In the first half of the year Ekosem-Agrar increased its revenue by 24% and its share of milk processing
Total revenue, including changes in the value of inventories, biological assets and other operating income, increased by 61% to EUR 162.2 million, said in the company.
EBITDA increased by 46% to EUR 45 million, the profitability of EBITDA amounted to 27.7%. The EBIT value rose to EUR 26.9 million from EUR 18.8 million a year earlier.
“EkoNiva” is Russia's largest producer of raw milk. Earlier Ekosem-Agrar announced that it plans to increase processing and enter the dairy market. "The leadership in the production of raw milk, which we have achieved in recent years, is now an important competitive advantage on the way to becoming the largest vertically integrated supplier of dairy products in Russia", said Stefan Durr, CEO of Ekosem - Agrar, quoted in the company's report.
According to him, by the end of the year the company will launch the first line of dairy products under the umbrella brand “EkoNiva” on the Russian market.
In the first half of the year, the company increased production of raw milk by 68% to 225 thousand tons. Sales of raw milk bring the agricultural holding more than half of the revenue (64% or EUR 63 million against EUR 57.2 million a year earlier). As the processing segment grew, its share of revenue was 13% (EUR 12.5 million) compared to 2% (EUR 1.6 million) a year earlier.
The revenue from the agricultural business amounted to EUR 11.1 million, from the sale of livestock - EUR 9.9 million.
At the end of June, the number of cattle in the agricultural holding reached 110 thousand, including 51,75 thousand heads of milking cows (at the end of last year - 97,52 thousand and 45,1 thousand, respectively). Daily milk production has increased by 25% to 1.365 thousand tons from 1.09 thousand tons at the end of the year. The growth of production by about 600 tons ensured the acquisition of two dairy farms in Kaluga and Voronezh regions in the IV quarter of 2017.
By the end of 2018, the company plans to increase the number of milking cows to 70 thousand heads and, as a result, to increase the production of raw milk up to 500-520 thousand tons.
By the end of 2019, the dairy herd will grow to 100-120 thousand heads, milk production - to 900 thousand - 1 million tons, predicts Ekosem-Agrar. Currently, the company is building 14 new dairy farms, which will be fully completed in early 2020.
The value of Ekosem-Agrar assets at the end of the first half of the year is EUR 1.1 billion (EUR 942.7 million at the end of the year). The land bank has 386 thousand hectares of agricultural land. By the end of the year it is planned to increase the area to 400 thousand hectares.
At the end of July Ekosem-Agrar announced that it is considering IPO as one of the possible ways to attract funding. The company has been transformed into a joint stock company (now called Ekosem-Agrar AG, not Ekosem-Agrar GmbH) to increase flexibility to attract funding. Management has begun preparations for the initial placement.
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