6 Aug 2009 13:02

Razgulay posts 6.2 bln rubles IFRS net loss in 2008

MOSCOW. Aug 6 (Interfax) - Razgulay , one of Russia's biggest agricultural holdings, closed 2008 with net losses of 6.2 billion rubles to International Financial Reporting Standards (IFRS) compared with profit 1.45 billion rubles in 2007, the company said in an earnings report.

Revenue fell to 31.01 billion rubles in 2008 from 36.4 billion rubles in 2007. EBITDA (earnings before interest, taxes, depreciation and amortization) declined to 2.6 billion rubles from 4.8 billion rubles.

Gross profit edged down 3.6% to 5.88 billion rubles in 2008 from 6.1 billion rubles a year earlier.

The company said the main factor behind the decline in its gross margins was growth in the cost of agricultural products starting in 2007, which led to an increase in production costs in 2008. Furthermore, once the company sold the products with the higher production costs in the second half of 2008, grain prices had already started to decline.

During a presentation of the 2008 results, Razgulay said that it actually had net profit of 400 million rubles in 2008 prior to the deduction of reserves for accounts receivable and the depreciation of assets compared to net profit of 1.7 billion rubles in 2007. The company lost 4.9 billion rubles from the depreciation of farmland mainly due to forecasts of lower cash flows from agricultural enterprises.

Razgulay boosted sales revenue in its grain division to 24.55 billion rubles in 2008 from 19.13 billion rubles in 2007 and revenue from its sugar division to 11.07 billion rubles from 10.63 billion rubles.

The company increased grain exports to 1.2 million tonnes last year from 0.8 million tonnes in 2007, boosting the group's share of total Russian grain exports to 9% from 6%.

The Razgulay Group was founded in 1992 as a grain and sugar trading company. The group now has two holdings - grain and sugar - and produces, processes and sells agricultural products. Razgulay owns 36 grain, flour milling and cereal enterprises, 12 sugar mills and one- canned dairy products plant.

Razgulay carried out an initial public offering in March 2006, from which it raised $144 million. In November 2007, it raised $66.5 million by placing 14 million supplementary shares in a secondary public offering. Existing shareholders used their preemptive rights to buy 87% of the shares.

Razgulay President Igor Potapenko is the company's main beneficiary.