Agria Q4 sales advance 9.2% YoY, net profit remains unchanged YoY (NEUTRAL)

24.02.2021 Source: Agria Group Holding; FFBH

Agria Group Holding consolidated revenue advanced 9.2% YoY to BGN 102.4m in Q4 2020, probably on rising prices of agricultural goods in end-2020. We estimate that the gross margin on grain trading alone increased to 10.8% in Q4 from 8.9% a year ago. However, Opex gained faster than revenue (+11.1%, BGN 92.6m) on rising cost of materials which led to 6.6% YoY lower EBITDA at BGN 9.8m. Lower depreciation and last quarter’s investments gains offset the decline and as a result Q4 cons net income was flat YoY at BGN 6.8m. 2020 preliminary consolidated revenue was BGN 348m, up 8.1% YoY. EBITDA margin, however, was 1 p.p. YoY lower to 7% due to the increase in cost of materials and more than doubling of hired services to BGN 9.8m (+136% YoY). Lower depreciation and gains on investments helped 10.8% YoY advance in 2020 preliminary cons net income to BGN 12.6m. On the balance sheet IB debt was at BGN 158.2m in year-end, compared BGN 171.7m in end-2019 on decline in LT debt outstanding. Capex doubled to BGN 9.5m, mostly due to the grain storage capacity expansion in Popovo to 170k tons. Cash conversion cycle improved in 2020 to 160 days (down 8 days YoY) which helped the BGN 20.9m CFO in 2020, compared to BGN 3.1m a year ago.