Highlights of 1Q 2015
Total revenue, other income, fair value adjustments and net changes in inventory
amounted to EUR 8.1 million (EUR 9.6 million in 1Q 2014).
EBITDA was a loss of EUR 1.3 million (loss of EUR 2.1 million in 1Q 2014).
The Net loss was EUR 8.3 million (loss of EUR 11.2 million in 1Q 2014). Please
note that the result includes EUR 4.1 million of non-cash currency translation
losses due to the depreciation of Ukrainian Hryvnia.
The consolidated assets as of March 31, 2015 amounted to EUR 154.2 million (EUR
149.6 million at December 31, 2014).
Trigon Agri’s Founder and Chairman of the Board, Joakim Helenius, Comments:
The political crisis in Russia and Ukraine continues to dominate business,
including agribusiness, in the region. Our operations have not been directly
impacted by the military conflict and it is looking increasingly unlikely that
the conflict area in the Donbass region of Eastern Ukraine will expand much from
its current geographical boundaries. The economic situation however remains
difficult to predict. Ukraine is in danger of having to declare a sovereign
default if it cannot reach agreement with its international creditors. Whilst we
are selling our produce in hard currency we nevertheless want to see a
resolution of Ukraine’s debt situation so as to ensure that we are not impacted
by currency controls. In Russia we have seen a gradual calming down of the
pressure on the Rouble but the international financial sanctions on Russia have
significantly hurt the liquidity of the Russian banking system, thereby
negatively impacting business transactions and sentiment and complicating our
asset disposals.
Our asset disposal efforts have led to interest in all our non-core assets but
this has still not translated into firm bids. We hope to receive price
indications from at least some of the parties carrying out due diligence on
assets belonging to us by summer, but cannot be sure given the prevailing
external uncertainties.
The financial results year to date reflect the usual state of affairs during the
winter period. Our costs are down on last year’s equivalent numbers largely
thanks to a positive currency effect from the weaker Rouble and Hryvnia. We
expect that our costs will benefit from the currency effect for the foreseeable
future. Our cash flow is under control despite the challenging external
situation thanks to our cost control efforts and support from our banks.
Importantly our banking relationships in Ukraine are all with international
banks.
On the agricultural side it is too early to give any meaningful yield
predictions. Our winter crops survived the winter period reasonably well and all
spring field works, including seeding, have been completed as planned. The crops
look promising, especially in Ukraine, but the final result will depend on
weather conditions going forward.
Soft commodity prices in the Black Sea region are broadly speaking below but not
far off what they were last year. So far, with the exception of the rapeseed
harvest in Ukraine, we have not locked in any prices through forward sales.
Events after the balance sheet date
The 2015 spring sowings have been completed on May 20th. The total expected
harvest area is 67 thousand hectares, out of which 70% is in Ukraine and 30% in
Russia.
Legal disputes
In April 2015 court proceedings were initiated in Commercial court of Rostov
Oblast against a Trigon Agri Group company in Russia with the aim of reversing
part of land-swap transaction under which Trigon Agri acquired 31,000ha of its
Rostov cluster (out of the total Rostov cluster size of 80,000ha). The initiated
case involves only land and no other significant assets are part of it. The
initiated legal case is based on taking out of context certain technical legal
steps that were completed in Russia by Trigon Agri and it does not take into
account the frame-work land swap agreement which was executed under Cypriot law
with legal disputes being discussed and settled under arbitration in Stockholm.
To defend its rights Trigon Agri has retained a leading Russian law firm and a
Stockholm based international law firm. Based on the legal advice received so
far Trigon Agri has a strong case in its favor and currently sees no risks in
defending its rights in the applicable courts. Any significant developments in
the case will be reported in applicable further company announcements but based
on received legal advice the management does currently not see any significant
financial downside other than financing respective legal defense costs.
Telephone conference details
A telephone conference will be held today, on May 29, 2015 at 10.00 CET.
Program:
Joakim Helenius, Chairman of the Board, and Ülo Adamson, President and CEO, will
present and comment upon the results. There will also be an opportunity to ask
questions.
To participate in the telephone conference, please call one of the following
numbers:
SE: +46 8 505 564 74
UK: +44 203 364 5374
US: +1 855 753 2230
FI: +358 981710460
NO: +47 235 002 10
DK: +45 354 45 580
CH: +41 225 675 541
The presentation material will be available on www.trigonagri.com before the
telephone conference starts. A recording of the telephone conference will be
available afterwards on www.trigonagri.com.
Investor enquiries:
Mr. Ülo Adamson, President and CEO of Trigon Agri A/S, Tel: +372 66 79200, E
-mail: mail@trigonagri.com
About Trigon Agri
Trigon Agri is a leading integrated soft commodities production, storage and
trading company with operations in Ukraine, Russia and Estonia. Trigon Agri’s
shares are traded on the main market of NASDAQ OMX Stockholm. Trigon Agri is
managed under a management agreement by Trigon Capital, a leading Central and
Eastern European operational management firm with around USD 1 billion of assets
under management.
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