ROSS GROUP PLC

Earnings Release • Mar 15, 2021

National Storage Mechanism | Additional information

RNS Number : 3186S

Ros Agro PLC

15 March 2021

15 March 2021

ROS AGRO financial results for 12M 2020 and 4Q 2020

15 March 2021 - Today ROS AGRO PLC (the "Company"), the holding company

of Rusagro Group (the "Group"), a leading Russian diversified food producer with vertically integrated operations, has announced the financial results for the year ended 31 December 2020.

12M 2020 Highlights

-     Sales amounted to RR 158,971 million (US$ 2,198 million1), an increase of RR 20,799 million (+15%) compared to 12M 2019;

-     Adjusted EBITDA2 amounted to RR 31,984 million (US$ 442 million), an increase of

RR 12,613 million (+65%) compared to 12M 2019;

-     Adjusted EBITDA margin rose from 14% in 12M 2019 to 20% in 12M 2020;

-     Net profit for the period amounted to RR 24,297 million (US$ 336 million), an increase of RR 14,588 million (+150%);

-     Net debt position3 as of 31 December 2020 amounted to RR 68,900 million (US$ 933 million);

-     Net Debt/Adjusted EBITDA (LTM4) as of 31 December 2020 was 2.15x.

Commenting on the results, Maxim Basov, a member of the Board of Directors of ROS AGRO PLC and CEO of the Group, said:

"In 2020 Rusagro achieved impressive results and managed to earn the highest adjusted EBITDA in the Company's history. 4Q followed the positive trend set during 9M 2020, sales and adjusted EBITDA of the Group improved significantly. Sales of all segments except Sugar have increased mainly due to sales prices growth of Oil and Fat products, pork and all crops despite the decrease of sales volumes in Oil and Fat and Agricultural Segments. Sales volumes in Meat Segments increased substantially as a result of higher volumes of processed pork due to production expansion in Tambov Region. Sugar price has also improved as a result of lower sugar beet harvest. 

Adjusted EBITDA margins of Oil and Fat, Meat and Agricultural Segments improved mostly as the result of sales prices growth in all product lines while costs were quite stable. Sugar Segment quarterly margin remained flat. 

In 2020 the Company operated in the world pandemic environment, which had two key effects. The first one was the growth of demand for consumer products, and the second one was rouble devaluation, as a result, of oil price drop.

Despite several identified cases among employees, travel and logistical disruptions, government restrictions Ros Agro managed to operate all plants at high capacity, continue construction and harvest crops well. The company implemented new production protocols, improved liquidity position and supported the medical infrastructure of the main regions of operation."

Key consolidated financial performance indicators

in RR million	Year ended		Variance		Three months ended		Variance
31 December 2020	31 December 2019	Units	%	31 December 2020	31 December 2019	Units	%
Sales 1	158,971	138,172	20,799	15	50,209	39,096	11,112	28
Gross profit	43,739	23,582	20,157	85	13,296	8,137	5,159	63
Gross margin, %	28%	17%	11 pp		26%	21%	5 pp
Adjusted EBITDA 2	31,984	19,371	12,613	65	11,789	7,379	4,410	60
Adjusted EBITDA margin, %	20%	14%	6 pp		23%	19%	4 pp
Net profit for the period 3	24,297	9,709	14,588	150	5,772	4,096	1,676	41
Net profit margin %	15%	7%	8 pp		11%	10%	1 pp

1 Sales and COS for 12M19 related to Oil & Fats (RR 7,396 million) and Other (RR 1,120 million) have been netted versus each other with no effect on Gross profit in accordance with p. 17(a) and 17(b) of IFRS15

2 Adjusted EBITDA for 9M20 was decreased by RR 544 million due to revaluation procedure, performed at the year end

Adjusted EBITDA calculation now also includes components of other operating income/(expenses), except for the non-recurring items, effect for 12M19 RR -673 million

3 Net profit for the period is affected by non-cash income/ (loss) on revaluation of biological assets and agricultural produce. See details in business-sections below

