Half-year Report
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19 August 2019
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ROS AGRO financial results for 1H 2019 and Q2 2019
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19 August 2019 - Today ROS AGRO PLC (the "Company"), the holding company
of Rusagro Group (the "Group"), a leading Russian diversified food producer with vertically integrated operations, has announced the financial results for the six months ended 30 June 2019.
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1H 2019 Highlights
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-Â Â Â Â Sales amounted to RRÂ 73,548Â million (US$Â 1,129 million1), an increase of RRÂ 40,733 million compared to 1H 2018;
-Â Â Â Â Adjusted EBITDA2 amounted to RRÂ 8,809Â million (US$Â 135Â million), an increase of RRÂ 3,038Â million compared to 1H 2018;
-Â Â Â Â Adjusted EBITDA margin dropped from 18% in 1H 2018 to 12% in 1H 2019;
-Â Â Â Â Net profit for the period amounted to RR 3,336Â million (US$ 51 million);
-Â Â Â Â Net debt position3 as of 30 June 2019 amounted to RR 44,197 million (US$ 701 million);
-Â Â Â Â Net Debt/ Adjusted EBITDA (LTM4) as of 30 June 2019 was 2.30x.
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Commenting on the results, Maxim Basov, a member of the Board of Directors of ROS AGRO PLC and CEO of the Group, said:
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 "Q2 2019 showed good results as sales and adjusted EBITDA of the Group continued to improve. Agriculture segment benefited from high sales prices partly caused by an increase in export sales leading to adjusted EBITDA margin growth. Meanwhile, Meat, Sugar and Oil & Fats segments showed strong sales results, but experienced margins drop. Meat segment was negatively influenced by increase in livestock pigs cost due to feed cost growth. Sugar segment faced EBITDA margin decrease due to high sugar prices during 2018 production season and, as result high sugar beet cost, and decrease in sugar prices in Q2 2019 due to market expectations related to overproduction. Oil & Fats segment sales were triggered by the growth of SolPro products sales related to tolling agreement with SolPro plants. However, the margin of this segment dropped due to the lack of EBITDA from SolPro assets on Ros Agro balance, which is compensated through interest income below EBITDA. All the SolPro plants have been rented by Ros Agro starting from 01.07.2019 and EBITDA margin is expected to rise in 2H 2019."
Key consolidated financial performance indicators
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in RR million | Six months ended | Variance | Three months ended | Variance | ||||
30 June 2019 | 30 June 2018 | Units | % | 30 June 2019 | 30 June 2018 | Units | % | |
Sales | 73,548 | 32,815 | 40,733 | 124 | 41,381 | 17,547 | 23,834 | 136 |
Gross profit | 11,141 | 8,080 | 3,061 | 38 | 6,124 | 5,125 | 999 | 19 |
Gross margin, % | 15% | 25% | -10% | 15% | 29% | -14% | ||
Adjusted EBITDA | 8,809 | 5,772 | 3,037 | 53 | 4,715 | 4,057 | 658 | 16 |
Adjusted EBITDAÂ margin, % | 12% | 18% | -6% | 11% | 23% | -12% | ||
Net profit for the period | 3,336 | 2,338 | 998 | 43 | 1,689 | 2,129 | (440) | (21) |
Net profit margin % | 5% | 7% | -2% | 4% | 12% | -8% |
* Net profit for the period is affected by non-cash loss on revaluation of biological assets and agricultural produce. See details in business-sections below.
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Key financial performance indicators by segments
in RR million | Six months ended | Variance | Three months ended | Variance | ||||
30 June 2019 | 30 June 2018 | Units | % | 30 June 2019 | 30 June 2018 | Units | % | |
Sales, incl. | 73,548 | 32,815 | 40,733 | 124 | 41,381 | 17,547 | 23,834 | 136 |
Sugar | 15,674 | 10,671 | 5,004 | 47 | 11,149 | 5,458 | 5,691 | 104 |
Meat | 11,171 | 9,417 | 1,754 | 19 | 5,983 | 5,091 | 892 | 18 |
Agriculture | 9,334 | 3,212 | 6,122 | 191 | 3,779 | 1,745 | 2,034 | 117 |
Oil and Fat | 36,337 | 10,029 | 26,308 | 262 | 19,408 | 5,551 | 13,857 | 250 |
Milk products | 1,830 | - | 1,830 | - | 969 | - | 969 | - |
Other | 1,276 | 114 | 1,162 | 1,0190 | 830 | 39 | 791 | 2,028 |
Eliminations | (2,075) | (628) | (1,447) | (231) | (738) | (336) | (402) | (120) |
Gross profit, incl. | 11,141 | 8,080 | 3,061 | 38 | 6,124 | 5,125 | 999 | 19 |
Sugar | 3,204 | 3,110 | 94 | 3 | 1,769 | 1,983 | (214) | (11) |
Meat | 1,986 | 2,444 | (458) | (19) | 1,691 | 1,478 | 213 | 14 |
Agriculture | 1,309 | 510 | 799 | 157 | 497 | 391 | 106 | 27 |
Oil and Fat | 4,056 | 2,332 | 1,724 | 74 | 2,258 | 1,312 | 946 | 72 |
Milk products | 151 | - | 151 | - | 98 | - | 98 | - |
Other | 130 | 21 | 109 | 519 | 90 | 13 | 77 | 592 |
Eliminations | 305 | (338) | 643 | 190 | (280) | (52) | (228) | (438) |
Adjusted EBITDA, incl. | 8,809 | 5,772 | 3,037 | 53 | 4,715 | 4,057 | 658 | 16 |
Sugar | 2,377 | 2,320 | 57 | 2 | 1,260 | 1,651 | (391) | (24) |
Meat | 2,594 | 2,844 | (250) | (9) | 1,757 | 1,702 | 55 | 3 |
Agriculture | 2,771 | 216 | 2,555 | 1,183 | 1,320 | 152 | 1,168 | 768 |
Oil and Fat | 578 | 1,080 | (502) | (46) | 265 | 687 | (422) | (61) |
Milk products | (3) | - | (3) | - | 8 | - | 8 | - |
Other | (802) | (477) | (325) | (68) | (184) | (234) | 50 | 21 |
Eliminations | 1,293 | (211) | 1,504 | 713 | 288 | 98 | 190 | 194 |
Adjusted EBITDAÂ margin, % | 12% | 18% | -6% | (32) | 11% | 23% | -12% | (51) |
Sugar | 15% | 22% | -7% | (30) | 11% | 30% | -19% | (63) |
Meat | 23% | 30% | -7% | (23) | 29% | 33% | -4% | (12) |
Agriculture | 30% | 7% | 23% | 342 | 35% | 9% | 26% | 300 |
Oil and Fat | 2% | 11% | -9% | 0 | 1% | 12% | -11% | 0% |
Milk products | 0% | 0% | 0% | - | 1% | 0% | 1% | - |
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Sugar Segment
The financial results of the sugar segment for 1H 2019 and Q2 2019 compared to 1H 2018 and Q2 2018 respectively are presented in the table below:
in RR million | Six months ended | Variance | Three months ended | Variance | ||||
30 June 2019 | 30 June 2018 | Units | % | 30 June 2019 | 30 June 2018 | Units | % | |
Sales | 15,674 | 10,671 | 5,004 | 47 | 11,149 | 5,458 | 5,691 | 104 |
Cost of sales | (12,464) | (7,565) | (4,899) | (65) | (9,378) | (3,480) | (5,898) | (169) |
Net gain/ (loss) from trading derivatives | (6) | 5 | (10) | - | (3) | 6 | (8) | - |
Gross profit | 3,204 | 3,110 | 94 | 3 | 1,769 | 1,983 | (214) | (11) |
Gross profit margin | 20% | 29% | -9% | 16% | 36% | -20% | ||
Distribution and selling expenses | (1,111) | (1,090) | (21) | (2) | (651) | (433) | (218) | (50) |
General and administrative expenses | (723) | (806) | 83 | 10 | (358) | (387) | 29 | 8 |
Other operating income/ (expenses), net | 315 | 47 | 268 | 570 | 363 | 36 | 327 | 911 |
Operating profit | 1,685 | 1,261 | 424 | 34 | 1,123 | 1,198 | (76) | (6) |
Adjusted EBITDA | 2,377 | 2,320 | 57 | 2 | 1,260 | 1,651 | (391) | (24) |
Adjusted EBITDA margin | 15% | 22% | -7% | 11% | 30% | -19% |
Higher stock has been accumulated by the end of 2018 (650 ths tn vs normal 450 ths tn) in view of expected prices growth in 1H 2019. Sugar sales revenue increased by RR 4,790 million due to sales volume increase by 127 ths tn (+116%). By-products sales revenue increased by RR 258 million due to beat pulp and molasses selling prices increase.
