ROS AGRO PLC 22 Maу 2023
ROS AGRO PLC financial results for 1Q 2023
22 May 2023 - Today ROS AGRO PLC (the Company), the holding company of Rusagro Group (Rusagro), a leading Russian diversified food producer with vertically integrated operations, has announced the financial results for the three months ended 31 March 2023.
1Q 2023 HIGHLIGHTS
- Sales amounted to RUB 47,395 million (US$ 651 million1), a decrease of RUB 14,111 million (-23%, US$ -63 million) compared to 1Q 2022;
- Adjusted EBITDA2 amounted to RUB 7,139 million (US$ 98 million), a decrease of RUB 9,050 million (-56% , US$ -90 million) compared to 1Q 2022;
- Adjusted EBITDA margin decreased to 15% in 1Q 2023 from 26% in 1Q 2022;
- Net profit for the period amounted to RUB 5,417 million (US$ 74 million), an increase of RUB 3,454 million (+176% , US$ +52 million);
- Net debt position3 as of 31 March 2023 amounted to RUB 83,585 million (US$ 1,084 million);
- Net Debt/Adjusted EBITDA (LTM4) as of 31 March 2023 was 2.32x.
Commenting on the results, Timur Lipatov, CEO of Rusagro, said:
"In 1Q 2023 sales of the Group decreased in all business segments except Meat, mainly due to a decrease in sales prices triggered by a drop in world prices and USD/RUB exchange rate from a high level in 1Q 2022, as well as the postponement of sales of agricultural products due to late harvesting.
Adjusted EBITDA declined in line with revenue across all business segments due to the pressure of lower selling prices. This drop was compensated by the growth in production volumes both in Primorie after the launch of the pork production cluster, and due to the efficiency increase in the Central region.
Despite the decline in adjusted EBITDA, Rusagro showed a 176% increase in net income and a significant decrease in net debt by 16%.''
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.
1
Key consolidated financial performance indicators
Three months ended | Variance | |||
in RUB million | 31 March | 31 March | Units | % |
2023 | 2022 | |||
Sales | 47,395 | 61,506 | (14,111) | (23) |
Gross profit 1 | 8,630 | 14,995 | (6,365) | (42) |
Gross margin, % | 18% | 24% | (6) pp | |
Adjusted EBITDA 1 | 7,139 | 16,189 | (9,050) | (56) |
Adjusted EBITDA margin, % | 15% | 26% | (11) pp | |
Net profit for the period 1,2 | 5,417 | 1,963 | 3,454 | 176 |
Net profit margin % | 11% | 3% | 8 pp |
- Several adjustments were made to the published key financial indicators for 1Q 2022:
- Gross profit for 1Q 2022 was increased by RUB 352 million, Net profit by RUB 282 million to reflect the distribution of depreciation expenses between the quarters of 2022 in Oil and Fat segment;
- Gross profit for 1Q 2022 was decreased by RUB 190 million to reflect the distribution of depreciation costs between lines of financial statements for Meat segment;
- Gross profit and adjusted EBITDA for 1Q 2022 were decreased by RUB 698 million, Net profit by RUB
559 million in order to reflect the distribution of costs of Far East project in Meat segment.
- 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.
2
Key financial performance indicators by segments
Three months ended | Variance | |||
in RUB million | 31 March | 31 March | Units | % |
2023 | 2022 | |||
Sales, incl. | 47,395 | 61,506 | (14,111) | (23) |
Sugar | 9,411 | 11,333 | (1,922) | (17) |
Meat | 10,725 | 9,258 | 1,467 | 16 |
Agriculture | 5,896 | 8,185 | (2,289) | (28) |
Oil and Fat | 23,357 | 35,111 | (11,754) | (33) |
Other | 464 | 208 | 256 | 123 |
Eliminations | (2,457) | (2,589) | 132 | 5 |
Gross profit, incl. | 8,630 | 14,995 | (6,365) | (42) |
Sugar | 2,815 | 5,552 | (2,736) | (49) |
Meat | 1,143 | 1,151 | (8) | (1) |
Agriculture | (774) | 1,736 | (2,510) | - |
Oil and Fat | 5,641 | 6,787 | (1,146) | (17) |
Other | 167 | (49) | 215 | - |
Eliminations | (362) | (183) | (179) | (98) |
Adjusted EBITDA, incl. | 7,139 | 16,189 | (9,050) | (56) |
Sugar | 2,010 | 4,679 | (2,668) | (57) |
Meat | 447 | 589 | (142) | (24) |
Agriculture | (116) | 4,173 | (4,290) | - |
Oil and Fat | 4,161 | 5,303 | (1,141) | (22) |
Other | (297) | (6) | (291) | (5,082) |
Eliminations | 934 | 1,451 | (517) | (36) |
Adjusted EBITDA margin, % | 15% | 26% | (11) pp | |