Key financial performance indicators by segments

in RR million	Year ended		Variance		Three months ended		Variance
31 December 2020	31 December 2019	Units	%	31 December 2020	31 December 2019	Units	%
Sales, incl.	158,971	138,172	20,799	15	50,209	39,096	11,112	28
Sugar	28,113	31,195	(3,082)	(10)	7,034	7,953	(919)	(12)
Meat	32,434	25,834	6,601	26	9,588	7,538	2,049	27
Agriculture	34,348	25,845	8,503	33	19,596	10,804	8,793	81
Oil and Fat	76,160	62,375	13,785	22	24,208	17,796	6,411	36
Milk Products	3,786	3,870	(83)	(2)	1,022	1,041	(19)	(2)
Other	631	300	331	111	234	76	158	207
Eliminations	(16,501)	(11,245)	(5,256)	(47)	(11,473)	(6,112)	(5,361)	(88)
Gross profit, incl.	43,739	23,582	20,157	85	13,296	8,137	5,159	63
Sugar	6,885	5,429	1,456	27	1,512	2,128	(616)	(29)
Meat	4,377	3,264	1,114	34	(372)	541	(913)	-
Agriculture	18,870	5,702	13,169	231	9,614	2,757	6,856	249
Oil and Fat	14,778	8,914	5,864	66	3,715	3,363	353	10
Milk Products	401	369	33	9	94	118	(24)	(21)
Other	153	155	(1)	(1)	77	30	48	161
Eliminations	(1,725)	(249)	(1,476)	(592)	(1,345)	(802)	(543)	(68)
Adjusted EBITDA, incl.	31,984	19,371	12,613	65	11,789	7,379	4,410	60
Sugar	6,352	3,988	2,364	59	1,347	1,517	(170)	(11)
Meat	6,473	4,820	1,653	34	1,539	1,262	276	22
Agriculture	15,191	5,913	9,278	157	10,176	1,916	8,259	431
Oil and Fat	9,388	3,385	6,003	177	1,995	1,888	107	6
Milk Products	(13)	53	(67)	-	13	16	(4)	(22)
Other	(1,300)	(1,149)	(151)	(13)	(206)	(93)	(113)	(121)
Eliminations	(4,108)	2,360	(6,468)	-	(3,073)	872	(3,945)	-
Adjusted EBITDA margin, %	20%	14%	6 pp		23%	19%	4 pp
Sugar	23%	13%	10 pp		19%	19%	0 pp
Meat	20%	19%	1 pp		16%	17%	(1) pp
Agriculture	44%	23%	21 pp		52%	18%	34 pp
Oil and Fat	12%	5%	7 pp		8%	11%	(3) pp
Milk Products	0%	1%	(1) pp		1%	2%	(1) pp

Sugar Segment

The financial results of the Sugar Segment of 12M20 and 4Q20 compared to 12M19 and 4Q19 respectively are presented in the table below:

in RR million	Year ended		Variance		Three months ended		Variance
31 December 2020	31 December 2019	Units	%	31 December 2020	31 December 2019	Units	%
Sales	28,113	31,195	(3,082)	(10)	7,034	7,953	(919)	(12)
Cost of sales	(21,238)	(25,758)	4,520	18	(5,522)	(5,822)	300	5
Net gain/ (loss) from trading derivatives	11	(7)	18	-	-	(2)	2	-
Gross profit	6,885	5,429	1,456	27	1,512	2,128	(616)	(29)
Gross profit margin	24%	17%	7 pp		21%	27%	(6) pp
Distribution and selling expenses	(1,964)	(2,077)	113	5	(478)	(803)	325	40
General and administrative expenses	(1,436)	(1,440)	4	0	(389)	(322)	(67)	(21)
Other operating income/ (expenses), net	602	544	58	11	(31)	32	(63)	-
incl. Other adjustments to EBITDA (non-recurring items)	425	468	(43)	(9)	(65)	15	(80)	-
Operating profit	4,088	2,457	1,631	66	614	1,036	(422)	(41)
Adjusted EBITDA	6,352	3,988	2,364	59	1,347	1,517	(170)	(11)
Adjusted EBITDA margin	23%	13%	10 pp		19%	19%	0 pp

Sales decreased in 12M20 compared to 12M19 due to sales volume reduction of 21%; sale price increased by 7%. Sugar sales decrease in 12M20 compared to 12M19 was partially compensated by sugar pulp sales growth of RR 810 million and buckwheat sales growth of RR 281 million.

Sales decrease in 4Q20 vs 4Q19 was attributable to sugar sales volume reduction of 52%. Quarterly sales volumes decreased in 4Q20 compared to 4Q19 due to lower production volumes of 2020/2021 season together with the limitation of storage facilities: excess of production volume over storage limit sold during 4Q was higher in 2019.

Sugar sales, production volumes and average sales prices per kilogram (excl. VAT) were

as follows:

	Year ended		Variance		Three months ended		Variance
31 December 2020	31 December 2019	Units	%	31 December 2020	31 December 2019	Units	%
Sugar production volume, thousand tonnes	764	880	(116)	(12)	484	642	(158)	(24)
Sales volume, thousand tonnes	812	1,022	(210)	(21)	142	295	(154)	(52)
Average sales price, rubles/kg, excl. VAT	29.5	27.5	2.0	7	39.2	21.9	17.2	78

Cost of sales in 12M20 showed in comparison to 12M19 a higher decrease than Sales mainly due to the significant drop of sugar beet purchase prices by 36% when seasons 2019/2020 and 2018/2019 are compared. The launch of second line of desugarization at the end of 2019 led to increase of high-margin sugar produced out of molasses and therefore additional Cost of sales decrease.

