During the first nine months the main financial indicators of organic food production company AUGA group have improved: sales revenue grew 30 per cent and gross profit increased more that two times. Good financial results are due to improved yield and the fact the harvest of Group‘s companies is sold at organic product prices this year.
AUGA group revenues for 9 months of 2017 were EUR 36.59 million and increased 30% compared to the same period of 2016, when it was EUR 28.07 million. Gross profit for 9 months of 2017 was EUR 14.86 million and increased more than two times compared to the same period of previous year (9 months of 2016 – EUR 6.81 million). Majority of gross profit increase is directly related to Group’s completed transition to organic farming.
“The report of this period already shows the actual results of completed transition to organic farming. They confirm that in 2015 we chose the right strategic direction to become efficient integrated organic food company. We were consistent in the implementation of our strategy and achieved the results we planned” – claims Linas Bulzgys, CEO of AUGA group.
Due to increase in scale of operations and number of employees, operational expenditures for 9 months of 2017 was EUR 6.90 million (9 months of 2016 – EUR 5.20 million). The expenses associated with acquisition of KTG Agrar SE companies operating in Lithuania also added to the increase of total operational expenditures.
According to L. Bulzgys, financial results were significantly impacted not only by the fact that the harvest of 2017 was traded at organic product prices, but also by the increased yield of main harvested crops of Group’s companies: “We continue to improve every year, to invest in technologies and development of our employees, which allows to do organic farming efficiently to achieve better yields and financial results”.
Group’s transformation to organic production company, favorable growth trends of European organic markets and improvements in agricultural system of Group’s companies have resulted in significantly higher EBITDA and net income results. AUGA Group EBITDA for 9 months of 2017 was EUR 13,19 million (9 months of 2016 – EUR 6.66 million), net income EUR 7.34 million (9 months of 2016 – EUR 0,78 million).
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