Interim information of AUGA group, AB for the 9-month period ended 30 September 2019
During the first nine months of 2019, AUGA group, AB and its subsidiaries (hereinafter - the Group) sales revenue amounted to EUR 47.05 million, a 12% increase compared to the same period of 2018, when it was EUR 42.16 million.
The Group’s gross profit for the three quarters of 2019 amounted to EUR 8.00 million and was EUR 6.24 million higher compared to the same period of 2018 (gross profit for the three quarters of 2018 - EUR 1.76 million).
During the first nine months period of 2019, Group’s net loss amounted to EUR 1.28 compared to net loss of EUR 4.88 million a year earlier. It should be noted that the financial results of the first nine months of 2018 and 2019 were both impacted by several one-off events and changes in accounting policy that are discussed in the consolidated interim financial statement’s management report. Excluding aforementioned effects the Group would have incurred EUR 0.63 million net loss during the three quarters of 2019 compared to EUR 6.16 million net loss during the same period last year.
The Group’s EBITDA for the first nine months of 2019 amounted to EUR 12.4 million, or EUR 7.86 million eliminating IFRS16 effect. During the same period in 2018 the Group’s EBITDA amounted to EUR 1.74 million.
“Most of the harvesting was completed during the third quarter. Alhough weather conditions were not favourable, agricultural segment results were significantly better this year compared to previous year, and positively impacted the overall results of the Group. Each year we are improving, accumulating more experience, prepare the soil better, thus we believe that under normal weather conditions, in the future financial results of the Group would reveal the full potential.” - says Kęstutis Juščius, CEO of AUGA group, AB.
| Main financial results, EUR’000 | 9 months of 2019 | 9 months of 2018 | Change, % |
| Revenues | 47,054 | 42,164 | 12% |
| Gross profit (loss) | 8,000 | 1,756 | 356% |
| Net profit (loss) (eliminating IFRS 16 effect) | (782) | (4,878) | - |
| Net profit (loss) (without elimination of IFRS 16 effect) | (1,279) | (4,878) | - |
| EBITDA (eliminating IFRS 16 effect) | 7,857 | 1,740 | 352% |
| EBITDA (without elimination of IFRS 16 effect) | 12,434 | data not available | - |
Crop growing segment
Crop growing segment sales revenue for the three quarters of 2019 amounted to EUR 16.45 million compared to EUR 15.59 million for the same period in 2018 (6% increase).
As at the end of the reporting period (30 September 2019) majority of cash crops except sugar beets, soy, corn and vegetables were already harvested. As at 30 September 2019 the Group recognized gain of EUR 3.88 million on changes in the fair value of biological assets and on recognition at fair value of agricultural produce at point of harvest. For comparison, EUR 3.80 million loss on recognition of fair value of agricultural produce at point of harvest was reported as at 30 September 2018. Thus the overall harvest results of 2018/2019 season are significantly better than the previous year.
Gross profit of crop growing segment including results of sales of agricultural produce, gain (loss) on changes in fair value of biological assets and agricultural subsidies, amounted to EUR 8.49 million in the first nine months of 2019 compared to EUR 1.81 million the year earlier.
Weather conditions in the fall of 2019 was favourable for autumn sowing and other preparatory land works for the season of 2019/2020. As a result, the seeding of winter crops and land preparation works were completed on time. The condition of the winter crops as at reporting date is good. Favourable 2019 autumn weather also allowed for proper land preparation for summer crops sowing in the spring 2020. As a result the Group is well prepared for the season of 2019/2020 and positive about next year harvest potential.
Mushroom growing segment
The revenue of the mushroom growing segment was EUR 21.14 million for the nine months of 2019, around EUR 2.11 million or 11% higher compared to the same period in 2018 when revenue was EUR 19.04 million.
Mushroom sales revenue increase in 2019 relates to increased average sales prices. Serving fresh market is a priority for the Group due to better prices and the purpose of keeping strong relations with the clients. Since prices of fresh mushrooms are higher than those sold to processors, increased volume share of fresh mushrooms also had positive impact on average prices.
Gross profit of mushroom growing segment in the first nine months of 2019 slightly decreased compared to the same period of 2018 and amounted to EUR 1.51 million and EUR 1.82 million, respectively.
Dairy segment
Dairy segment sales revenue for the three quarters of 2019 amounted to EUR 7.63 million and was around 17% higher compared to the same period a year earlier.
Total amount of milk sold per nine months of 2019 amounted to 18.60 thousand tonnes compared to 16.93 thousand tonnes during the same period of 2018 (10% increase). Average price of milk sold was around EUR 380 per tonne in the three quarters of 2019 or 9% higher compared to EUR 347 per tonne in the same period last year.
The volume share of milk sold at organic production prices was around 69% in the three quarters of 2019 compared to 37% in the same period of 2018. Moreover, the total amount of organic milk sales increased from 6.20 thousand tonnes in three quarters of 2018 to 12.91 thousand tonnes in three quarters of 2019 (108% increase).
The Group is still in the process of getting its organic milk production certified according to China requirements which require the whole chain of production: from the farm till the processors to be certified. These certificates will widen potential to sell all the milk with organic price premium. The certification project is lagging behind the schedule, but the Group plans to complete the certification during the first quarter of 2020.
Gross loss of dairy segment amounted to EUR 2.00 million in nine-month period ended 30 September 2019 (gross loss of EUR 1.94 million was reported for nine-month period ended 30 September 2018).
End-consumer packaged goods segment
Total revenues of end-consumer packaged goods segment amounted to EUR 1.83 million during the first nine months of 2019 compared to EUR 1.01 million a year earlier.
The USA market was entered at the end of third quarter of 2019 and first orders have already been delivered to Costco Wholesale USA. Negotiations with several major retailers in the USA and other countries are in process with estimation to be finished in the first quarter of 2020.
Preserved products, especially ready-to-eat organic soups, remain the main export product in the segment. Although intense talks on expansion of range with dairy products are in process in Middle East.
For the first three quarters of 2019 gross profit of EUR 0.01 million was recorded for end-consumer packaged goods segment (gross profit of EUR 0.06 million reported for the same period in 2018).
Financial data in MS Excel file
In purpose to ensure more convenient access to the financial data of the Group and analyse them, the Group has prepared and publishes financial data that includes both data from previous periods and most recent reporting period in MS Excel format. The data file is available by the following link:
CEO
Kęstutis Juščius
Attachments