Meat Segment

The financial results of the Meat Segment of 12M20 and 4Q20 compared to 12M19 and 4Q19 respectively are presented in the table below:

in RR million	Year ended		Variance		Three months ended		Variance
31 December 2020	31 December 2019	Units	%	31 December 2020	31 December 2019	Units		%
Sales	32,434	25,834	6,601	26	9,588	7,538	2,049		27
Net gain/ (loss) on revaluation of biological assets and agricultural produce	(681)	(852)	171	20	(1,504)	(396)	(1,108)		(279)
Cost of sales	(27,376)	(21,717)	(5,658)	(26)	(8,455)	(6,600)	(1,855)	(28)
Gross profit	4,377	3,264	1,114	34	(372)	541	(913)		-
Gross profit margin	13%	13%	0 pp		(4) %	7%	(11) pp
Gross profit excl. effect of biological assets revaluation	5,059	4,116	942	23	1,132	938	194		21
Adjusted gross profit margin	16%	16%	0 pp		12%	12%	0 pp
Distribution and selling expenses	(1,204)	(847)	(357)	(42)	(342)	(296)	(46)		(16)
General and administrative expenses	(1,509)	(1,288)	(221)	(17)	(549)	(407)	(142)		(35)
Other operating income/ (expenses), net	654	326	328	100	258	198	60		30
incl. reimbursement of operating costs (government grants)	105	57	48	85	42	7	35		502
incl. Other adjustments to EBITDA (non-recurring items)	460	366	94	26	181	195	(14)		(7)
Operating profit income/ (expenses), net	2,318	1,454	864	59	(1,005)	37	(1,042)		-
Adjusted EBITDA	6,473	4,820	1,653	34	1,539	1,262	276		22
Adjusted EBITDA margin	20%	19%	1 pp		16%	17%	(1) pp

Sales of the Meat Segment increased by 26% in 12М20 and by 27% in 4Q20 compared to the respective periods of the prior year because of increase in production volumes of pork mainly due to launch of 3rd stage of Tambov Bacon in 3Q19 and increase in productivity. In addition, Sales increased as the result of sales price growth in 4Q20 of all meat product categories and livestock pigs by 8% and 13%, respectively, and increased export sales with a premium price relative to the domestic price.  

Cost of sales increased by 25% in 12M20 due to higher volumes of livestock pigs transferred to meat processing.

Net loss on revaluation of biological assets and agricultural produce in 12M20 resulted mainly from loss in revaluation on bearer livestock as at 31 December 2020 and compensated by gain on revaluation of consumable livestock pigs (caused by increase in market prices during the period compared to market prices at the end 2019).

An increase in Distribution and selling expenses in 12М20 and 4Q20 compared to the same prior year periods included an increase in transportation costs as a result of higher sales volume of processed pork and an increase in payroll costs related to launch of 3rd stage of Tambov Bacon, and also as a result of the rise in the costs of marketing activities.

Pork sales volumes and the average pork sales prices per kilogram (excl. VAT) were as follows:

	Year ended		Variance		Three months ended		Variance
31 December 2020	31 December 2019	Units	%	31 December 2020	31 December 2019	Units	%
---	---	---	---	---	---	---	---	---
Sales volume (in thousand tonnes), incl.	249	202	47	23	71	61	10	17
livestock pigs	34	33	1	3	14	14	0	1
processed pork	215	169	46	27	57	47	10	21
Average sale prices (rubles per kg, excl. VAT):
livestock pigs	80.0	75.3	4.6	6	81.9	72.5	9.4	13
processed pork	137.9	137.6	0.3	0	146.6	135.2	11.4	8

An increase in Other operating income in 12M20 compared to the same prior year period is due to the launch of the grain elevator in Primorie and the reimbursement for part of the costs under the animal insurance program with state support.

