"Rusagro" fell into the financial tailspin

Agroholding Vadim Moshkovicha reported a decrease in revenue for the fourth consecutive quarter. He was led by low prices for sugar, grain and pork.
In the first quarter of 2018, the Rusagro group reported a 19% decrease in revenue to RUB 15.3 bn, the company said in a statement on its financial results under IFRS. During this period all the enterprises of the group "worked in conditions of low prices", the words of the general director Maxim Basov are quoted in the message.

Rusagro is one of the largest Russian agroholdings, it is controlled by the family of former senator Vadim Moshkovich (71.9%). Rusagro occupies the third place in the sugar market with a 14% share, the 2nd place in the pork market (5%) and the available land with a land bank of 670 000 ha, according to the BEFL data for April 2017.

Most of all, by 60% to 1.5 billion rubles., Sales in the agricultural segment declined. This is due to a decrease in prices for basic crops in comparison with the first quarter of 2017. Thus, sugar beet has fallen in price by more than half - up to 1000 rubles per ton. Wheat - by 12% to 6300 rubles per ton, barley - by 8% to 6500 rubles per ton.

Sales in the sugar segment, which accounts for 34% of the proceeds of the agricultural holding, fell 30% to 5.2 billion rubles. This is also associated with a 16% drop in sugar prices and a 16% drop in sales in physical terms to 166,000 tonnes. Part of the decline in revenue in this segment was offset by higher prices for beet pulp, the company said.

Revenues from the meat segment, which accounted for just under a third of revenue, fell 9% to 4.3 billion rubles. This is due to lower selling prices for pigs and processed pork. The company also reduced pork products sales by 11% to 39,000 tonnes.

The growth in revenue was shown only by the fat and oil segment, which includes the production of butter, margarine, mayonnaise, etc., by 3% to 4.5 billion rubles.

As a result, the adjusted EBITDA decreased by 37% to RUB 1.7 billion. Net profit amounted to 209 million rubles. While in the first quarter of last year the company reported a loss. Analysts of "VTB Capital" call the financial results "not impressive." Traditionally, the first quarter is the weakest year, Basov recalls, in the second quarter the price situation is better.

The proceeds of the agricultural holding are declining for the fourth consecutive quarter, the company's materials show. In 2017, annual revenues of Rusagro contracted for the first time in 5 years: by 7% to 89 billion rubles.