Agria Group – 2024 cons – annual review

Macro strategy already yielding positive results

2024 Consolidated Results

• Agria’s total consolidated revenues decreased 15.9% in 2024 to BGN 654 mln. That, however, includes the sales revenue, which decreased 14.4% to BGN 622 mln, Revenues from government funding (dropping 12.6% to BGN 11mln, Other revenues (marking a 4.3x rise to BGN 19mln, of which BGN 16mln is the profit from the sale of non-current assets), and financial revenues, which decreased 19% to BGN 2.6mln. Also, the positive effect of the acquisition of Almagest EOOD in 2023 (BGN 32.2mln coming from the difference between price of acquisition and fair value of the assets) and not present in 2024 helped drag revenues down.
• In the operational revenues account, the sales of goods and materials, which represent the sale of grains, marked a decline of 21.3% to BGN 482 The sales of production, which is the oils produced from oilseed grains, marked an increase of 24.8% to BGN 135 mln. These two revenue streams represent over 99.3% of the sales revenue, the rest of which is sales of services.
• OPEX dropped by a greater amount than revenues – by 15.9% to BGN 612mln. The greatest contributors were the decrease of COGS by 16.3% to BGN 426mln and Materials expense – 24.6% to BGN 102mln. This resulted in EBITDA growing 72% to BGN 62.7mln and EBIT jumping 182% to BGN 39.7mln.
• It is very likely that the drop of sales revenues is due to the drop of prices in the main materials. In their inventory, over 70% are held by sunflower (48.3% of materials) and wheat (over 22%). The price of sunflower in 2021/2022 was USD 32.90/cwt, in 2022/2023 was USD 27.80/cwt and in 2023/2024 was USD 21.20/cwt. Sunflower oil in the same years went for 111.39 cents/lb, 80.11 cents/lb and 58.65 cents/lb. Similarly, wheat dropped 19% from the beginning of 2023 at USD 771/bu to USD 619/bu at the end of it. 2024 was volatile, but it marked another overall decrease of 15% to USD 531/bu.
• Net profit decreased by 36.4% to BGN 18.3mln because the positive effect from the acquisition of Almagest EOOD in 2023 (BGN 32.2mln coming from the difference between price of acquisition and fair value of the assets) was far greater in 2023 than the BGN 0.3mln coming from profit from associated companies in 2024.
• If we do not consider one-off scenarios (sales long term assets in 2024 and acquisition of Almagest in 2023), 2023 Net profit would be a loss of BGN 3.5mln and 2024 Net profit would be BGN 2.3mln, indicating a positive operational trend.
• As mentioned in our annual review, they continued the trend of leveraging. Long term bank debt marked a massive increase of 70% to reach BGN 86mln by the end of 2023. In 2024 the trend continued albeit at a significantly slower pace – they increased 2% to reach BGN 88mln. Long term bank loans increased 7.7% to BGN 69mln, while long term leasing dropped 14% to BGN 19.5mln.
• Similarly, short term bank loans shot up 30% by end of 2024 to BGN 265mln.
• The increased leverage added additional BGN 57.2mln of both long and short term debt (BGN 1.8mln long term and BGN 55.4mln short term), which affected the financial expenses, which increased 17% to BGN 22.3mln.
• Inventory increased 32.2% to BGN 197.6mln. In that, materials increased 48% to BGN 135.7mln. In it, the major contributors were sunflower (going up from BGN 63mln to BGN 89.3mln), wheat (going up from BGN 10.5mln to BGN 30.2mln) and sunflower byproduct (going from zero to BGN 7mln).
• Alternatively, the production in progress account increased over 14% to reach BGN 24.7mln. Production stayed at the same levels of BGN 4.6mln.
• These steps indicate that the company is considering a future increase in the prices of its products and they are trying to position themselves favorably for such development. Needless to say, increased prices and increased volumes, as demonstrated currently, will lead to a very positive result in 2025. We have seen the prices of the main products reverse the negative trend in the second half of 2024 and the beginning of 2025, which means that this strategy is already yielding positive results.

Full report can be read here.