AgroGeneration sees wheat yield rise 30%, but all grain feed-grade

MOSCOW. Oct 11 (Interfax) - AgroGeneration, Euronext Paris-listed agribusiness with operations in Ukraine, harvested 23,400 tonnes of winter wheat this year and increased its yield by 30% to 4 tonnes per hectare from 3 tonnes last year, Ukrainian media reported, citing the company's website.

"Despite the increase in the crop's production performance, the quality of wheat declined yoy with almost 100% presented as feed grain (vs. c.a. 80% in 2022). The wheat's quality deteriorated (all over Ukraine as well) due to heavy rains prior of harvesting campaign in June- July 2023 and due to late terms of sowing campaign execution in the fall of 2022 on the back of weather conditions," the company said in a press release.

AgroGeneration recalled that the crop area was over 60% smaller compared with the previous year due to weather issues in the fall of 2022 that prevented the company from completing of late crop harvesting in 2022 and consequently carrying out winter sowing within planned areas.

In mid-August 2023, the group's farms started late crop harvesting. As of late September, around 40% of the area under sunflower and around 60% of the area under soy were harvested. Corn harvesting had not been started yet.

"Current estimates of the late crops harvest remain good, though, due to weather conditions, some deterioration in the quality of sunflower seeds (lower oil content) may take place. Late crops harvesting completion is scheduled for late October-mid-November 2023 and related production results are expected to be disclosed together with the Group's interim financial results for 2023 in late November," the company said.

Concurrently with late crop harvesting, AgroGeneration started sowing winter crop and preparing the soil for the 2024 harvest. The group plans to increase the area under winter wheat to as much as 50% of the company's total cultivated area from about 20% in 2022.

The company said that, as of late September, the group had sold around 40% of winter wheat and 7% of sunflower from the new 2023 harvest. Due to logistics problems in Ukraine and neighboring countries, AgroGeneration expects to sell most of the 2023 harvest on the domestic market at lower than planned prices.

The company also said that it will be forced to publish its interim financial statements later than the obligatory deadline, which is the end of October.

AgroGeneration, founded in 2007, specializes in cultivating grain and oil crops. The group's land holdings decreased to 30,000 hectares in 2022 from 58,000 hectares in Kharkov region in 2021.

The group posted a net loss of 31.595 million euros in 2022 compared to a net profit of 14.202 million euros the previous year on revenue down 41.1% to 25.854 million euros.

Konkur Investments Limited, a subsidiary of private equity company SigmaBleyzer, holds a 56.9% stake in AgroGeneration, the Libyan Foreign Bank holds 9.89% and the free float is 33.21%.

Ukraine's Antimonopoly Committee is now considering an application from Novaagro Ukraine LLC to buy a controlling stake in AgroGeneration S.A.