KSG Agro cuts debt 30% YTD, sales halved yoy in 9M14

Revenue at KSG Agro (KSG PW), Ukraine’s farmer focused on the southern Dnipropetrovsk region and Crimea, plunged 50% yoy to USD 18.4 mln in 9M14, according to its Nov. 13 filing. Its EBITDA for the period dropped to close to zero, compared to USD 25.9 mln in 9M13. This spectacular result last year was solely due to USD 25.9 mln in an IAS-41 revaluation gain, while in 9M14 the company posted USD 2.8 mln in revaluation losses

The company’s cash flow generated from operations improved to USD -0.6 mln, from USD -9.0 mln in 9M13, and due to an absence of new acquisitions, the company’s free cash flow improved to about USD -2.0 mln in 9M14, vs. USD -24.4 mln a year before. The company was able to slightly deleverage by using its term deposits, causing total debt to decrease to 30% YTD to USD 74 mln. The biggest portion of the decline, we estimate, is attributable to devaluation of the local currency. The company’s net debt decreased 20% YTD to USD 70 mln, solely due to devaluation effect.