Sugar sales, production volumes and average sales prices per kilogram (excl. VAT) were
as follows:
Six months ended | Variance | Three months ended | Variance | |||||
30 June 2019 | 30 June 2018 | Units | % | 30 June 2019 | 30 June 2018 | Units | % | |
Sugar production volume | 24 | 26 | (2) | (7) | 7 | 17 | (10) | (60) |
Sales volume | 453 | 326 | 127 | 39 | 348 | 161 | 187 | (117) |
Average sales price | 31.8 | 29.4 | 2.4 | 8 | 30.3 | 31.0 | (0.7) | (2) |
EBITDA margin decrease was caused by sugar beet purchase prices growth by 39% (due to high sugar price during production season Aug'18 - Dec'18) and selling prices drop in Jan'19-Jun'19 due to market expectations of sugar overproduction in Russia.
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Meat Segment
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The financial results of the meat segment for 1H 2019 and Q2 2019 compared to 1H 2018 and Q2 2018Â respectively are presented in the table below:
in RR million | Six months ended | Variance | Three months ended | Variance | ||||
30 June 2019 | 30 June 2018 | Units | % | 30 June 2019 | 30 June 2018 | Units | % | |
Sales | 11,171 | 9,417 | 1,754 | 19 | 5,983 | 5,091 | 892 | 18 |
Net gain/ (loss) on revaluation of biological assets and agricultural produce | (256) | (88) | (168) | (192) | 103 | (61) | 164 | - |
Cost of sales | (8,930) | (6,886) | (2,044) | (30) | (4,395) | (3,552) | (843) | (24) |
Gross profit | 1,986 | 2,444 | (458) | (19) | 1,691 | 1,478 | 213 | 14 |
Gross profit margin | 18% | 26% | -8% | 34% | 29% | 5% | ||
Gross profit excl. effect of biological assets revaluation | 2,241 | 2,531 | (290) | (11) | 1,958 | 1,539 | 419 | 27 |
Adjusted gross profit margin | 20% | 27% | -7% | -Â | 33% | 30% | 3% | -Â |
Distribution and selling expenses | (367) | (276) | (91) | (33) | (210) | (164) | (46) | (28) |
General and administrative expenses | (577) | (470) | (107) | (23) | (212) | (258) | 46 | 18 |
Other operating income/ (expenses), net | 140 | 102 | 38 | 37 | 125 | 69 | 56 | 82 |
incl. reimbursement of operating costs (government grants) | 2 | - | 2 | - | 2 | - | 2 | - |
Operating profit | 1,182 | 1,800 | (618) | (34) | 1,394 | 1,125 | 270 | 24 |
Adjusted EBITDA | 2,594 | 2,844 | (250) | (9) | 1,757 | 1,702 | 55 | 3 |
Adjusted EBITDA margin | 23% | 30% | -7% | -Â | 29% | 33% | -4% | Â - |
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Sales in the meat segment increased by 19% in 1H 2019 and by 18% in Q2 2019 compared to the respective periods of prior year because of increase in sales prices and volumes of processed pork mainly due to CapitalAgro acquisition. Sales increase was partly offset by decrease in selling prices and volumes of livestock pigs as only culled pigs have been sold in 2019.
Cost of sales increased by 30% due to growth in feed cost in 1H 2019 and higher volumes of livestock pigs transfer to meat processing. Swine foot and mouth disease in Primorie in Q1 2019 resulted in additional loss of RR 136 million, which has been partly compensated by insurance income (recognized in Other operating income).
Pork sales volumes and the average pork sales prices per kilogram (excl. VAT) were as follows:
Six months ended | Variance | Three months ended | Variance | |||||
30 June 2019 | 30 June 2018 | Units | % | 30 June 2019 | 30 June 2018 | Units | % | |
Sales volume (in thousand tonnes), incl. | 85 | 78 | 7 | 9 | 45 | 39 | 6 | 15 |
livestock pigs | 8 | 14 | (6) | (38) | 4 | 7 | (3) | (43) |
processed pork | 78 | 64 | 14 | 22 | 41 | 32 | 9 | 28 |
Average sale prices (roubles per kg, excl. VAT): | ||||||||
livestock pigs | 73.2 | 82.9 | (9.7) | (12) | 76.1 | 86.0 | (9.9) | (12) |
processed pork | 134.8 | 129.3 | 5.5 | 4 | 136.4 | 136.3 | 0.1 | 0 |
Net loss on revaluation of biological assets and agricultural produce in 1H 2019 resulted mainly from a decrease in market prices for livestock pigs during the period and a respective decrease in fair value of livestock in the closing balance compared to the beginning of the year.
An increase in Distribution and selling expenses in 1H 2019 and Q2 2019 compared to prior year periods included an increase in transportation costs as a result of higher sales volume of processed pork, an increase in payroll costs related to CapitalAgro acquisition.
An increase in General and administrative expenses in 1H 2019 compared to prior year period related to cost of farms in construction.
