KSG Agro keeps 9M12 EBITDA flat, cuts sunflower yield 20% yoy

Farming and food company KSG Agro reported 56% yoy growth in its top line to USD 18.6 mln in 9M12. The company’s EBITDA (including IAS-41 gains) remained broadly flat yoy at USD 19.6 mln, while net income declined 43% yoy to USD 10.5 mln in 9M12. The company’s operating cash flow before working capital changes improved to USD 2.4 mln from USD -2.1 mln in 9M11. KSG also updated its harvesting progress on its flagship crop, sunflower: its yield is 1.73 t/ha (harvested so far from a quarter of its area) – some 20% below the previous season’s result.

Alexander Paraschiy: The main takeaway from the report is the interim sunflower yield that suggests a likelihood of the crop’s total yield at 2.0 t/ha (as the company guided earlier) does not look feasible. The company’s crop yields fell 20%-50% yoy this season, which is yet to be reflected in financials for the next three quarters. We are going to revise our forecasts for KSG for 2012 and 2013 downward.