Ros Agro S Regulatory News (AGRO)

1 December 2011, Moscow

Ros Agro 9 month financial results of the year 2011

Moscow, 1 December 2011 - Today ROS AGRO PLC, Holding Company of Rusagro Group, a leading Russian diversified food producer with vertically integrated operations, has announced the unaudited financial results for the period ended 30 September 2011.

9 month of the year 2011 Highlights

- Sales amounted to 29 314 mln roubles (1 020 mln USD), an increase of 7 365 mln roubles compared to 9 months of the year 2010;

- Adjusted EBITDA (*) amounted to 1 748 mln roubles (61 mln USD), a decrease of 3 201 mln roubles compared to 9 months of the year 2010;

- Adjusted EBITDA margin achieved is 5,96 %;

- Adjusted Net profit (**) for the period of 1 595 mln roubles (56 mln USD) (in comparable terms with 9 months 2010 excluding share-based remuneration of 570 mln), a decrease of 2 221 mln roubles compared to 9 months of the year 2010;

- Net debt position (***) on 30 September 2011 of 9 647 mln roubles (303 mln USD);

- Net Debt/ EBITDA (LTM) (****) 2,0x.

Commenting on the results, Maxim Basov, a member of the Board of Directors of ROS AGRO PLC and CEO of the Group said:

Considering the 9 month results of 2011, we can acknowledge that despite the negative impact of the drought in 2010 and extremely volatile situation on world markets, the company has shown sustainable results and has strong cash flow.

Over the past nine months we have faced significant macroeconomic uncertainty, which has seriously affected the dynamics of world commodity prices, while also breaking the correlation between world and domestic prices. The result has been that we have not earned the money that was targeted for cane sugar.

The significant reduction in market sales prices, which among others was caused by the uniquely high yield, especially in the sugar and agricultural divisions, has forced us to lower sales volumes in the current year in order to achieve better results in a period with more attractive market prices. At the same time, we are satisfied with the results of the B2C sugar division, which has given us more stability during a period of high price volatility

We are also very pleased with the positive dynamics in the meat division, which has shown a significant increase in the results despite the costs of the Tambov bacon project which had only expenditure component before its startup.

We continue to focus on operational efficacy, which permits us to accomplish more stability in any market situation with impossibility to influence the dynamics of sales prices.

The company has shown the record production levels and achieved all planned goals in production of all business divisions. We would like to confirm that all of our key investment projects remain on schedule and within budget.

The Group is looking to the future with confident and we continue to believe that our focus on operational efficiency and strong financial position will allow the company to achieve its strategic goals.

Consolidated Income statement, key indicators

Change of Sales and adjusted EBITDA as per divisions

Key operational and financial figures as per division

Sugar

During the reported period our seven sugar processing plants have produced 743 thousand tons of sugar, 38% more than in 9M 2010 (3Q 2011: 215 thousand tons of sugar, 40% more than in the 3Q 2010). For 9M 2011 sales volume was 749 thousand tons (20% more than last year), which included 122 thousand tons of beet sugar and 627 thousand tons of cane sugar. In the 3rd Q2011 sales volume was 267 thousand tons (33% more than last year), which included 42 thousand tons of beet sugar and 225 thousand tons of cane sugar.

Net Sales of Sugar division has increased by 37% to 20 886 mln roubles (727 mln USD), average sale price was 27.7 roubles per kilogram excl. VAT (26,41 roubles per kilogram excl. VAT for the 3rd Q2011). While performing the B2C expansion strategy, the Group continued to increase the refined packed cube sugar market share.

Division EBITDA was 446 mln roubles (16 mln USD), 86% less than in 9M 2010 primarily due to significant volatility on global commodities markets and the smaller sales of beet sugar (by 68 thousand tones) and higher cost of beet sugar in 2010 than in 2009 as a result of summer drought 2010.

Meat

The meat sales volume during the reported period was 44 thousand tons, which was 1% less than last year. An average sale price for 9M 2011 was 75 roubles per kilogram excl. VAT (77 roubles per kilogram excl. VAT for the 3rd Q 2011). At the same time mixed fodder sales volume have increased by 37% to 44 thousand tons.

The key production efficiency figures were better than in 9M of last year.

Net Sales have increased by 17% to 3 740 mln roubles (130 mln USD). EBITDA has increased by 15% to 1 577 mln roubles (55 mln USD) despite higher feed cost with EBITDA margin of 42,16% .

