Linked In
News In
Linked In

You are viewing 1 of your 2 complimentary articles.

Register now to receive full access.

Already registered?

Login | Join us now

Ekotechnika's wounded investors get, a little, recompense

Twitter Linkedin

Ekotechnika hailed the performance of its shares, whose gains had "partly rewarded" investors hurt by a debt-for-equity swap, as the John Deere dealer unveiled the near-elimination of losses.

Stefan Durr, the chairman and chief executive of Germany's Ekotechnika - the holding company of Russian farm machinery sales giant Ekoniva-Technika - termed "highly encouraging" the performance of the group's shares in their first six months since being listed in Dusseldorf in December.

While trading volumes had been "low", the shares "gained over 70%, which means that the price trend is pointing in the right direction", Mr Durr said.

The stock's performance "is at least partly rewarding those investors who have remained loyal to our company after the restructuring process and the debt-to-equity-swap".

'Crisis year'

Ekotechnika, which takes a little over half its sales from Deere products, was listed as part of a rescue deal last year - in the face of a slide in Russia's agr machinery market, worsened by the depreciation of the rouble - which saw bondholders swap E60m of debt for shares worth some E2m.

"Some legal disputes are still outstanding" over the restructuring, said the group, the largest distributor of agricultural equipment in Russia.

Last year was "a crisis year for the entire industry, with sales revenues falling at double-digit rates not only in the Russian market, which has declined for three years, but also in the US and throughout Europe," Mr Durr said.

"The [global] agricultural machinery business continues to face major challenges and will again fail to reach its pre-crisis sales level in 2016."

'Difficult market conditions'

Indeed, market conditions "remain difficult" for farm machinery dealers in Russia, he added, attributing farmers' "continued spending restraint" to high financing costs, a symptom of the Western sanctions against the country's banks.

"High funding costs make loans more expensive for local farmers," Ekotechnika said.

Nonetheless, the group unveiled a fall in after-tax losses for the October-to-March half to E1.6m, from the E16.5m reported a year before.

This represented a "satisfactory performance given that the first half of the [financial] year is the seasonally weaker period", Ekotechnika said.

Full-year hopes

Sales in euro terms rose 2% to 9m, although in rouble terms, thanks to the recovery in the currency alongside the revival in oil prices, the increase was 22%

The revenue growth was "slightly above" target, Ekotechnika said, restating a target for full-year results of "moderately growing" sales, and a return to operating profit.

The group achieved an operating profit of E1.45m in the October-to-March period, compared with a loss of E1.13m a year before.

Ekotechnika shares closed up 1.4% at E7.50 in Dusseldorf on Tuesday.


Twitter Linkedin
Related Stories

Festive staff shortages 'likely' as British growers cut ties with UK supermarkets

Faced with mounting concerns over labour shortages and fears they may not be able to fulfil retailer contracts, some British growers have sought to cut ties with UK supermarkets in favour of companies elsewhere in Europe.

Hard Brexit to have 'catastrophic' effect on European meat industry; new report

A hard Brexit will have a ‘catastrophic impact’ on the European meat industry, according to a report published by Europe’s meat industry body, UECBV, as the UK and EU continue negotiations.

Manufacturers stockpile agrochemicals in bid to keep post-Brexit prices down for farmers

Manufacturers of crop protection products are stockpiling agrochemicals in warehouses in a bid to keep input costs down for farmers after Brexit, according to the chief executive of the Crop Protection Association, Sarah Mukherjee.

Dairy groups sidestep shockwaves from GDT price slump

Indeed, shares in the likes of A2 and Beston soar. Still, that does not mean there are no losers from the dairy price falls...
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

Our Brands: Comtell | Feedinfo | FGInsight

© 2017 and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of the Briefing Media group
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069