Agroton audited 2012 P&L fall in line with preliminary numbers

Farming company Agroton (AGT PW) reported audited 2012 financials that are broadly in line with preliminary numbers released on April 18. The company’s 2012 revenue amounted to USD 88.0 mln (-11% yoy), while reported EBITDA was USD 22.7 mln, or 22% higher than what it reported a year ago (USD 18.6 mln) and 180% more than the revised 2011 EBITDA (USD 8.0 mln). Agroton’s net income amounted to USD 6.8 mln.

The company’s end-2012 cash and cash equivalents fell 44% yoy to USD 9.8 mln. Of this amount, USD 8.5 mln was reportedly held in the deposit accounts of a bank that was rated “Ca” by Moody’s. Moody’s has assigned that rating to the Bank of Cyprus. The company estimates its end-2012 Net Debt/EBITDA at 1.73x.

Alexander Paraschiy: The company’s financial report, now without an auditor’s qualified opinion, is a good step towards recovering the company’s reputation. We also are happy to see that the company was able to collect USD 44.2 mln in outstanding receivables. As a source of worry, we raise our concern over the company’s ability to service its debt obligations (in particular, a USD 50 mln bond due in 2014). 

Despite the company’s seemingly safe Net Debt/EBITDA ratio, we see a high risk that both the net debt and EBITDA numbers aren’t real. Some portion of the company’s cash it held on accounts with Bank of Cyprus (USD 4.5 mln as of mid-April, as reported by S&P) that makes the company’s net debt higher. Meanwhile, its USD 22.7 mln EBITDA in 2012 mismatches heavily with just USD 4.9 mln in operating cash flow before working capital changes.