Livestock update Q4 2013

Agrokultura AB (First North Stockholm: AGRA, “Agrokultura” or “the Company”), the producer of agricultural commodities in Russia and Ukraine, reports its livestock update for Q4 2013.

In December 2013, the Company announced the signing of an agreement to dispose of its Kaliningrad assets. Included in the first step of the transaction was the sale of the Company’s livestock asset in Kaliningrad. This disposal leaves three dairy farms in the Central Black Soil region of Russia. All figures in this report are prepared to exclude Kaliningrad assets and all figures relate to the average of the 12 months preceding the end of the quarter.

During the twelve months ending December 2013, the average milk production per milking cow increased by 2 per cent to 508 litres per cow per month compared to the same period in 2012. Despite this modest increase, production has fallen by 7.8 per cent to 965,000 litres a month compared to 2012 owing to the reduction in the size of the herd and a focus on milking more profitable cows.

Milk sales for the twelve months to the December 2013, increased by 12.5 per cent on the same period in 2012 due to higher prices. Average ex VAT prices for the same period were 3.5 SEK per litre (USD 0.53) which is an increase of 24 per cent on the same period in 2012.

Sales of meat have fallen 42 per cent on generally constant prices. This is for the most part related to the restructuring of the herd which took place in 2012 which temporarily inflated 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 livestock revenues compared to the current 16 per cent.

At 31 December 2013, the Company’s Russian livestock herd amounted to approximately 4,900 animals, consisting of 1,500 milking cows, 1,000 dry cows, 2,100 heifers and 300 bulls and calves. The Company also has a small livestock herd in Ukraine which has now been partially liquidated and, which is not included in this report.

Stephen Pickup, Managing Director, comments:

“We have a reduced herd due to the focus on reducing crowding, increasing the comfort and therefore the productivity of our cows. It is an exciting time for our livestock business with high milk prices due to shortages in Russia of quality milk together with markedly reduced costs due to the 2013 reduction in feed inputs. Strong yields on the own grown corn silage will have further benefits on yield and cost. Fat and protein content continues to rise which allows us to charge a premium for our produce.”

Stockholm, 10 February 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.