Agroton reports 1.7x yoy growth in preliminary EBITDA in 2012

Ukrainian farming company Agroton (AGT PW) reported its preliminary unaudited results for 2012, with net revenue of USD 93.2 mln (-6.5% yoy), EBITDA of USD 32.5 mln (+74% yoy) and profit of USD 20.7 mln (up 77x yoy). The company attributed its revenue decline to a smaller yoy average price for its key crops, sunflower and wheat.

Alexander Paraschiy: While the preliminary figures reveal little about Agroton’s operating performance, the spectacular growth in its bottom line looks like a positive signal (although it should be treated cautiously as it includes IAS 41 gains, the calculation of which is left broadly up to the company’s discretion). As we reported in our Dec. 3 note on agricultural producers, Agroton was one of the luckiest Ukrainian farmers in the 2012 harvesting season, with its land plots not affected by severe drought. So its fundamentals have a strong chance to improve significantly in the 2012-13 season.

The main investors’ concern about Agroton in 2012 was its poor reporting practices. With robust 2012 harvest results, the company has an opportunity to rehabilitate its reputation by reporting accurate numbers in financial statements. So we will wait for the audited 2012 report to conclude whether our hopes for a transparency turnaround materialize.