OREANDA-NEWS. May 2, 2012.  Agroton Public Limited, one of the largest agricultural producers in Ukraine, announces its consolidated financial results for the year ended 31 December 2011.

In 2011 the Company’s revenues increased by 25.4%, from USD 97.4 million to USD 122.1 million.

FINANCIAL RESULTS – REVIEW
Selected financial data (in USD thousands)  2010 2011 Change
Total revenues(1) 97,351 122,080 25.4%
Sales revenues 57,253 99,738 74.2%
Crop production 35,321 79,356 124.7%
Livestock 13,686 17,356 26.8%
Food processing  8,031 2,577 -67.9%
Other 215 449 108.8%
Fair value change (IAS 41) (2) 40,098 22,342 -44.3%
Cost of sales (56,507) (94,217) 66.7%
Crop production (23,538) (37,600) 59.7%
Livestock (14,970) (18,260) 22.0%
Food processing  (8,240) (1,707) -79.3%
IAS 41 cost of sales (3) (9,759) (36,650) 275.6%
Gross profit  40,844 27,863 -31.8%
Gross margin 42.0% 22.8% -45.7%
EBITDA(4) 35,100 18,630 -46.9%
EBITDA margin  36.1% 15.3% -57.6%
Profit for the year(5) 15,985 270 -98.3%
Net Debt /EBITDA 0.1 1.8 1700.0%

 
Notes:
(1) Total revenue is the sum of Sales revenue and Fair value change (IAS 41) (2).
(2) Fair value change (IAS 41) is the gain from changes in fair value less cost to sell of biological assets and agricultural products, net.

(3) IAS 41 cost of sales is theeffect on cost of sales from gain from changes in fair value less cost to sell of biological assets and agricultural products, net.The Group's cost of sales includes an increase (or decrease) in income from changes in fair value of biological assets and agricultural products as a result of an increase (or decrease) in costs due to revaluation of biological assets and agricultural products. It does not include revaluation of seeded winter crops as of 31/12/2011, which carried at cost.

(4)EBITDA is the sum of net profit, finance costs, income tax expense, depreciation and amortization and extraordinary or nonrecurring impairments.

(5)Profit for the year is the Profit for the year from continuing operations.

During the reporting period, the Group performed a revaluation of the fair value of its agricultural products at the date of harvesting. In accordance with paragraph 13 of IAS 41 "Agriculture", agricultural produce harvested from an entity's biological assets is measured at its fair value less costs to sell at the point of harvest. Such measurement is the cost at that date when applying IAS 2 "Inventories" or another applicable standard. The Group ascertained the weight of particular agricultural products at the harvesting date and applied to this quantity the market prices determined either by observation of the Ukrainian market or, in the cases where the Group concluded agreements for a substantial volume of these agricultural products for a higher price, the contractually agreed price.

The gain or loss arising from the variation in fair value of the agricultural products, after deduction of the cost of sales, is incorporated as a separate line item in the Consolidated Statement of Comprehensive Income for the period in which the change occurred. The extent of such fair value gains and losses on agricultural products in a given period is affected by various factors, including the product mix and price movement.

In accordance with IAS 41 "Agriculture", the Group's biological assets (comprising (i) current biological assets, being assets with a useful life of less than one year (such as crops under cultivation) and animals (such as cattle, pigs and poultry) in grow-out and (ii) non-current biological assets, being assets with a useful life of over one year (such as milk-producing cattle and pigs for breeding)) have been recognised on initial recognition and re-measured at each reporting date at their fair value after deducting the estimated cost of sale. Due to the lack of observable market prices for certain biological assets in their condition at the time of valuation, the fair value cannot always be estimated in a reliable manner. If the fair value of the biological asset cannot be ascertained at the moment of its initial recognition, the Group estimates the fair value by taking the costs and deducting the accumulated depreciation and impairment losses, and the biological assets are re-valued when a fair value can be ascertained. If the fair value of the biological asset cannot be ascertained at any other moment, the Group estimates the fair value of its asset by other means.