Agricultural Segment
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As at 30 June 2019 the segment's area of controlled land stands at 648 thousand hectares
(30 June 2018: 687 thousand hectares). Land bank was reduced as the result of disposal of non-arable land. The financial results of the agricultural segment for 1H 2019 and Q2 2019 compared to 1H 2018 and Q2 2018 are presented below:
in RR million | Six months ended | Variance | Three months ended | Variance | ||||
30 June 2019 | 30 June 2018 | Units | % | 30 June 2019 | 30 June 2018 | Units | % | |
Sales | 9,334 | 3,212 | 6,122 | 191 | 3,779 | 1,745 | 2,034 | 117 |
Net gain/ (loss) on revaluation of biological assets and agricultural produce | (2,795) | (618) | (2,177) | (352) | (1,392) | (337) | (1,055) | (313) |
Cost of sales | (5,230) | (2,083) | (3,146) | (151) | (1,890) | (1,016) | (873) | (86) |
Net gain/ (loss) from trading derivatives | - | - | - | - | - | - | - | - |
Gross profit | 1,309 | 510 | 799 | 157 | 497 | 391 | 106 | 27 |
Gross profit margin | 14% | 16% | -2% | 13% | 22% | -9% | ||
Gross profit excl. effect of biological assets and agricultural produce revaluation | 4,104 | 1,129 | 2,975 | 264 | 1,889 | 729 | 1,160 | 159 |
Adjusted gross profit margin | 44% | 35% | 9% | 50% | 42% | 8% | ||
Distribution and selling expenses | (1,592) | (643) | (949) | (148) | (700) | (434) | (266) | (61) |
General and administrative expenses | (591) | (611) | 19 | 3 | (319) | (319) | 1 | 0 |
Other operating income/ (expenses), net | (108) | (68) | (40) | (59) | (70) | (52) | (17) | (33) |
incl. reimbursement of operating costs (government grants) | 72 | 60 | 12 | 19 | 36 | 33 | 3 | 10 |
Operating profit | (982) | (811) | (171) | (21) | (591) | (414) | (177) | (43) |
Adjusted EBITDA | 2,771 | 216 | 2,555 | 1,183 | 1,320 | 152 | 1,168 | 768 |
Adjusted EBITDA margin | 30% | 7% | 23% | 35% | 9% | 26% |
Sales increased due to increase both in selling volumes and prices (except for sunflower and soy). Higher crops sales volumes were affected by the management decision to transfer sales from the end of 2018 to Q1 2019 mainly due to expected increase in selling prices.
Sales volumes by product were as follows:
Thousand tonnes | Year ended | Variance | Three months ended | Variance | ||||
30 June 2019 | 30 June 2018 | Units | % | 30 June 2019 | 30 June 2018 | Units | % | |
sugar beet | - | 2 | (2) | (100) | - | - | - | - |
wheat | 262 | 113 | 149 | 131 | 83 | 74 | 9 | 11 |
barley | 121 | 79 | 42 | 52 | 72 | 47 | 25 | 52 |
corn | 125 | 76 | 49 | 64 | 40 | 34 | 6 | 16 |
sunflower seeds | 8 | 3 | 5 | 182 | 8 | 1 | 7 | 682 |
soy | 130 | 31 | 99 | 324 | 91 | 14 | 77 | 572 |
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The average sale prices per kilogram (excl. VAT) were as follows:
RR per kilogram, excl. VAT | Year ended | Variance | Three months ended | Variance | ||||
30 June 2019 | 30 June 2018 | Units | % | 30 June 2019 | 30 June 2018 | Units | % | |
sugar beet | - | 1.0 | (1.0) | - | - | - | - | - |
wheat | 12.8 | 7.2 | 5.6 | 79 | 12.9 | 7.6 | 5.3 | 70 |
barley | 11.2 | 7.3 | 3.9 | 54 | 11.0 | 7.8 | 3.2 | 41 |
corn | 12.1 | 9.5 | 2.6 | 28 | 12.6 | 9.5 | 3.1 | 32 |
sunflower seeds | 18.8 | 18.5 | 0.3 | 2 | 18.8 | 18.8 | - | - |
soy | 20.3 | 21.8 | (1.5) | (7) | 19.2 | 23.8 | (4.6) | (19) |
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Net loss on revaluation of biological assets and agricultural produce in 1H and Q2 2019 and 2018 figures represents the realisation of gain from crops revaluation, recognised in the previous year financial statements and remained unrealised as at the year-end.
In IFRS financial statements of 2018 the Group recognised gain from all crops, harvested in 2018, including crops in stock at the year-end. Consequently, the crops in stock as at 31 December 2018 were measured at market prices prevailing at the time of harvest. In IFRS financial statements
of 2019, as these crops are realised, the gain on revaluation is written off in the statement
of comprehensive income decreasing the profit of the segment. The gain on revaluation of crops and its subsequent realisation do not affect the Adjusted EBITDA figure.
Distribution and selling expenses increased by RR 949 million in 1H 2019 (Q2 2019: RR 266 million) against 2018 as a result of higher sales volumes and crops held in stock for a longer period of time (according to changes in the timing of sales), which increased storage costs.
Other operating expenses, net include expenses from lost harvest write-off, which are higher by RR 81 million in 1H 2019 vs 2018Â (Q2 2019: RR 83 million), loss from disposal of property, plant and equipment, and loss from sales of other services and materials higher by RR 47 million in 1H 2019 vs 2018. Further, an operating foreign exchange loss turned into gain in 1H 2019 resulting an increase by RR 60 million (Q2 2019: RR 5 million).
