Agroton posts USD 3.6 mln net loss in 1H20 on heavy forex losses

Ukraine’s farmer Agroton decreased net revenue 22% yoy
to USD 13.85 mln in 1H20, according to its filing on Aug. 27. Most of its
revenue comprised sales of sunflower seeds, or USD 12.14 mln (doubled yoy). Its
operating profit jumped 29x yoy to USD 5.86 mln, which was the result of
increased profits from crop farming and higher reported IAS 41 gain. At the
same time, the company’s bottom line was negative at USD 3.59 mln in 1H20 due
to reported ForEx losses of USD 8.37 mln (vs. USD 3.28 mln net profit reported
in 1H19 on the background of ForEx gains of USD 3.56 mln).

The company reported that the value of its crops under
cultivation and harvested as of end-1H20 was USD 32.42 mln (vs. USD 33.03 mln a
year before).

Agroton’s financial debt remained flat yoy at USD 0.13
mln, while the value of land lease obligations amounted to USD 18.95 mln (down
7% yoy) as of end-1H20. Its end-1H20 cash balance was USD 10.24 mln (down 14%
yoy) and the book value of loans receivable was flat yoy at USD 18.55 mln.

Alexander Paraschiy: The company’s results look good if one ignores the heavy ForEx losses
of an unclear nature. Agroton remains cash-rich and continues to generate cash
flow, which is positive. At the same time, it remains a generous provider of
financing for its related parties, which brings into question its corporate
governance practices and limits its value growth.