Linas Agro Group's revenue for the first half of the 2021/2022 financial year grew by 80%, net profit by 323%During the first six months of the financial year, the subsidiaries of AB Linas Agro Group, an owner of agricultural and food industry companies, sold 1.9 million tons of production or 15% more than in the previous year. Consolidated revenue of the Group grew by 80% in H1 of FY 2021/2022 and amounted to EUR 856 million. Consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by 205% to EUR 41 million.
The group of companies earned EUR 23 million operating profit or 351% more than in the previous year. Gross profit was EUR 64 million or 222% higher than during the last year. Profit before taxes grew by 380% to EUR 19 million. Net profit increased by 323% to EUR 16 million. ‘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 seasonality of our operations. We are observing an increase in returns, which was one of our objectives - to increase shareholder value, return to shareholders’, commented Mažvydas Šileika, Chief Financial Officer AB Linas Agro Group. Consolidated Group’s revenue for the second quarter was EUR 416 million and 76% higher than a year before (EUR 236 million). Gross profit for Q2 increased from EUR 7 million to EUR 27 million, and the operating profit went up from EUR 0.2 million to EUR 8.8 million. Net profit for the period was EUR 4.2 million, compared to EUR 0.1 million net loss for the corresponding period of the previous year. Total revenue of the Grain, Oilseeds, and Feed Segment increased by 47% during the reporting period up to EUR 517 million, and operating loss amounted to EUR 0.4 million as compared to EUR 0.9 million profit for the corresponding period of the previous year. The Group sourced 1.5 million tons of grains and oilseeds, or 32% less than in the same period last year, of which 1 million tons were sold, which is 14% less than last year. As much as 448 thousand tons of compound feed, premixes and feed materials were sold, or 95% more. ‘Trade in wheat, the Group's main export product, contracted due to lower yields and poor wheat quality. The harvest was difficult to market of as its quality indicators were not in line with the desired parameters on the international market, resulting in sales with price discounts. The high self-cost of commodities led to a loss on wheat and rapeseed trading in the first half of the financial year.,’ said M. Šileika. The Group’s revenue from goods and services for farmers grew by 92% to EUR 186 million, and the operating profit was 487% higher and almost reached EUR 25 million. Sales of certified seeds went up 108%, plant care products and micronutrients sales increased by 273%, fertilizers traded volumes were 54% higher. ‘We have experienced strong growth of demand, not only due to the increase in winter crop area, but also due to farmers' desire to avoid the inflation trap and to hedge against the unexpected in the context of the escalating geopolitical situation in the region’, said M. Šileika. Compared to the same reporting period last year, agricultural machinery sales increased by 25%, spare parts and services sales by 13%, and revenue from grain elevators and farm installation projects went up 66%. The income of agricultural companies from crop production diminished by 4%, from milk – increased by 21%, in total – went up 2% to EUR 21 million, however, the operating loss of EUR 0.9 million incurred as compared to EUR 1.2 million operating profit in same period of previous year. “Due to the heat during the ripening of grain, we gained 19% lower harvests and 4% less milk. Excellent milk quality and higher milk purchase prices boosted our milk income, but an increase in the cost of production resulted in a loss. The fourth quarter of the financial year, when companies receive EU subsidies, should help us get out of it’, said M. Šileika. Revenue of the Food Products Segment, which includes poultry and flour products, grew by 358% during the reporting period to EUR 162 million, and operating loss amounted to EUR 0.2 million, as compared to EUR 0.1 million loss for the same period a year earlier. ‘Revenue growth is related to the completion of the acquisition. Revenue from the poultry business alone was 258% higher, although they would have grown by 13% without the acquisition as well. However, the poultry farming situation is very difficult in both countries, as all factors are unfavorable for the activity: exports have not recovered due to the ongoing COVID-19 pandemic; the cost of poultry farming has risen due to high grain prices; energy prices are at a high; and the overproduction of chicken in Europe, and in particular in the neighboring country of Poland, where the VAT on food products has been reduced, is pressing sales prices below cost. The poultry business made a loss in the first half of the financial year, but we expect it to recover as a result of the general increase in prices across Europe. Other food production was profitable and mitigated the loss in the food segment,’ commented M. Šileika. The acquisition of companies acting under the brand KG Group has resulted in some new activities in the Group, which have been allocated to the Other Activities segment. These include the provision of pest control and hygiene goods and services, the production and sale of petfood, the provision of veterinary pharmaceutical services and the wholesale and retail sale of veterinary medicines. Revenue from these activities was EUR 20 million, and operating profit almost reached EUR 2 million. AB Linas Agro Group is the Baltics' largest agricultural and food production group, comprising 75 subsidiaries and three associates operating in 8 countries and employing 5,398 people. The group operates along the entire food production chain ‘from the field to the table’: company’s subsidiaries produce, process, and market agricultural and food products, also provide goods and services to farmers. ENCL.:
AB Linas Agro Group Consolidated unaudited Financial Statements and Interim Activity Report for the six months period ended 31 December 2021 Mažvydas Šileika, CFO of AB Linas Agro Group
Mob. +370 619 19 403
E-mail m.sileika@linasagro.lt
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