30 Aug 2012 08:00
30 August 2012, Moscow
Ros Agro financial results 1st half of the year 2012
Moscow, August 30, 2012 - Today ROS AGRO PLC, Holding Company of Rusagro Group, a leading Russian diversified food producer with vertically integrated operations, has announced the financial results for the period ended 30 June 2012.
1st half of the year 2012 Highlights
- Sales amounted to 14,060 mln rubles (460 mln USD), a decrease of 4,783 mln rubles compared to 1st half of the year 2011;
- Adjusted EBITDA (*) amounted to 3,978 mln rubles (130 mln USD), an increase of 2,477 mln rubles compared to 1st half of the year 2011;
- Adjusted EBITDA margin achieved is 28 %;
- Net profit for the period of 1,917 mln rubles (63 mln USD), an increase of 1,989 mln rubles compared to 1st half of the year 2011;
- Net debt position (**) on 30 June 2012 of 12,809 mln rubles (390 mln USD);
- Net Debt/ Adjusted EBITDA (LTM) (***) on 30 June 2012 1.7x.
Commenting on the results, Maxim Basov, a member of the Board of Directors of ROS AGRO PLC and CEO of the Group said:
Looking at the 1st half of the year 2012 results we are pleased to highlight that they are better than 2011 results both in profit and profitability. The company has the best first half year EBITDA in its history.
Product price dynamics in the first half were positive. Our decision to accumulate sugar inventory in 2H 2011 for sale in 2012 proved to be right.
The EBITDA growth was driven mainly by the Oil division which has reached record results of 1,020 mln rubles. In the Meat division we continue to have high EBITDA margin of 46%. All our investment projects are progressing on time and in budget. Moreover we made a decision to increase our Tambov project by another 16 thousand tons and to build a slaughterhouse there. Despite the huge CAPEX program our net debt is well-balanced in terms of maturity and remains on the comfortable level for investors.
The accession to WTO will have diversified effect for the company - positive in Sugar due to increase protection of local market, neutral for Oil and Agricultural and possibly negative for Meat if veterinary ban for livestock import is removed. Furthermore the Company does not expect decrease in state support for the sector, though support may be redistributed among existing and new instruments.
The Group is looking to the future with optimism as we continue to believe that our strategy, management team and low-cost production assets will allow the Company to sustainably increase profits.
Consolidated Income statement, key indicators
in mln Roubles | Six months ended | % change | Three months ended | % change | ||
30 June 2012 | 30 June 2011 | 30 June 2012 | 30 June 2011 | |||
Sales | 14,060 | 18,843 | -25% | 7,758 | 12,783 | -39% |
Gross profit | 5,014 | 2,933 | 71% | 2,852 | 2,049 | 39% |
Gross margin, % | 36% | 16% | 37% | 16% | ||
Adjusted EBITDA | 3,978 | 1,501 | 165% | 2,491 | 1,237 | 101% |
Adjusted EBITDA margin, % | 28% | 8% | 32% | 10% | ||
Net profit for the period | 1,917 | (72) | 2764% | 1,360 | (43) | 3254% |
Net profit margin % | 14% | 0% | 18% | 0% |
Key financial indicators as per divisions
in mln Roubles | Six months ended | % change | Three months ended | % change | ||
30 June 2012 | 30 June 2011 | 30 June 2012 | 30 June 2011 | |||
Sales, incl. | 14,060 | 18,843 | -25% | 7,758 | 12,783 | -39% |
Sugar | 6,383 | 13,804 | -54% | 3,565 | 9,960 | -64% |
Meat | 2,625 | 2,400 | 9% | 1,402 | 1,295 | 8% |
Agriculture | 1,071 | 204 | 425% | 272 | 129 | 111% |
Oil & Fats | 4,359 | 2,501 | 74% | 2,536 | 1,450 | 75% |
Other | 143 | 137 | 4% | 54 | 79 | -32% |
Eliminations | (522) | (203) | -157% | (71) | (130) | 45% |
Gross profit, incl. | 5,014 | 2,933 | 71% | 2,852 | 2,049 | 39% |
