IMC revenue jumps 52%, EBITDA rises 22% in 1H19

Ukrainian farmer IMC (IMC PW) reported a 52.1% yoy
revenue advance to USD 96.0 mln and EBITDA improvement by 22.4% yoy to USD 42.3
mln in 1H19, according to its financial statements published on Sept. 27. The
company’s key revenue driver was corn sales, which gained 59.2% yoy to USD 91.7
mln as the average selling corn price rose 1.8% yoy to USD 167/t in 1H19. The
company’s operating profit increased 20.4% yoy to USD 32.5 mln, while its net
profit climbed 13.4% yoy to USD 27.6 mln in 1H19.

IMC’s operating cash flow before working capital
changes surged 2.9x yoy to USD 39.3 mln and net cash from operating activities
surged 70.8% yoy to USD 35.7 mln in 1H19. The company reduced its total debt to
USD 57.8 mln, or 13.9% YTD. Its net debt decreased 32.7% YTD to USD 31.7 mln
and the ratio of net debt-to-LTM EBITDA improved to 0.59x from 1.3x a year ago.

Andriy Perederey: The
company’s financial results improved due to a strong corn harvest in 2018,
which drove its sales volumes in late 2018 and 1H19, even though corn prices
barely grew. The company’s leverage reduction is a positive signal that
indicates IMC will be able to attract funds for a possible purchase of farmland
it operates. At the same time, our view on the company’s stock, which trades at
a 5.7-5.8 forward EV/EBITDA multiple, is neutral.