AUGA group results for 12 months of 2023

The sales revenue of AUGA group amounted to EUR 81.41 million in the reporting period, compared to EUR 80.09 million in 2022.

AUGA group’s gross loss in 2023 was EUR 0.62 million, while in the previous year the gross profit was EUR 15.27 million. In 2023, AUGA group’s EBITDA was EUR 1.48 million. In 2022, EBITDA was EUR 19.58 million.

“Although 2023 was a challenging year, all of the AUGA group’s segments were profitable in the last quarter of the year. The largest negative impact on the annual result was caused by the falling purchase prices of organic products in the crop and dairy segments. In view of this trend, we have already decided in the summer of 2023 to cultivate a part of the land through regenerative conventional agriculture, hence in 2024 the income from the different forms of agriculture will be split approximately equally. This will diversify our income, reduce yield and income volatility, lay the foundations for more sustainable financial results. In addition, AUGA group continues to focus on strategic projects – the development of sustainable agricultural technologies, and in the first half of 2024 will seek to attract funding for technology development,” says Kęstutis Juščius, Chair of the Board of AUGA group.

Crop growing segment

The overall segment result arising from sales of agricultural products, changes in the fair value of biological assets and agricultural subsidies amounted to a gross loss of EUR 3.23 million at the end of 2023, compared to the previous year’s gross profit of EUR 12.43 million.

Although drought was recorded at the beginning of 2023, winter crop yields were average. Summer crops were the most affected, their yield decreased by more than half compared to average years.

In the new season, 31% more winter crops were sown than in previous year. They are less sensitive to climate change, so even under more challenging conditions in spring or summer, they produce a larger and more stable yield. According to the AUGA group’s assessment, the quality of winter crops is good. Next season, the areas for summer organic crops, which are sensitive to climate, will be 40% smaller compared to this season.

Additionally, on August 7, 2023, AUGA group announced that a part of the land will be cultivated through regenerative conventional farming agriculture. Participation in both organic and conventional raw material markets will allow diversification of financial risk arising from fluctuations in production prices and ensure a more sustainable financial flow.

Dairy segment

Overall performance in the dairy segment was lower in 2023 than in 2022 mainly due to a 18% average decrease in product prices.

The last quarter of 2023 was already profitable, as AUGA group improved its milk yield, kept productions costs under control, and as product prices rose in November and December. The final gross loss for 2023 was EUR  0.40 million, while the segment’s gross profit for 2022 was EUR 2.57 million.

Mushroom growing segment

In 2023, the mushroom growing segment generated a gross profit of EUR 1.72 million, compared to a gross loss of EUR 1.4 million in 2022. Although the volume of production remained similar to 2022, the control of production costs and the decrease in energy prices enabled costs to be maintained at the 2022 level. Sales prices increased by 10% in 2023, remained at this level and have the potential to increase in 2024.

Fast-moving consumer goods (FMCG) segment

In 2023, the gross profit of the FMCG segment was EUR 1.29 million, compared to a gross profit of EUR 1.74 million in 2022. The greatest impact on the segment result was the sale of 100% of the shares of the canned products production division Grybai LT in mid-2023.

In 2023, AUGA group introduced to consumers a new line of more sustainable organic products, which is based on daily consumption dairy products, as well as oat flakes, oatmeal porridges, eggs and vegetables. They are sold in major Lithuanian supermarket chains and HORECA channels. AUGA group aims to mobilize a community of conscious consumers prioritizing more sustainable products, expand the range of products, and to broaden the sales network for the products.

Operating costs

AUGA group’s operating costs amounted to EUR 14.93 million in 2023, compared to EUR 12.77 million in 2022. Operating costs were increased by marketing expenses, investments related to the introduction of new end-consumer products, and higher employee pay.

Implementation of the strategy

AUGA group continues to develop its technology projects and is preparing to scale their portfolio. AUGA Tech obtained a patent in the USA, States to the Eurasian Patent Convention and, as yet undisclosed publicly, in Australia for the structure of the AUGA M1 biomethane and electric-powered tractor for large farms. The company indirectly owned by the AUGA group, has applied for patents in other strategic markets. Obtaining and awaiting technology patents lead to faster possibilities for technology commercialization.

On 29 November 2023, AUGA group announced the confirmed results of testing of its feed technology. Scientific institutions have confirmed that the technology enables an increase in the milk yield with no impact on the milk’s quality and a reduction of the methane emissions from cows’ digestive processes by 32% per litre of raw milk. The test results were confirmed by scientists from the Veterinary Academy of the Lithuanian University of Health Sciences, who positively evaluated the validity of the results.

Three strategic biomethane units of AUGA group are being prepared for the supply of biomethane gas to the natural gas system.