LHV Institutional 'Linas Agro (LNA1L LH) Annual Review, September 30th, 2020'
* Linas Agro Group AB is engaged in the business of agricultural supplies and machinery, farming, processing of agricultural products, food production, and agricultural commodities trading. LNA is one of the major exporters of grains, feedstuffs, and poultry products. Trade with foreign countries accounts for 71.8% (last five years average) of total revenues.* We expect that due to the high uncertainty related to the COVID-19 pandemic, the bleak short-term outlook of the HORECA sector, falling milk prices, volatile agricultural commodities prices, and potential stricter measures to contain the COVID-19 spread, total revenues may decline by c.a. 9-10% in FY 20/21 before rebounding in FY 21/22. We assume that the revenues would grow 4–5% from FY 22/23 to FY 24/25.
* During FY 2015/16-2018/19, LNA maintained a dividend payout ratio of 14–32%. The Group has not announced any dividend for FY 2019/20. During FY 2020/21-2024/25, we assume a dividend payout ratio of about 18-31%, resulting in a dividend yield of about 2-4% at the share price of EUR 0.575. Given the significant changes in the operating conditions in the Group’s key markets, we have revised our forecasts and, accordingly, have changed our fair value range from EUR 0.63-0.68 to EUR 0.54-0.60 because of high uncertainty due to the COVID-19 pandemic. This report contains a full set of financial forecasts and is useful for gaining an initial insight into the company. Please also refer to the tables and charts in the attachment.
Linas Agro Group AB. Linas Agro Group AB is a Lithuania-based holding company involved in the agricultural sector. It's activities are structured into five basic segments: The Grains and Oilseeds segment includes wheat, barley, rapeseed, sunflower and linseed, among others; The Feedstuffs segment's activities include international supply of and trade in secondary products of the food industry, such as sunflower cake, sunflower meal and others; The Agricultural segment covers supplies of such products for crop production as seeds, fertilizers, plant protection products, and agricultural machinery; The Farming segment covers primary production of agricultural produce, including diary production, as well as cultivation of grains, rape and sugar beet, and the Other Products and services segment covers sales of solid biofuel. In February 2014, it acquired poultry companies SIA Lielzeltini, SIA Cerova, and SIA Broileks. In May 2014, it sold a 100% stake of UAB Lignineko.
LHV Bank is an independent pan-Baltic bank, based on Estonian capital. The company was founded in 1999 by two founders of Hansapank (today’s Swedbank in the Baltics) and has been offering a full range of investment services for 15 years. In May 2009, LHV received a credit institution licence allowing it to provide all banking services.
The head office is situated in Tallinn, Estonia. Cross-border services are offered in Vilnius, Lithuania and in Riga, Latvia. LHV provides brokerage (institutional and retail), asset management, banking and capital markets services. Compared to other banks, we are more innovative and have more solid experience in investment and entrepreneurship.
The Bank, together with the Group asset management company employs over 320 people. LHV Group shares are listed on Nasdaq Tallinn.
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