AUGA group results for 9 months of 2023

The sales revenues of AUGA group in the first nine months of 2023 amounted to EUR 59.93 million and grew by 4% compared to the same period of 2022.

AUGA group had a gross loss of EUR 1.87 million for the first nine months of 2023, while in the same period last year it had a gross profit of EUR 13.14 million.

AUGA group‘s EBITDA for the reporting period was EUR –1.22 million. In 2022, EBITDA was EUR 16.78 million.

“The main reason for AUGA group‘s financial performance is fallen purchase prices for organic products. Seeing the situation, we decided already in summer 2023 to employ regenerative conventional farming methods on part of the land. That will let us diversify market risks, reduce yield and income volatility, lay the foundations for future growth and improve our financial performance. Meanwhile, AUGA group is not changing its strategic focus on developing and commercialising sustainable agricultural technologies, and so will seek additional, varied forms of financing for further development,” says Kęstutis Juščius, the Chair of the Board of AUGA group.

Crop growing segment

According to AUGA group‘s figures, the overall yield for the 2023 season is average, except for beans, which were the worst hit by the drought early in the season. The yield of beans was half of what was planned. The result of the segment was also determined by one of the lowest purchase prices for organic products in recent years. Precisely for this reason, on August 7, 2023, AUGA group announced that a third of the land will be cultivated using regenerative conventional farming. Next season, 40% less land than this year will go to summer organic crops, which are sensitive to the climate. Such a decision will ensure that by 2024, half of AUGA group‘s income will come from the sale of conventional products, and price changes will have a smaller impact on the variability of results. At the same time, enough organic raw materials will be produced to meet demand on the Lithuanian market and ensure the provision of organic products for end-consumers.

The segment’s gross loss for the first nine months of 2023 was EUR 3.57 million, which includes sales of agricultural products, changes in the fair value of biological assets and agricultural subsidies. That compares to a gross profit of EUR 11.96 million in same period of 2022.

Dairy segment

Although milk yields were 4% higher in the first nine months of 2023 than a year earlier, the segment’s overall performance reflects a 18% drop in milk prices.

During the reporting period, the dairy sales revenue fell to EUR 11.26 million, compared to EUR 12.32 million in the first nine months last year.

The segment had a gross loss of EUR 0.60 million for the first nine months of 2023, compared to a gross profit of EUR 1.67 million for the same period in 2022.

Mushroom growing segment

Higher production prices, managed production costs and lower energy prices have improved results in the mushroom segment.

For the first nine months of 2023, this segment had a gross profit of EUR 1.12 million, compared to a gross loss of EUR 1.51 million in the same period last year.

Fast-moving consumer goods (FMCG) segment

During the reporting period, this segment’s sales decreased slightly to EUR 5.28 million compared to EUR 5.50 million a year earlier. The change reflects the fact that as of August, the product portfolio no longer includes canned products following the sale of 100% of the shares of the Kooperatinė bendrovė “Grybai LT”.

Gross profit for the first nine months of 2023 increased 16% to EUR 1.17 million, up from EUR 1.01 million in the same period in 2022.

In 2023, AUGA group launched a new line of more sustainable organic products for consumers, based on a range of dairy products and also including oat flakes, eggs and vegetables. The new products are made exclusively from raw materials grown on AUGA group‘s organic farms. They are sold in major Lithuanian supermarket chains.

Operating costs

AUGA group‘s operating costs for the first three quarters of 2023 amounted to EUR 10.86 million, compared to EUR 8.93 million in the same period last year. 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 them. The AUGA M1 tractors from the first production batch are being further tested. Three biomethane plants are being prepared for connection to the natural gas grid. On 29 November 2023, AUGA group announced the confirmed results of testing of its feed technology. Tests showed 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 evaluated and their validity was confirmed by scientists from the Veterinary Academy of the Lithuanian University of Health Sciences.