732

(654,679)

 1,504,101

 15,605,812

 

 

* Non-IFRS measure

Appendix 3. Consolidated statement of financial position as at 30 June 2024
(in RUB thousand)

 

 


30 June 2024

31 December 2023

ASSETS

 


Current assets

 


Cash and cash equivalents

7,476,436

25,936,781

Short-term investments

9,460,016

2,288,852

Trade and other receivables

49,671,467

47,861,374

Prepayments

10,116,502

10,814,811

Current income tax receivable

124,322

132,186

Other taxes receivable

7,712,845

9,006,784

Inventories and short-term biological assets

95,882,065

100,617,833

Other current assets

876,076

2,718,720

Total current assets

181,319,729

199,377,341

Non-current assets

 


Property, plant and equipment

145,486,196

141,897,092

Inventories intended for construction

501,337

465,830

Right-of-use assets

6,663,396

6,392,885

Goodwill

3,840,150

3,840,150

Advances paid for non-current assets

3,872,657

2,867,735

Long-term biological assets

3,083,232

2,736,644

Long-term investments and receivables

42,527,215

42,527,657

Investments in associates

562,323

562,323

Deferred income tax assets

3,871,162

2,532,975

Other intangible assets

7,547,262

7,765,853

Total non-current assets

217,954,930

211,589,144

Total assets

399,274,659

410,966,485

 

Appendix 3 (continued). Consolidated statement of financial position as at 30 June 2024
(in RUB thousand)

 

 


30 June 2024

31 December 2023

LIABILITIES and EQUITY

 


Current liabilities

 


Short-term borrowings

45,509,578

68,034,977

Lease liabilities

1,089,553

1,098,135

Trade and other payables

34,705,537

39,452,813

Provisions

153,354

123,212

Current income tax payable

235,210

555,913

Other taxes payable

3,021,856

5,458,529

Total current liabilities

84,715,088

114,723,579

Non-current liabilities

 


Long-term borrowings

65,532,545

59,498,119

Government grants

14,033,969

12,860,211

Lease liabilities

5,102,632

4,325,136

Deferred income tax liability

3,547,799

2,502,074

Total non-current liabilities

88,216,945

79,185,540

Total liabilities

172,932,033

193,909,119

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

174,598,911

173,344,692

Equity attributable to owners of ROS AGRO PLC

202,448,229

201,194,010

Non-controlling interest

23,894,397

15,863,356

Total equity

226,342,626

217,057,366

Total liabilities and equity

399,274,659

410,966,485

 



Appendix 4. Consolidated statement of cash flows for the Six months ended 30 June 2024 (in RUB thousand) - NOT IFRS PRESENTATION (*)


Six months ended

 

30 June 2024

30 June 2023

Cash flows from operating activities

 


Profit/(loss) before income tax

 5,212,467

 16,448,174

Adjustments for:

 


Depreciation and amortization

 6,344,476

 7,003,399

Interest expense

 9,118,509

 9,264,000

Government grants

(5,999,828)

(6,536,472)

Interest income

(4,337,267)

(4,954,001)

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

 23,000

(116,880)

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

 335,965

 965,675

Change in provision for impairment of loans issued

(69)

(123)

Interest expense on leases

 355,458

 133,630

Change in provision for net realisable value of inventory

 955,630

 591,994

Change in provision for impairment of receivables and prepayments

(70,294)

 1,605,292

Foreign exchange (gain) / loss, net

 2,123,761

(8,171,930)

Lost / (reversal of) harvest write-off

 454,543

 -

Settlement of loans and accounts receivable previously written-off

(1)

(31,379)

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

 8,630

 29,613

Change in other provisions

 30,142

 59,549

Dividend income

 -

(345,499)

Loss on disposal of other assets

 -

 456

Loss on disposal of other assets

 27,007

 -

Gain on SolPro loans redemption

 -

(260,587)

Other non-cash and non-operating expenses, net

 138,421

(7,275)

Operating cash flow before working capital changes

 14,720,550

 15,677,636

Change in trade and other receivables and prepayments

(2,590,982)

 2,727,560

Change in other taxes receivable

 732,233

 739,260

Change in inventories and short-term biological assets

 4,414,931

(364,691)

Change in trade and other payables

 2,016,660

 15,358,946

Change in other taxes payable

(1,676,353)

(951,606)

Change on other current assets

 1,926,698

 -

Cash generated from operations

 19,543,737

 33,187,105

Income tax paid

(2,653,290)

(610,788)

Net cash from operating activities

 16,890,447

 32,576,317

 

 

Appendix 4. Consolidated statement of cash flows for the Six months ended 30 June 2024 (in RUB thousand) - NOT IFRS PRESENTATION (*)

 


Six months ended

 

30 June 2024

30 June 2023

Cash flows from investing activities

 


Purchases of property, plant and equipment

(10,794,669)

(5,058,367)

Purchases of other intangible assets

(282,795)

(451,098)

Purchases of land lease rights

(7,560)

(15,486)

Proceeds from sales of property, plant and equipment

 71,822

 12,165

Purchases of inventories intended for construction

(97,110)

(134,198)

Purchases of associates

 -

(33,000)

Investments in subsidiaries, net of cash acquired

 -

(6,625,625)

Dividends received

 -

 345,499

Proceeds from sales of other investments

 -

 13,205

Other investing activities

 72,024

(26,672)

Net cash from investing activities

(11,038,288)

(11,973,577)

Cash flows from financing activities

 


Proceeds from borrowings

 44,737,549

 79,094,106

Repayment of borrowings

(62,343,855)

(111,419,218)

Interest paid

(3,053,452)

(3,238,680)

Change in cash on bank deposits

(7,750,908)

 33,286,758

Loans given*

(9)

(3,500)

Loans repaid*

 166

 527,164

Interest received*

 4,240,819

 6,454,099

Proceeds from government grants

 783,933

 690,780

Purchases of non-controlling interest

(5)

 -

Repayment of lease libilities - principal

(681,353)

(50,492)

Net cash from  financing activities

(24,067,115)

 5,341,017

Net effect of exchange rate changes on cash and cash equivalents

(245,389)

 4,227,780

Net increase/ (decrease) in cash and cash equivalents

(18,460,345)

 30,171,537

Cash and cash equivalents at the beginning of the period

 25,936,781

 21,473,029

Cash and cash equivalents at the end of the period

 7,476,436

 51,644,566

 


(*) 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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