Trigon downplays Ukraine crisis, weather threats
By - Published 30/05/2014

Trigon Agri downplayed threats from both Ukraine's weather and its political crisis as the farm operator heralded becoming "significantly cash flow positive in its operations", contrasting with a net outflow in the first three months of the year.

The dairy and arable group, which has planted some 67,000 hectares of crops this year in Russia and Ukraine, said that its winter crops "look to be in good condition", despite regional rainfall falling below average levels.

And although frosts in late April and early May hit its rapeseed "visually quite hard", the crop "appears to have recovered well after some warm nights and light rainfall".

Spring sowings had already been completed, ahead of schedule, with early development "of a high standard".

"The current condition of the crop as of the end of May is better even than the condition of our all-time record crop last year at the same point in time," Joakim Helenius, the Kernel chairman, said.

The comments echo those of Kernel Holding, the Ukraine sunflowers-to-sugar group which said that its crops – comprising 339,000 hectares of spring corn, sunflowers and soybeans, and 34,000 hectares of winter grains – were "all… reported to be in good condition".

Political crisis

Mr Helenius downplayed the dent from the Ukraine political crisis too, saying that the "continued political uncertainty in Ukraine has not impacted Trigon Agri's business in a major way".

"About a third of our operating expenses are paid in hryvnia," the Ukraine currency, which has hit a record low against the dollar, as Kernel Holding highlighted separately on Friday.

"But they are likely to adjust fairly rapidly towards pre-crisis dollar equivalent levels," he said.

Where the turmoil had affected the group was in "complicating the work we are doing" on a programme of sales of non-core assets, although the sale of its Penza farms in central Russia was nearing completion, and other disposals were "moving forwards".

'Significantly cash flow positive'

The comments came as the group unveiled a third successive quarter in the red, reporting a loss of E11.2m for the January-to-March period, wider than the E7.27m loss a year before.

However, the wider loss, on revenues up 6.4% at E10.2m, reflected an earlier start to spring sowings, which brought forward the booking of planting costs.

Looking ahead, "assuming no extreme weather conditions and no significant drop in commodity prices from current levels Trigon Agri should be significantly cash flow positive in its operations," Mr Helenius said.

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