IMC revenue slides 3%, EBITDA jumps 63% in 9M21

Ukrainian farmer IMC (IMC PW) posted a 3.0% decrease
in revenue to USD 110.4 mln in 9M21, according to its interim report published
on Nov. 11. Its key revenue was generated by sales of corn (up 7.8% yoy to USD
83.1 mln) and wheat (up 30.4% yoy to USD 22.4 mln). IMC’s EBITDA jumped 62.8% yoy
to USD 105.3 mln in 9M21, which was a result of huge revaluation gains (up
41.3% yoy to USD 90.7 mln). Key contributors to the result were higher crop
prices (corn price rose 20.6% yoy to USD 205/t, wheat price increased 17.7% yoy
to USD 219/t in 9M21). The company’s net profit surged 2.5x yoy to USD 83.2 mln
in 9M21.

IMC’s operating cash flow before working capital
changes surged 39.0% yoy to USD 53.9 mln and net cash flow from operating
activities slid 1.6% yoy to USD 51.4 mln in 9M21. Its net debt rose 53.3% YTD
to USD 184.4 mln and the ratio of net debt-to-LTM improved to 1.64x from 1.88x
a year ago.

Andriy Perederey: The company is enjoying of strong crop prices, its record high
sunflower seed harvesting results (yielding 3.52 t/ha, or 0.6% up yoy), stable
harvest of wheat (yield slid 2.2% yoy to 5.7 t/ha), and the expectation of
strong corn harvesting results. We see that the company’s stock, which trades
at a 4.3-4.4 forward EV/EBITDA multiple, has limited upside potential.