The turnover of Linas Agro Group in the first half

In the first six months of the financial year, the subsidiaries of the AB Linas Agro group, owner of companies in the agricultural and food industry, sold 1.9 million tons of production, 15% more than the last year. The Group’s consolidated revenue increased by 80% in the first half of the 2021/2022 financial year and amounted to €856 million. Consolidated earnings before interest, tax, depreciation and amortization (EBITDA) increased by 205% to 41 million euros.

The group of companies achieved an operating profit of 23 million euros, which is 351% more than the previous year. Gross profit amounted to 64 million euros, 222% more than last year. Pre-tax profit increased by 380% to 19 million euros. Net profit increased by 323% to 16 million euros.

“The decision to acquire Kauno Grūdai is already having a positive effect on the group’s finances, improving our group’s profitability ratios and reducing the seasonality of our operations. We are seeing an increase in returns, which was one of our goals – to increase shareholder value, return to shareholders,” commented Mažvydas Šileika, CFO of AB Linas Agro Group.

Consolidated group turnover for the second quarter amounted to 416 million euros, or 76% more than a year earlier (236 million euros). Second quarter gross profit increased from €7 million to €27 million, and operating profit increased from €0.2 million to €8.8 million. Net profit for the period amounted to €4.2 million, compared to a net loss of €0.1 million for the corresponding period of the previous year.

Total revenue for the Grains, Oilseeds and Feed segment increased by 47% during the reporting period to EUR 517 million, and operating loss amounted to EUR 0.4 million. euros, compared to a profit of 0.9 million euros for the corresponding period of the previous year. The Group purchased 1.5 million tonnes of grains and oilseeds, 32% less than the same period last year, of which 1 million tonnes were sold, 14% less than last year . No less than 448,000 tonnes of compound feed, premixes and raw materials were sold, ie 95% more.

“Trade in wheat, the Group’s main export product, has contracted due to lower yields and poor wheat quality. The crop was difficult to market because its quality indicators did not meet the desired parameters in the international market, which led to sales with price discounts. The high cost of raw materials led to a loss on wheat and rapeseed trading in the first half of the financial year,” Šileika said.

The Group’s turnover from goods and services for farmers increased by 92% to 186 million euros, and the operating result increased by 487% and almost reached 25 million euros. Sales of certified seeds increased by 108%, sales of phytosanitary products and micronutrients increased by 273%, volumes of fertilizers traded increased by 54%.

“We have seen strong growth in demand, not only due to the increase in winter crop area, but also due to farmers’ desire to avoid the inflation trap and hedge against contingencies in the context of the escalating geopolitical situation in the region,” said Mr. Šileika.

Compared to the same period last year, sales of agricultural machinery increased by 25%, sales of spare parts and services by 13%, and income from grain elevators and agricultural installation projects increased by 66%.

Agricultural business income from crop production decreased by 4%, that of milk – increased by 21% in total – increased by 2% to 21 million euros, however, the operating loss of 0, 9 million euros incurred compared to 1.2 million euros operating profit during the same period of the previous year.

“Due to the heat during the ripening of the cereals, we obtained 19% less harvest and 4% less milk. Excellent milk quality and higher milk purchase prices boosted our dairy revenues, but an increase in production costs resulted in a loss. The fourth quarter of the financial year, when companies receive subsidies from the EU, should help us out,” said Mr. Šileika.

Sales in the Food segment, which includes poultry and flour products, increased by 358% during the reporting period to EUR 162 million, and the operating loss was amounted to 0.2 million euros, against a loss of 0.1 million euros for the same period a year earlier. .

“Revenue growth is tied to the completion of the acquisition. Revenues from the poultry business alone increased 258%, although they would also have increased 13% without the acquisition. However, the poultry situation is very difficult in both countries, as all factors are unfavorable to the activity: exports have not recovered due to the ongoing COVID-19 pandemic; the cost of poultry farming has increased due to high grain prices; energy prices are at their highest; and the overproduction of chicken in Europe, and particularly in neighboring Poland, where VAT on food products has been reduced, is pushing selling prices below cost. The poultry business recorded losses in the first half of the year, but we expect these to recover following the general rise in prices in Europe. Other food productions were profitable and mitigated the losses of the food segment,” commented Mr. Šileika.

The acquisition of companies acting under the brand KG Group gave rise to new activities in the Group, which were allocated to the Other activities segment. These include the supply of pest control and hygiene products and services, the production and sale of pet food, the supply of veterinary pharmaceutical services and the wholesale and detail of veterinary drugs. Revenue from these activities amounted to 20 million euros and operating profit reached nearly 2 million euros.

AB Linas Agro Group is the largest agricultural and food production group in the Baltic countries, comprising 75 subsidiaries and three associates operating in 8 countries and employing 5,398 people. The group operates across the entire food production chain “from field to table”: the company’s subsidiaries produce, process and market agricultural and food products, and also supply goods and services to farmers.

PC:
AB Linas Agro Group Unaudited consolidated financial statements and interim activity report for the six-month period ended December 31, 2021

Mažvydas Šileika, CFO of AB Linas Agro Group
Crowd. +370 619 19 403
Email [email protected]

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