Oil and Fat segment
The financial results of the oil and fat segment for 1H 2019 and Q2 2019 as compared to 1H 2018 and Q2 2018 respectively are presented in the table below:
in RR million | Year ended | Variance | Three months ended | Variance | Â | |||||
30 June 2019 | 30 June 2018 | Units | % | 30 June 2019 | 30 June 2018 | Units | % | Â | ||
Sales | 36,337 | 10,029 | 26,308 | 262 | 19,408 | 5,551 | 13,857 | 250 | Â | |
Cost of sales | (32,281) | (7,696) | (24,585) | (319) | (17,150) | (4,239) | (12,911) | (305) | ||
Gross profit | 4,056 | 2,332 | 1,724 | 74 | 2,258 | 1,312 | 946 | 72 | Â | |
Gross profit margin | 11% | 23% | -12% | 12% | 24% | -12% | Â | |||
 | ||||||||||
Distribution and selling expenses | (3,028) | (1,110) | (1,918) | (173) | (1,721) | (554) | (1,167) | (211) | Â | |
General and administrative expenses | (741) | (385) | (356) | (93) | (421) | (192) | (229) | (119) | Â | |
Other operating income/ (expenses), net | (209) | (26) | (183) | (703) | (191) | (41) | (150) | (369) | Â | |
Operating profit/ (loss) | 77 | 811 | (734) | (90) | (75) | 526 | (601) | - | Â | |
 | ||||||||||
Adjusted EBITDA | 578 | 1,080 | (502) | (46) | 265 | 687 | (422) | (61) | Â | |
Adjusted EBITDA margin | 2% | 11% | -9% | 1% | 12% | -11% | Â | |||
The breakdown of Sales, Gross profit and Adjusted EBITDA between the Samara oil plant, the Ekaterinburg fat plant and Far East operations is as follows:
in RR million | Year ended | Variance | Three months ended | Variance | ||||
30 June 2019 | 30 June 2018 | Units | % | 30 June 2019 | 30 June 2018 | Units | % | |
Sales, incl. | 36,337 | 10,029 | 26,308 | 262 | 19,408 | 5,551 | 13 857 | 250 |
Samara oil plant | 22,051 | 5,314 | 16,737 | 315 | 11,554 | 3,107 | 8,447 | 272 |
Ekat. fat plant | 20,792 | 3,855 | 16,937 | 439 | 11,436 | 2,170 | 9,266 | 427 |
Far East | 1,706 | 2,062 | (356) | (17) | 854 | 1,152 | (298) | (26) |
Eliminations(*) | (8,212) | (1,202) | (7,010) | (583) | (4,436) | (878) | (3 558) | (405) |
Gross profit, incl. | 4,056 | 2,332 | 1,724 | 74 | 2,258 | 1,312 | 946 | 72 |
Samara oil plant | 1,853 | 1,023 | 830 | 81 | 1,015 | 624 | 391 | 63 |
Ekat. fat plant | 2,164 | 1,047 | 1,117 | 107 | 1,248 | 537 | 711 | 133 |
Far East | 35 | 347 | (312) | (90) | (8) | 211 | (219) | - |
Eliminations(*) | 3 | (85) | 88 | - | 4 | (59) | 63 | - |
Adjusted EBITDA, incl. | 578 | 1,080 | Â Â Â (502) | (46) | 265 | 687 | (422) | (61) |
Samara oil plant | 353 | 556 | (203) | (37) | 152 | 390 | (238) | (61) |
Ekat. fat plant | 257 | 351 | (94) | (27) | 147 | 187 | (40) | (22) |
Far East | (48) | 193 | (241) | - | (42) | 133 | (175) | - |
Eliminations(*) | 16 | (20) | 36 | Â Â Â Â Â Â Â Â - | 8 | (24) | 32 | - |
Adjusted EBITDA margin, % | 2% | 11% | -9% | - | 1% | 12% | -11% | - |
Samara oil plant | 2% | 10% | -8% | - | 1% | 13% | -12% | - |
Ekat. fat plant | 1% | 9% | -8% | - | 1% | 9% | -8% | - |
Far East | -3% | 9% | -12% | - | -5% | 12% | -17% | -Â |
Intra-segment sales include sales of bulk oil from Samara oil plant and bulk and bottled oil from Far East to Ekaterinburg fat plant.
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Sales volumes to third parties by product were as follows:
thousand tons | Six months ended | Variance | Three months ended | Variance | ||||
30 June 2019 | 30 June 2018 | Units | % | 30 June 2019 | 30 June 2018 | Units | % | |
mayonnaise | 63 | 20 | 43 | 206 | 37 | 11 | 26 | 243 |
margarine | 20 | 14 | 6 | 47 | 10 | 6 | 4 | 70 |
bottled oil | 72 | 25 | 47 | 189 | 36 | 16 | 20 | 122 |
industrial fats | 106 | 4 | 102 | 2932 | 62 | 3 | 59 | 2360 |
bulk oil | 317 | 74 | 243 | 330 | 169 | 38 | 131 | 344 |
meal | 334 | 133 | 201 | 152 | 168 | 67 | 101 | 149 |
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The average sale prices per kilogram (excl. VAT) for sales to third parties were as follows:
RR per kilogram, excl. VAT | Year ended | Variance | Three months ended | Variance | ||||
30 June 2019 | 30 June 2018 | Units | % | 30 June 2019 | 30 June 2018 | Units | % | |
mayonnaise | 79.9 | 80.6 | (0.7) | (1) | 80.2 | 81.5 | (1.3) | (2) |
margarine | 81.0 | 79.5 | 1.5 | 2 | 80.7 | 82.3 | (1.6) | (2) |
bottled oil | 52.5 | 53.9 | (1.4) | (3) | 52.7 | 54.0 | (1.3) | (2) |
industrial fats | 50.0 | 48.8 | 1.2 | 2 | 48.9 | 48.2 | 0.7 | 1 |
bulk oil | 44.0 | 43.2 | 0.8 | 2 | 44.4 | 45.2 | (0.8) | (2) |
meal | 15.1 | 18.1 | (3) | (16) | 14.1 | 20.6 | (6.5) | (31) |
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Sales increased due to tolling scheme with SolPro assets. At the same time EBITDA margin decreased to 2% in 1H 2019 as all sales have been transferred to Rusagro, while profit remains on SolPro entities and has been further withdrawn through interest income reflected in Other segment below EBITDA. Starting from July 2019 all the SolPro plants are rented by Rusagro and margin will be reflected in Rusagro EBITDA. Selling prices for meal decreased due to lower prices in sunflower and soy sector.
Increase in Distribution and selling expenses by RR 1,918 million in 1H 2019 and by RR 1,167 million in Q2 2019 compared to the prior period is mainly attributed to higher transportation and loading services expenses related to an increase in sales volume in Oil and Fat segment. Increase by RR 211 million was related to SolPro personnel added to EZhK.
Increase in General and administrative expenses by RR 356 million in 1H 2019 and by RR 229 million in Q2 2019 compared to the prior period is attributed to higher number of employees in administrative function in Oil and Fat segment. Increase by RR 183 million was related to SolPro personnel added to EZhK.
Increase in Other operating expenses by RR 183 million in 1H 2019 and by RR 150 million in Q2 2019 was mainly due to write-off of RR 175 million as result of sunflower technological losses.
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Milk Products Segment
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The financial results of the Milk Products segment for 1H 2019 and Q2 2019 as compared to 1H 2018 and Q2 2018 respectively are presented in the table below:
in RR million | Six months ended | Variance | Three months ended | Variance | ||||
30 June 2019 | 30 June 2018 | Units | % | 30 June 2019 | 30 June 2018 | Units | % | |
Sales | 1,830 | - | 1,830 | - | 969 | - | 969 | - |
Cost of sales | (1,679) | - | (1,679) | - | (871) | - | (871) | - |
Gross profit | 151 | - | 151 | - | 98 | - | 98 | - |
Gross profit margin | 8% | - | 8% | - | 10% | - | 10% | - |
Distribution and selling expenses | (109) | - | (109) | - | (66) | - | (66) | - |
General and administrative expenses | (46) | - | (46) | - | (24) | - | (24) | - |
Other operating income/ (expenses), net | 13 | - | 13 | - | - | - | - | - |
Operating profit | 9 | - | 9 | - | 8 | - | 8 | - |
Adjusted EBITDA | (3) | - | (3) | - | 8 | - | 8 | - |
Adjusted EBITDA margin | 0% | - | 0% | 1% | - | 1% | - |
Group is now focusing on entering the retail chains with a consumer product, developing brands and increasing sales profitability.
