Agroton ups harvest for sunflower 1.1x, wheat 1.2x, corn 4.3x in 9M12

Farming company Agroton (AGT PW) reported a 4% yoy decline in net revenue to USD 78 mln in 9M12, the company reported on Nov. 28. Its adjusted EBITDA was down 36% yoy to USD 8.9 mln, and reported net income was down 14% yoy to USD 24.8 mln. This time, the company did not disclose its balance of doubtful receivables from related parties (which totaled USD 49.3 mln as of Dec. 31, 2011 and USD 11.7 mln as of Aug. 30, 2012), just providing the total number of gross receivables as of end-September at USD 18.7 mln (down 10.1 mln qoq). Agroton also reported a higher 9M12 harvest for key crops:  wheat +16% yoy to 140 kt, sunflower +12% yoy to 65.7 kt and corn 4.3x yoy to 24.7 kt, with the latter two crops still in the process of harvesting.

Alexander Paraschiy: The main takeaway from the company’s 9M update is the preliminary harvest results, which is important taking into account the tough weather conditions in certain regions of Ukraine. The company’s results, as well as those of its core Luhansk region,  suggest Agroton enjoyed unexpectedly good weather conditions and thus was able to increase yields for all of its key crops. Based on the reported data, we estimate the company’s sunflower yield is close to 2.0 t/ha this season, which is about a 4% yoy improvement compared to last season, 26% better than in Agroton’s core region and 16% above our initial estimate. The market – concentrated on the developing situation on Agroton’s questionable receivables – seems to be ignoring Agroton’s solid harvest prospects for the current season.