Report on interim financial results of AUGA group, AB for six-months period ended 30 June 2020

During the first half of 2020, the sales revenue of AUGA group, AB and its subsidiaries amounted to EUR 34.69 million, a 20% increase on the same period in 2019, when it was EUR 28.84 million.

According to the Group’s data, gross profit for the first half of 2020 amounted to EUR 8.58 million and was 36% higher than in the same period a year earlier. During the first half of 2020 the Group earned EUR 1.30 million net profit, compared to EUR 0.34 million a year earlier.

The Group’s EBITDA increased by 24% and was equal to EUR 11.53 million in the first half of 2020 (compared to EUR 9.33 million during the same period last year).

“The weather of this year was more favourable than in the previous years, however COVID-19 pandemic has created uncertainty in the market and challenges on the daily operations of the Group’s companies. We will have a better harvest this year, therefore we can expect better financial results also in the third and fourth quarters, when all agricultural produce is harvested. Moreover, revenues and profits in all the business segments have been positively impacted by the Company’s focus on efficiency, the expansion of export markets and the growing demand for organic products,” explains Kęstutis Juščius, CEO of AUGA group, AB.

Crop growing segment

Sales revenue from the previous year’s crop yield amounted to EUR 11.89 million, demonstrating an increase of 36% on the same period last year. The sales of this year’s harvest is going according to the plan and on 30 June 2020 –the Company has already signed contracts for the sale of 67% of the forecasted new harvest.

Gross profit from the Company’s crop growing segment, including the sales of agricultural produce and gain (loss) on changes in the fair value of biological assets and agricultural subsidies, amounted to EUR 7.35 million in the first six months of 2020, compared to EUR 5.54 million in the first six months of 2019.

This year’s yield, especially in terms of leguminous plants, is expected to be higher than in 2019, however the quality and cost of some crops might be lower. The impact on financial results due to the higher yields will also be reflected in the upcoming quarters.

Dairy segment

Sales revenue from the dairy segment reached EUR 5.59 million in the first half of 2020 and was 7% higher than in the same period a year earlier. General growth in milk sales and an increased sales share of organic milk had a positive impact on revenue growth. The volume of milk sold at organic production prices was 91% in the first half of 2020, compared to 64% the same period in 2019.

The average price of milk sold was 5% higher compared to the same period last year.

During the first six months of 2020 there was noticeable growth in milk yield due to increased efficiency. In 2020, the segment became profitable and has a lot of potential to improve its current results.

Mushroom growing segment

Revenue from the mushroom growing segment was EUR 15.21 million in the first half of 2020, 10% higher compared to the same period in 2019 when revenue was EUR 13.80 million. The growth is attributed to better yields, higher demand, and increased average price.

According to Company’s data, during the first half of 2020 the average costs per 1 tonne of mushrooms sold increased by 3%, as the demand for packaged mushrooms increased during COVID-19. Moreover, this increase in segment’s costs was impacted by the preventive measures implemented by the Company to protect its employees during the pandemic.

Gross profit from the mushroom growing segment increased by 2% in the first half of 2020 to EUR 1.06 million, compared to EUR 1.04 million in the first half of 2019.

Fast-moving consumer goods (FMCG) segment

The total sales revenues of the fast-moving consumer goods (FMCG) segment amounted to EUR 1.99 million during the first half of 2020, compared to EUR 1.05 million a year earlier. The biggest increase of sales was recorded in the USA and the Baltic States markets. A newly opened market Sweden has also significantly impacted sales results.

As of 28 May 2020, the Group acquired full control of Grybai LT, KB. The acquisition of Grybai LT, KB did not have an appreciable effect on the results of the FMCG segment. The increased sales revenue of this segment was primarily driven by better results. It is noticeable that the acquisition of Grybai LT, KB will allow the Company to be more flexible, to respond more quickly to customer needs, and to grow gross profit margin.

In the first half of 2020, gross profit of the segment amounted to EUR 0.09 million (gross profit of EUR 0.04 million reported for the same period in 2019).

Operating costs

The Group's operating expenses for the first half of 2020 amounted to EUR 4.59 million, compared to EUR 4.41 million for the same period of 2019.

CEO

Kęstutis Juščius



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