Reporting period highlights Net turnover for the first nine months of 2008 amounted to RUR 941,895 thousand (USD* 37,308 thousand) which includes gain on revaluation of biological assets and agricultural produce in the amount of RUR 432,244 thousand (USD* 17,121 thousand). Net turnover for the same period in 2007 was equal to RUR 391,242 thousand (USD* 15,496 thousand) with gain on revaluation of biological assets and agricultural produce in the amount of RUR 218,845 thousand (USD* 8,668 thousand). Due to the currently unfavorable price environment, the Company had only sold approximately 8% of this year's harvest as of 30 September 2008, the rest being held in storage. Operating loss for the first nine months of 2008 amounted to RUR 175,025 thousand (USD* 6,933 thousand) compared to a loss of RUR 168,588 thousand (USD* 6,679 thousand) for the same period in 2007. The operating income was affected by general and administrative expenses in the amount of RUR 544,529 thousand (USD* 21,569 thousand), in comparison the general and administrative expenses amounted to RUR 186,999 thousand (USD* 7,407 thousand) in the same period 2007. The largest expense item was personnel expenses - constituting about 56% of the total amount of general and administrative expense. Loss after tax for the first nine months of 2008 amounted to RUR 126,425 thousand (USD* 5,008 thousand) compared with a loss of RUR 145,472 thousand (USD* 5,763 thousand) for the same period in 2007. Cash outflow from operating activities amounted to RUR 1,665,404 thousand (USD* 65,965 thousand) compared to RUR 889,132 thousand (USD* 35,217 thousand) in 2007. The result for the period has been adjusted by depreciation and amortization charges in the amount of RUR 124,440 thousand (USD* 4,929 thousand). The largest item that affected operating cash flow for the period was increase in inventories in the amount of RUR 1,011,407 thousand (USD* 40,061 thousand). Cash outflows utilized by investing activities amounted to RUR 897,784 thousand (USD* 35,562 thousand) in comparison with RUR 1,651,791 thousand (USD* 65,427 thousand) in 2007. In 2008 the significant cash outflows were mainly concerned with acquisition of fixed assets and land plots in the combined total amount of RUR 1,298,496 thousand (USD* 51,433 thousand), compared to RUR 1,695,420 thousand (USD* 67,155 thousand) in the first half of 2007. Cash inflow from financing activities for the first nine months of 2008 amounted to RUR 451,925 thousand (USD* 17,900 thousand) compared to RUR 2,688,988 thousand (USD* 106,510 thousand) for the same period in 2007. Basic loss per share was equal to RUR 1.02 (USD* 0.04) for the first half of 2008 compared to a loss per share of RUR 1.90 (USD* 0.08) for the same period in 2007. Cash position as of 30 September 2008 was RUR 5,281,605 thousand (USD* 209,202 thousand). In light of the changing economic environment, the Company's senior management continues to carefully evaluate its budgetary requirements and has made some adjustments in terms of strategic capital deployment namely related to elevator construction. While establishing its own storage capacity still remains one of key strategic drivers, the Company now believes that cash conservation theme has become an important imperative and, therefore, the short term elevator construction projects have been scaled down as compared with previously announced plans. Cash flow generation is prioritised and the 2009 production plan has been increased. As of 30 September 2008 the Company controlled 332,600 hectares of land, including 83,348 hectares in registered ownership and 8,100 hectares of registered long term leases. On 27 August 2008 Igor Smolkin was recruited as the new CEO of the Company's Russian subsidiaries Agro-Invest Significant events after the end of the reporting period As of 31 October 2008 the Company had obtained ownership certificates for an additional 5,602 hectares of land compared to the end of the reporting period, bringing the total of owned land to 88,950 hectares. On 10 November 2008 Michel Orlov - President and Deputy Chairman of the Board of Directors of Black Earth Farming resigned and Sture Gustavsson - the Company's Chief Agronomist was appointed as acting president and CEO of Black Earth Farming Ltd. * The USD equivalent figures are provided for information purposes only and do not form part of the interim consolidated financial statements - refer to note 2 (d) in the complete interim report. Nine months report conference call Date: 17 November 2008 Time: 15:00 CET Hosts: Acting president and CEO - Sture Gustavsson AgroInvest CEO - Igor Smolkin CFO - Michael Shneyderman IR Director - Gustav Wetterling Dial-in details: UK: +44 (0)20 7806 1967 USA: +1 718 354 1385 Sweden: +46 (0)8 5051 3792 Participant passcode: 1476357 Please call in 5 minutes before the conference starts and stay on the line (an operator will be available to assist you) To take part of the interactive presentation and the Q&A session, please log on to: http://www.livemeeting.com/cc/premconfeurope/join?id=1476357&role=attend&pw=pw25 98 Or visit the website http://www.euvisioncast.com and login using the following information: Meeting ID: 1476357 Meeting Password: pw2598 See attached complete report. For additional information, please contact: Gustav Wetterling, IR Director, Black Earth Farming Ltd., tel: +44 207 117 81 00 Notes to Editor: Black Earth Farming Ltd. is a leading farming company, publicly listed in Stockholm and operating in Russia. It acquires, owns and cultivates agricultural land assets primarily in the fertile Black Earth region in southwest Russia. Black Earth Farming has gained a strong market position in the Kursk, Tambov, Lipetsk, Samara, Voronezh and Ryazan areas, controlling over 332,000 hectares of what perhaps is the world's most fertile soil. Black Earth Farming will continue to acquire farmland in order to draw full benefits of economies of scale in its operations. In 2008 Black Earth Farming harvested some 141,900 hectares and in 2009 it will harvest over 180,000 hectares Black Earth Farming's Certified Advisor on First North is E. Öhman J:or Fondkommission AB
BLACK EARTH FARMING LTD NINE MONTHS REPORT COVERING THE PERIOD JANUARY 1 - SEPTEMBER 30, 2008
| Source: Black Earth Farming Ltd.