A/S Trigon Agri operational update: Total gross harvest 2012 expected to be on the same level as in 2011
Copenhagen, June 18, 2012
The widely reported extremely dry weather conditions during the spring have negatively affected the expected harvest area for the full year of 2012 as the Group decided to cut back on the area in Stavropol due to be seeded with sunflower. However, despite the lowering of the overall seeded area the total gross harvest is expected to be roughly on the same level as in 2011 given improved yield prospects in areas other than Stavropol. As in previous years, wheat is the largest crop by seeded area.
Crop production 2012
As at the date of the current press release the Group has completed its spring sowing, and harvesting is due to start shortly. The total expected harvested area is 86 thousand hectares in 2012 (89 thousand hectares in 2011), out of which around 61% is in Ukraine and 39% in Russia. The shortfall in the total harvested area in 2012 compared to the initial targets is due to drought conditions in the Group’s Stavropol production cluster. In the other production regions, although weather conditions were unusually dry with the Group experiencing above normal temperatures and below normal rain in April and May, the situation has been relieved by rainfall towards the end of May and early June.
Given the current conditions in the fields the Group expects the total gross harvest to remain roughly on the same level as in previous year, even though the total harvested area will be lower by 3%. As in previous years, wheat is the largest crop in terms of seeded area, constituting 41% of the total crop plan in 2012 (40% in 2011). For production area breakdown by crops please refer to the table below:
| Harvested area breakdown |
2011 |
2012E |
| Wheat |
40% |
41% |
| Sunflower |
37% |
25% |
| Rapeseed |
6% |
17% |
| Corn |
5% |
7% |
| Barley |
3% |
5% |
| Soya |
7% |
5% |
| Sugar Beet |
1% |
1% |
| Total |
100% |
100% |
Further details on the 2012 harvest results will be given in the Group’s 2Q 2012 Interim Report to be published in August 2012. Please note that weather conditions during the rest of the growing season will determine whether we increase or decrease our crop estimates going forward.
Domestic prices
The tables below show recent domestic price information on the Group’s main crops. As can be observed, today’s market prices are significantly higher compared to the average actual sales prices achieved by the Group in 2011. If prices remain at current levels or better in the second half of the current financial year, the Group is well positioned to show a strong improvement on its full year 2012 financial results.
| Cereals sales prices, EUR/t excl VAT |
2011 actual EXW sales prices achieved by the Group in Ukraine* |
08.06.2012 EXW market prices in Ukraine** |
2011 actual EXW sales prices achieved by the Group in Russia |
08.06.2012 EXW market prices in Russia** |
|
| Wheat*** |
119 |
142 |
114 |
160 |
|
| Sunflower |
284 |
339 |
173 |
333 |
|
| Rapeseed |
336 |
360 |
307 |
- |
|
| Corn |
153 |
134 |
- |
n/r |
|
| Barley |
121 |
134 |
n/r |
n/r |
|
| Soya |
263 |
330 |
n/r |
n/r |
* Weighted average sales prices of own produced crops including export sales after transportation costs
**Source: APK-Inform
***Average price across wheat quality classes
Rostov farm acquisition update
As previously announced, the Group has signed an agreement for the acquisition of a new 30,000ha cereals production cluster in Rostov, Russia. The parties have agreed that Trigon Agri will pay for the acquisition with two components: 18,500ha of land in free-hold ownership in its Samara cluster and EUR 16 million to be paid in cash or in new shares of Trigon Agri. The targeted closing of the transaction remains in 3Q 2012.
Trigon Agri rapeseed field, Kharkov, Ukraine, June 2012
Trigon Agri sunflower field, Kharkov, Ukraine, June 2012
Trigon Agri wheat field, Kharkov, Ukraine, June 2012
Investor enquiries:
Mr. Ülo Adamson, President and CEO of Trigon Agri A/S Tel: +372 66 79200 E-mail: [email protected]
About Trigon Agri
Trigon Agri is a leading integrated soft commodities production, storage and trading company with operations in Ukraine, Russia and Estonia. Trigon Agri’s shares are traded on the main market of NASDAQ OMX Stockholm. Trigon Agri is managed under a management agreement by Trigon Capital, a leading Central and Eastern European operational management firm with around USD 1 billion of assets under management.
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