Sales volumes by product were as follows:
Thousand tonnes | Year ended | Variance | Three months ended | Variance | ||||
30 June 2019 | 30 June 2018 | Units | % | 30 June 2019 | 30 June 2018 | Units | % | |
cheese | 2 | - | 2 | - | 1,1 | - | 1,1 | - |
cheese product | 2 | - | 2 | - | 0,9 | - | 0,9 | - |
butter | 1 | - | 1 | - | 0,4 | - | 0,4 | - |
spread | 0 | - | 0 | - | 0,1 | - | 0,1 | - |
dry mixes | 7 | - | 7 | - | 3,9 | - | 3,9 | - |
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The average sale prices per kilogram (excl. VAT) were as follows:
RR per kilogram, excl. VAT | Year ended | Variance | Three months ended | Variance | ||||
30 June 2019 | 30 June 2018 | Units | % | 30 June 2019 | 30 June 2018 | Units | % | |
mixes dry | 79 | - | 79 | - | 81.2 | - | 81.2 | - |
cheese | 282.2 | - | 282.2 | - | 288.9 | - | 288.9 | - |
cheese product | 176.6 | - | 76.6 | - | 173.3 | - | 173.3 | - |
butter | 335.7 | - | 335.7 | - | 365 | - | 365 | - |
spread | 97.9 | - | 97.9 | - | 91.6 | - | 91.6 | - |
dry mixes | 79 | - | 79 | - | 81.2 | - | 81.2 | - |
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Key consolidated cash flow indicators (not IFRS presentation*)
The key consolidated cash flow indicators presented according to management accounts methodology were as follows:
in million Roubles | Six months ended | Variance | Three months ended | Variance | ||||
30 June 2019 | 30 June 2018 | Units | % | 30 June 2019 | 30 June 2018 | Units | % | |
Net cash from operating activities, incl. | 18,624 | 7,306 | 11,318 | 155 | 14,710 | 193 | 14,517 | Â Â Â Â Â Â 7,515 |
Operating cash flow before working capital changes | 9,604 | 6,543 | 3,062 | 47 | 7,484 | 3,505 | 3,979 | Â Â Â Â Â Â Â Â Â Â 114 |
Working capital changes | 9,109 | 993 | 8,117 | 818 | 7,223 | (3,239) | 10,462 | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â - |
Net cash from investing activities, incl. | (6,108) | (7,939) | 1,830 | 23 | (2,979) | (5,088) | 2,109 | Â Â Â Â Â Â Â Â Â Â Â Â 41 |
Purchases of property, plant and equipment and inventories intended for construction | (6,405) | (7,882) | 1,477 | 19 | (3,306) | (4,981) | 1,675 | Â Â Â Â Â Â Â Â Â Â Â Â 34 |
Net cash from financing activities | (11,452) | (1,749) | (9,703) | (555) | (7,285) | (8,239) | (954) | (12) |
Net effect of exchange rate changes on cash and cash equivalents | (114) | 63 | (177) | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â - | (113) | 160 | (272) | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â - |
Net increase/ (decrease) in cash and cash equivalents | 949 | (2,318) | 3,268 | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â - | 4,333 | (12,974) | 17,307 | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â - |
(*) See Appendix 4
The main investments in property, plant and equipment and inventories intended for construction in H1 2019 were made in the Meat segment in the amount of RR 3,677 million (H1 2018: RR 5,267 million), related to the construction project in the Tambov and Far East regions. Significant investments were also made in Sugar segment in the amount of RRÂ 1,672 million (H1 2018: RRÂ 1,222 million) for construction of second desugarisation line. Investments in the Oil and Fat segment amounted to RRÂ 100 million (H1 2018: RRÂ 623 million) and in the Agriculture segment amounted to RR 838 million (H1 2018: RR 750 million), related to purchases of machinery and equipment.
Debt position and liquidity management
in RR million | 30 June 2019 | 31 December 2018 | Variance | |
Units | % | |||
Gross debt | 80,952 | 95,102 | (14,150) | (15) |
Short-term borrowings | 17,268 | 32,514 | (15,246) | (47) |
Long-term borrowings | 63,684 | 62,588 | 1,096 | 2 |
Cash and cash equivalents, bank deposits and bonds | (36,755) | (40,759) | 4,004 | 10 |
Short-term cash, deposits and bonds | (2,885) | (4,543) | 1,658 | 37 |
Long-term cash, deposits and bonds | (33,870) | (36,216) | 2,346 | 6 |
Net debt | 44,197 | 54,342 | (10,145) | (19) |
Short-term borrowings, net | 14,384 | 27,971 | (13,587) | (49) |
Long-term borrowings, net | 29,813 | 26,371 | 3,442 | 13 |
Adjusted EBITDA (LTM4) | 19,216 | 16,179 | 3,037 | 19 |
Net debt/ Adjusted EBITDA (LTM) | 2.30 | 3.36 | (1.1) |
Net finance income/ (expense)
in RR million | Six months ended | Variance | Three months ended | Variance | ||||
30 June 2019 | 30 June 2018 | Units | % | 30 June 2019 | 30 June 2018 | Units | % | |
Net interest expense | (2,718) | (1,079) | (1,639) | (152) | (1,142) | (397) | (745) | (188) |
Gross interest expense | (3,336) | (1,589) | (1,747) | (110) | (1,517) | (763) | (753) | (99) |
Reimbursement of interest expense | 618 | 510 | 108 | 21 | 375 | 366 | 8 | 2 |
Interest income | 3,988 | 1,815 | 2,173 | 120 | 993 | 873 | 119 | 14 |
Net gain/ (loss) from bonds held for trading | (23) | (8) | (15) | (183) | (19) | (39) | 20 | 52 |
Other financial income, net | 384 | (81) | 465 | - | 352 | (83) | 436 | - |
Net foreign exchange gain/ (loss) | 10 | (102) | 113 | - | 68 | (82) | 150 | - |
Other financial income / (expenses), net | 374 | 21 | 353 | 1 671 | 284 | (1) | 286 | - |
Total net finance income/ (expenses) | 1,631 | 647 | 985 | 152 | 184 | 353 | (169) | (48) |
In Q2 2019 the Group continued to enjoy benefits from the state agriculture subsidies programme.
In addition, in 2019 the Group continued the receiving bank loans with decreased preferential interest rates under the new programme of government support. Under this programme, the government provides subsidies to the banks to compensate the loss of income on credits with decreased interest rates, given by the banks to agricultural producers. In Q2 2019 IFRS accounts these credits are accounted for according to its face value with no adjustments to prevailing market rates. The differences between nominal and market interest rate is recognized as interest expenses and government grants in a statement of comprehensive income or in a statement of financial position.
