A/S Trigon Agri: 2007 Ukraine Harvest Completed with Exceptional Yields Despite Severe Drought

Despite one of the most severe droughts in recent decades in the Ukraine A/S Trigon Agri has completed the 2007 harvest on 22,658ha of land which it operates in the Harkov region in Ukraine with exceptional results under the circumstances. The result of the harvest has coincided with the sharp price increases for soft commodities (partly resulting from the severe drought), which gives further confidence to the management to expect the first full year of operations in Ukraine to give significantly better financial results than originally expected.

In connection with the IPO carried out in May 2007, A/S Trigon Agri gave out yield forecasts based on assumptions of a normal summer (normal summer experiences rainfall of about 200mm during the growing season). This summer 97.3% of Trigon Agri’s fields in the Ukraine received zero rainfall and only 615ha received a minimal rainfall of no more than 35mm. Nevertheless, A/S Trigon Agri outperformed its first year production yield targets for the deep root-system crops, sunflower and corn, out-performing by +26% and +5% respectively, due to the ability of the deep root-system crops to access moisture from the deeper levels of soil. For the shallow root-system crops the results came in lower than originally expected on fields which did not receive any rainfall, while the 615ha of wheat fields, which received at least a minimal level of rainfall, the production yield came in at 4.51 tonnes per hectare i.e. a 13% out-performance from the initial first year’s target. However, the underperformance in production in these two crops has been more than compensated by a very sharp price increase for the commodities.

The table below gives the relevant productivity figures as well as the latest price dynamics for the four main crops of the company:

A/S Trigon Agri: 2007 Harvesting in Ukraine

Yield expected in Interim Report on June 30, 2007 (tonnes/hectare)
Wheat 2.95
Barley 1.44
Sunflower 1.94
Corn 4.43


Actual yield from the 2007 harvest (tonnes/hectare)
Wheat 2.95
Barley 1.44
Sunflower 2.52
Corn 5.26


Price Change June 30, 2007 to October 26, 2007*
Wheat 18%
Barley 28%
Sunflower 26%
Corn 12%
* Source APK Inform

The Black Earth region in the Ukraine is one of the most fertile agricultural regions of the world. Its deep top-soil and high humus content give the soil a unique ability to trap moisture from autumn rains and the spring snow-melt. A/S Trigon Agri’s first year’s harvest proves that even under extreme conditions the Black Earth soil when farmed using modern and efficient farming techniques can yield exceptional results. This gives the management of the company further grounds to believe that targets outlined in the connection with the IPO in May 2007 are not only reachable but can potentially be significantly exceeded.