GC "Rusagro" in the first quarter reduced revenue by 23%

The revenue of Rusagro Group of Companies, one of the leading agricultural holdings in RUSSIA, in the first quarter of 2023 amounted to 49.4 billion rubles (before inter-segment eliminations), which is 23% less than a year earlier.

"This was mainly due to a decrease in the revenue of the oil and fat business, due to a decrease in sales prices against the backdrop of falling world oil prices and the DOLLAR exchange rate against the ruble, as well as a decrease in sales volumes realized with high profitability due to lower costs," the press release said. group release.

The revenue of the oil and fat business amounted to 23.357 billion rubles (47% of the total), which is 33% less in annual terms, the revenue of the MEAT business increased by 16%, to 10.725 billion rubles (22%), the SUGAR business decreased by 17%, to 9.411 billion rubles (19%), agricultural - also decreased by 28%, to 5,

The company said it produced 132,000 tons of crude vegetable oil in the first quarter, down 25% (-44,000 tons) from the same quarter last year. The decrease is due to market conditions and difficulties with the shipment of ships due to ice conditions in Astrakhan in January and February 2023.

Sales of industrial oil and fat and dairy products amounted to 266 thousand tons, which is 18% (-59 thousand tons) less. Sales of crude vegetable oil decreased by 42% (-38 thousand tons) to 132 thousand tons, due to a reduction in sunflower processing amid the market situation and difficulties with the shipment of ships. The entire volume of crude vegetable oil was sold at a significant profitability due to cost reduction. Meal sales decreased by 11% (-16 thousand tons) to 133 thousand tons, following a decrease in seed processing.

Pork production (in live weight) in the first quarter amounted to 89 thousand tons, which is 14% (+11 thousand tons) more than a year ago. The growth of the indicator is mainly due to the increase in production capacities in the Primorsky Territory.

Sales of pig products increased by 19% (+11 thousand tons), to 72 thousand tons, primarily due to an increase in production volumes in Primorsky Krai and an increase in production efficiency in the Central Federal District, including through the implementation of a project to expand deboning capacity . The sales of lumpy meat increased the most.

The company also said that in the first quarter, sugar production amounted to 69,000 tons, up 23% from a year earlier. This is due to the extension of the work of the plants until February 2023. At the same time, the volume of sugar sales decreased by 17% (-29 thousand tons), to 148 thousand tons. This is due to a decrease in sugar production in the current season, mainly due to a decrease in beet digestion due to weather conditions, the report explains.

88 thousand tons of grain crops were sold in January-March, which is 51% (-92 thousand tons) less than a year ago. In particular, wheat sales fell by 26% (-20 thousand tons), to 59 thousand tons, due to a decrease in demand in the domestic market, as well as the expectation of an increase in the dollar exchange rate and a reduction in duty or a revision of the mechanism for determining it. Corn sales decreased by 71% (-72 thousand tons), to 29 thousand tons. The entire volume of corn of the current season is contracted for sale in the second and third quarters of 2023 on more favorable terms, including for EXPORT in connection with the receipt of export quotas.

Sales of oilseeds increased by 8% (+9 thousand tons), to 127 thousand tons as a result of an increase in sunflower sales volumes by 2.5 times (+25 thousand tons), to 40 thousand tons, with a decrease in soybean sales by 15% (- 16 thousand tons), up to 86 thousand tons. In the first quarter, there was an active sale of sunflower seeds in anticipation of lower prices. Changes for soybeans are associated with the postponement of harvesting to 2023 due to weather conditions and a shift in the implementation schedule for the next quarters of 2023, the report explains.

Sales of sugar beets in January-March amounted to 494,000 tons, 435,000 tons more than in the same period last year. The dynamics is associated with a shift in the schedule for harvesting and selling sugar beets to January-February 2023 due to adverse weather conditions.

Rusagro is a major Russian producer of sugar, pork, sunflower oil, mayonnaise and margarine. Revenue in 2022 amounted to 240.2 billion rubles, which is 8% more than a year earlier, net profit decreased by 84%, to 7.787 billion rubles, adjusted EBITDA - by 6%, to 45 billion rubles, profitability for this indicator - by 16 p.p., up to 3%.

Rusagro occupies 15% in the production of sugar in the Russian Federation (3rd place), including 48% in the production of lump sugar (1st place), 6% in the production of marketable pork (4th place), 13 % - sunflower oil (1st place), 52% - margarine (1st place).

The company's assets are located in 11 regions of the Russian Federation: Belgorod, Tambov, Voronezh, Kursk, Orel, Sverdlovsk, Samara, Ulyanovsk, Saratov, Orenburg regions and Primorsky Krai.