Livestock update Q2 2014
Agrokultura AB (First North Stockholm: AGRA, “Agrokultura” or “the Company”), the producer of agricultural commodities in Russia and Ukraine, reports its livestock update for Q2 2014.
During the twelve months ending June 2014, the average milk production per milking cow increased by 4 per cent to 531 litres per cow per month compared to the twelve months to June 2013. This growth rate has increased from the 1 per cent growth reported in Q1. Despite this increase, overall production has fallen by 7.7 per cent to 945,000 litres a month compared to 2013 owing to the reduction in the size of the herd.
Despite the overall fall in milk production, revenue in SEK for the twelve month period to June 2014 increased by 11.6 per cent on the same period in 2013. This was due to 36 per cent higher rouble milk prices which, when reported in SEK, is partially offset by the recent devaluation in the Russian rouble. Average ex VAT prices for the period were 3.9 SEK per litre (USD 0.60) which is a SEK price increase of 25 per cent. The livestock business is principally a domestic business in terms of cost inputs, sales and financing.
Meat revenues in SEK have fallen 31 per cent incorporating an approximate 10 per cent fall in local meat prices. The drop in meat revenues is for the most part related to the restructuring of the herd which took place in 2012 which temporarily inflated the meat contribution to livestock revenues as old unprofitable stock was slaughtered. The Company is looking at ways to improve the efficiency of the meat sales and targets meat revenues to form 20-25 per cent of total livestock revenues compared to the current 13 per cent.
At 30 June 2014, the Company’s Russian livestock herd amounted to approximately 5,000 animals, consisting of 1,800 milking cows, 500 dry cows, 2,150 heifers and 550 bulls, calves, and meat animals.
Stephen Pickup, Managing Director, comments:
“The pricing environment remains strong with prices in local currency up 36 per cent compared to the previous year. Good work continues on productivity per cow. Much of the forage harvest has been successfully executed with good results and we are looking at ways of making selected investments in machinery and increasing planting of Lucerne with the ultimate goal of making the business self-sufficient on feed thereby improving profitability.”
Stockholm on 5 August 2014
For additional information, please contact:
Investor Relations, tel. +44 203 427 3983
About Agrokultura AB (publ)
Agrokultura invests in farmland and produces agricultural commodities in Russia and Ukraine. The Group aims to generate an attractive return on invested capital by optimally utilizing its agricultural land bank through crop production, livestock and related operations. Shares in Agrokultura are listed in Sweden on the Nasdaq OMX First North exchange under the ticker AGRA and the Group’s Certified Adviser is Remium Nordic AB.