Agricultural Segment

As at 31 December 2020 Group's area of controlled land stands at 638 thousand hectares

(31 December 2019: 641 thousand hectares). The financial results of the Agricultural Segment

of 12M20 and 4Q20 compared to 12M19 and 4Q19 respectively are presented below:

in RR million	Year ended		Variance		Three months ended		Variance
31 December 2020	31 December 2019	Units	%	31 December 2020	31 December 2019	Units	%
---	---	---	---	---	---	---	---	---
Sales	34,348	25,845	8,503	33	19,596	10,804	8,793	81
Net gain/ (loss) on revaluation of biological assets and agricultural produce	3,583	(1,560)	5,142	-	(56)	685	(741)	-
Cost of sales	(19,060)	(18,584)	(476)	(3)	(9,926)	(8,731)	(1,195)	(14)
Gross profit	18,870	5,702	13,169	231	9,614	2,757	6,856	249
Gross profit margin	55%	22%	33 pp		49%	26%	23 pp
Gross profit excl. effect of biological assets and agricultural produce revaluation	15,288	7,261	8,027	111	9,670	2,072	7,597	367
Adjusted gross profit margin	45%	28%	17 pp		49%	19%	30 pp
Distribution and selling expenses	(2,370)	(2,826)	457	16	(918)	(819)	(99)	(12)
General and administrative expenses	(1,363)	(1,342)	(20)	(2)	(414)	(400)	(14)	(4)
Other operating income/ (expenses), net	460	(95)	555	-	446	8	438	5,629
incl. reimbursement of      operating costs (government grants)	299	131	168	129	188	31	158	514
incl. Other adjustments to EBITDA (non-recurring items)	71	(17)	89	-	97	(1)	98	-
Operating profit	15,597	1,437	14,160	985	8,728	1,546	7,181	464
Adjusted EBITDA	15,191	5,913	9,278	157	10,176	1,916	8,259	431
Adjusted EBITDA margin	44%	23%	21 pp		52%	18%	34 pp

Sales in 12M20 and 4Q20 compared to the prior year increased thanks to higher sales price of all crops.

Sales volumes by product were as follows:

Thousand tonnes	Year ended		Variance		Three months ended		Variance
31 December 2020	31 December 2019	Units	%	31 December 2020	31 December 2019	Units	%
---	---	---	---	---	---	---	---	---
sugar beet	2,952	3,875	(924)	(24)	2,120	2,931	(811)	(28)
wheat	653	831	(177)	(21)	386	357	29	8
barley	122	278	(156)	(56)	30	30	0	1
corn	149	156	(7)	(4)	57	19	38	197
sunflower seeds	78	80	(2)	(3)	59	70	(11)	(15)
soybean	331	225	106	47	97	51	47	92

The average sale prices per kilogram (excl. VAT) were as follows:

RR per kilogram, excl. VAT	Year ended		Variance		Three months ended		Variance
31 December 2020	31 December 2019	Units	%	31 December 2020	31 December 2019	Units	%
---	---	---	---	---	---	---	---	---
sugar beet	3.4	1.6	1.9	119	3.6	1.5	2.1	140
wheat	12.9	10.4	2.5	24	13.8	9.5	4.2	44
barley	10.2	10.2	0.1	1	11.5	8.6	2.9	34
corn	14.0	12.6	1.4	11	13.1	12.9	0.3	2
sunflower seeds	30.0	17.3	12.6	73	33.0	17.2	15.8	92
soybean	28.6	20.5	8.2	40	34.3	22.0	12.3	56

Net gain on revaluation of biological assets and agricultural produce in 12M20 represents the gain recognised from revaluation of crops for 2020 harvest and the realisation of loss from revaluation of 2019 crops harvest remained in stock as at 31 December 2019 and being sold to customers during 2020.

The gain on revaluation of crops and its subsequent realisation do not affect the Adjusted EBITDA figure.

Dynamics in distribution and selling expenses correlate with crops sales volume in 12M20

and in 4Q20 vs 2019.

Other operating income/(expenses), net increased as a result of the higher reimbursement of operating costs through government grants by RR 168 million in 12M20 vs 12M19 (by RR 158 million in 4Q20 vs 4Q19) and other operating income from the rental of land to the Meat Segment by RR 243 million in 12M20 vs 12M19 (by RR 104 million in 4Q20 vs 4Q19). Gain from PPE disposal was by RR 230 million higher in 12M20 compared to 12M19 (in 4Q20 gain from PPE disposal was higher by RR 174 million vs 4Q19). Foreign exchange gain is lower by RR 61 million in 12M20 vs 12M19.

