Agroton cuts sales 35% yoy, third-party receivables 2x YTD in 1H12

Agroton (AGT PW) reported a 35% decrease in net revenue to USD 41.3 mln in 1H12, according to reviewed financial statements released last Friday. EBITDA (including IAS 41 gains) was down 3% yoy to USD 39.8 mln, and net profit was 11% lower yoy at USD 30.5 mln in 1H12. Over the second quarter of 2012, the company received back just USD 19.8 mln in questionable receivables out of USD 43.8 mln outstanding at the beginning of the quarter. The promise had been to recover it fully in 2Q12 – the company’s CEO asked for patience and said that “as of today” only USD 11.7 mln was left to be recovered.

Alexander Paraschiy: We admit that the company made significant progress in the recovery of its questionable receivables from related parties, although it (fully expectedly) missed its promise. The company’s 1H12 P&L is broadly meaningless due to Agroton’s long operating cycle, while we are slightly concerned about the large decline in net revenue. Nevertheless, we still remain comfortable with our FY12 revenue outlook of USD 91 mln (-9% yoy) and our HOLD recommendation for the stock.