Sugar | 21% | 41% | (20) pp | |
Meat | 4% | 6% | (2) pp | |
Agriculture | (2%) | 51% | (53) pp | |
Oil and Fat | 18% | 15% | 3 pp |
3
SUGAR SEGMENT
In 1Q 2023 Sugar segment earned RUB 2,010 million of adjusted EBITDA (-57%y-o-y) with 21% margin (-20 pp y-o-y). The financial results of the Sugar Segment of 1Q 2023 compared to 1Q 2022 are presented in the table below:
Sugar segment 1Q 2023 Financial Results
Three months ended | Variance | |||
in RUB million | 31 March 2023 | 31 March 2022 | Units | % |
Sales | 9,411 | 11,333 | (1,922) | (17) |
Cost of sales | (6,595) | (5,781) | (814) | (14) |
Gross profit | 2,815 | 5,552 | (2,736) | (49) |
Gross profit margin | 30% | 49% | (19) pp | |
Distribution and selling expenses | (945) | (1,080) | 136 | 13 |
General and administrative expenses | (394) | (408) | 14 | 3 |
Other operating income/ (expenses), net | (3) | (206) | 203 | 99 |
incl. other adjustments to EBITDA (non-recurring | 22 | (216) | 238 | - |
items) | ||||
Operating profit | 1,473 | 3,857 | (2,384) | (62) |
Adjusted EBITDA | 2,010 | 4,679 | (2,668) | (57) |
Adjusted EBITDA margin | 21% | 41% | (20) pp |
In 1Q 2023 compared to 1Q 2022 Sales of Sugar segment decreased by 17% mainly due to the decrease in sugar sales volume by 17% down to 148 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.
Revenue from sale of beet pulp decreased by RUB 419 million on the back of lower sales prices, which was partially offset by the increase in sales volumes due to the extension of the sugar beet processing season to January and February 2023.
Revenue from sales of molasses, betaine, buckwheat and rice decreased by RUB 183 million.
Production and sales volume of sugar in 1Q 2023
Three months ended | Variance | |||
31 March | 31 March | Units | % | |
2023 | 2022 | |||
Sugar production volume, thousand tonnes | 69 | 56 | 13 | 23 |
Sales volume, | 148 | 177 | (29) | (17) |
thousand tonnes | ||||
Cost of sales in 1Q 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. Distribution and selling expenses in 1Q 2023 decreased mainly due to the decrease in sugar transportation costs as the result of lower sugar sales volumes.
Other operating expenses in 1Q 2023 decreased mainly due to the positive dynamics of operating exchange differences.
4
MEAT SEGMENT
In 1Q 2023 Meat segment earned RUB 447 million of adjusted EBITDA (-24%y-o-y) with 4% margin (-2 pp y-o-y). The financial results of the Meat Segment of 1Q 2023 compared to 1Q 2022 respectively are presented in the table below.
Meat segment 1Q 2023 Financial Results
Three months ended | Variance | |||
in RUB million | 31 March 2023 | 31 March 2022 | Units | % |
Sales | 10,725 | 9,258 | 1,467 | 16 |
Net gain/ (loss) on revaluation of biological assets and | 1,327 | 967 | 360 | 37 |
agricultural produce | ||||
Cost of sales | (10,909) | (9,075) | (1,834) | (20) |
Gross profit | 1,143 | 1,151 | (8) | (1) |
Gross profit margin | 11% | 12% | (1) pp | |
Gross profit excl. effect of biological assets and | (184) | 183 | (367) | - |
agricultural produce revaluation | ||||
Adjusted gross profit margin | -2% | 2% | (4) pp | |
Distribution and selling expenses | (315) | (430) | 115 | 27 |
General and administrative expenses | (601) | (447) | (154) | (34) |
Other operating income/ (expenses), net | 314 | 147 | 167 | 114 |
incl. Reimbursement of operating costs (government | 19 | 6 | 14 | 237 |
grants) | ||||
incl. Other adjustments to EBITDA (non-recurring | 98 | 89 | 10 | 11 |
items) | ||||
Operating profit | 541 | 420 | 121 | 29 |
Adjusted EBITDA | 447 | 589 | (142) | (24) |
Adjusted EBITDA margin | 4% | 6% | (2) pp |
Sales of the Meat segment increased by 16% in 1Q 2023 compared to the respective period of 2022. Sales volume increase was caused mainly 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 1Q 2023
Three months ended | Variance | |||
31 March 2023 | 31 March 2022 | Units | % | |
Pigs production, | 89 | 77 | 11 | 14 |
thousand tonnes in live weight | ||||
Sales volume, | 72 | 60 | 11 | 19 |
thousand tonnes | ||||
5
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Rusagro plc published this content on 22 May 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 May 2023 16:48:31 UTC.