Sugar | 1,957 | 1,800 | 9% | 1,224 | 1,360 | -10% |
Meat | 1,184 | 730 | 62% | 628 | 437 | 44% |
Agriculture | 149 | 57 | 164% | (42) | 50 | -186% |
Oil & Fats | 1,527 | 305 | 401% | 900 | 192 | 369% |
Other | 143 | 137 | 4% | 54 | 79 | -32% |
Eliminations | 54 | (95) | 157% | 87 | (68) | 228% |
Adjusted EBITDA, incl. | 3,978 | 1,501 | 165% | 2,491 | 1,237 | 101% |
Sugar | 1,236 | 1,085 | 14% | 877 | 852 | 3% |
Meat | 1,215 | 855 | 42% | 659 | 501 | 32% |
Agriculture | 21 | (258) | 108% | (111) | (111) | 0% |
Oil & Fats | 1,020 | (81) | 1358% | 627 | 0 | - |
Other | (83) | (47) | -79% | (38) | 40 | -195% |
Eliminations | 570 | (53) | 1170% | 477 | (44) | 1192% |
Adjusted EBITDA margin, % | 28% | 8% | 32% | 10% | ||
Sugar | 19% | 8% | 25% | 9% | ||
Meat | 46% | 36% | 47% | 39% | ||
Agriculture | 2% | -126% | -41% | -86% | ||
Oil & Fats | 23% | -3% | 25% | 0% |
SUGAR DIVISION
During the reported period our sugar processing plants have produced 112 thousand tons of sugar (2Q 2012: 49 thousand tons of sugar), 79% less than in 1H 2011. Production volumes decreased due to record Russian beet sugar production in 2011 and lower cane import into Russia. By the same reason for 6M 2012 sales volume was 245 thousand tons (49% less than in 6M 2011) (2Q 2012: 133 thousand tons, 63% less than in 2Q 2011). Sales volume for 6M 2012 included only beet sugar, whereas 6M 2011 sales volume included 57 thousand tons of beet sugar and 425 thousand tons of cane sugar (2Q 2012: 133 thousand tons of beet sugar compared 362 thousand tons of cane sugar in 2Q 2011).
Sales of Sugar division during the reported period has decreased by 54% to 6,383 mln rubles (209 mln USD), average sale price was 24.95 rubles per kilogram excl. VAT (28.42 rubles per kilogram excl. VAT for 6M 2011) (2Q 2012: 25.63 rubles per kilogram compared 27.26 rubles per kilogram in 2Q 2011). While performing the B2C expansion strategy, the Group continued to increase the refined packed cube sugar market share.
General and administrative expenses in Sugar segment decreased by 13% from 363 million rubles in 6M 2011 to 318 million rubles in 6M 2012 primarily due to reduction in Bank services expenses by 45 million rubles. Distribution and selling expenses increased by 5%. Basically this increase is explained by growth in storage services expenses due to significant stock balance of white sugar and increasing in depreciation in connection with beginning operating of new warehouses in 6M 2012.
Division EBITDA was 1,236 mln rubles (40 mln USD), 14% more than in 6M 2011. Lack of cane sugar in sales structure in 6M 2012 resulted in favorable changes in Adjusted EBITDA margin amounted to 19% in 6M 2012 (8% in 6M 2011) primary due to lower cost of sales of beet sugar comparing to cost of sales of cane sugar.
MEAT DIVISION
During 6M 2012 Meat segment sales have increased by 9% to 2,625 mln rubles (86 mln USD) primarily due to increased pork price. The meat sales volume during the reported period was 28.8 thousand tons, which was 4% more than in comparable period of the previous year (2Q2012: 15.1 thousand tons, which was 7% more than in 2Q2011). At the same time mixed fodder sales volume has decreased by 21% to 26.0 thousand tons (2Q2012: decreased by 30% to 14.3 thousand tons). The average pork sale prices increased from 73.12 rubles per kilogram excl. VAT in 6M 2011 to 81.67 rubles per kilogram excl. VAT in 6M 2012 (2Q2012: increased from 74.68 rubles per kilogram excl. VAT in 2Q 2011 to 82.96 rubles per kilogram excl. VAT in 2Q 2012), average fodder sale prices decreased from 10.75 rubles per tons excl. VAT in 6M 2011 to 10.28 rubles per tons excl. VAT in 6M 2012 (2Q: decreased from 10.46 rubles per tons excl. VAT in 2Q 2011 to 10.23 rubles per tons excl. VAT in 2Q 2012).
