WOOD Flash – AUGA Group: 3Q20 results review – solid 9% EBITDA beat

Yesterday (30 November), after the close, AUGA reported its 3Q20 figures. AUGA posted a net loss of EUR 0.9m on revenues of EUR 27.7m (+52% yoy) and EBITDA of EUR 4.4m (+42% yoy). Its 3Q20 gross profit reached EUR 3.3m, up 97% yoy. Versus our estimates, AUGA beat our numbers on the revenues, gross profit and EBITDA (by 24%, 10% and 9%, respectively), but missed our net profit estimate of EUR 0.8m (by -EUR 1.7m). The beat vs. our numbers on the revenues stems mainly from higher crops yields, compensated at the EBITDA level by lower pricing, driven by the higher production of feed products this year. The bottom-line miss seems to have been driven by higher finance cost but, given last week’s refinancing, we are not particularly worried going forward, with the average interest rate declining by 0.8%. No consensus was available. In 9M20, revenues were up 33% yoy, at EUR 62.4m, and the bottom line is breakeven already, at EUR 0.4m, on track to stay positive this year, assuming further qoq and yoy growth in 4Q20E. Despite the disappointing mushroom results and lower contribution from higher-end crops products, we view the results as positive and believe that AUGA is on track to reach, or exceed, our estimates for the full year. We initiated on AUGA recently, with a BUY rating and a PT of EUR 0.64/share. We remain BUYers of AUGA. Today, at 15:00 CET, AUGA will host a call for analysts and investors.