RusAgroAGRO787,60
8 In August, Rusagro published on its website the financial results of the results 1 half of 2022, That, at first sight, look ambiguous: revenue increased, EBITDA and Gross Profit, but net profit for the first half of the year collapsed more than 100 times, and in 2 quarter even a net loss occurred. Here are the highlights from the report:
- revenue increased by 22%, to 127.23 billion rubles, which was a record result for this period;
- adjusted EBITDA increased by 36% and reached 30.16 billion rubles, and the profitability of the indicator has increased since 21 to 24%;
- net profit compared to 1 half of 2021 collapsed from 17.6 billion rubles to 166 million rubles due to non-cash losses from exchange rate differences;
- net debt since the beginning of the year increased by 35% and almost reached 99 billion rubles;
- debt load at net debt / adjusted EBITDA ratio for 6 months rose from 1.53 to 1.76×;
- a return to the payment of dividends may take place after, how the company is re-registered in the Russian jurisdiction.
Revenue and profit
The holding's revenue in January-June 2022 increased by 22% and reached 127.23 billion rubles, which is due to an increase in natural sales of sugar and pig products, as well as high inflation in Russia for food products, especially since March of this year.
Among other things, due to inflationary processes, the cost of sales of Rusagro increased by almost 15%, to RUB 92.8 billion. Operating expenses of the business in 1 half of the year grew almost in 2,5 Times, to RUB 15.1 billion, which is mainly caused by an increase in commercial expenses since 4,32 to RUB 7.36 billion, as well as increases in other operating expenses.
As a result, Rusagro's operating profit decreased by 5% from last year's high base and amounted to 17.45 billion rubles.
At the same time, the business reflected in the line of other financial expenses a loss of 19.68 billion rubles., which is mainly due to the non-monetary revaluation of exchange rate differences against the background of high volatility of the ruble exchange rate in 1 Half.
As a result, Rusagro received a net loss before tax in the amount of 1.2 billion rubles. And only the income tax refund in the amount of 1.37 billion rubles allowed the business to avoid a net loss for the entire half of the year.. Nevertheless, the net profit of the holding amounted to only 166 million rubles., which was a multi-year low.
Furthermore, in 2 Quarter, the company still recorded a net loss of 1.78 billion rubles. But it is worth considering, that this loss is mainly due to one-time non-cash items due to exchange rate fluctuations.
So, adjusted EBITDA in January-June increased by 36% for the first time in the same period, exceeding 30 billion rubles. The main contribution to the growth of the indicator was made by the sugar segment.
Rusagro's Financial Results, billion rubles
| 1п2019 | 1п2020 | 1п2021 | 1p2022 | |
|---|---|---|---|---|
| Revenue | 65,32 | 72,16 | 104,37 | 127,23 |
| Operating profit | 1,45 | 9,97 | 18,30 | 17,45 |
| Adjusted EBITDA | 7,78 | 11,9 | 22,12 | 30,16 |
| Net profit | 2,57 | 9,73 | 17,6 | 0,17 |
Investments and debts
In January-June 2022, Rusagro's capital expenditures amounted to 4.63 billion rubles, of which 3.09 billion rubles were invested in 1 quarter, when market conditions were more favorable for investment. IN 2 in the quarter, the business allocated only 1.54 billion rubles for the acquisition of fixed assets.
In the structure of investments by segments, the main share is 48,3%, or 2.23 billion rubles, — in 1 half of the year fell on the meat segment, which is mainly due to the construction of a large industrial complex in the Far East.
For 6 months since the beginning of the year, the net debt of the business has grown by 35% — from 73.41 to 98.97 billion rubles, — which is mainly due to the growth of short-term loans and loans for 60%, to 69.56 billion rubles. Against this background, the debt burden of the business increased in terms of the net debt / EBITDA ratio from 1.53 to 1.76×.
Rusagro's capital expenditures, billion rubles
| 1п2019 | 6,405 |
| 1п2020 | 4,825 |
| 1п2021 | 6,222 |
| 1p2022 | 4,627 |
6,405
Dividends
In September 2021, the Company's Board of Directors decided to increase the minimum level of dividend payments from 25 to 50% of net profit under IFRS.. The company paid dividends in dollars.
The final dividend at the end of 2021 should have been 5,1 $ per share, but against the background of the realization of geopolitical risks, the company decided to suspend dividend payments., among other things and to avoid the risk of blocking money transfers through foreign financial institutions.
At an online conference on financial results for 2 quarter and 6 2022 management said, that so far the resumption of dividend payments is not planned and that part of the solution to this issue will be associated with a possible process of re-omiciliation - the re-registration of the company in the Russian jurisdiction, but no details on the possible parameters and timing of the "move" were not named..
5 August, the Board of Directors recommended not to pay dividends based on the results 1 half of 2022, and also not to hold meetings of shareholders.
What's the bottom line?
Financial results of the business for the past six months look contradictory. On the one side, the company significantly increased revenue and EBITDA, on the other hand, the debt burden is growing and there is a significant loss from exchange rate differences. Business 'unlucky', that on the date of calculation — 30 June - the ruble was the strongest against the dollar in recent years.
Still unclear, when the company returns to the previous dividend policy. apparently, this will happen only after, how business is re-registered in Russia.
It is worth noting, that Rusagro has successfully completed the sowing campaign 2022, and global food prices remain high amid risks of scarcity. All this creates good prospects for business., to take advantage of favorable market conditions to further increase revenue in 2 Half.