Key production efficiency figures such as total mortality and culling pork, number of live pigs per farrowing sow were better than in 6M of the previous year.
EBITDA has increased by 42% to 1,215 mln rubles (40 mln USD) with EBITDA margin of 46% due to high pork price and production efficiency.
The Group's major capital expenditure projects in Tambov and Belgorod region are progressing in accordance with the plan.
AGRICULTURAL DIVISION
The Group increased the area of controlled land to 440.5 thousand hectares. Sales have increased by 425% to 1,071 mln rubles (35 mln USD). The sales volume of grains amounted to 97 thousand tons, sunflower seeds to 4 thousand tons, sugar beets to 163 thousand tons in the 1H 2012 (2Q2012: grains - 26 thousand tons). The average sale prices per tonne (excl. VAT) in 6M 2012 were as follows: 4.57 thousand rubles for wheat, 4.71 thousand rubles for barley, 9.04 thousand rubles for sunflower seeds, 6.25 thousand rubles for peas, 4.76 thousand rubles for corn (2Q2012: 5.63 thousand rubles for wheat, 4.74 thousand rubles for barley, 13.18 thousand rubles for sunflower seeds, 6.24 thousand rubles for peas, 4.55 thousand rubles for corn).
EBITDA has increased by 279 mln rubles from 258 mln rubles of loss for 6M 2011 to 21 mln rubles of profit for 6M 2012 (0.7 mln USD), with EBITDA margin of 2%.
OIL&FAT DIVISION
Division Sales increased by 74% to 4,359 mln rubles (143 mln USD), with average margarine sale price of 49.83 rubles per kilogram excl. VAT (+7%) for 6M 2012 (46.47 rubles per kilogram for 6M 2011) (2Q 2012: 50.22 rubles per kilogram; 2Q2011: 47.60 rubles per kilogram), mayonnaise sale price of 54.05 rubles per kilogram excl. VAT (+2%) for 6M 2012 (52.89 rubles per kilogram for 6M 2011) (2Q 2012: 54.01 rubles per kilogram; 2Q 2011: 53.62 rubles per kilogram) and selling raw oil prices 32.04 rubles per kilogram excl. VAT (-13%) for 6M 2012 (36.91 rubles per kilogram for 6M 2011) (2Q 2012: 32.68 rubles per kilogram; 2Q 2011: 36.90 rubles per kilogram).
The expansion of business through acquisition of oil extraction plant Samaraagroprompererabotka in March 2011 was the main reason for 19% increase in General and administrative expenses and 46% increase in Distribution and selling expenses.
Division EBITDA increased to 1,020 mln rubles (33 mln USD), comparing the negative result in the amount of 81 mln rubles in 6M 2011. Adjusted EBITDA margin in 6M 2012 amounted to 23%.
OTHER
Share-based remuneration to the CEO included in segment Other for the purpose of segment information amounted 258 mln rubles for 6M 2012 that is 28% lower compared to 6M 2011. The shares were provided to CEO before IPO by main shareholder and not by the Company, but according to IFRS this transaction has to be accounted as expense by the Company. The main reason for decrease is 86 mln rubles of expenses recognized in the statement of comprehensive income for 6M 2011 under the share-purchase agreement that provided for immediate transfer of shares to the CEO without any vesting conditions. So the difference between the fair value of the shares granted under this agreement and cash paid for them in the amount of 86 mln rubles was expensed immediately at the grant date. That was not the case in 6M 2012. The remaining decrease in share-based remuneration for 6M 2012 compared to 6M 2011 relates to the second share-purchase agreement under which the expenses are recognized according to graded vesting schedule that results in gradual decrease of the expenses recognized during the vesting period. For more details of the respective transactions and its accounting treatment please see the Group's audited consolidated financial statement for 2011 (note 24).
In 6M 2011 Other operating income of holding companies included 1,050 million rubles of intercompany dividends (6M 2012: nil) that is netted out of our consolidated results owing to inter-segment eliminations.
ELIMINATIONS
Increase in white sugar stocks at the end of 2011 compared to 2010 gave reason for significant unrealized gain as at 31 December 2011, aroused on sales of sugar beet from Agro segment to Sugar segment, and unrealized fair value revaluation of sugar beet produced in 2011. Sales of 245 thousand tons of beet sugar in 6M 2012 resulted in realization of major portion of this intercompany gain and lead to the positive effect of inter-segment elimination on Adjusted EBITDA figure in 6M 2012 in the amount of 570 mln rubles.
