Unaudited results for year 2015 of Agrowill Group, a group of companies implementing a model of organic agricultural production, indicate that its revenue was 13% higher than in 2014 and reached EUR 47.42 million. At the same time EBITDA of the company was EUR 10.87 million – a 49% better result than in 2014 when it equalled EUR 7.08 million. Net profit of Agrowill Group in 2015 was EUR 3.87 million, since Agrowill Group had a net profit of EUR 10.3 million over the same period of 2014.
Although net profit of Agrowill Group decreased, but taking into consideration the elimination of negative goodwill write-off in 2014 (according to IFRS after the merger of Agrowill Group AB and Baltic Champs UAB), the actual net profit in 2015, was EUR 2.6 million higher than in 2014.
“It is a good result for a group of companies which are reorganizing internal processes in a way that fits to strict organic agriculture rules. And it is still being negatively influenced by outside factors, such as embargo in Russia and overproduction in dairy sector. Gross profit of mushroom and milk production have decreased, but negative impact has been absorbed by significant growth of yields in grain production. We have been working in accordance with strict rules of organic farming since last spring, thus we feel more and more confident about the allocation of resources and risks within the companies of the group in order to make sure that our business model is sustainable and has an economic background,” said Linas Bulzgys, the General Manager of Agrowill Group.
In 2015 gross profit of Agrowill Group was EUR 10.52 million and was EUR 2.69 million higher than in 2014.
Gross profit for the year 2015 consists of EUR 2.06 million from the sale of mushroom production and compost segment, gross profit from grain production equalled to EUR 2.87 million, dairy and livestock production generated the loss of EUR 0.92 million. The accumulated amount of subsidies received in 2015 have reached EUR 7.5 million, out of which EUR 4 million were subsidies for organic farming. Subsidies for organic farming are dedicated to all organic and transitional farms in order to compensate decreased yields of production due to organic farming requirements.
Last year Agrowill Group transferred shares of the companies that control land-operating subsidiaries to Fixed Yield Invest Fund, investment fund for informed investors controlled by the fund management company Synergy Finance. In total, the companies indirectly manage around 6.4 thousand hectares of land that has a market value of EUR 24 million. For the 100% of the shares the fund paid by its own-issued investment certificates which on the day of the deal had a market value of EUR 6.6 million. The controlling companies were transferred together with their financial commitments of EUR 15.3 million. Agrowill Group has not given any guarantees or warranties for these commitments.
The group is sole keeper of fund’s investment units and, as advised by the auditors and in accordance to International Accounting Standards, debts of the companies acquired by the fund were consolidated. Consequently, the total worth of Agrowill Group debt portfolio equalled to EUR 46.7 million in 2015. If debts which were transferred to the investment fund and which are repaid solely by fund were eliminated, the total worth of the debt portfolio would equal EUR 35.2 million.
In 2015 Agrowill Group reached a strategic agreement with DNB and Swedbank on the refinancing of the Company‘s long-term debt portfolio in order to reduce its debt burden. A syndicated loan of EUR 39 million was granted by both banks in equal parts. EUR 33 million of the money were dedicated to refinance current loan portfolio, while the rest of the loan will be used to finance Company‘s operations as well as its development projects. In the upcoming years this agreement will allow to decrease the debt service expenditure for more than 30 per cent.
In December 2015 Ekoagros, an institution for organic farming and food production certification, finished the certification process of all land (23.5 thousand hectares) rented and owned by Agrowill Group and group’s livestock farms.
The harvest of the year 2016 will match the requirements of organic farming status P2 which means that the crops could be added in organic livestock feeding ration in a proportion of 30 per cent. The stock of that type usually trades in the market at the price, which is 30-50 euros per tonne cheaper than organic crops, but it is significantly more expensive than conventional crops, especially now, when prices of conventional crops are low.
More info:
Linas Bulzgys, CEO of Agrowill Group, AB. Phone +370 685 16 267