AUGA group results for 6 months of 2022

The sales revenue of AUGA group was EUR 33.99 million in the first half of 2022, an increase of 3% compared to EUR 33.13 million in the same period last year.

In the first six months of 2022, the group’s gross profit was EUR 12.43 million, representing an increase of 46% compared to the previous year (EUR 8.50 million). The group had a net profit of EUR 3.65 million in the reporting period, as compared with EUR 0.75 million in the first half last year.

The group’s EBITDA in the reporting period amounted to EUR 15.05 million and was up 35% from a year earlier, when the figure was EUR 11.14 million.

The overall sales results for the first half of this year are similar to last year’s, since the 2021 harvest was sold in the first half of 2022. The sales results for this year’s harvest will start to be seen only as of the third quarter, though the final profit and EBITDA figures already show positive trends: profit is up compared to last year, largely due to expectations for the outcome of this season’s harvest.

“Like others in the production sector, this year we faced challenges due to drastically higher energy costs. The current context suggests our strategic move to invest in producing biomethane from agricultural waste to replace the fossil fuels used in our operations was a good decision. At the end of the year, we will start production of biomethane, and that will partly offset the impact of unpredictable energy costs and increase the business’s resilience to external factors,” says Kęstutis Juščius, the CEO of AUGA group.

Crop growing segment

As assessed at 30 June of 2022, the crop harvest will be better than last year, with higher product prices offsetting increased production costs as the major factor impacting results. Nevertheless, the group will only be able to assess the final result of the crop segment for 2022 after the third quarter ends. The third quarter of 2021 saw significant adjustments to the gain on recognition of biological assets at fair value, leading to a negative final result. The weather will also affect the final result in 2022, but the negative impact is likely to be much smaller this year.

Overall, for the first half of 2022, the group has estimated a EUR 9.62 million profit on the recognition of biological assets at fair value. The figure is 47% larger than in the same period last year, when it was EUR 6.53 million.

Gross profit in the crop segment, which includes sales of agricultural products, changes in the fair value of biological assets and agricultural subsidies, was EUR 11.29 million in the first half of 2022 and was 50% higher than in the same period last year.

Dairy segment

Performance of the dairy segment improved in the first half of 2022 compared to the same period last year. The main factor was rising product prices. Sales revenue in the segment in for the first half of this year was EUR 8.14 million, compared to EUR 6.73 million a year earlier. The segment’s gross profit in the first half of 2022 reached to EUR 1.29 million. In 2021, the segment’s gross loss for the same period was EUR 0.27 million.

However, milk yields fell by 4% in the second quarter of this year compared to the same quarter last year. This was influenced by last year’s poor harvest and the consequent drop in feed quality this year for lack of feed ingredients. After the new harvest in 2022, it is expected that feed composition will be restored and milk yields will return to their previous level.

Mushroom growing segment

In the mushroom growing segment, rising costs, mainly related to energy, remain the key challenge. Although production volumes are returning to previous levels, energy costs increased 124% year-on-year in January-June. This led to a negative result for the mushroom growing segment.

Sales revenue in the mushroom growing segment totaled EUR 14.28 million in the first half of 2022, similar to the year-earlier figure (EUR 14.33 million).

The gross loss for the segment was EUR 0.33 million. Last year, it had a profit of EUR 0.59 million.

Fast-moving consumer goods (FMCG) segment

The group’s figures show no growth of the fast-moving consumer goods (FMCG) segment in the first half of 2022. Seasonality of sales is increasing for FMCG products, part of planned sales are expected to materialise in the third quarter. But given the global surge in inflation and logistics disruptions that pose challenges for projects in Japan and US markets, it is expected that this year’s growth plan for the segment will not be met.

The segment’s sales totaled EUR 2.72 million in the first half of 2022, compared to EUR 2.59 million in the same period last year. The gross profit of the FMCG segment in the first half of 2022 was EUR 0.19 million. In the same period of 2021, it was EUR 0.66 million. Rising costs have also affected this segment’s profitability.

Operating costs

The group’s operating costs for the two quarters of 2022 amounted to EUR 5.78 million, as compared with EUR 5.15 million in the same period last year. This increase is mainly due to higher wage costs, sales and insurance costs.

Technology development

The group is continuing the technology projects planned in 2022. Biomethane production facilities are being developed, one of the units will start operating already late this year. The future biomethane production capacity will fully satisfy the group’s needs. During the last quarter of the year, the group plans to complete the first batch of tractors powered by biomethane and electricity. The group is also continuing its tests of specialised feed technology aimed at higher dairy yields and lower CO2 emissions from cattle digestion.