Consolidated Statement of cash flows - key indicators
in mln Roubles | Six months ended | % change | Three months ended | % change | |||
30 June 2012 | 30 June 2011 | 30 June 2012 | 30 June 2011 | ||||
Net cash from / (used in) operating activities, incl. | 2,576 | (2,498) | 203% | 965 | (1,335) | 172% | |
Operating cash flow before working capital changes | 3,839 | 1,527 | 151% | 2,371 | 1,327 | 79% | |
Working capital changes | (1,062) | (3,861) | 73% | (1,301) | (2,505) | 48% | |
Net cash used in investing activities, incl. | (2,270) | (17,676) | 87% | (3,270) | (16,412) | 80% | |
Purchases of property, plant and equipment | (2,921) | (6,159) | 53% | (1,936) | (3,985) | 51% | |
Net cash (used in) / from financing activities | (4,436) | 17,920 | -125% | 1,806 | 18,543 | -90% | |
Net decrease in cash and cash equivalents | (4,115) | (2,251) | -83% | (475) | 796 | -160% |
Net cash from operating activities in 6M 2012 totaled 2,576 million rubles comparing to net cash used in operating activities in 6M 2011 of 2,498 million.
CAPEX investments in 6M 2012 totaled 2,921 million rubles, 53% lower than in the 6M 2011. The main investments in 6M 2012 were made in Meat division in the amount of 1,982 million rubles (2Q 2012: 1,256 million rubles) in connection with construction of new pig-breeding complex in Tambov region and expansion of pig-breeding facilities in Belgorod region. Significant investments were also made in Agricultural division in the amount of 557 million rubles (2Q 2012: 426 million rubles) and Sugar division 338 million rubles (2Q 2012: 226 million rubles).
Major investments in 6M 2011 were made in Agricultural division in the amount of 3,619 million rubles due to purchases of land and machinery and equipment. Investments in Meat division totaled 1,765 million rubles and 644 million rubles investments were made in Sugar division.
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.
Debt position and liquidity management
in mln Rubles | 30 June 2012 | 31 December 2011 | % change |
Gross debt | 28,380 | 31,972 | -11% |
Short term borrowings | 11,341 | 17,129 | -34% |
Long term borrowings | 17,039 | 14,843 | 15% |
Net debt | 12,809 | 11,877 | 8% |
Short term borrowings, net | (3,371) | (2,563) | -32% |
Long term borrowings, net | 16,180 | 14,440 | 12% |
Adjusted EBITDA (LTM) | 7,631 | 5,154 | 48% |
Net debt/ Adjusted EBITDA (LTM) | 1.7 | 2.3 |
Net finance expense:
in mln Roubles | Six months ended | % change | Three months ended | % change | ||
30 June 2012 | 30 June 2011 | 30 June 2012 | 30 June 2011 | |||
Net interest expense | (530) | (317) | -67% | (192) | (149) | -28% |
Gross interest expense | (1,022) | (875) | -17% | (499) | (464) | -8% |
Reimbursement of interest expense | 492 | 558 | -12% | 308 | 315 | -2% |
Interest income | 533 | 298 | 79% | 266 | 161 | 65% |
Other financial income, net | - | 24 | -100% | 133 | 49 | 173% |
Total net finance income | 3 | 5 | -41% | 208 | 60 | 244% |
The Group Net Debt increased by 8% compared to the beginning of the year mainly due to bank borrowings attracted in Meat segment to finance the investment program. Leverage ratio with Net Debt / Adjusted EBITDA (LTM) was held at comfortable level about 1.7x in spite of huge CAPEX program 2011 and 2012.
Net debt is well balanced by maturity and demonstrates the stable financial position of the Group. Group Treasury aims to maintain low currency risk in deposit and credit portfolio thereby all our borrowings and basically all our bank deposits are nominated in Russian Rubles.
On 30 June 2012 the Group has kept committed credit lines available in the amount over 24 billion rubles. As an agricultural producer Rusagro benefits from government support in the form of government grants for repayment of interest paid. All gross debt excluding trade financing as at 30 June 2012 can be subsidized.
