Agroton releases audited 2009 financials

Agroton Public Limited (FSE: A2TA GR), a large Ukrainian agricultural holding, released its audited 2009 financial results yesterday, according to which, its sales grew 8% yoy to UAH 430.8 mln, but dropped 27% yoy to USD 55.3 mln in USD terms due to hryvnya devaluation. The company’s EBITDA amounted to USD 20.7 mln (+107% yoy), which translates into an EBITDA margin of 38%, compared to just 13% a year ago. Net income totaled USD 5.1 mln, vs. a USD 18.9 mln loss in 2008 and implied net margin of 9% for 2009. The company’s total debt remained flat at USD 58.1 mln, while Agroton’s total equity grew 3.5x yoy to USD 56.4 mln, driven by USD 38.9 mln in proceeds from its share capital placement late last year. As a result, Agroton’s debt-to-equity ratio decreased to 103% from 360% in 2008, while its net debt-to-EBITDA dropped to 1.1x from 5.7x a year ago. Cash on balance totaled USD 35.1 mln vs. just USD 0.8 mln in 2008. Ruslan Patlavskyy: Agroton managed to decrease combined SG&A costs by 32% yoy and financial expenses by 51% yoy, while keeping its total debt flat yoy.  At the same time, we question the purpose of its 86% of cash and equivalents (or USD 30.1 mln, the lion’s share of its placement proceeds), being held by brokers, as reported on its balance sheet. To us, this seems to fall beyond the usual operating activity of the agricultural company, and might have an adverse effect on the immediate availability of this cash for Agroton’s needs.