Livestock update Q4 2014

Agrokultura AB (First North Stockholm: AGRA, “Agrokultura” or “the Company”), the producer of agricultural commodities in Russia and Ukraine, reports its Russian livestock update for Q4 2014.

During the twelve months ending December 2014, the average milk production per milking cow increased by 14 per cent to 580 litres per cow per month compared to the twelve months to December 2013. This growth rate has increased from the 8 per cent growth reported in Q3 and 4 per cent in Q2. Overall production has also increased by 5 per cent to 1,012,000 litres a month compared to 2013 despite an 8 per cent reduction in the size of the milking herd. Key production parameters are all showing increasingly positive improvements.

Despite the devaluation of the rouble, milk revenue in SEK for the twelve month period to December 2014 increased by 20 per cent on the same period in 2013. This was due to higher rouble milk prices and increased production levels per cow which, when reported in SEK, are partially offset by the recent devaluation in the Russian rouble. Average ex VAT prices for the period were 3.8 SEK per litre (USD 0.56) which is a SEK price increase of 11 per cent on the same 12 month period in 2013. The livestock business is principally a domestic business in terms of cost inputs, sales and financing. Milk revenues in local currency are up 36 per cent on the previous 12 month average which includes a 25 per cent increase in local rouble pricing.

Meat revenues in SEK have fallen 37 per cent reflecting the devaluation of the rouble, holding back of selling animals and generally flat local currency meat pricing. The Company is looking at ways to improve the efficiency of the meat sales and targets meat revenues to form materially more of total livestock revenues compared to the current 10 per cent. 

At 31 December 2014, the Company’s Russian livestock herd amounted to approximately 5,050 animals, consisting of 1,750 milking cows, 650 dry cows, 2,100 heifers and 550 bulls, calves, and meat animals. 

Stephen Pickup, Managing Director, comments:

“The milk pricing environment remains strong with prices in local currency up 25 per cent compared to the previous year. Although SEK contribution will fall due to the rouble devaluation, operating costs will also fall which should maintain current margins. Good work continues on productivity per cow driven primarily by changes in feed regime and some limited investments to improve the wellbeing of the animals. The government supported subsidy situation remains favourable.”

For additional comments, please contact:

Stephen Pickup, 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.