Net finance income in 1H 2018 in the sum of RR 647 million increased to net finance income in amount of RR 1,631 million in the 1H 2019 as a result of accrual of interest on rights to claims SolPro entities and an increase in other financial income due to revaluation effect of rights to claims SolPro entities.
________________________________
(1) The exchange rates used for translation of RR amounts into USD represent average Central Bank official exchange rate for the respective reporting period for income, expenses and profits and the Central Bank official exchange rate as at the reporting date for balance figures.
(2) Adjusted EBITDA is defined as operating profit before taking into account (i) depreciation included in operating profit, (ii) other operating income/ (expenses), net (other than reimbursement of operating costs (government grants)), (iii) net gain/ (loss) on revaluation of biological assets and agricultural produce, (iv) provision/ (reversal of provision) for net realizable value of agricultural products in stock, (v) share-based remuneration (see Appendix 2 for the detailed calculation of Adjusted EBITDA). Adjusted EBITDA is not a measure of financial performance under IFRS. It should not be considered as an alternative to profit for the period as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. Our calculation of Adjusted EBITDA may be different from the calculation used by other companies and therefore comparability may be limited. We believe that Adjusted EBITDA provides useful information to investors because it is an indicator of the strength and performance of our ongoing business operations, including our ability to fund discretionary spending such as capital expenditures, acquisitions of subsidiaries and other investments and our ability to incur and service debt.
(3) The Group determines the net debt as short-term borrowings and long-term borrowings less cash and cash equivalents, bank deposits, bank promissory notes and bonds held for trading.
(4) LTM - The abbreviation for the "Last twelve months".
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Note:
ROS AGRO PLC (LSE: AGRO) - a holding company of Rusagro Group, a leading Russian diversified food producer with vertically integrated operations in the following branches:
Sugar:
Rusagro is one of the leading Russian sugar producers (â„–3Â with 13% share in sugar production in Russia and â„–1 with 47% share of cubed sugar market), producing sugar from sugar beet at nine production sites in four regions. Group produces white and brown cube sugar and packaged sugar sold under the brands Russkii Sakhar, Chaikofsky, Mon Cafe and Brauni. Sugar segment is vertically integrated and sugar beet is supplied byRusagro's Agriculture segment, which ensures a consistent supply of raw material. Sugar segment also operates a cereal plant and sell buckwheat and rice under the brand Tyoplye Traditsii.
Meat:
Rusagro is the third largest pork producer in Russia with 5% share of pork produced in Russia. It operates 18 commercial pork complexes with correspondence to high biosecurity standards, has own compound feed production, slaughterhouses and meat processing plants in Tambov and Belgorod Regions. Since 2016 Rusagro sells retail products under its own brand Slovo Myasnika (Butcher's word).
Agricultural:
The Group currently controls one of the largest land banks among Russian agriculture producers, with 648Â thousand hectares of land under control located in the highly fertile Black Earth region of Russia (in the Belgorod, Tambov, Voronezh, Kursk and Orel regions)
and in the Far East Primorie Region. Land and production sites are strategically located within
the same regions to optimize efficiency and minimize logistical costs. Rusagro is one
of the major sugar beet producers in Russia, but it also produces wheat and barley, sunflower seeds and soybeans. These products are partially consumed by the meat segment, supporting a synergistic effect and lowering price change risk.
Oil and Fat:
Rusagro is one of the leading producers of mayonnaise and consumer margarine in Russia sold under a number of brands, such as EZhK, Schedroye Leto,Mechta Khozyaiki, Gotovim Doma, Maslava and Soyaco. The Group operates an Oil extraction plant in Samara and two oil and fats plant in Ekaterinburg and in the Far East Primorie Region. Own sunflower and soy oil production allows to control the source of the vegetable oil required to produce oil and fats products. In 2018 Rusagro acquired the debt of Solnechnye Producty from Russian Agriculture bank and is planning to purchase assets of some of its plants increasing the production and its market share.
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Forward-looking statements
This announcement includes statements that are, or may be deemed to be, forward-looking statements. These forward-looking statements do not relate to historical or current events,
or to any future financial or operational activity of the Group.
By their nature, forward-looking statements involve risk and uncertainty because they relate
to future events and circumstances, a number of which are beyond the Rusagro Group's control. As a result, actual future results may differ materially from the plans and expectations set out
in these forward-looking statements.
The Group undertakes no obligation to release the results of any revisions to any forward-looking statements that may occur due to any change in its expectations or to reflect events
or circumstances after the date of this document.
Rusagro management is organizing a conference call about its 1H and Q2 2019 financial results for investors and analysts.
Details of call:
Date | 19 August 2019 |
Time | 4:00 PM (Moscow) / 2:00 PM (London) |
Subject | ROS AGRO PLC 1H and Q2 2019 Financial results |
UK Toll Free UK Local Line | 0800 376 6183 +44 207 194 3759 |
USA Toll Free USA Local Line | 1 844 286 06 43 +1 646 722 49 16 |
Russia Toll Free | 8Â 800Â 500 9863 Â |
Russian Local Line | +7Â 495Â 646 9315 |
Conference ID | 44198180# |
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 Contacts:
Svetlana Kuznetsova, Chief Investment Officer Phone:Â +7Â 495Â 363 1661, e-mail: [email protected] |
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Appendix 1. Unaudited consolidated statement of comprehensive income for the six months ended 30 June 2019 (in RR thousand)
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Six months ended 30 June | Three months ended 30 June | |||
2019 | 2018 | 2019 | 2018 | |
Sales | 73,547,786 | 32,814,570 | 41,380,829 | 17,547,016 |
Net gain on revaluation of biological assets and agricultural produce | (3,911,093) | (900,439) | (1,951,989) | (541,715) |
Cost of sales | (58,490,212) | (23,838,828) | (33,302,315) | (11,885,498) |
Net gain from trading derivatives | (5,823) | 4,560 | (2,542) | 5,542 |
Gross profit | 11,140,658 | 8,079,863 | 6,123,983 | 5,125,345 |
Distribution and selling expenses | (6,280,567) | (3,328,901) | (3,488,625) | (1,669,414) |
General and administrative expenses | (3,422,817) | (2,641,801) | (1,569,552) | (1,318,112) |
Other operating income/ (expenses), net | 312,116 | (23,146) | 596,379 | 8,977 |
Operating profit / (loss) | 1,749,390 | 2,086,015 | 1,662,185 | 2,146,796 |
Interest expense | (2,717,808) | (1,079,010) | (1,142,032) | (397,075) |
Interest income | 3,987,686 | 1,815,118 | 992,613 | 873,156 |
