AUGA group, AB interim financial results for the 6-month period
ended 30 June 2023
In the first half of 2023, the sales revenue of
AUGA group, AB and its subsidiaries (hereinafter – the Group)
amounted to EUR 40.93 million and grew by 20% compared to the same
period of 2022. This result was due to the higher 2022 harvest,
part of which was sold during the first half of 2023, and to the
increased sales of mushrooms and end-consumer products.
In 2023, the declining prices of the main
agricultural products (grain and milk) had a negative impact on the
financial results. The Group's gross profit for the first half of
2023 amounted to EUR 3.07 million, compared to a gross profit of
EUR 12.43 million in the same period last year. In the reporting
period, the Group's EBITDA was EUR 3.57 million, compared to EUR
15.05 million last year.
"While the declining prices of organic
production have had an impact on the financial results, the Group
has been implementing the major operational changes foreseen in its
strategy for some time now, which will increase the resilience of
the business to external factors. We are implementing a new
business model based on the development of agricultural
technologies and the scaling of the sustainable farming standard.
In order to make sustainable technologies and the AUGA farming
standard accessible to both organic and conventional farmers, we
have converted part of our organic land to regenerative
conventional farming. In this way, we are diversifying our
activities, opening up wider markets, increasing efficiency and
reducing the impact of external uncertainties. This will allow for
an improvement in financial results," said Kęstutis Juščius, CEO of
AUGA group, AB.
Crop growing segment
In the first half of 2023, total revenue of the
segment amounted to EUR 13.74 million, compared to EUR 8.85 million
in the previous year. Sales revenues were increased by higher
harvest of the 2022 sold this year. However, in 2023, decreasing
prices of organic products did not allow to achieve better results.
Gross profit, which includes the result of the sale of agricultural
production, changes in the fair value of biological assets and
agricultural subsidies, amounted to EUR 1.25 million at the end of
the first half of 2023. In the same period of 2022, it was EUR
11.29 million.
According to the group's data, the harvest for
the year 2023 will be average. However, the final season results
can only be evaluated after the third quarter.
Dairy segment
The 12% decrease in milk purchase prices during
the first half of 2023, compared to the same period last year, had
a significant impact on the segment's results. Dairy sales revenues
in the first half of 2023 were EUR 7.77 million compared to EUR
8.14 million in the same period of 2022.
The segment's gross loss in the first half of
2023 was EUR 0.14 million, compared to a gross profit of EUR 1.29
million in the same period last year.
Mushroom growing segment
Stable production volumes, more efficiently
managed processes, and higher selling prices in the first half of
2023 increased the segment's sales revenue to EUR 15.28 million
(compared to EUR 14.28 million in the same period of 2022) and the
segment's gross profit to EUR 1.00 million, compared to a gross
loss of EUR 0.33 million in the same period last year.
Fast-moving consumer goods (FMCG)
segment
In the first half of 2023, segment sales
increased by 52% and amounted to EUR 4.14 million, compared to EUR
2.72 million in the same period last year. The gross profit of the
FMCG segment amounted to EUR 0.98 million in the first half of 2023
(in the same period of 2022 – EUR 0.19 million).
In May 2023, the Group launched a new line of
more sustainable organic products. It consists of milk, kefir,
curd, sour cream, butter, oat flakes and eggs. The new products are
made exclusively from raw materials grown on AUGA organic farms.
The products are sold in major Lithuanian supermarket chains.
Operating costs
The Group's operating costs in the first half of
2023 were EUR 7.37 million, compared to EUR 5.78 million in the
same period last year. Operating costs were increased by employees'
salaries, marketing expenses, investments related to the
introduction of the new end-consumer products into the market.
Implementation of the
strategy
In the second quarter of 2023, the Group
presented a new business model to the public and investors. The
model is based on three main pillars: the development and
production of sustainable farming technologies, the organisation of
agricultural activities through cooperatives applying the AUGA
sustainable farming standard, and supplying consumers with more
sustainable food products.
Since the start of the season, AUGA M1 tractors
from the first production batch are being tested in real work. The
Group is also further developing and testing specialised feed
technology. The Group is focusing on biomethane production projects
– infrastructure is installed, the connection of biogas to the
natural gas network is being carried out.
In August, the Group also announced the scaling
of the sustainable farming standard not only on organic farms, but
also on conventional farms, converting a part of arable lands into
regenerative conventional agriculture. The Group will aim to scale
the technology and the sustainable farming standard by inviting all
farmers to join the sustainable farming community, not only those
engaged in organic farming today.
As reported on 21 July 2023, the Group sold 100%
of the shares of Kooperatinė bendrovė "Grybai LT" to Akcinė
bendrovė "Kauno grūdai“. For the transaction, the Group received an
amount of EUR 16,327,365.26, including EUR 12,948,612.14 for the
Company's shares and EUR 3,378,753.12 in repayment of a loan
previously owed to Baltic Champs UAB. The profit from this
transaction will be reflected in the results of the third quarter
of 2023. With the sale of this part of the business, the Group will
focus on the scaling of the new, more sustainable organic products
in a much larger food category than before.
Financial data in MS Excel
format
To facilitate investors' access to and analysis
of the Group's financial data, the Group has prepared and makes
publicly available on its website historical financial data,
including data for the most recent reporting period, in MS Excel
format. The data can be accessed at the following link:
https://auga.lt/en/investors/reports-and-presentations1/quarterly-and-annual-reports/
CEO of AUGA Group, AB Kęstutis Juščius +370 5
233 5340
Auga Group Ab (LSE:0IR4)
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