Oil and Fat Segment

The financial results of the Oil and Fat Segment for 12M20 and 4Q20 compared to 12M19 and 4Q19 respectively are presented below:

in RR million	Year ended		Variance		Three months ended		Variance
31 December 2020	31 December 2019	Units	%	31 December 2020	31 December 2019	Units		%
---	---	---	---	---	---	---	---	---	---	---
Sales	76,160	62,375	13,785	22	24,208	17,796	6,411		36
Cost of sales	(61,383)	(53,461)	(7,922)	(15)	(20,492)	(14,434)	(6,059)	(42)
Gross profit	14,778	8,914	5,864	66	3,715	3,363	353		10
Gross profit margin	19%	14%	5 pp		15%	19%	(4) pp
Distribution and selling expenses	(4,639)	(4,408)	(231)	(5)	(1,759)	(1,298)	(461)		(35)
General and administrative expenses	(1,675)	(1,604)	(71)	(4)	(288)	(419)	130		31
Other operating income/ (expenses). net	(257)	(453)	196	43	(127)	(243)	116		48
incl. Other adjustments to EBITDA (non-recurring items)	(463)	(321)	(142)	(44)	(215)	(327)	112		34
Operating profit/ (loss)	8,207	2,449	5,758	235	1,541	1,403	138		10
Adjusted EBITDA	9,388	3,385	6,003	177	1,995	1,888	107		6
Adjusted EBITDA margin	12%	5%	7 pp		8%	11%	(3) pp

Sales volumes to third parties by product were as follows:

thousand tons	Year ended		Variance		Three months ended		Variance
31 December 2020	31 December 2019	Units	%	31 December 2020	31 December 2019	Units	%
mayonnaise	138	136	2	2	37	43	(6)	(15)
margarine	43	45	(2)	(5)	12	14	(2)	(15)
bottled oil	160	147	13	9	45	43	2	4
industrial fats	313	243	70	29	92	81	11	13
bulk oil	384	406	(21)	(5)	98	107	(9)	(8)
meal	589	647	(58)	(9)	146	178	(31)	(18)

The average sale prices per kilogram (excl. VAT) for sales to third parties were as follows:

RR per kilogram, excl. VAT	Year ended		Variance		Three months ended		Variance
31 December 2020	31 December 2019	Units	%	31 December 2020	31 December 2019	Units	%
---	---	---	---	---	---	---	---	---
mayonnaise	87.3	80.1	7.2	9	96.4	80.7	15.7	19
margarine	89.3	80.3	9.0	11	97.9	79.1	18.8	24
bottled oil	68.0	53.7	14.3	27	87.1	53.3	33.8	64
industrial fats	59.7	48.4	11.3	23	69.3	49.0	20.4	42
bulk oil	53.6	44.4	9.2	21	66.9	44.5	22.3	50
meal	15.2	14.2	0.9	7	17.9	12.2	5.7	47

Sales increased as a result of new production capacities rented since 3Q19 in Saratov region, and, as a result, higher sales volumes of industrial fats, supported by regained market share in 2H19, and higher sales volumes mayonnaise. Also increase in sales in 12M20 is due to higher sales prices for all products. At the same time, EBITDA increased by RR 6,003 million in 12M20 due to increased production capacities. EBITDA margin has increased by 7 pp in 12M20 compared to 12M19 due to higher sales prices for all products while cost of sales have changed less significantly because during 2020 sunflower, including purchased at lower prices in 2019, was used.

An increase in Distribution and selling expenses in 12М20 and 4Q20 compared to the same prior year periods included an increase in advertising expenses.

Increase in General and administrative expenses in comparison to the prior period is attributed to higher number of employees in administrative function in Oil and Fat segment.

Increase in Other operating expenses by RR 196 million in 12M20 was mainly due to the write-off of RR 175 million as result of sunflower technological losses in 2Q19.

Increase in Other adjustments to EBITDA (non-recurring items) by RR 142 million in 12M20 was caused by a change in the exchange rate and charity expenses.

Milk Products Segment

The financial results of the Milk Products Segment for 12M20 and 4Q20 compared to 12M19 and 4Q19 respectively are presented in the table below:

in RR million	Year ended		Variance		Three months ended		Variance
31 December 2020	31 December 2019	Units	%	31 December 2020	31 December 2019	Units	%
Sales	3,786	3,870	(83)	(2)	1,022	1,041	(19)	(2)
Cost of sales	(3,385)	(3,501)	116	3	(928)	(923)	(6)	(1)
Gross profit	401	369	33	9	94	118	(24)	(21)
Gross profit margin	11%	10%	1 pp		9%	11%	(2) pp
Distribution and selling expenses	(276)	(175)	(101)	(57)	(78)	(75)	(2)	(3)
General and administrative expenses	(141)	(132)	(9)	(7)	(33)	(28)	(4)	(16)
Other operating income/ (expenses). net	(276)	(11)	(266)	(2,473)	(244)	1	(244)	-
incl. Other adjustments to EBITDA (non-recurring items)	(269)	(1)	(268)	(39,749)	(266)	(1)	(265)	(42,721)
Operating profit	(292)	50	(342)	-	(260)	15	(275)	-
Adjusted EBITDA	(13)	53	(67)	-	13	16	(4)	(22)
Adjusted EBITDA margin	0%	1%	(1) pp		1%	2%	(1) pp