The Group's biggest capital expenditure projects in Tambov and Belgorod region were progressing in accordance with plan.

Agricultural

The Group increased the area of controlled land to 420 thousand hectares. Net Sales have increased by 66% to 1 993 mln roubles (69 mln USD). The sales volume of grains amounted to 150 thousand tons (including 112 thousand tons sold to the Group's Meat Division) in the 9M2011. EBITDA has increased to 295 mln roubles (10 mln USD) despite decreasing government grants (39 mln roubles in 9M 2011 compared with 115 mln roubles in 9M 2010) with EBITDA margin of 14.8%.

The group completed the harvest of grain and has started sugar beet harvest. On our estimates the yields are very good and exact numbers will be published late in 4Q.

Oil&Fat

The Group has launched vegetable oil production on its new extraction plant located in Samara region and has produced 30 thousand tons of oil.

Production volume of mayonnaise and consumer margarine have exceeded the 9M 2010 figures by 1% and 7% respectively.

Division Net Sales increased by 37% to 4 337 mln roubles (151 mln USD), with average margarine sale price of 47,4 roubles per kilogram excl. VAT (+4%) for 9M 2011 (49.4 roubles per kilogram for the 3rd Q 2011), mayonnaise sale price of 53,3 roubles per kilogram excl. VAT (+10%) for 9M 2011 (54 roubles per kilogram for the 3rd Q 2011) and selling raw oil prices 36,5 roubles per kilogram for 9M 2011 (36,3 roubles per kilogram for the 3rd Q 2011). Margarine and mayonnaise selling price increase did not offset 18% increase in vegetable oil price comparing to 2010 (due to 2010 drought). These factors have resulted in EBITDA decrease in mayonnaise and margarine sales in 9M2011 comparing to 9M2010 results. EBITDA in 9M2011 include 213 mln roubles loss of Samaraagroprompererabotka, the oil extraction plant acquired at the beginning of 2011 year. This loss resulted from the sharp decrease in sale prices for raw oil.

Consolidated Statement of cash flow - key indicators

Net cash from operating activities of 3 089 mln roubles have increased by 30% as result of favorable changes in working capital that offset negative changes in operating profit.

Capex investments during the reported period have totaled to 8 712 mln roubles, 235% higher than in 9M2010 primarily due to purchases of property and equipment in Agricultural division of 4,7 bln roubles, in Meat division of 2,9 bln roubles and in Sugar division of 0,8 bln roubles.

For the capital expenditure financing purposes the Group uses both its own resources and long-term loans (typically with maturities of seven years) with the partial rebates of the interest expenses incurred provided by the State.

One of the main factors of increasing net cash from financing activities was the Group's IPO.

Debt position and liquidity management

Net finance expense:

Regardless of traditional seasonal peak the Group has had a relatively low leverage, well balanced net debt maturity structure and strong, longstanding relationships with leading Russian banks which provide us access to significant, long-term financing at competitive rates.

Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities. Debt and deposit position of the Group are sufficiently balanced, all deposits were placed only into high quality Russian banks. Group Treasury aims are to maintain low currency risk (only functional currency Russian roubles) in deposit and credit portfolio. Ratio Net Debt/EBITDA on 30 September 2011 has been strengthened vs. ratio on 30 September 2010 and amounted to 2.0x. On 30 September 2011 the Group has kept committed credit lines available on 13 bln roubles. The group reduced its net finance expense by 381 mln roubles compared with 9 months 2010. As an agricultural producer Rusagro benefits from government support in the form of government grants for repayment of interest paid. Gross debt excluding trade financing as of 30 September 2011 can be subsidized.

Appendices:

I. Unaudited Consolidated Statement of Comprehensive Income for the Nine Months Ended 30 September 2011

II. Unaudited Consolidated Highlights as per divisions for the Nine Months Ended 30 September 2011

III. Unaudited Consolidated Statement of Financial Position at 30 September 2011

IV. Unaudited Consolidated Cash Flow for the Nine Months Ended 30 September 2011

(*) In order to provide investors with additional insight into the earnings of the Group and for the purpose of comparison with similar businesses, information is presented in accordance with the accounting policies adopted by the Group for the preparation of the Consolidated Financial Statements. This information is prepared on the basis of IFRS principles, but such segment information is not required by IFRS to be presented, and the Group presents such information in the notes to the Consolidated Financial Statements for comparison purposes only.