(*) 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 and feed costs (government grants)), (iii) the difference between gain on revaluation of biological assets and agriculture 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 attributable to realised biological assets and included in cost of sales (iv) provision/(reversal) for net realisable value, (v) share-based remuneration. 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.
(**) The Group determines the net debt of the Group as short-term borrowings and long-term borrowings less cash and cash equivalents, bank deposits and bank promissory notes within short-term and long-term investments.
(***) LTM - The abbreviation for the "Last twelve months".
(****) SG&A - Distribution and Selling, General and administrative expenses.
Note:
ROS AGRO PLC (LSE: AGRO) - Holding Company of Rusagro Group, a leading Russian diversified food producer with vertically integrated operations in the following divisions:
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 440.5 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 that we are a leading Russian sugar beet producer, producing also 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 2011 amounted to 39,715 mln. rubles (1,351 mln. USD), adjusted EBITDA amounted to 5,154 mln rubles, (175 mln USD), Net profit amounted to 2,420 mln rubles (82 mln USD). An average growth rate on Sales shows more than 30 % for the last four years and more than 25 % 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 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 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:
Date | 30 August 2012 |
Time | 4:00 PM (Moscow) / 1:00 PM (London) / 8:00 AM (New-York) at the same day |
Subject | ROS AGRO PLC 2nd Quarter |
UK Toll Free UK Local Line | 0800-358-5256 44-20-7190-1596 |
USA Toll Free USA Local Line | 1-877-941-1469 1-480-629-9678 |
Russia Toll Free | 810-8002-198-4011 |
Conference ID | 4561588 |
___________________________________________________________________________
Contacts:
Sergey Tribunsky Chief Investment Officer (Deputy CEO on Investment) LLC Rusagro Group Phone: +7 495 363 16 61 stribunsky@rusagrogroup.ru | Vladimir Gromov First Deputy CEO LLC Rusagro Group
Phone: +7 495 363 16 61 vgromov@rusagrogroup.ru |
Appendix 1. Unaudited consolidated statement of comprehensive income for the six months ended 30 June 2012 (in thousand rubles)
Six month ended 30 June: | Three month ended 30 June: | |||
2012 | 2011 | 2012 | 2011 | |
Sales | 14,059,739 | 18,842,755 | 7,758,205 | 12,782,641 |
Gain on revaluation of biological assets and agriculture produce | 1,075,972 | 717,936 | 579,683 | 465,411 |
Cost of sales | (10,165,445) | (17,085,368) | (5,529,965) | (11,623,314) |
Gains less losses from trading sugar derivatives | 43,754 | 457,633 | 43,597 | 424,571 |
Gross profit | 5,014,020 | 2,932,956 | 2,851,519 | 2,049,309 |
Distribution and selling expenses | (1,122,783) | (981,201) | (569,316) | (622,560) |
General and administrative expenses | (1,167,844) | (1,139,731) | (530,911) | (520,983) |
Share-based remuneration | (258,391) | (359,719) | (129,195) | (228,526) |
Other operating expenses, net | (103,948) | (14,985) | (99,494) | (10,285) |
Operating profit/ (loss) | 2,361,054 | 437,319 | 1,522,603 | 666,955 |
Interest expense | (529,926) | (316,790) | (191,600) | (149,201) |
Interest income | 533,405 | 297,782 | 265,859 | 160,734 |
Other financial income, net | 275 | 23,878 | 133,410 | 48,900 |
Unrealised gains less losses from trading sugar derivatives | - | (508,253) | - | (747,099) |
Profit/ (loss) before taxation | 2,364,808 | (66,063) | 1,730,272 | (19,711) |
Income tax expense | (447,403) | (5,911) | (370,501) | (23,401) |
Profit for the period | 1,917,405 | (71,974) | 1,359,771 | (43,112) |