Group is now focusing on entering the retail chains with a consumer product, developing brands and increasing sales profitability. Sales volumes by product were as follows:

Thousand tonnes	Year ended		Variance		Three months ended		Variance
31 December 2020	31 December 2019	Units	%	31 December 2020	31 December 2019	Units	%
---	---	---	---	---	---	---	---	---
cheese and cheese product	8.1	8.4	(0.3)	(3)	1.9	2.4	(0.5)	(22)
butter and spread	0.8	1.9	(1.1)	(57)	0.3	0.2	0.1	25
dry mixes	14.6	15.4	(0.9)	(6)	3.9	4.2	(0.3)	(7)
cream	4.2	1.4	2.7	190	1.3	0.7	0.7	101

The average sale prices per kilogram (excl. VAT) were as follows:

RR per kilogram, excl. VAT	Year ended		Variance		Three months ended		Variance
31 December 2020	31 December 2019	Units	%	31 December 2020	31 December 2019	Units	%
---	---	---	---	---	---	---	---	---	---	---
cheese and cheese product	212.9	217.9	(5.0)	(2)	224.2	219.9	4.3		2
butter and spread	242.4	273.5	(31.2)	(11)	247.0	227.3	19.6		9
dry mixes	74.0	79.4	(5.4)	(7)	76.1	77.7	(1.6)		(2)
cream	181.7	200.6	(18.9)	(9)	183.3	204.3	(21.1)		(10)

Sales of milk products decreased in 12M20 (RR -83 million, -2%) as a result of decrease of sales volume and shift of sales volume from cheese (more expensive product) to cheese products and significant decrease of milk fat prices due to oversupply in the market.

Growth of Selling, General and Administrative expenses due to newly hired during 2019 staff, including key personnel.

Key consolidated cash flow indicators (not IFRS presentation*)

The key consolidated cash flow indicators presented according to management accounts methodology were as follows:

in mln Roubles	Year ended		Variance		Year ended		Variance
31 December 2020	31 December 2019	Units	%	31 December 2020	31 December 2019	Units	%
Net cash from operating activities, incl.	12,117	21,165	(9,048)	(43)	(12,560)	(7,466)	(5,094)	(68)
Operating cash flow before working capital changes	31,899	19,423	12,476	64	10,984	6,962	4,021	58
Working capital changes	(17,748)	1,948	(19,697)	-	(22,496)	(14,179)	(8,317)	(59)
Net cash from investing activities, incl.	(13,494)	(24,324)	10,830	45	(3,627)	(3,653)	26	1
Purchases of property plant and equipment and inventories intended for construction	(14,066)	(16,799)	2,732	16	(3,976)	(4,409)	433	10
Net cash from financing activities	10,892	3,673	7,219	197	18,512	8,280	10,232	124
Net effect of exchange rate changes on cash and cash equivalents	180	(72)	253	-	(111)	42	(153)	-
Net increase / (decrease) in cash and cash equivalents	9,696	442	9,254	2,092	2,214	(2,797)	5,011	-

(*) See Appendix 4

The key investments in property, plant and equipment and inventories intended for construction during 12M20 were made in Meat Segment in the amount of RR 8,750 million (12M19: RR 10,851 million), purchases related to the construction project in Far East region. Investments in Sugar Segment in the amount of RR 1,494 million (12M19: RR 3,408 million), Agriculture Segment in the amount of RR 2,038 million (12M19: RR 2,021 million), Oil and Fat Segment in the amount of RR 1,625 million (12M19: RR 519 million) and in Milk Products Segment in the amount of RR 159 million (no investments in 12M19) mainly relate to purchases of machinery and equipment for production facilities renewal and maintenance.

Debt position and liquidity management

in RR million	31 December 2020	31 December 2019	Variance
Units	%
Gross debt	114,929	97,876	17,053	17
Short-term borrowings	51,753	31,835	19,918	63
Long-term borrowings	63,176	66,041	(2,865)	(4)
Cash and cash equivalents, bank deposits and bonds	(46,029)	(36,136)	(9,893)	(27)
Short-term cash, deposits and bonds	(12,064)	(2,171)	(9,893)	(456)
Long-term cash, deposits and bonds	(33,965)	(33,965)	(0)	(0)
Net debt	68,900	61,740	7,160	12
Short-term borrowings, net	39,689	29,664	10,025	34
Long-term borrowings, net	29,211	32,076	(2,865)	(9)
Adjusted EBITDA (LTM4)	31,984	19,371	12,613	65
Net debt/ Adjusted EBITDA (LTM)	2.15	3.19	(1.0) pp
Adjusted EBITDA (LTM)* without other operating income/expenses	32,435	20,045	12,390	62
Net debt/ Adjusted EBITDA (LTM)* without other operating income/expenses	2.12	3.08	(1.0) pp

