Report on interim financial results of AUGA group, AB for 9-months period ended 30 September 2020

AUGA group, AB and its subsidiaries (hereinafter – the Group) continued to increase sales revenue in all business segments and improved profit indicators.The aggregate sales of AUGA group, AB amounted to EUR 62.38 million for the three quarters of 2020, representing a 33% increase on the same period last year when aggregate sales were EUR 47.05 million.The Group’s gross profit for the first 9 months period of 2020 amounted to EUR 11.88 million, demonstrating a 48% rise compared to the same period last year when gross profit amounted to EUR 8.00 million. In the same period of 2020, the Group earned EUR 0.44 million net profit, compared to EUR 1.28 million loss a year earlier.According to the AUGA group, AB data, for the three quarters of 2020 the Group’s EBITDA amounted to EUR 16.21 million, representing a 30% increase on the same period last year when EBITDA amounted to EUR 12.43 million.“We are pleased that the results of this year in the agricultural sector are much better than in the previous two years. We are seeing positive results in our other operations as well. Despite the global instability caused by the COVID-19 pandemic, we are witnessing a clear breakthrough in the fast-moving consumer goods segment. It is also important that the growing results of the Group and the favourable attitude of banks to our business sector has allowed AUGA group, AB to improve the terms of its loans. The new agreements will give the Group more flexibility and opportunities to implement our strategic goals,” – says Kęstutis Juščius, CEO of AUGA group, AB.Crop growing segmentSales revenue in the crop growing segment was up 70% in the first 9 months of 2020 compared to the same period last year. Sales amounted to EUR 27.89 million in this period, up from EUR 16.45 million in the same quarter last year. In addition, the Group has already signed contracts for the sale of 77% of its current year’s harvest.Gross profit from the crop growing segment, encompassing sales of agricultural produce, gains (or losses) based on changes in the fair value of biological assets, and agricultural subsidies, amounted to EUR 10.16 million in the first three quarters of 2020 compared to EUR 7.13 million the year earlier.Based on the Group‘s data, this year’s yields were better than the previous years in almost all major crops, and this had a direct impact on the production of better results. However, the higher results were not achieved in crop production due to the lower quality of wheat, which also led to lower sales prices.Dairy segmentSales revenue in the dairy segment amounted to EUR 8.17 million for the 9 months of 2020, representing a 7% increase on the same period for the previous year, when sales amounted to EUR 7.63 million. The share of milk sold at organic production prices reached 93%, as compared to 69% in the same period last year. From the second quarter of this year, the Group sold almost all its milk at organic prices, thus maintaining a high average selling price.The Group pays special attention to the efficiency of the dairy sector. As milk yields and the gross result from milk sales increase, whilst costs remain at a similar level, the gross results of the dairy segment continue to improve compared to the previous year. The gross profit of the dairy segment amounted to EUR 0.04 million in the first 9 months of 2020 (a gross loss of EUR 0.65 million was reported in the first nine months of 2019).  Mushroom growing segmentDuring the first 9-month period of 2020, the results of the segment remained stable. Revenue generated from the mushroom growing segment amounted to EUR 22.93 million in the three quarters of 2020. This is up from EUR 21.14 million in the same period of 2019, representing an 8% rise in revenue.Gross profit of the mushroom growing segment for the first 9 months period of 2020 amounted to EUR 1.37 million, demonstrating a 9% fall on the same period last year when the gross profit of the segment was EUR 1.50 million.The COVID-19 pandemic and the general economic situation have affected the results of this segment. Sales of mushrooms for catering have decreased as have the sales of compost to export markets. The reasons mentioned above have also led to increase of the fluctuations in supply and demand in the market. Moreover, an exceptionally good season of forest mushrooms has made a significant impact, leading to a decreased demand for grown mushrooms. However, despite all these reasons listed above, the mushroom growing segment continues to operate stably.Fast-moving consumer goods (FMCG) segmentSegment results improved significantly. Overall, sales in the segment rose by 84% to EUR 3.36 million in the last 3 quarters. In the equivalent period last year, sales in the segment were EUR 1.83 million. The biggest increase in sales in 2020, compared to the previous year was recorded in the U.S. and Sweden markets.The demand in both local and foreign markets for organic and long shelf-life products continued to grow and during this period the Group actively expanded its export markets, which positively affected sales.According to Group’s data, during the first 9 months of 2020, the gross profit of the FMCG segment amounted to EUR 0.29 million (a gross profit of EUR 0.01 million was reported for the same period in 2019).Operating costsAUGA group, AB operating expenses for the three quarters of 2020 amounted to EUR 7.26 million and were higher compared to EUR 6.83 million during the same period last year.Other related informationThe companies of AUGA group, AB have signed agreements with financial institutions to refinance loans and provide additional limits. The agreements with these financial institutions specify that in total, the contracts signed amount to EUR 38.1 million and this means that the new credit limits will increase by EUR 11.6 million in comparison with previous limits. The average interest rate decreased by 0.8%.For some time now, the Group has been seeking to achieve the goal that’s set out in our strategy to refinance its existing liabilities and to restructure its funding structure, by reducing the short-term and increasing the long-term liabilities in the portfolio. This will give the group more flexibility and opportunities to implement the new strategy and achieve its goals: to increase efficiency, reduce the greenhouse gas emissions of the Group’s operations and develop unique technologies.Financial data in MS Excel fileIn order to ensure more convenient access and analysis of the financial data of the Group, AUGA group has prepared and published financial data that includes both the data from previous periods and the most recent reporting periods in MS Excel format. The data file is available at the following link: http://auga.lt/en/investors/reports-and-presentations/#tabsContacts:
Mindaugas Ambrasas, AUGA group, AB CFO
Phone: +370 620 67296
Email: m.ambrasas@auga.ltAttachmentsConfirmation of responsible persons_20201130AUGA group, AB Consolidated Interim Financial Statements 9M2020