Mriya reports better P&L, weaker cash flow in 9M13

Agricultural holding Mriya (MAYA GR, MRIYA) reported a 6% yoy increase in net revenue to USD 265 mln in 9M13. The company’s reported EBITDA improved 19% yoy to USD 232 mln, mainly fueled by 26% yoy growth in revaluation gains to USD 202 mln. As the company’s finance costs increased 60% yoy (to USD 62 mln), its bottom line was flat yoy at USD 137 mln in 9M13.

The company’s operating cash flow fell 3.4x yoy to USD 48 mln in 9M13, and the company attributed this decline to an increase in working capital by USD 156 mln over 9M13. At the same time, Mriya intensified its CapEx with net investments into PP&E that advanced 7% yoy to USD 164 mln. That resulted in the growth of the company’s net debt by USD 168 mln YTD to USD 535 mln as of end-9M13.

Mriya reported its LTM EBITDA at USD 293 mln, which implies an end-September Net Debt/LTM EBITDA ratio at 1.8x, far below its Eurobond covenant of 3.0x. Mriya’s total debt increased USD 283 mln YTD (to USD 754 mln).

Alexander Paraschiy: The company’s P&L figures look unexpectedly strong, especially taking into account this season’s weak prices for corn and wheat that should have prevented Mriya from increasing its revaluation gains in 3Q and 9M of 2013. Besides this issue and the company’s weak cash flow from operations in 9M13, the company looks financially strong and its bonds look like a safe investment right now.