Net gain/ (loss) from bonds | (22,515) | (7,959) | (19,013) | (39,318) |
Other financial income/ (expenses), net | 384,022 | (81,376) | 352,330 | (83,461) |
Profit before income tax | 3,380,775 | 2,732,788 | 1,846,083 | 2,500,098 |
Income tax expense | (44,995) | (395,288) | (156,717) | (371,153) |
Profit for the year | 3,335,780 | 2,337,500 | 1,689,366 | 2,128,945 |
Total comprehensive income for the period | 3,335,780 | 2,337,500 | 1,689,366 | 2,128,945 |
Profit is attributable to: | ||||
Owners of ROS AGRO PLC | 3,355,489 | 2,317,189 | 1,713,075 | 2,113,255 |
Non-controlling interest | (19,709) | 20,311 | (23,709) | 15,690 |
Profit for the period | 3,335,780 | 2,337,500 | 1,689,366 | 2,128,945 |
Total comprehensive income is attributable to: | ||||
Owners of ROS AGRO PLC | 3,355,489 | 2,317,189 | 1,713,075 | 2,113,255 |
Non-controlling interest | (19,709) | 20,311 | (23,709) | 15,690 |
Total comprehensive income for the period | 3,335,780 | 2,337,500 | 1,689,366 | 2,128,945 |
Earnings per ordinary share for profit attributable to the owners of ROS | 124.74 | 86.14 | 63.68 | 78.56 |
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Appendix 2. Segment information for the Six month ended 30 June 2019 (in RR thousand)
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1H 2019 | Sugar | Meat | Agriculture | Oil and Fat | Other | Elimination | Total |
Sales | 15,674,283 | 11,171,200 | 9,333,729 | 36,336,910 | 3,106,566 | (2,074,903) | 73,547,785 |
Net gain / (loss) on revaluation of biological assets and agricultural produce | - | (255,627) | (2,794,959) | - | - | (860,507) | (3,911,093) |
Cost of sales | (12,464,131) | (8,929,821) | (5,229,822) | (32,281,154) | (2,825,991) | 3,240,707 | (58,490,212) |
incl. depreciation | (966,917) | (1,263,857) | (658,246) | (229,296) | (3,878) | (5,853) | (3,128,047) |
Net gain/ (loss) from trading derivatives | (5,817) | - | - | - | (6) | - | (5,823) |
Gross profit / (loss) | 3,204,335 | 1,985,752 | 1,308,948 | 4,055,756 | 280,569 | 305,297 | 11,140,657 |
General and administrative expenses, Distribution and selling expenses | (1,834,310) | (943,691) | (2,182,756) | (3,769,047) | (1,100,599) | 127,019 | (9,703,384) |
incl. depreciation | (40,185) | (30,825) | (120,082) | (62,067) | (11,495) | 5,853 | (258,801) |
Other operating (expenses)/ income, net | 314,920 | 140,099 | (107,984) | (209,494) | 10,067,510 | (9,892,935) | 312,116 |
incl. Reimbursement of operating costs (government grants) | - | 1,575 | 71,783 | - | - | - | 73,358 |
Operating profit / (loss) | 1,684,945 | 1,182,160 | (981,792) | 77,215 | 9,247,480 | (9,460,619) | 1,749,389 |
Adjustments: | |||||||
Depreciation included in Operating Profit | 1,007,102 | 1,294,682 | 778,328 | 291,363 | 15,373 | - | 3,386,848 |
Other operating income, net | (314,920) | (140,099) | 107,984 | 209,494 | (10,067,510) | 9,892,935 | (312,116) |
Reimbursement of operating costs (government grants) | - | 1,575 | 71,783 | - | - | - | 73,358 |
Net gain / (loss) on revaluation of biological assets and agricultural produce | - | 255,627 | 2,794,959 | - | - | 860,507 | 3,911,093 |
Adjusted EBITDA | 2,377,127 | 2,593,945 | 2,771,262 | 578,072 | (804,657) | 1,292,823 | 8,808,572 |
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* Non-IFRS measure
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Appendix 2 (continued). Segment information for the Six month ended 30 June 2018 (in RR thousand)
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1H 2018 | Sugar | Meat | Agriculture | Oil and Fat | Other | Eliminations | Total |
Sales | 10,670,515 | 9,416,924 | 3,212,126 | 10,028,581 | 113,960 | (627,537) | 32,814,569 |
Net gain/ (loss) on revaluation of biological assets and agricultural produce | - | (87,502) | (618,239) | - | - | (194,698) | (900,439) |
Cost of sales | (7,564,829) | (6,885,919) | (2,083,484) | (7,696,415) | (92,775) | 484,594 | (23,838,828) |
incl. Depreciation | (1,057,184) | (1,035,071) | (203,648) | (176,330) | (492) | (6,990) | (2,479,715) |
Net gain/ (loss) from trading derivatives | 4,560 | - | - | - | - | - | 4,560 |
Gross profit / (loss) | 3,110,246 | 2,443,503 | 510,403 | 2,332,166 | 21,185 | (337,641) | 8,079,863 |
Distribution and Selling, General and administrative expenses | (1,896,708) | (746,003) | (1,253,626) | (1,494,715) | (511,967) | (67,682) | (5,970,701) |
incl. Depreciation | (49,418) | (23,816) | (76,830) | (66,382) | (12,967) | 6,990 | (222,423) |
Other operating income/(expenses), net | 46,978 | 102,417 | (67,816) | (26,008) | 10,840,370 | (10,919,086) | (23,145) |
incl. Reimbursement of operating costs (government grants) | - | - | 60,277 | - | - | - | 60,277 |
Operating profit / (loss) | 1,260,516 | 1,799,917 | (811,039) | 811,443 | 10,349,588 | (11,324,409) | 2,086,015 |
Adjustments: | |||||||
Depreciation included in Operating Profit | 1,106,601 | 1,058,886 | 280,478 | 242,712 | 13,459 | - | 2,702,136 |
Other operating (income) /expenses, net | (46,978) | (102,417) | 67,816 | 26,008 | (10,840,370) | 10,919,086 | 23,145 |
Reimbursement of operating costs (government grants) | - | - | 60,277 | - | - | - | 60,277 |
Net gain/ (loss) on revaluation of biological assets and agricultural produce | - | 87,502 | 618,239 | - | - | 194,698 | 900,439 |
Adjusted EBITDA* | 2,320,139 | 2,843,888 | 215,771 | 1,080,163 | (477,323) | (210,744) | 5,771,894 |
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* Non-IFRS measure
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Appendix 3. Consolidated statement of financial position as at 30 June 2019
(in RR thousand)
30 June 2019 | 31 December 2018 | |
ASSETS | ||
Current assets | ||
Cash and cash equivalents | 2,677,762 | 1,728,396 |
Restricted cash | 274,468 | 49 |
Short-term investments | 5,694,944 | 8,551,238 |
Trade and other receivables | 8,291,015 | 6,226,403 |
Prepayments | 2,462,921 | 2,194,971 |
Current income tax receivable | 452,318 | 533,459 |
Other taxes receivable | 3,788,155 | 4,420,011 |
Inventories and short-term biological assets | 44,437,407 | 53,076,878 |
Total current assets | 68,078,990 | 76,731,405 |
Non-current assets | ||
Property, plant and equipment | 72,027,306 | 68,606,452 |
Inventories intended for construction | 4,003,447 | 4,136,855 |
Goodwill | 2,364,942 | 2,364,942 |
Advances paid for non-current assets | 9,771,855 | 9,681,448 |
Long-term biological assets | 3,111,851 | 2,650,201 |
Long-term investments and receivables | 50,297,065 | 54,494,252 |
Investments in associates | 7,320 | 7,320 |
Deferred income tax assets | 3,273,216 | 1,866,593 |
Other intangible assets | 4,060,223 | 2,202,786 |
Other non-current assets | - | 215,417 |
Non-current assets held for sale | 820,950 | 820,950 |
Total non-current assets | 149,738,175 | 147,047,216 |
Total assets | 217,817,165 | 223,778,621 |
 Liabilities and EQUITY | ||
Current liabilities | ||
Long-term borrowings | 17,268,064 | 32,513,595 |
Government grants | 16,575,811 | 12,190,160 |
Deferred income tax liability | 117,232 | 60,913 |
Other non-current liability | 4,069,388 | 4,023,910 |
Total current liabilities | 38,030,495 | 48,788,611 |
Non-current liabilities | ||
Long-term borrowings | 63,683,830 | 62,587,531 |
Government grants | 8,189,125 | 7,310,975 |
Deferred income tax liability | 1,570,468 | 359,051 |
Other non-current liability | 4,167,325 | 2,465,813 |
Total non-current liabilities | 77,610,748 | 72,723,370 |
