Key Highlights:

1H22 Astarta’s revenues increased by 45% y-o-y to EUR218m, with the biggest contribution by the Agricultural segment with a 35% share. Gross profit declined by 37% y-o-y to EUR77m in 1H22 and Gross margin by 47pp to 35%. Accordingly, EBITDA decreased by 45% y-o-y to EUR68m and EBITDA margin from 83% to 31% in 1H22. Excluding the impact of IAS41, Gross margin increased from 27% to 31%, and EBITDA margin was largely stable at 27% (versus 28% in 1H21). As of the end of 1H22 Net Debt increased by 8% y-o-y to EUR193m on growth in working capital (Net Financial Debt was down 30% y-o-y to EUR53m on higher cash balances as of the end of 1H22).

Agriculture

Revenues almost tripled y-o-y to EUR77m in 1H22. Growth was driven by high pre-war sales volume and price growth. Exports accounted for 79% of 1H22 revenues vis-à-vis 89% in 1H21. Gross margin was down from 337% in 1H21 to 59% in 1H22 due to the revaluation of biological assets in view of lower estimated prices, yields and higher costs. As of the date of this press release, Astarta finished harvesting winter crops totalling – 265kt of wheat and – 19kt of rapeseed. Due to less favourable weather conditions, the yields were lower than the previous year: wheat – 4.8t/ha (down by 17% y-o-y), rapeseed – 3.1t/ha (down by 4% y-o-y).

Sugar

1H22 revenues increased by 5% y-o-y to EUR62m, with 16% y-o-y lower sugar sales volumes offset by 23% y-o-y higher prices. Export volumes stood at 4kt, comprising 4% of total sales. Gross margin dropped by 14pp from 37% in 1H21 to 23% in 1H22 due to higher cost of sales. EBITDA totalled EUR12m in 1H22, down 36% y-o-y, with the EBITDA margin declining 12pp y-o-y to 19% in 1H22.

Soybean Processing

1H22 revenues reached EUR53m, up by 17% y-o-y, amid higher soybean meal and oil prices, 7% and 38% y-o-y correspondingly. Exports contributed 79% of the segment revenues or 7pp growth y-o-y. Gross margin doubled to 21% in 1H22 y-o-y on higher selling prices leading to EBITDA margin widening to 16% vs 8% in 1H21.

Сattle Farming

1H22 revenues increased by 9% y-o-y to EUR20m, driven by higher selling prices. Milk sales stood at 48kt, flat y-o-y. The selling price averaged EUR384/t, up 10% y-o-y, owing to the price premium for “extra” grade milk, which accounted for 93% of total volume sales. Gross margin was largely stable at 26% in 1H22 versus 27% in 1H21. EBITDA improved by 45% y-o-y to EUR4m in 1H22.

“Astarta’s diversified business model helped the сompany to quickly adapt its operations to martial law conditions, secure continuity of production processes, maintain and, for some products, even increase output. The decrease in grain and oilseed exports due to russia’s blockade of the Black Sea ports is compensated by the сompany’s wide product range. After all, almost two-thirds of the products produced by Astarta are currently in demand and are being sold domestically. First of all, these are sugar, milk, and soybean-based products that are supplied to meat producers in Ukraine. At the same time, we are exploiting all available routes to achieve planned grain exports. We are fully ready to harvest and process this year’s crop of soybeans, sunflower, sugar beets, and corn while actively investing in the 2023 harvest to maintain the scale of planting at the same level as in previous years.” – said Viktor Ivanchyk, CEO and the founder of Astarta agro-industrial holding.