Published: 2021-11-30 20:56:50 CET
AUGA group
Interim information

Report on interim financial results of AUGA group, AB for the 9-month period ended 30 September 2021

The sales revenue of AUGA group, AB, and its subsidiaries (hereinafter, the Group) for the 9-month period amounted to EUR 54.90 million and was 12% lower than the same period last year, when the sales revenue totalled EUR 62.38 million.

According to the Group data, for the three quarters of 2021, the Group’s gross profit was EUR 1.70 million. The gross profit of the same period last year amounted to EUR 11.88 million. In the first 9 months of 2021, the Group’s net loss was EUR 10.43 million.

The EBITDA of the Group amounted to EUR 5.45 million in the first 9 months of 2021, representing a 66% decrease from the same period last year, when EBITDA was EUR 15.94 million.

“These 9-month results were driven by challenges in the crop growing segment. In June and July, when summer crops grow the most, an extreme heatwave was recorded in Lithuania. Organic farming was especially affected, resulting in poor performance in a key segment of our operations.

There is no doubt that we have started feeling the effects of climate change more frequently and more adversely than ever before, so accelerating our innovation agenda becomes even more important. Today, AUGA group is diversifying its income, growing FMCG sales and entering the AgTech segment, so fluctuating agricultural performance will become less important in achieving our long-term goals", says Kęstutis Juščius, CEO of AUGA group, AB.

Crop growing segment

Due to the extreme heatwave recorded in the summer, a relatively low yield was produced. Plants stop growing when the air temperature reaches 25–27 °C. During the heatwave in Lithuania, the nights were too hot for dew to form, thus, the plants did not have the right conditions to revive overnight. Legumes were affected the most. 

Moreover, the results of the crop growing segment were affected by other factors. In order to manage risk, the Group concludes contracts at the beginning of the year for the sale of a part of the future harvest. As the yield of certain crops fell by about 60%, the Group dedicated almost all the harvest to implement previous contracts. As a result, part of the forecast harvest could not be sold at current market prices, which have increased significantly. However, current market prices allow for an expectation of better results for the crop growing segment in the future.

The reasons mentioned above led to negative profitability. The gross loss of the crop growing segment amounted to EUR 0.50 million in the 3 quarters of 2021. A gross profit of EUR 10.13 million was reported in the same period of 2020.

Dairy segment

The sales of the dairy segment amounted to EUR 10.16 million during the first 9 months of 2021. This is broadly in line with the sales of the same period the year before, which amounted to EUR 9.87 million.

The Group faced challenges in production at the beginning of the year, and milk yield did not reach the desired result during the first half of the year. Moreover, due to the Group’s strategic attention to the dairy segment, the results were improved in the third quarter. Milk yield was 3% higher in the third quarter of 2021, compared to the same period last year.

Total gross profit grew to EUR 0.17 million during the 3 quarters of 2021. This compares to total gross profit of EUR 0.08 million during the same period of 2020.

Mushroom growing segment

There was a 6% decrease in sales of the mushroom growing segment in the first 3 quarters of 2021 compared to sales for the same quarters last year. In 2021, total sales for this period amounted to EUR 21.46 million; last year they were EUR 22.94 million.

Production challenges and the COVID-19 pandemic resulted in a 18% decrease in production volumes during the third quarter, compared to the second quarter. This led to an overall decrease in segment results for the entire period.

During the first 9 months of 2021, the gross profit of the mushroom growing segment amounted to EUR 0.56 million. This demonstrated a 59% fall from the same period last year, when gross profit amounted to EUR 1.38 million. 

The Group expects to return to typical production volumes in the fourth quarter.

Fast-moving consumer goods (FMCG) segment

Overall, sales in the segment rose by 45% to EUR 4.88 million in the last 3 quarters. In the equivalent period last year, sales in the segment were EUR 3.37 million.

The third quarter showed the strongest results in 2021, partly related to the large number of orders in the second quarter which have been implemented during the third quarter of 2021. 

Although the challenges in logistics increased the volatility of sales and increased costs, the segment maintains similar profitability. According to data from the Group, during the first 9 months of 2021, the gross profit of the FMCG segment amounted to EUR 1.47 million (a gross profit of EUR 0.29 million was reported for the same period in 2020).

Operating expenses

The Group's operating expenses during the 9-month period of 2021 amounted to EUR 8.22 million compared to EUR 7.26 million in the same period last year. Operating expenses increased mainly due to increased salaries, selling expenses and share-based payment expenses. Additionally, operating expenses of Grybai LT KB is fully represented in 2021, while operating expenses of Grybai LT KB were only partly represented in the comparative period as the respective entity was included in the consolidated financial statements as of 1 June 2020.

Business development

In the third quarter of 2021, the Group introduced its first hybrid biomethane-electric tractor for professional use AUGA M1. This is the Group’s first step in offering technological solutions that will eliminate climate pollution throughout the food supply chain, from field to table, and allow food to be produced with no cost to nature. In addition, at the end of November of 2021, the Group signed the Cooperation Agreement on the contract manufacturing for AUGA’s hybrid tractors with Rokiškio mašinų gamykla, AB, which specializes in the production of various agricultural machinery.

The Group is currently developing other sustainable solutions for technologies that will eliminate greenhouse gas emissions from the soil and digestive processes of cattle. These technology projects are part of the Group's strategy to become an AgTech company.

Financial data in MS Excel file

In order to ensure more convenient access to, and analysis of, the financial data of the Group, AUGA group, AB has prepared and published the data from previous and the most recent reporting periods in MS Excel format available at the following link: http://auga.lt/en/investors/reports-and-presentations/#tabs

Contacts:
Mindaugas Ambrasas, AUGA group, AB CFO
Phone: +370 620 67296
Email: m.ambrasas@auga.lt

Attachment



Auga group AB FS 20210930.pdf