IMC reports 18% increase in 9M18 EBITDA

Farming company IMC (IMC PW) generated USD 81.4 mln in
net revenue in 9M18 (flat yoy), according to its Nov. 16 report. Its EBITDA
rose 18.4% yoy to USD 50.6 mln, while its cash flow from operating activities
before working capital decreased 26.4% yoy to USD 17.2 mln in 9M18. The
company’s working capital jumped 70.3% yoy to USD 10.3 mln and its CapEx rose
10.0% yoy to USD 4.4 mln. IMC’s total debt dropped 20.3% yoy to USD 48.9 mln,
and its net debt slid 18.8% yoy to USD 44.2 mln. Its net debt-to-LTM EBITDA
ratio was 0.94x as of end-9M18 vs. 1.19x a year ago.

Andriy Perederey: As usual, IMC’s main revenue driver was its key crop corn, which
contributed 75% to total revenue vs. 74% a year ago. But corn sales volumes
decreased 3.9% yoy to 370 kt at an average selling price of USD 164/t (5.1% yoy
growth). So the company’s only EBITDA driver was net gain from changes in fair
value of biological assets and agricultural produce, which increased 19.8% yoy
to USD 62.9 mln and was based on expectations of high yields of corn and
already harvested sunflower seeds. Also, the company has adhered to its
strategy of reducing its debt, which is at a healthy level. So we remain
positive about IMC stock’s mid-term growth.