OREANDA-NEWS. February 22, 2011. ASTARTA Holding N.V., the leading agri-industrial producer has published its preliminary unaudited results for the year 2010

Key preliminary unaudited results for the year 2010:

• Consolidated revenue grew 59% y-o-y to UAH 2,154 million (73% to EUR 203 million in the Euro equivalent)

• Gross profit increased by 82% to UAH 810 million (102% to EUR 77 million in the Euro equivalent). Gross margin constituted 38% vs. 33% in 2009

• EBITDA gained 69% to UAH 960 million (84% in the Euro equivalent to EUR 92 million). EBITDA margin rose to 45% from 42% in 2009

Consolidated revenue

Increasing volumes of sugar sales, successful marketing policy as well as positive pricing environment provided for a 59% y-o-y increase in revenues to UAH 2,154 million (73% to EUR 203 million in the Euro equivalent). Initiation of sugar, grains, and oilseeds trading contributed to a gain in revenues as well.

Gross profit

The ratio of cost of sales to revenue has decreased from 66% in 2009 to 64% following efficient cost management. Gain from remeasurement of agricultural produce to fair value has increased in 2010 due high level of crop inventories at the balance date and positive changes in crop prices. As a result of the mentioned drivers, the gross profit grew by 82% to UAH 810 million (102% to EUR 77 million in the Euro equivalent). Gross margin constituted 38% vs. 33% in 2009.

Profit from operations and EBITDA

Profit from operations increased by 71% to UAH 782 million (a 87% increase to EUR 76 million in the Euro equivalent). EBITDA grew by 69% to UAH 960 million (84% in the Euro equivalent to EUR 92 million). EBITDA margin grew to 45% vs. 42% a year before.

Key operational results

• ASTARTA retained its leading position among the Ukrainian sugar makers having produced 13% of the total Ukrainian sugar output, and maintaining high level of vertical integration (78% of sugar beet provided to plants by own farms).

• The Group is the biggest producer of industrialized milk, and one of leading producers of grains and oilseeds in Ukraine. 

• The Group's land bank increased to 210 thousand hectares by the end of the reporting period. In 2011 the Group intends to expand the land under operations to 250  thousand hectares.

• Winter crops are planted on the area of more than 41 thousand ha (plus17% y-o-y). Cultivation of soil on area of above 160 thousand ha (plus26% y-o-y) for the on-coming spring sowing campaign has been conducted, including application of complex mineral fertilizers for the sugar beet planting on about 43 thousand ha.

• The Group has materially enhanced its production assets and infrastructure in 2010: capacity of sugar plants increased by nearly 25%, number of storage facilities for grains and elevators with overall design capacity of 50 thousand tonnes was commissioned. Also a seed processing plant, a cattle forage factory, and a modern cattle farm were put into operations.  

Sugar production and sales

The Group's plants processed around 1,560 thousand tons of sugar beet (plus2% y-o-y) and produced 200 thousand tons of sugar. A 12% decrease in sugar output y-o-y was caused by lower yields of sugar beet along with decline in sugar extraction ratio following unusually harsh weather conditions in summer 2010.

Sugar plants modernization and implementation of engineering programs provided for an increase in daily beet processing capacity and for a cut in energy consumption (8% less of natural gas per ton of beet possessed y-o-y).

In terms of volumes, around 7% more sugar y-o-y was sold, while providing a substantial increase of c.74% in revenues in the segment on a back of recovering sugar price.

Production and sales of agricultural crops

In 2010, ASTARTA harvested more than 330 thousand tons of crops. Despite unfavorable weather conditions that negatively impacted yields, ASTARTA increased the gross harvest of corn by 3% and soybeans by 61%. In volume terms, sales of agricultural crops decreased 29% y-o-y following quotation of export of crops from Ukraine. However due to favorable market conditions the revenues in the segment increased by around 6%. At the same time, inventories of grains and oilseeds by the end of 2010 were substantially higher than a year before, and the current upward trend on international and domestic agricultural markets shall support better pricing and profitability in 1H2011 in crop segment.

Production of cattle farming produce

ASTARTA's cattle farming business showed the successful growth in 2010: the cattle herd increased by 8% to 24 thousand heads, and production of milk to 52 thousand tons (16% y-o y). Milk production per cow increased by 14% y-o-y. 

ASTARTA Holding N.V. CEO Viktor Ivanchyk said:

"We continue to work hard to make our business more efficient and simultaneously to grow it in size. We are now focused on building up the Groups assets in strategically important segments of operations, securing sectoral and geographic diversification. At the same time the management pays high attention to our current operating activities and their increased effectiveness."

Information about ASTARTA Holding N.V.

ASTARTA Holding N.V. controls the agri-industrial holding "Astarta-Kyiv" . Established in 1993, today "Astarta-Kyiv" consolidates five regional subsidiaries in Poltava, Vinnitsa and Khmelnytsky regions. In 2011 the Group started to develop another business-unit in Kharkiv region of Ukraine. 

The Group's main activity is production of high quality sugar and sugar by-products (molasses and dry granulated pulp), growing and sales of grains and oilseeds, and production of milk and  meat. Implementing its strategy of vertical integration, the Group operates about 210 thousand hectares of land under long-term lease. The Group is the biggest producer of sugar and industrialized milk in Ukraine. Since August 2006, ASTARTA Holding N.V. shares are listed on the Warsaw Stock Exchange.

Caution note regarding forward-looking statements

Certain statements contained in this press release constitute forecasts and estimates. The audited financial results to be published by April 27, may differ from the preliminary results announced.