Harvest report 2014

Agrokultura AB (“the Company”), the owner and operator of farmland with agricultural operations in Russia and Ukraine, reports the completion of its 2014 harvest with record yields across Ukraine and consolidation of 2013 improvements in Russia.


- Harvest fully completed across both Russian and Ukrainian operations

- Yields continue to show strong positive trends demonstrating improvements in operations

- 2013 Russian weighted average yield improvements of 34 per cent consolidated with an overall increase of +1 per cent for 2014, held back by the dry summer which negatively impacted spring crop yields

- Ukraine weighted average yields up 20 per cent on 2013 which itself was an increase of 11 per cent on 2012

- Total harvested area at 115,500 hectares (2013: 127,000)

- Company has refocused its cost base to reflect the lower pricing and has adjusted its planting to more profitable crops

Stephen Pickup, Managing Director of Agrokultura, commented,

“2014 crops in Russia have had mixed weather conditions with conditions favouring the winter planted wheat whereas the dry summer severely impacted the yield potential of the spring crops. Significant yield improvements in some areas show the potential of our crops. We will continue to improve the efficiency of operations in the coming year with a focus on further increasing profits”
“The most significant improvement was delivered in the Ukrainian operation which is delivering market leading yields which we are looking to repeat again in the 2015 harvest. Rapeseed has again shown it is well suited to western Ukraine with excellent yields and winter grains have shown they can deliver the required result to prove the business concept.”

Harvest 2014

The Group’s Ukrainian operations have benefited from ideal farming conditions through most of the year which has assisted yield improvements. Being located on the west of Ukraine, operations have been isolated from the troubles in the eastern part of the country and the Group has encountered no operational disruption although financing has clearly become more difficult and costly.

Russia’s dry summer and autumn has meant good harvest conditions with little or no drying required although most spring planted crops suffered yield reductions due to the lack of moisture over the growing season. Given the lack of material global weather events, global supply for agricultural commodities has been high this year which has kept international pricing down at or lower than the levels seen in 2013.

The Company has harvested a gross total of approximately 475,000 tonnes of crop, which is broadly at the same level at 2013 (470,000 tonnes gross) despite the 9 per cent reduction in planted area which is linked to the disposal of the Group’s Kaliningrad operation.

In Russia, the weighted average improvement in yields was 1 per cent compared to 2013. 2013 delivered a step change in Russian yields with an average yield improvement of 34 per cent. This year’s winter wheat was successful with an average net yield of 4.1 tonnes per ha, an improvement of 10% on 2013 and 62% on 2012. The sunflower harvest which was the second largest in terms of area was impacted by the drought and delivered an average net yield of 2.0 tonnes per ha (down 16 per cent on 2013 – 2.4 tonnes per ha), the same level as 2012 which is a level which will deliver a profitable crop. Spring barley was the third largest crop by area and delivered yields of 3.7 tonnes per ha with an improvement of 37 per cent on 2013 and 105 per cent on 2012. The Russian business has maintained strong sugar beet net yields of 43.7 tonnes per ha which was a small reduction compared to 2013, directly related to the dry weather. Sugar beet planting will be substantially increased in the coming years given beet provides the Group’s highest margins.

In Ukraine, weighted average yields were up 20 per cent compared to 2013 with the greatest improvements coming from the winter grains (wheat and barley) which both showed increased yield of 49 per cent compared to 2013 over 12,500 ha. Historically, winter grains have not been successful and the Group has relied on winter rapeseed to generate profit but this year all three winter planted crops have exceeded expectations. All crops other than sunflower showed an increase in yield. Although the sunflower yield of 1.9 tonnes per ha was satisfactory, it was impacted by some localised hail storms together with some operational shortcomings which will be addressed for 2015.

The table below shows the harvested yields achieved in the 2014 harvest. Net yields are estimates.

Harvest 2014, split by crop and by region

Harvested area, ha  Gross Yield tonne/ha
Total for Group 115,500 4.1
Crop Harvested area, ha Gross Yield tonne/ha Estimated Net Yield/ha Increase /
(decrease) on 2013
Winter rape 12,200 3.5 3.4 +16%
Winter wheat 8,200 5.8 5.6 +49%
Winter barley 4,100 5.7 5.5 +49%
Corn 7,900 9.4 7.6 +34%
Sunflower 12,100 2.1 1.9 -12%
Total Ukraine 44,500 4.4
Russia Central Black Soil Region
Crop Harvested area, ha Gross Yield tonne/ha Estimated Net Yield/ha Increase /
on 2013
Winter wheat 16,250 4.2 4.1 +10%
Sunflower 16,650 2.1 2.0 -16%
Sugar beet 1,350 47.6 43.7 -9%
Spring barley 11,150 3.8 3.7 +37%
Corn 4,400 4.8 4.3 -30%
Soybean 5,150 0.7 0.7 -43%
Spring rape 7,250 1.5 1.4 +33%
Buckwheat 1,950 1.2 1.1 -32%
Spring Wheat 4,600 2.9 2.9 NA
Other 2,250 2.4 2.2 -10%
Total Russia CBS 71,000 3.7

   Stockholm, 12 February 2015

For further information, please contact:

Stephen Pickup, Group Managing Director, tel. +44 782 529 4352

Kristian Shaw, Group CFO, tel. +44 782 529 4356

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.