Agroton reports negative gross profit in 1H14, blames war

Ukrainian farmer Agroton (AGT PW), which operates in the war-afflicted Luhansk region, reported a limited set of its 1H14 financials in its Sept. 1 update. The war has limited access to some of its documents and has prevented it from undertaking an independent review of its semi-annual accounts, according to the company’s release. Meanwhile, its land and assets are periodically under heavy attack.

Agroton revenue fell 44% yoy to USD 22.8 mln in 1H14, according to the provided numbers. Its gross profit plunged to negative USD 30.3 mln from positive USD 9.9 mln a year before as the cost of sales jumped 22% yoy to USD 52.4 mln and there was no traditional positive revaluation under UAS 41.  The company’s net loss amounted to USD 36.6 mln in 1H14.

Alexander Paraschiy: War is a convenient excuse for poor results, and it’s hard to blame a company in such circumstances. What we can clarify however is that the war affected only a part of the Luhansk region (about 1/4), mostly its industrial, non-farming regions at that.