Interim financial report for 1 January - 30 June 2021 for FirstFarms A/S
High prices on crops and upward adjustment
FirstFarms A/S has in the first half year of 2021 realised the highest prices on crops in history but has also experienced significantly lower pig prices compared to first half year 2020. As FirstFarms is not dependent on individual branches of operation, the company can still present a satisfactory result for first half year of 2021 and adjust the expectations upwards.
The Board of Directors and Management of FirstFarms A/S have today reviewed and adopted the un-audited interim financial accounts for the period 1 January – 30 June 2021.
FirstFarms has in the accounting period realised:
- A turnover of 143 mDKK
- An EBITDA of 57 mDKK
- An EBIT of 36 mDKK
- A pre-tax result of 25 mDKK
The high crop prices have had a knock-on effect on the sale of crops from the 2020 harvest, as well as on the value adjustment of inventories from the 2021 harvest. Overall, there is as of 30 June 2021 a value adjustment on inventories of 18 mDKK against 9 mDKK in 2020.
However, a lower EBITDA was realised compared to the same period last year (56.9 mDKK against 65.3 mDKK in 2020). The most significant reasons are revenue recognition of a negative goodwill of 19.7 mDKK in 2020 when acquiring an agricultural company in Northwest Romania and significantly lower pig prices in first half year of 2021 compared to first half year of 2020.
The turnover on pigs is 22 mDKK lower compared to first half year 2020, production and efficiency is however at the same level as previous period. The value adjustment on pigs is positive with 5.5 mDKK against a negative value adjustment in first half year 2020 of 8.5 mDKK, which can be attributed to the fact that the value at the end of 2020 was very low.
Thus, the net effect on the pig production on turnover and value adjustment is negative with 8 mDKK compared the first half year 2020.
”As part of our strategy of risk diversification, FirstFarms’ turnover and earnings are divided on four branches of operation; crops, milk, pigs and land development. We are therefore not dependent on individual branches of operation, which is crucial for us to be able present a satisfactory result for first half year 2021,” says CEO Anders H. Nørgaard and continues:
”Our business model is robust and stable in a market that has been very volatile over the past 18 months. Thus, the very low pig prices in first half year 2021 are set off by high crop prices and stable yield. In 2020, we experienced very high pig prices in first half year, while experiencing drought in individual areas. This way, stable results emerge as the individual business areas are not directly coherent”.
Branches of operations
- The milk price has been on par with the budget, while the efficiency and production have been better than both expected and same period last year.
- The prices for piglets and slaughter pigs have increased during first half year from a historically low level. The herd is adjusted with 5.5 mDKK against -8.5 mDKK in the same period last year.
- Overall, the harvest of the autumn crops has been better than budgeted and significantly above 2020. The spring crops are satisfactory at this stage.
Overall a satisfactory half year, and an expected sale of activities in Romania the next 4-8 months and an expectation of slightly higher prices for pigs, means that FirstFarms adjusts the expectations upwards for 2021:
- An EBITDA in the level of 100-120 mDKK
- An EBIT of 50-70 mDKK
In 2020, an EBITDA of 100 mDKK and an EBIT of 54 mDKK was realised, which was historically good. If the expectations for this year are met, 2021 will be better than the result for 2020.
”FirstFarms’ journey of growth continues. We continue to develop and operate agriculture with respect for the surrounding communities, and we will continue to deliver products of the highest quality, which are primarily sold and consumed locally. Last but not least, we continue to develop towards more sustainable agriculture while executing on new opportunities that also create value for the consumers and our investors,” says Anders H. Nørgaard.
Best regards,
FirstFarms A/S
For further information:
Please visit our website or contact CEO Anders H. Nørgaard on telephone .
About FirstFarms:
FirstFarms is a Danish stock exchange listed company. We operate FirstFarms with responsibility for the surrounding communities, and we deliver highest quality which is primarily sold locally. We act on new opportunities, that create value for our investors and for the surroundings. Every day, we work on creating a more sustainable company.
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