Ukrlandfarming posts 38% revenue plunge, USD 164 mln loss in 9M15

Ukraine’s leading agricultural and food holding Ukrlandfarming (ULF, UKRLAN) reported a 38% yoy decline in net revenue to USD 716.1 mln in 9M15. The holding’s gross profit decreased 45% yoy to USD 273.3 mln and operating profit fell 83% yoy to USD 66.2 mln in 9M15. It reported EBITDA of USD 241.4 mln in 9M15, which is a 54% yoy decline, we estimate. The holding’s bottom line was negative USD 164.5 mln in 9M15 compared to a net profit of USD 17.6 mln a year before.

ULF’s core business, crop production, looked better than the company’s consolidated results: the segment’s net revenue increased 29% yoy to USD 362.9 mln, while operating profit fell 38% yoy to USD 183.5 mln in 9M15.

Ukrlandfarming’s operating cash flow before working capital changes was USD 276.8 mln (-39% yoy), while net operating cash flow was USD 58.5 mln (-66% yoy). It spent net USD 91.8 mln for the purchase of properties in 9M15 (vs. net USD 204.7 mln spent a year before). Its total cash and equivalents decreased 62% yoy to USD 74.3 mln, with a large part of the decrease (USD 40.2 mln) attributed to “cash obsolesce,” most likely meaning burned deposits in ULF’s related banks that were declared insolvent.

The holding’s total debt decreased 3% YTD to USD 1,633 mln as of end-3Q15, while net debt increased 5% YTD to USD 1,559 mln. Its ratio of net debt to 9M15 EBITDA was 6.46x (and over 10x if LTM EBITDA is used, we estimate).

Roman Topolyuk: ULF’s P&L results look in line with our expectations (we estimated full-year EBITDA of USD 280 mln in 2015) while its net debt result looks a bit higher than we expected. We maintain our negative view on UKRLAN bonds, as the company’s operating profit does not cover in full its finance costs, which suggests a need of debt restructuring, involving interest rate reduction. As we see from 9M15 results, Ukrlandfarming did not change its CapEx appetites (it planned to spend over USD 100 mln annually), which looks strange given its tough financial position.

Источник: Конкорд Капитал