Agroton downsizes financials in updated 2012 management account

Agroton (AGT PW) reported some 2012 unaudited financial indicators on April 18, which are below its “indicative” 2012 numbers presented in the end of February. The company’s updated revenue estimate is USD 88.1 mln, 6% below the indicative number and 12% smaller yoy. Agroton also downgraded 2.4x its IAS 41 gain to USD 11.4 mln, as well as revised 8% downward its COGS estimate for 2012 to USD 82.5 mln. All this resulted in a 46% cut in its gross profit estimate to USD 17.0 mln (-39% yoy). The company’s preliminary profit figure is USD 6.7 mln, which is still significant progress compared to 2011 (USD 0.3 mln), when the company wrote off about USD 14.3 mln in impairment provisions.

Agroton’s end-2012 net debt estimate is USD 38.6 mln (USD 4.5 mln higher yoy) and cash balance is 44% smaller yoy at USD 9.8 mln. Its trade receivables are 6.6x smaller yoy at USD 6.32 mln, and inventories are 15% smaller yoy at USD 44.8 mln.

The company stressed the numbers it presented are management accounts and not yet audited, noting that its audited financials might not be available on time “in accordance with applicable requirements.”

Alexander Paraschiy: The updated results look broadly disappointing, as they are below our estimates and those of the consensus, in terms of top and bottom line. Given that the numbers are not “final”, there is a risk that they will be revised downward further after the audit.

Nevertheless, we believe Agroton has been punished by the market too severely over the last couple of sessions, on the fear that the company’s liquidity has evaporated. The company’s end-2012 balance sheet looks no worse than a year ago and nothing suggests the company won’t be able to service its debt in 2013.