IMC reports 17% decrease in 1Q18 revenue

Net revenue at grain
farmer IMC (IMC PW) decreased 16.8% yoy to USD 30.6 mln in 1Q18, according to
its May 17 report. The revenue drop was driven by corn sales falling 21.2% yoy
to USD 27.3 mln, which was the result of a 20.7% yoy drop in volume sold. While
the sale of soybeans, the company’s second key crop, jumped 98% yoy to USD 1.6
mln due to an 84% yoy advance in sales volumes and a 7.5% yoy improvement in
its selling price to USD 403/t.

The company’s EBITDA
fell deeper to negative USD 3.7 mln vs. negative USD 0.18 mln a year ago. Its
cash flow from operating activities before working capital dropped 55% yoy to
USD 5.6 mln in 1Q18. Also, the company’s investments in working capital
decreased 25% yoy to USD 0.8 mln. And its CapEx more than doubled to USD 3.5
mln in 1Q18. IMC’s total debt increased 23% qoq to USD 89.4 mln and net debt
rose 22% qoq to USD 81.2 mln. Its net debt-to-LTM EBITDA ratio was 2.29x as of
end 1Q18 vs. 1.26x a year before.

Andriy Perederey:  First quarter P&L data is not indicative for crop farmers like IMC. But the warning point
was the leverage multiple
increase in 1Q18, which contradicts the company’s updated strategy published in
February that calls for reducing its debt. On other hand, its debt is at a
healthy level and the company has the ability to maintain it while expanding
its CapEx program in 1Q18. So we remain positive about IMC stock’s mid-term
growth.