Sintal announces key strategic targets for 2011-13

The management of Sintal Agriculture (FSE: SNPS GR) has announced strategic 2011-13 targets in the investor presentation during “Russia Calling”, a Moscow-based investment forum. In addition to the anticipated launch of Kharkiv silo, boosting company’s storage capacity 2.2x to 215 ths mt by the year-end, Sintal plans to acquire two river-based elevators in Kherson region of 60 ths mt capacity, increase its grain warehouse capacity by 75% to 70 ths mt and expand company’s land bank by 50% to 150 ths mt. Ruslan Patlavskyy: We see the aforementioned strategic targets as fundamentally positive for the company upon a successful achievement, although will require an estimated CapEx of USD 50 mln (incl. working capital needs for increased planted area) over 2011-13 or 2.5x of the company’s forecast EBITDA for 2010. Given the company’s debt-free position, we see a high probability that the company will succeed in raising funds to support such an aggressive CapEx in the coming years.