Adjusted EBITDA is defined as operating profit before taking into account (i) depreciation, (ii) other operating income, net (other than reimbursement of fuel and fertilisers (government grants)), (iii) the difference between gain on initial recognition of agricultural produce recognised in the year and the gain on initial recognition of agricultural produce attributable to realized agricultural produce for the year, and revaluation of biological assets of previous years attributable to realised biological assets and included in cost of sales (iv) provision/(reversal) for net realisable value, (v) share-based remuneration and (vi) unrealized losses from trading sugar derivative (see Appendix 2 for the detailed calculation of Adjusted EBITDA). Adjusted EBITDA is not a measure of financial performance under IFRS. You should not consider it an alternative to profit for the year 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.

(**) Adjusted Net profit is determined as Profit for the year excluding share-based remuneration of 570 mln roubles.

Share-based remuneration represents the fair value of shares of ROS AGRO PLC granted by the controlling shareholder in March 2011 to Maxim Basov as part of his compensation package and gradually expensed in statement of comprehensive income until 2014, providing Mr. Basov remains in the position of the Director.

(***) The Group determines the net debt of the Group as outstanding bank loans and state budget loans less cash in hand, bank balances receivable on demand, bank deposits and promissory notes.

(****) LTM - The abbreviation for the "Last twelve months".

(*****) The functional currency of the Group's consolidated entities is the Russian Rouble (RR). We believe that for the purpose of convenience some of the figures in the above Release could be presented in USD. For PL figures we have used an average exchange rate for the reported period of 28,7423 RR/USD. For the Balance sheet figures on 30 September 2011- 31,8751 RR/USD respectively. Recent changes in currency rate RR/USD has resulted significantly on financial indicators, recalculated in USD compared to the similar of the prior year.

(******) In the current Release EBITDA ratio should be treated as Adjusted EBITDA. See definition as per note above.

Note:

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

Sugar:

We are a leading Russian sugar producer, producing sugar on seven production sites from both sugar beets and raw cane sugar. We produce white cube sugar and white packaged sugar branded under the brands Chaikofsky, Russkii Sakhar, Brauni. Our Sugar division is vertically integrated with the sugar beet cultivation in our Agriculture division, through which we strive to ensure a consistent supply of sugar beets.

Meat:

Our pig breeding project was launched in 2006 and, according to the National Union of Pig Breeders, is currently the fifth largest pig breeding complex in Russia. We have implemented the best practices regarding biosecurity at our pig farms.

Agricultural:

The Group currently controls what it believes to be one of the largest land banks among Russian agriculture producers, with approximately 420 thousand hectares of land currently under our control located in the highly fertile Black Earth region of Russia, in the Belgorod, Tambov and Voronezh regions. Land and production sites are strategically located within the same regions to optimize efficiency and minimize logistical costs. We believe we are a leading Russian sugar beet producer, and our agricultural division also produces winter wheat and barley, sunflower products and soybeans. These products are partially consumed by the meat division, supporting and developing the synergic effect and lowering the price change risk.

Oil&Fat:

We are a leading producer of mayonnaise and consumer margarine in Russia, such as Provansal EZhK and Schedroe Leto. In addition, in March 2011, we acquired control of an oil extraction plant located in Samara, through which we expect to be able to control the source of 100% of the vegetable oil required by our oil and fats production plant.

Our sales in 2010 amounted to 30 956 mln. RRles (1 018 mln. USD), adjusted EBITDA amounted to 7 916 mln RRles, (260 mln USD), Net profit amounted to 5 158 mln RRles (169 mln USD). An average growth rate on Sales shows more than 30% for the last three years and more than 75% on Adjusted EBITDA

Forward-looking statements

This announcement includes statements that are, or may be deemed to be forward-looking statements. These forward-looking statements can be identified, that they do not relate to the historical or current events, or relate 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 the result, actual future results may differ materially from the plans and expectations set out in these forward-looking statements.

The Group undertakes no obligation policy 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 organizes the presentation on conference call for investors and analytics

Details of call:

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Contacts:

Appendix 1. Unaudited consolidated statement of comprehensive income for the nine months ended 30 September 2011 (in thousand roubles)

Appendix 2. Unaudited segment information for the nine months ended 30 September 2011 (in thousand roubles)

Appendix 2 (continued). Unaudited segment information for the nine months ended 30 September 2010 (in thousand roubles)

Appendix 3. Unaudited consolidated statements of financial positions as at 30 September 2011 (in thousand roubles)

Appendix 4. Unaudited consolidated statements of cash flows for the nine months ended 30 September 2011 (in thousand roubles)