Total comprehensive income for the period | 1,917,405 | (71,974) | 1,359,771 | (43,112) |
Profit/ (loss) is attributable to: | ||||
Owners of ROS AGRO PLC | 1,789,872 | (43,109) | 1,269,646 | (18,165) |
Non-controlling interest | 127,533 | (28,866) | 90,125 | (24,948) |
Profit for the period | 1,917,405 | (71,974) | 1,359,771 | (43,113) |
Total comprehensive income/ (loss) is attributable to: | ||||
Owners of ROS AGRO PLC | 1,789,872 | (43,109) | 1,269,646 | (18,165) |
Non-controlling interest | 127,533 | (28,866) | 90,125 | (24,948) |
Total comprehensive income/ (loss) for the period | 1,917,405 | (71,975) | 1,359,771 | (43,113) |
Earnings per ordinary share for profit / (loss) attributable to the equity holders of ROS AGRO PLC, basic and diluted (in RR per share) | 75.39 | (1.98) | 53.48 | (0.77) |
Appendix 2. Unaudited segment information for the six months ended 30 June 2012 (in thousand rubles)
Six months ended 30 June 2012 | Sugar | Meat | Other agriculture | Oil | Other | Eliminations | Total |
Sales | 6,383,109 | 2,625,321 | 1,071,036 | 4,359,350 | 142,803 | (521,880) | 14,059,739 |
Gain on revaluation of biological assets and agriculture produce | - | 1,075,972 | - | - | - | - | 1,075,972 |
Cost of sales | (4,470,157) | (2,517,429) | (921,905) | (2,831,905) | - | 575,952 | (10,165,444) |
incl. Depreciation | (241,570) | (284,736) | (106,722) | (115,011) | - | (14,440) | (762,480) |
Gains less losses from trading sugar derivatives | 43,754 | - | - | - | - | - | 43,754 |
Gross profit | 1,956,706 | 1,183,863 | 149,131 | 1,527,445 | 142,803 | 54,072 | 5,014,021 |
Distribution and Selling, General and administrative expenses | (910,297) | (168,104) | (422,604) | (642,780) | (231,077) | 84,236 | (2,290,626) |
incl. Depreciation | (34,228) | (8,891) | (25,513) | (20,102) | (4,960) | - | (93,695) |
Share-based remuneration | - | - | - | - | (258,391) | - | (258,391) |
Other operating income/ (expenses), net | 15,315 | (59,302) | (37,224) | (11,794) | 5,287 | (16,230) | (103,948) |
incl. Reimbursement of fuel and fertilisers and feed costs (government grants) | - | 1,641 | 13,814 | - | - | - | 15,455 |
Operating profit/ (loss) | 1,061,724 | 956,457 | (310,697) | 872,871 | (341,378) | 122,078 | 2,361,055 |
Adjustments: | |||||||
Depreciation included in Operating Profit | 275,799 | 293,628 | 132,235 | 135,113 | 4,960 | 14,440 | 856,175 |
Other operating (income)/expenses, net | (15,315) | 59,302 | 37,224 | 11,794 | (5,287) | 16,230 | 103,948 |
Share-based remuneration | - | - | - | - | 258,391 | - | 258,391 |
Reimbursement of fuel and fertilisers and feed costs (government grants) | - | 1,641 | 13,814 | - | - | - | 15,455 |
Gain on revaluation of biological assets and agriculture produce | - | (1,075,972) | - | - | - | - | (1,075,972) |
Gain on initial recognition of agricultural produce attributable to realised agricultural produce | - | - | 148,569 | - | - | 417,105 | 565,674 |
Revaluation of biological assets attributable to realised biological assets and included in cost of sales | - | 1,006,733 | - | - | - | - | 1,006,733 |
Provision/ (Reversal) for net realizable value | (86,641) | (26,846) | - | - | - | - | (113,487) |
Adjusted EBITDA* | 1,235,567 | 1,214,944 | 21,144 | 1,019,778 | (83,314) | 569,854 | 3,977,973 |
* Non-IFRS measure
Appendix 2 (continued). Unaudited segment information for the six months ended 30 June 2011 (in thousand rubles)
Six months ended 30 June 2011 | Sugar | Meat | Other agriculture | Oil | Other | Eliminations | Total |
Sales | 13,804,056 | 2,400,268 | 204,137 | 2,500,566 | 136,961 | (203,232) | 18,842,755 |
Gain/ (loss) on revaluation of biological assets and agriculture produce | - | 717,936 | - | - | - | - | 717,936 |
Cost of sales | (12,461,384) | (2,388,393) | (147,631) | (2,195,958) | - | 107,999 | (17,085,368) |