Total liabilities | 115,641,243 | 121,511,981 |
Equity | ||
Share capital | 12,269 | 12,269 |
Treasury shares | (490,606) | (490,606) |
Additional paid-in capital | 26,964,542 | 26,964,479 |
Other reserves | 1,326,579 | 1,326,579 |
Retained earnings | 74,215,017 | 74,286,089 |
Equity attributable to owners of ROS AGRO PLC | 102,027,801 | 102,098,809 |
Non-controlling interest | 148,122 | 167,831 |
Total equity | 102,175,922 | 102,266,640 |
Total liabilities and equity | 217,817,165 | 223,778,621 |
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Appendix 4. Consolidated statement of cash flows for the six months ended 30 June 2019
(in RR thousand) - NOT IFRS PRESENTATION (*)
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Six months ended | Six months ended | |
30 June 2019 | 30 June 2018 | |
Cash flows from operating activities | ||
Profit before income tax | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 3,380,774Â Â Â | 2,732,758 |
Adjustments for: | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â -Â Â Â | - |
Depreciation and amortization | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 4,175,740Â Â Â | 3,813,700 |
Interest expense | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 2,716,805Â Â Â | 1,588,837 |
Government grants | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â (332,006)Â Â | (754,454) |
Interest income | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â (3,987,686)Â Â | (1,815,118) |
Loss/ (gain) on disposal of property, plant and equipment | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 93,300Â Â Â | 14,767 |
Net (gain) / loss on revaluation of biological assets and agricultural produce | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 3,911,093Â Â Â | 900,439 |
Change in provision for net realisable value of inventory | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â (38,719)Â Â | (66,378) |
Change in provision for impairment of receivables and prepayments | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 71,869Â Â Â | 7,562 |
Foreign exchange (gain) / loss, net | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 19,874Â Â Â | 154,766 |
Lost/(reversal of) harvest write-off | 82,785 | 2,224 |
Net (gain) / loss from bonds held for trading | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 22,515Â Â Â | 7,954 |
Settlement of loans and accounts receivable previously written-off | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â (11)Â Â | (130) |
Change in provision for impairment of advances paid for property, plant and equipment | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 29,235Â Â Â | (35,039) |
Dividend income | 39 | - |
Loss/(gain) on disposal of subsidiaries, net | (364Â 880) | - |
Loss on other investments | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 575Â Â | - |
Other non-cash and non-operating expenses, net | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â (176,806)Â Â | (9,360) |
Operating cash flow before working capital changes | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 9,604,495Â Â Â | 6,542,529 |
Change in trade and other receivables and prepayments | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â (2,329,312)Â Â Â | (106,072) |
Change in other taxes receivable | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 631,855Â Â Â | (106,784) |
Change in inventories and biological assets | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 4,222,699Â Â | 245,011 |
Change in trade and other payables | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 6,552,036Â Â Â | 896,768 |
Change in other taxes payable | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 32,176Â Â | 63,868 |
Cash generated from operations | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 18,713,949Â Â Â | 7,535,319 |
Income tax paid | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â (90,134)Â Â | (229,035) |
Net cash from operating activities | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 18,623,815Â Â Â | 7,306,285 |
Cash flows from investing activities | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â -Â Â Â | - |
Purchases of property, plant and equipment | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â (5,643,964)Â Â | (7,083,672) |
Purchases of other intangible assets | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â (47,092)Â Â | (93,666) |
Proceeds from sales of property, plant and equipment | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 142,458Â Â Â | 35,919 |
Purchases of inventories intended for construction | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â (761,049)Â Â | (797,854) |
Investments in subsidiaries, net of cash acquired | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â -Â Â Â | 80 |
Proceeds from sale of subsidiaries, net of cash disposed | 478,710 | - |
Movement in restricted cash | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â (277,327)Â Â | 658 |
Net cash from investing activities | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â (6,108,264)Â Â | (7,938,535) |
Cash flows from financing activities | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â -Â Â Â | - |
Proceeds from borrowings | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 19,753,266Â Â | 5,975,114 |
Repayment of borrowings | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â (34,813,882)Â Â | (6,390,966) |
Interest paid | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â (2,961,203)Â Â | (1,299,958) |
Change in cash on bank deposits* | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 2,594,903Â Â Â | (1,947,002) |
Proceeds from sales of bonds with maturity over six months | 2,323,560 | - |
Loans given* | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â (87,189)Â Â Â | (1,404,808) |
Loans repaid* | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 1,629,718Â Â Â | 3,378 |
Interest received* | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 2,733,560Â Â Â | 1,288,976 |
Proceeds from government grants | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 770,390Â Â Â | 591,516 |
Purchases of non-controlling interest | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â -Â Â | (56,816) |
Dividends paid to owners Ros Agro PLC | (3,401,828) | (2,384,983) |
Lease payments | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 6,982Â Â | (17,605) |
Net cash from financing activities |                      (11,452,177)   | (1,749,149) |
Net effect of exchange rate changes on cash and cash equivalents | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â (114,007)Â Â | 63,011 |
Net increase/ (decrease) in cash and cash equivalents | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 949,366Â Â | (2,318,389) |
Cash and cash equivalents at the beginning of the period | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 1,728,396Â Â Â | 4,860,335 |
Cash and cash equivalents at the end of the period | Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 2,677,762Â Â Â | 2,541,947 |
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(*) For the purpose of conformity with the methodology of the Group's net debt calculation, investments in financial assets related to financial activities are presented in Cash flows from financing activities in the Group's management accounts.
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