Ros Agro S Regulatory News (AGRO)

11 May 2022

ROS AGRO financial results for 1Q 2022

11 May 2022 - Today ROS AGRO PLC (the "Company"), the holding companyof Rusagro Group (the "Rusagro"), a leading Russian diversified food producer with vertically integrated operations, has announced the financial results for the three months ended 31 March 2022.

1Q 2022 HIGHLIGHTS

- Sales amounted to RUB 61,506 million (US$ 715 million1), an increase of RUB 11,573 million (+23%) compared to 1Q 2021;

- Adjusted EBITDA2 amounted to RUB 16,887 million (US$ 196 million), an increase of RUB 5,718 million (+51%) compared to 1Q 2021;

- Adjusted EBITDA margin rose from 22% in 1Q 2021 to 27% in 1Q 2022;

- Net profit for the period amounted to RUB 2,240 million (US$ 26 million), a decrease of RUB 4,286 million (-66%);

- Net debt position3 as of 31 March 2022 amounted to RUB 91,681 million (US$ 1,090 million);

- Net Debt/Adjusted EBITDA (LTM4) as of 31 March 2022 was 1.70.

Commenting on the results, Timur Lipatov, CEO of Rusagro, said:

"In 1Q 2022 Rusagro continued to demonstrate growth of its revenue and adjusted EBITDA, but net profit decreased due to forex losses caused by money blocking by European banks. Supported by higher total sales volumes across all business segments except Sugar segment, net revenue increased by 23%. Moreover, as sales grew more than corresponding rise in costs of goods, adjusted EBITDA margin had a 5 pp improvement, which pushed EBITDA by 51% up in comparison to the same quarter of the previous year."

Key consolidated financial performance indicators

1 Net profit for the period is affected by non-cash income/(loss) on revaluation of biological assets and agricultural produce.

Sales volume of Rusagro products in 1Q 2022

KEY CONSOLIDATED CASH FLOW INDICATORS (NOT IFRS PRESENTATION*)

The key consolidated cash flow indicators presented according to management accounts methodology

(*) See Appendix 3

The key investments in property, plant and equipment and inventories intended for construction during 1Q 2022 were made in the Meat segment in the amount of RUB 1,277 million (1Q 2021: RUB 1,251 million) mainly due to the purchases related to the construction project in the Russian Far East. Investments in the Agriculture segment in the amount of RUB 830 million (1Q 2021: RUB 258 million), Oil and Fat segment in the amount of RUB 815 million (1Q 2021 : RUB 405 million), and Sugar segment in the amount of RUB 166 million (1Q 2021: RUB 126 million) mainly relate to purchases of machinery and equipment for production facilities renewal and maintenance.

Debt position and liquidity management

Net finance income/ (expense)

Net debt increased at 31 March 2022 compared at 31 December 2021 as a result of an increase in short-term borrowings.

In 1Q 2022 Rusagro continued to enjoy benefits from the state agriculture subsidies programme. The Rusagro continued to receive bank loans with decreased preferential interest rates under the 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 1Q 2022 IFRS accounts these credits are accounted according to its face value with no adjustments to prevailing market rates. The differences between nominal and market interest rate is recognized as either government grants in a statement of financial position for borrowings received with the purpose to finance investment projects or interest expenses in a statement of comprehensive income for general purpose borrowings.

Net finance income of 1Q 2021 in the sum of RUB 505 million changed to net finance expense in the amount of RUB 7,092 million in 1Q 2022 as the result of negative dynamics in forex losses in 1Q 2022 and increase in interest income on bank deposits in 1Q 2022, partially compensated by lower interest income on SolPro loans.

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(1) The exchange rates used for translation of RUB 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) net gain/ (loss) on revaluation of biological assets and agricultural produce, (iii) non-recurring components of other operating income/ (expenses), net, (iv) share-based remuneration, (v) provision for impairment of loans issued (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 Rusagro 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".

(5) Starting from the beginning of 2020 part of other operating income and expensed (recurring items) was included in Adjusted EBITDA calculation. Figures of 2022 and 2021 calculated using prior periods' logic (excluding other operating income/expenses) are shown in table Debt position and liquidity management above and in the diagram with Net debt/ LTM EBITDA trend analysis for comparative purposes

NOTE

ROS AGRO PLC (LSE, MOEX: AGRO) - a holding company of Rusagro Group, a leading Russian diversified food producer with vertically integrated operations in the following branches:

Agricultural:

Rusagro currently controls one of the largest land banks among Russian agriculture producers, with 643 thousand hectares of land under control located in the highly fertile Black Earth region of Russia (in the Belgorod, Tambov, Voronezh, Kursk, Orel regions) and in the Far East Primorye Region. Land and production sites are strategically located withinthe same regions to optimize efficiency and minimize logistical costs. Rusagro is oneof the major sugar beet producers in Russia, but it also produces wheat and corn, sunflower seeds and soybeans. These products are partially consumed by the Meat and Oil and Fat segments, supporting a synergistic effect and lowering price change risk.

Oil and Fat:

Rusagro is the leading crude sunflower oil and consumer margarine producer, second largest industrial fats and mayonnaise producer in Russia with products sold under eleven key brands, such as EZhK, Schedroye Leto, Mechta Khozyaiki, umbrella brand Ya Lublu Gotovit (includes Moskovskiy Provansal, Novosibirskiy Provansal and Saratovskiy Provansal), Rossiyanka and Saratovskiy Slivochniy, Benefitto, Maslava and Leto Krasno (红色夏日), which is sold on the Chinese market. Rusagro also produces dry industrial mixes, cheeses, butter and cream sold under three brands: Milie, Syrnaya Kultura and Ya Lublu Gotovit. Rusagro owns four crushing and two oil & fats plants and leases two milk processing plants. Owning its sunflower and soy oil production allows Rusagro to control the source of the sunflower and soybean oil required to produce oil and fats products.

Sugar:

Rusagro is one of the leading Russian sugar producers (№3 in Russia and №1 on cube white sugar market), producing sugar from sugar beet at nine production sites in four regions. Group produces white and brown sugar sold under the brands Russkii Sakhar, Chaikofsky, Mon Cafeand Brauni. The Sugar segment is vertically integrated and sugar beets are supplied by Rusagro's Agriculture segment, which ensures a consistent supply. The sugar segment also operates a cereal plant and sells buckwheat and rice under the brand Tyoplye Traditsii.

Meat:

Rusagro is №4 largest pork producer in Russia. It operates large commercial pig breeding complexes adhering to best practices regarding biosecurity standards, nucleus farms, compound feed plants, slaughterhouses and meat processing plants in Tambov and Belgorod Regions and in the Russian Far East. Since 2016, Rusagro sells retail products under its own brand Slovo Myasnika (Butcher's word).

CONFERENCE CALL

Rusagro management is organizing a conference call on Company's 1Q 2022 financial results for investors and analysts.

Details of the call:

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 relateto 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 outin 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 eventsor circumstances after the date of this document.

CONTACTS

Appendix 1. Consolidated statement of comprehensive income for the Three months ended 31 March 2022 (in RUB thousand)

Appendix 2. Consolidated statement of financial position as at 31 March 2022(in RUB thousand)

Appendix 3. Consolidated statement of cash flows for the Three months ended 31 March 2022 (in RUB thousand) - NOT IFRS PRESENTATION (*)

(*) 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.