incl. Depreciation | (196,004) | (331,632) | (43,944) | (67,843) | - | (11,291) | (650,714) |
Gains less losses from trading sugar derivatives | 457,633 | - | - | - | - | - | 457,633 |
Gross profit | 1,800,304 | 729,811 | 56,506 | 304,607 | 136,961 | (95,234) | 2,932,955 |
General and administrative expenses, Distribution and selling expenses | (926,733) | (203,467) | (367,691) | (468,097) | (185,625) | 30,681 | (2,120,932) |
incl. depreciation | (15,474) | (3,027) | (10,656) | (14,557) | (2,028) | - | (45,742) |
Share-based remuneration | - | - | - | - | (359,719) | - | (359,719) |
Other operating income, net | 15,645 | (456) | 25,703 | (4,687) | 1,021,102 | (1,072,291) | (14,985) |
incl. Reimbursement of fuel and fertilisers (government grants) | - | - | 15,031 | - | - | - | 15,031 |
Operating profit | 889,216 | 525,888 | (285,483) | (168,176) | 612,718 | (1,136,843) | 437,319 |
Adjustments: | |||||||
Depreciation included in Operating Profit | 211,478 | 334,659 | 54,600 | 82,400 | 2,028 | 11,291 | 696,456 |
Other operating income, net | (15,645) | 456 | (25,703) | 4,687 | (1,021,102) | 1,072,291 | 14,985 |
Share-based remuneration | - | - | - | - | 359,719 | - | 359,719 |
Reimbursement of fuel and fertilisers (government grants) | - | - | 15,031 | - | - | - | 15,031 |
Gain/ (loss) on revaluation of biological assets and agriculture produce | - | (717,936) | - | - | - | - | (717,936) |
Gain on initial recognition of agricultural produce attributable to realised agricultural produce | - | - | (16,052) | - | - | - | (16,052) |
Revaluation of biological assets of previous years attributable to realised biological assets and included in cost of sales | - | 711,583 | - | - | - | - | 711,583 |
Adjusted EBITDA | 1,085,049 | 854,650 | (257,606) | (81,089) | (46,636) | (53,261) | 1,501,106 |
Appendix 3. Unaudited consolidated statement of financial positions as at 30 June 2012 (in thousand rubles)
30 June 2012 | 31 December 2011 | ||
ASSETS | |||
Current assets | |||
Cash and cash equivalents | 1,342,923 | 5,457,567 | |
Restricted cash | 11 | 29,618 | |
Short-term investments | 14,044,750 | 14,670,667 | |
Trade and other receivables | 1,923,036 | 2,315,475 | |
Prepayments | 962,106 | 507,009 | |
Current income tax receivable | 21,974 | 32,161 | |
Other taxes receivable | 1,621,697 | 1,480,439 | |
Inventories | 8,029,482 | 10,402,449 | |
Short-term biological assets | 4,946,729 | 1,145,562 | |
Total current assets | 32,892,707 | 36,040,947 | |
Non-current assets | |||
Property, plant and equipment | 24,023,026 | 21,537,127 | |
Goodwill | 1,175,578 | 1,175,578 | |
Advances paid for property, plant and equipment | 1,051,387 | 1,762,301 | |
Long-term biological assets | 1,293,746 | 880,048 | |
Long-term investments | 979,434 | 487,681 | |
Deferred income tax assets | 123,978 | 474,577 | |
Other intangible assets | 39,808 | 49,640 | |
Restricted cash | 175,985 | 101,432 | |
Total non-current assets | 28,862,942 | 26,468,384 | |
Total assets | 61,755,649 | 62,509,331 | |
| |||
Liabilities and EQUITY | |||
Current liabilities | |||
Short-term borrowings | 11,340,500 | 17,129,130 | |
Trade and other payables | 3,008,739 | 1,889,143 | |
Current income tax payable | 92,723 | 80,049 | |
Other taxes payable | 311,866 | 499,915 | |
Total current liabilities | 14,753,829 | 19,598,237 | |
Non-current liabilities | |||
Long-term borrowings | 17,039,063 | 14,842,960 | |
Government grants | 539,349 | 512,998 | |
Deferred income tax liability | 248,666 | 376,451 | |
Other non-current liabilities | 49,538 | 46,659 | |
Total non-current liabilities | 17,876,615 | 15,779,068 | |
Total liabilities | 32,630,444 | 35,377,305 | |
Equity | |||
Share capital | 9,734 | 9,734 | |
Treasury shares | (303,750) | (303,750) | |
Share premium | 10,557,573 | 10,557,573 | |
Share-based payment reserve | 930,638 | 672,247 | |
Retained earnings | 17,877,698 | 15,851,492 | |
