Mriya reports 1H12 financials

Mriya Agro Holding (MAYA GF) reported unaudited financials for 1H12 last Friday: revenue grew 20% yoy to USD 54.5 mln, mainly on the sale of last year’s bumper harvest, though cash receipts from customers fell 10% yoy to USD 108.8 mln. EBITDA and net income were, as usual, higher than sales: USD 165.9 mln (+18% yoy) and USD 132.3 mln (+8% yoy), respectively – mostly driven by IAS 41 gains. Cash from operations, however, halved yoy to USD 25.8 mln in 1H12, which can be explained by higher costs related to planting and harvesting (due to an earlier start to the harvesting campaign this year). Mriya said the company’s first half activity was focused on extending storage capacities and new agricultural equipment.

Alexander Paraschiy: The company’s interim results are largely meaningless, due to its large operating cycle. One positive we took away is that the company decreased its exposure to related parties (by cutting receivables and loans granted) more than twofold YTD. At the same time, we find it worrying that the company is actively investing into storage infrastructure (CapEx nearly quadrupled yoy to USD 143 mln) which has a very long payback period and is the least transparent operation an agro company in Ukraine can pursue. As the company has yet to provide an update on the condition of its harvest this season, we are staying with our projections on the company’s operating performance and financials for 2012 and beyond, as well as with our SELL recommendation.