OREANDA-NEWS. March 11, 2010. Agri-industrial holding ASTARTA Holding N.V., a leading agri-and sugar producer has published its preliminary key unaudited financials for the year 2009.

Preliminary key unaudited financials for the year 2009:

Consolidated revenue grew 40% y-o-y in the Ukrainian hryvnia equivalent to UAH 1,358 million, while in the Euro equivalent it was marginally lower (4% y-o-y) at EUR 118 million

Gross profit increased by 75% in the Ukrainian hryvnia equivalent to UAH 443 million and 9% in the Euro equivalent to EUR 38 million. Gross margin constituted 33% vs. 26% in 2008

EBITDA gained 148% in the Ukrainian hryvnia equivalent and 58% in the Euro equivalent and constituted UAH 555 million (EUR 49 million). EBITDA margin rose from 23% in the previous year to 41% in 2009

Export sales grew 40% to approximately USD 20 million

Consolidated revenue

Upward price trends in the agri- and sugar markets in 2009 contributed to a 40% y-o-y increase in revenue in the Ukrainian hryvnia equivalent to UAH 1,358 million. At the same time, due to the Ukrainian hryvnia depreciation against the Euro, revenue in the Euro equivalent marginally decreased by 4% y-o-y to EUR 118 million. Noteworthy, that the Group sales were lower in terms of volumes (especially sugar sales) in the 4th quarter 2009 than those in the 4th quarter 2008. On the back of favorable market conditions, the inventories of finished goods available should provide for high sale revenue in 2010.

Gross profit

Cost of sales grew 17% in the Ukrainian hryvnia equivalent to UAH 900 million. At the same time, in the Euro equivalent cost of sales decreased 19% to EUR 78 million.

The gross profit grew 75% to UAH 443 million and 9% in the Euro equivalent to EUR 38 million. Gross margin constituted 33% vs. 26% in 2008.

Profit from operations and EBITDA

In 2009, the Group's structure was optimized, which contributed to minimizing general and administrative expense, as well as transaction costs. As a result, general and administrative expense, as well as selling and distribution expense in the Ukrainian hryvnia equivalent grew slower than revenue (5% and 20% respectively). Due to the Hryvnia devaluation against the Euro, these expenses decreased in the Euro equivalent by 29% and 19% respectively.

In 2009, other operating expense decreased significantly as well. Simultaneously, government subsidies received also decreased, which caused a substantial cut in other operating income.

As a result of a significant increase in dairy prices, as well as growing sowing areas under key crops, the change in fair value of biological assets constituted approximately UAH 143 million (EUR 14 million).

All the above drivers contributed to a 208% increase in the profit from operations to UAH 464 million in the Ukrainian hryvnia equivalent (a 91% increase to EUR 41 million in the Euro equivalent). EBITDA grew 148% in the Hryvnia equivalent to UAH 555 million (58% in the Euro equivalent to EUR 49 million). EBITDA margin grew to 41% vs. 23% in 2008.

Key operational results

ASTARTA strengthened its leading position among the Ukrainian sugar makers having produced c. 18% of the total Ukrainian sugar output.

Vertical integration in the sugar production reinforced to 90% of the beet grown in-house (84% in 2008).

The Group's land bank increased to over 175 thousand hectares by the end of December 2009, all of the leased land used in operations.

Sugar production and sales

In December, ASTARTA finished beet processing season of 2009. Reinforced vertical integration in the sugar production resulted in an increase of the share of own sugar beet to 90% (84% a year earlier). ASTARTA's share in the total Ukrainian sugar production grew to c. 18%, which consolidated its position of No. 1 sugar producer in Ukraine. Sugar plants modernization and implementation of engineering programs provided for an increase in daily beet processing capacities and for a cut in inputs consumption per ton of sugar beet (by 18% of natural gas, 33% of lime stone, and by 27% of coal).

In 2009, ASTARTA also reinforced its market position among large industrial sugar consumers and demonstrated a flexible marketing approach actively developing its B2B client base. Approximately 87% of sugar was sold to large Ukrainian and international beverage producers and confectionaries (approximately 63% in 2008). In terms of quantity, sugar sales decreased by 9%.

Production and sales of agricultural crops

In 2009, ASTARTA harvested 376 thousand tons of grains and oilseeds. A 4% decrease in gross harvest was caused by less favorable than in 2008 weather conditions and by a cut in fertilizers application aimed at the reduction of production costs.

In terms of quantity, sales of agricultural crops grew 27%. Traditionally, international traders were the largest crop buyers in 2009. Over 50% of grains and oilseeds were exported.

Production of cattle farming produce

ASTARTA's cattle farming business showed the successful growth in 2009. Namely, the cattle heard increased by 3% to 22.3 thousand heads and 44.1 thousand tons of milk (22% up y-o-y) was produced.

Export

Exports are an important element for hedging the foreign currency risks. In 2009, export sales grew 40% to over USD 20 million (USD 14.3 million in 2008), which corresponds to 12% of the total sales. Export revenues in hard currencies in 2009 and those planned for 2010 fully and amply cover repayments on banking debts and other liabilities.