Agrokultura kicked off its era with sports
retail tycoon Nikolay Fartushnyak as its top investor by unveiling its best-ever harvest results, which
the farm operator heralded as a major step towards entering profitability.
The farm operator in Russia and Ukraine said that it had
risen to the "top end of scale farmers in the region" after crediting "improved
processes", besides "excellent weather conditions", for company-best
performances in winter crops.
For Ukraine, besides confirming a 49% rise to 5.5 tonnes per
hectare in the winter barley yield, Agrokultura pegged its rapeseed result at
3.4 tonnes per hectare, a gain of 17%, with the winter wheat yield soaring 50%
to 5.7 tonnes per hectare.
In Russia, the group achieved an 11% increase to 4.1 tonnes
per hectare in the winter wheat yield, and said early results of the spring
grains harvest were "materially in excess" of last year's.
"We are pleased to be able to confirm the winter planted
yields have come in at record levels," said Stephen Pickup, the Agrokultura managing
"These results are a major contributor to the turnaround
which is ongoing in the business and are particularly satisfying given the
major cost reductions which have been put through the business while delivering
In Ukraine, yields had reached levels which are "at the
level required to make the Ukraine business profitable", Agrokultura said.
And with some test plots showing "materially higher" yields
still, "the company is taking forward lessons to try and push average yields
further in future years".
The harvest results are the latest in a series of upbeat harvest
reports from Ukraine, both by companies and at the national level, with the
government on Tuesday reporting a wheat harvest of 24.4m tonnes bunker weight
from 99% of the sown area.
Bunker weight, which includes chaff and impurities, is
typically some 5-7% bigger than the clean weight used as an international
Ukraine last year achieved a 22.3m-tonne harvest and has
been expected by the US Department of Agriculture, whose data set world
benchmarks, to produce a 22.0m-tonne crop this year – a figure which now looks
However, there are some question marks over the quality of
the harvest, with the proportion of milling wheat expected at 60-65%, down from
the typical 75%.
Agrokultura's briefing also comes two weeks after the group named
as Nikolay Fartushnyak, a Ukrainian-born sports entrepreneur in Russia, where
he runs the Sportmaster empire, as the investor snapping up Agrokultura shares,
amassing a 47% stake.
Steenord, the investment group through which Mr Fartushnyak
has bought its stake, "is supportive of" Agrokultura's current strategy, the
group said at the time.
It added that Steenord's interest "brings stability and industrial
competence giving [Agrokultura ] an improved ability to execute the chosen strategy
from an operations, financing and asset divestiture perspective."
Agrokultura, which was founded in 2006, has, on records
going back to 2008, yet to report a profit, running up an aggregate loss of
more than SEK950m, the equivalent of about $135m at current exchange rates.
Its Stockholm-listed shares - which peaked at SEK81.81 on
their second day of trading, in October 2009 – stood at SEK4.45 in lunchtime
deals on Wednesday, down 0.5% on the day.