Livestock update Q1 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 Q1 2014.

During the twelve months ending March 2014, the average milk production per milking cow increased by 1 per cent to 516 litres per cow per month compared to the twelve months to March 2013. Despite this modest increase, overall production has fallen by 10.8 per cent to 940,000 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 March 2014 increased by 6.5 per cent on the same period in 2013. This was due to 33 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 3.7 SEK per litre (USD 0.57) which is a SEK price increase of 23 per cent. The livestock business is principally a domestic business in terms of cost inputs, sales and financing.

Meat revenues in SEK have fallen 38 per cent incorporating an approximate 10 per cent fall in local meat prices. The drop 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 14 per cent. 

At 31 March 2014, the Company’s Russian livestock herd amounted to approximately 5,000 animals, consisting of 1,650 milking cows, 750 dry cows, 2,100 heifers and 500 bulls, calves, and meat animals. The Company also has now divested all its livestock which were previously in Ukraine but not material enough to be disclosed in this report. 

Stephen Pickup, Managing Director, comments:

“The pricing environment remains strong with prices in local currency up 33 per cent compared to the previous year. Births are increasing and we look forward to having more milking cows in production. The good work carried out in the past year to reduce the milking herd to the best performers will reduce costs and improve profitability.”


Stockholm, 5 May 2014

For additional 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.