Ekosem-Agrar significantly enhances profitability in H1 2013
13 September 2013 Corporate News
- Milksales rises by 41% to EUR 22.8 million
- Earnings before interest and taxes climb by 54% to EUR 13.8 million
- Overall conditions on the Russian Agricultural market remain very positive
Walldorf, 13. September 2013 – Ekosem-Agrar GmbH, the German holding company of Russian milk producer Ekoniva Group, increased its profitability significantly in the first six months of 2013. Adjusted for special income from the acquisition of two agricultural businesses, earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by 47% to EUR 23.6 million. The adjusted operating result (EBIT) increased by 54% to EUR 13.8 million. The operating performance, which is an important indicator for an agricultural company and includes sales revenues as well as changes in inventories, biological assets and other operating income, reached EUR 74.8 million (+42%). Including special income, the operating performance amounted to EUR 78.8 million, while EBITDA and EBIT including special income totalled EUR 27.6 million and EUR 17.8 million, respectively. After interest and taxes the remaining net income for the period came in at EUR 7.1 million (EUR 3.1 million in adjusted terms). The solid business performance is also reflected in the latest rating assessment by Creditreform Rating AG, which has maintained its BB rating of the company and removed its previous qualification from the rating.
The positive performance is primarily attributable to the strong expansion of the milk business. Vegetable agricultural products generate significant revenues only in the second half of the year (H1 2013: EUR 6.5 million). Revenues from the sale of milk increased by 41% to EUR 22.8 million in the first half of the year. The growth in milk production is due not only to the larger dairy cow herd but also to the increased milk output per day as well as to higher prices. The first half of the year saw the milk output grow by 42% to approx. 59 litres, for which approx. 41 euro cents per litre were received. The milk output per day increased to an average 324 tons in the first six months, compared to 227 tons in the prior year period. On the half-year reporting date, the milk output stood at 345 tons. The strong growth is the result of the high investments in heifers, sheds and animal fodder made over the past years. The dairy cow herd has increased from 15,500 to 16,900 animals since 31 December 2012 alone. The Group’s total farmland was expanded by 10,000 hectares to 186,000 hectares in the first half of the year, of which 101,000 hectares were owned by the company as of the interim reporting date.
Good overall conditions for the expansion of the milk cow herd
“Russia’s agricultural sector and the undersupplied milk market, in particular, continue to offer excellent opportunities, which we are exploiting consistently,” said Stefan Dürr, Managing Director and majority shareholder of the Group. “We are the country’s largest milk producer and still hold only 1% of the market. This shows that the market is extremely fragmented and offers huge potential for growth. In the first half of the year, we acquired two more farming businesses, expanded our farmland and our livestock and continued to increase our efficiency. This is a strategy we want to continue.”
On the basis of the harvest to date, the company is satisfied with the 2013 season. Animal feed stocks have been increased in response to the expansion of the livestock. The grain harvest in the Czernochem region has again shown that land that has been managed by the company for several years generates continuously higher yields. “This efficiency potential shows that our profitability is set to improve steadily over the coming years,” said Wolfgang Bläsi, CFO of Ekosem-Agrar GmbH.
As far as livestock growth is concerned, the company aims to increase the number of cattle to over 43,000 and of dairy cows to approx. 19,000 by the end of 2013.
Key operating figures can also be found in the attached Pdf-version of this news release.