Equity attributable to owners of ROS AGRO PLC | 29,071,893 | 26,787,296 | |
Non-controlling interest | 53,311 | 344,730 | |
Total equity | 29,125,204 | 27,132,026 | |
Total liabilities and equity | 61,755,649 | 62,509,331 |
Appendix 4. Unaudited consolidated statement of cash flows for the six months ended 30 June 2012 (in thousand rubles)
Six months ended | Six months ended | |
30 June 2012 | 30 June 2011 | |
Cash flows from operating activities | ||
Profit / (loss) before taxation | 2,364,808 | (66,063) |
Adjustments for: | ||
Depreciation of property, plant and equipment | 856,175 | 696,456 |
Interest expense | 1,022,176 | 874,601 |
Government grants | (554,060) | (619,748) |
Interest income | (533,405) | (297,782) |
Loss on disposal of property, plant and equipment | 10,459 | 3,894 |
Unrealised losses from trading sugar derivatives | - | 508,253 |
Gain on initial recognition of agricultural produce attributable to realised agricultural produce | 565,674 | (16,052) |
Change in provision for net realisable value of inventory | (113,487) | - |
Revaluation of biological assets, net | (69,238) | (6,353) |
Change in provision for impairment of receivables and prepayments | 13,199 | 65,579 |
Unrealised foreign exchange gain | (57,700) | (42,756) |
Write-off of trade and other receivables | - | 20,503 |
Share based remuneration | 258,391 | 359,719 |
Lost harvest write-off | 30,212 | 13,974 |
Change in provision for impairment of advances paid for property, plant and equipment | 37,262 | 38,259 |
Other non-cash and non-operating expenses, net | 8,607 | (5,120) |
Operating cash flow before working capital changes | 3,839,073 | 1,527,363 |
Change in trade and other receivables and prepayments | (81,423) | (1,674,265) |
Change in other taxes receivable | (141,258) | (1,024,811) |
Change in inventories | 2,407,055 | 870,984 |
Change in biological assets | (4,167,814) | (3,442,448) |
Change in trade and other payables | 1,109,910 | 1,434,046 |
Change in other taxes payable | (188,048) | (24,954) |
Cash generated from / (used in) operations | 2,777,495 | (2,334,084) |
Income tax paid | (201,727) | (82,580) |
Cash flow from trading sugar derivatives related to unrealised positions | - | (81,649) |
Net cash from / (used in) operating activities | 2,575,768 | (2,498,314) |
Cash flows from investing activities | ||
Purchases of property, plant and equipment | (2,920,769) | (6,159,042) |
Purchases of other intangible assets | (3,705) | (11,469) |
Proceeds from sales of property, plant and equipment | 15,393 | 15,917 |
Investments in subsidiaries, net of cash acquired | - | (2,418) |
Change in promissory notes | (292,236) | (212,913) |
Proceeds from sales of other investments | - | 110 |
Change in cash on bank deposits | 718,532 | (9,705,222) |
Loans given | (113,923) | (1,339,078) |
Loans repaid | 3,894 | 229,178 |
Interest received | 366,627 | 242,151 |
Movement in restricted cash | (44,175) | (733,124) |
Net cash used in investing activities | (2,270,362) | (17,675,910) |
Cash flows from financing activities | ||
Proceeds from borrowings | 11,306,418 | 18,054,452 |
Repayment of borrowings | (14,863,114) | (7,907,984) |
Interest paid | (1,300,932) | (870,442) |
Purchases of non-controlling interest | (182,617) | (104,983) |
Proceeds from government grants | 604,047 | 591,564 |
Proceeds from issue of own shares, net of transaction cost | - | 8,173,831 |
Lease payments | - | (16,146) |
Net cash (used in) / from financing activities | (4,436,198) | 17,920,291 |
Net effect of exchange rate changes on cash and cash equivalents | 16,148 | 2,807 |
Net decrease in cash and cash equivalents | (4,114,644) | (2,251,126) |
Cash and cash equivalents at the beginning of the period | 5,457,567 | 5,120,208 |
Cash and cash equivalents at the end of the period | 1,342,923 | 2,869,082 |