AGROTON PUBLIC LIMITED 1H 2011 FINANCIAL RESULTS
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Agroton Public Limited, a leading agricultural producer in eastern Ukraine, increased its sales revenue by a factor of 3.2 times compared to 1H 2010, to USD 63.4 million. The Group also increased net profit in the first half of 2011 by 21.8%, to USD 34.2 million, compared to the same period in 2010.
FINANCIAL RESULTS – REVIEW
Selected financial data (in USD thousands)
During the reporting period, the Group performed a revaluation of the fair value of its agricultural products at the reporting date. In accordance with IAS 41 "Agriculture", the Group's biological assets – comprising (i) current biological assets, being assets with a useful life of less than one year (such as crops under cultivation) and animals (such as cattle, pigs and poultry) in grow-out; and (ii) non-current biological assets, being assets with a useful life of over one year (such as milk-producing cattle and pigs for breeding) – are re-measured at each semi-annual reporting date at their fair value.
The gain or loss arising from the variation in fair value of the agricultural products, after deduction of the cost of sales, is incorporated as a separate line item in the Consolidated Statement of Comprehensive Income for the period in which the change occurred. The extent of such fair value gains and losses on biological assets in a given period is affected by various factors, including price movement.
In 1H 2011 crop sales revenue increased by 228.0% due to increases in average sunflower and wheat selling prices of 94.2% and 95.8%, respectively, and increases in sunflower and wheat volume sales of 747.2% and 32.0% (from 6,001 tonnes in 1H 2010 to 50,841 tonnes in 1H 2011 for sunflower, and from 41,366 tonnes in 1H 2010 to 54,610 tonnes in 1H 2011 for wheat).
Commenting on the results, Iurii Zhuravlov, Chief Executive Officer of Agroton Public Limited, said:
“The first half was successful. The semi-annual results are strong, and we will continue to drive the growth in the second half. We increased our storage capacities by 50,000 tonnes and successfully issued USD 50 million in notes at the London Stock Exchange. We are now considering expansion by 50,000 hectares before the end of the year.”
Notes:
(1) Total revenue is the sum of Sales revenue and Fair value change.
(2) Fair value change (IAS 41) is the gain from changes in fair value less cost to sell of biological assets and agricultural products, net
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