KSG Agro revenue rises 43%, EBITDA improves 11% in 9M21

Ukrainian farmer KSG Agro (KSG PW) reported in its
Nov. 15 filling that its revenue grew 42.8% yoy to USD 20.9 mln and its EBITDA
rose 10.5% yoy to USD 7.4 mln in 9M21. The company’s revenue from crop
production increased 76.5% yoy to USD 12.1 mln and its revenue from pig
breeding inched up 9.1% yoy to USD 8.1 mln in 9M21. The company’s net profit
jumped 3.6x yoy to USD 17.3 mln in 9M21.

KSG Agro’s operating profit increased 10.7% yoy to USD
6.1 mln in 9M21. Its operating cash flow before working capital changes dropped
80.0% yoy to USD 0.5 mln, while its net cash flow from operating activities
turned to positive USD 3.7 mln vs. negative USD 0.4 mln a year ago. The
company’s net debt slid 0.7% YTD to USD 35.3 mln and its net debt-to-LTM EBITDA
ratio improved to 4.9x from 7.3x a year ago.

Andriy Perederey: The
company’s top line rose due to higher crop prices in 9M21, while the strong improvement
of its bottom line was driven by one-off income (selling of subsidiaries by USD
11.6 mln in May and September 2021). KSG Agro’s improvement of financial
leverage was driven by an EBITDA increase on an LTM basis, while its net debt
was almost flat yoy. On the other hand, the company’s leverage remains high, so
we see the company’s shares as a risky investment.