Net finance income/ (expense)

in RR million	Year ended		Variance		Three months ended		Variance
31 December 2020	31 December 2019	Units	%	31 December 2020	31 December 2019	Units	%
---	---	---	---	---	---	---	---	---
Net interest expense	(4,805)	(5,481)	676	12	(1,085)	(1,564)	479	31
Gross interest expense	(6,448)	(6,830)	381	6	(1,558)	(1,984)	426	21
Reimbursement of interest expense	1,643	1,348	295	22	473	420	52	12
Interest income	7,165	7,305	(140)	(2)	2,535	1,293	1,242	96
Net gain/ (loss) from bonds held for trading	(16)	(28)	12	43	0	(7)	7	-
Other financial income, net	(1,844)	(331)	(1,513)	(458)	(353)	88	(441)	-
Net foreign exchange gain/ (loss)	(1,234)	211	(1,444)	-	(116)	243	(358)	-
Other financial income / (expenses), net	(610)	(541)	(69)	(13)	(237)	(155)	(82)	(53)
Total net finance income/ (expenses)	500	1,465	(965)	(66)	1,098	(190)	1,288	-

Net debt increased at 31 December 2020 compared at 31 December 2019 as a result of an increase in short-term borrowings.

In 12M20 the Group continued to enjoy benefits from the state agriculture subsidies programme. The Group continued to receive bank loans with decreased preferential interest rates under the programme of government support. Under this programme, the government provides subsidies to the banks to compensate the loss of income on credits with decreased interest rates, given by the banks to agricultural producers. In 12M20 IFRS accounts these credits are accounted according to its face value with no adjustments to prevailing market rates. The differences between nominal and market interest rate is recognized as either government grants in a statement of financial position for borrowings received with the purpose to finance investment projects or interest expenses in a statement of comprehensive income for general purpose borrowings.

Net finance income of 12M19 in the sum of RR 1,465 million changed to net finance income in the amount of RR 500 million in 12M20 as the result of negative dynamics in forex losses and decrease in interest expense as a result of savings in net interest expense due to higher volume of government grants.

________________________________

(1) The exchange rates used for translation of RR amounts into USD represent average Central Bank official exchange rate for the respective reporting period for income, expenses and profits and the Central Bank official exchange rate as at the reporting date for balance figures.

(2) Adjusted EBITDA is defined as operating profit before taking into account (i) depreciation included in operating profit, (ii) net gain/ (loss) on revaluation of biological assets and agricultural produce, (iii) non-recurring components of other operating income/ (expenses), net, (iv) share-based remuneration, (v) provision for impairment of loans issued (see Appendix 2 for the detailed calculation of Adjusted EBITDA). Adjusted EBITDA is not a measure of financial performance under IFRS. It should not be considered as an alternative to profit for the period as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. Our calculation of Adjusted EBITDA may be different from the calculation used by other companies and therefore comparability may be limited. We believe that Adjusted EBITDA provides useful information to investors because it is an indicator of the strength and performance of our ongoing business operations, including our ability to fund discretionary spending such as capital expenditures, acquisitions of subsidiaries and other investments and our ability to incur and service debt.

(3) The Group determines the net debt as short-term borrowings and long-term borrowings less cash and cash equivalents, bank deposits, bank promissory notes and bonds held for trading.

(4) LTM - The abbreviation for the "Last twelve months".

Note:

ROS AGRO PLC (LSE: AGRO) - a holding company of Rusagro Group, a leading Russian diversified food producer with vertically integrated operations in the following branches:

Sugar segment

Rusagro is one of the leading Russian sugar producers (№3 with 13% share in sugar production in Russia and №1 with 46% share of cube white sugar market), producing sugar from sugar beet at nine production sites in four regions. Group produces white and brown cube sugar and packaged sugar sold under the brands Russkii Sakhar, Chaikofsky, Mon Cafe and Brauni. Sugar Segment is vertically integrated and sugar beet is supplied by Rusagro's Agriculture Segment, which ensures a consistent supply of raw material. Sugar Segment also operates a cereal plant and sell buckwheat and rice under the brand Tyoplye Traditsii.

Meat segment

Rusagro is the fourth largest pork producer in Russia with 5.6% share of pork produced in Russia. It operates 18 commercial pork complexes with correspondence to high biosecurity standards, has own compound feed production, slaughterhouses and meat processing plants in Tambov and Belgorod Regions. Since 2016 Rusagro sells retail products under its own brand Slovo Myasnika (Butcher's word).

