Black Earth Farming Ltd Q1 Report 2016
Strong winter crop outlook, spring seeding in progress.
1Q16 revenue and gain is up to USD 19.9mn (13.5) on increased sales volume and higher average price. EBIT improved from USD -3.9mn to USD -3.6mn. Negative profitability in the first quarter is expected and reflects business seasonality. 1Q16 Net loss of USD -4.6mn (-2.1) differs from 1Q15 due to reduced positive effect from ruble revaluation: foreign exchange (FX) gain is USD 0.4mn versus USD 2.8mn in 1Q15.
Winter wheat outlook remains strong, virtually without winter kill. Seeding campaign is 72% completed. Very high rainfall so far in 2016 means soils are very wet.
2016 Highlights (vs 2015)
· Total revenue and gains of USD 19.9mn (13.5)
· Sales volume of 118.9kt (84.8)
· Average sales price of 166 USD/tn (162)
· Gross profit of USD 4.9mn (2.3), distribution cost USD 5.1mn (2.4)
· G&A of USD 3.2mn (4.3)
· Operating loss of USD -3.6mn (-3.9)
· FX income of USD 0.4mn (2.8)
· Net loss of USD -4.6mn (-2.1)
· Net debt less finished good inventory of USD 7mn (11.8)
Significant and subsequent events
· Strong winter wheat yield prospects, no identified winter kill
· Seeding campaign is 72% completed
· Bond buyback of SEK 29mn (USD 3.4mn) par value
· In April 2016, the Group agreed credit facility extension with VTB bank from RUR 800mn to RUR 2,400mn (from USD 11.8mn to USD 35.5mn).