Bulgarian grain producer and trader, Agria Group Holding (AGH) has witnessed an impressive growth on its top and bottom lines on increasing grain prices and the abundant harvest in Northeastern Bulgaria. Group’s consolidated sales expanded by 27% y/y to BGN 434 m. 12% (BGN 51 m.) of the latter comes from agribusiness segment (grain production), which marks an 82% y/y growth. The remaining revenue comes mostly from grain trading, processing and storage and related services.
Meanwhile OPEX grew with a slower pace of 23% y/y to BGN 409m mostly due to rising prices of grain and production materials. As a result EBIT (incl. subsidies) stood at BGN 31 m. (up 115% y/y) while EBIT margin added 293 bps. y/y to 7.13%. After factoring in the negative differences from operations with financial instruments, Agria’s net profit stood at BGN 25.6 m., up 2x y/y, yielding an EPS of BGN 3.76 for its investors, which implies a P/E of 4.07.
Balance sheet wise, Agria’s book value of arable land slightly increased y/y (1.6%) to BGN 125.6m mostly on purchases of new land. Working capital jumped 1.6x y/y on higher inventories and receivables, which also led to higher short-term borrowings and D/E ratio of 1.16 (vs 0.98 in 2020). The shares of the Company still trade below its net assets value at P/B of 0.58.
Follow up investment
In addition, in late February, Agria acquired the remaining 45% stake of Silk Gas BG, becoming a 100% owner of the company. The price of the deal was not disclosed. Silk Gaz BG is a grain trading company, operating in Northeast Bulgaria. Please note, that Agria acquired the initial 55% stake in the company back in 2017.