Agricultural segment

The Group currently controls one of the largest land banks among Russian agriculture producers, with 638 thousand hectares of land under control located in the highly fertile Black Earth region of Russia (in the Belgorod, Tambov, Voronezh, Kursk and Orel regions)

and in the Far East Primorie Region. Land and production sites are strategically located within

the same regions to optimize efficiency and minimize logistical costs. Rusagro is one

of the major sugar beet producers in Russia, but it also produces wheat and barley, sunflower seeds and soybeans. These products are partially consumed by the Meat Segment, supporting a synergistic effect and lowering price change risk.

Oil and Fat segment

Rusagro is the leading crude sunflower oil and consumer margarine producer, second largest industrial fats and mayonnaise producer in Russia with products sold under eight key brands, such as EZhK, Schedroye Leto, Mechta Khozyaiki, Moskovskiy Provansal, Novosibirskiy Provansal, Saratovskiy Provansal, Rossiyanka and Saratovskiy Slivochniy. The Group operates (including through ownership and the lease) five crushing and three oil and fats plants. Own sunflower and soy oil production allows to control the source of the vegetable oil required to produce oil and fats products.

Milk Products segment

Launched at the end of 2018 Milk Products Segment operates two plants in Samara and Ulyanovsk Regions. It produces dry industrial mixes, cheeses, butter and cream. Consumer products are sold under three brands, which are Milie, Buterbrodnoe utro and Syrnaya Kultura. 

Forward-looking statements

This announcement includes statements that are, or may be deemed to be, forward-looking statements. These forward-looking statements do not relate to historical or current events,

or to any future financial or operational activity of the Group.

By their nature, forward-looking statements involve risk and uncertainty because they relate

to future events and circumstances, a number of which are beyond the Rusagro Group's control. As a result, actual future results may differ materially from the plans and expectations set out

in these forward-looking statements.

The Group undertakes no obligation to release the results of any revisions to any forward-looking statements that may occur due to any change in its expectations or to reflect events

or circumstances after the date of this document.

Rusagro management is organizing a conference call about its 12M and 4Q 2020 financial results for investors and analysts.

Details of the call:

Date	15 March 2020
Time	4:00 PM (Moscow) / 1:00 PM (London)
Subject	ROS AGRO PLC 3Q 2020 Financial results
Zoom	https://ib-translations.zoom.us/j/95649463469?pwd=clhHTmg1UFBydmZ1Q0JlL1R3NW5MQT09
Password	989307

Contacts:

Svetlana Kuznetsova

IR & ESG Director

Phone:  +7 495 363 1661

E-mail: ir@rusagrogroup.ru

Appendix 1. Consolidated statement of comprehensive income for the Year and Three months ended 31 December 2020 (in RR thousand)

	Year ended 31 December		Three months ended 31 December
	2020	2019	2020	2019
Sales	158,971,035	138,172,424	50,208,835	39,096,396
Net gain/(loss) on revaluation of biological assets and agricultural produce	5,890,447	(4,111,947)	461,484	(827,618)
Cost of sales	(121,132,658)	(110,470,963)	(37,374,419)	(30,130,074)
Net gain/(loss) from trading derivatives	10,552	(7,348)	-	(2,203)
Gross profit	43,739,376	23,582,166	13,295,900	8,136,501
Distribution and selling expenses	(9,760,841)	(9,818,779)	(3,252,990)	(2,859,744)
General and administrative expenses	(7,377,449)	(6,711,005)	(1,891,956)	(1,582,737)
Other operating income/ (expenses), net	2,293,017	1,926,686	910,573	1,179,383
Provision for impairment of loans issued	(5,070,598)	-	(5,070,598)	-
Operating profit / (loss)	23,823,505	8,979,068	3,990,929	4,873,403
Interest expense	(4,804,995)	(5,481,240)	(1,084,823)	(1,563,510)
Interest income	7,164,816	7,304,845	2,534,967	1,292,723
Net (loss)/gain from bonds	(15,698)	(27,711)	279	(7,062)
Other financial income/ (expenses), net	(1,844,130)	(330,699)	(352,567)	88,004
Profit before income tax	24,323,498	10,444,263	5,088,785	4,683,558
Income tax expense	(26,771)	(735,754)	683,661	(587,236)
Profit for the period	24,296,727	9,708,509	5,772,446	4,096,322
Other comprehensive income:
Items that will not be reclassified to profit or loss:
Gains less losses on investments in equity securities at fair value through other comprehensive income	56,556	-	56,556	-
Income tax relating to other comprehensive income	(7,070)	-	(7,070)	-
Total comprehensive income for the period	24,346,213	9,708,509	5,821,932	4,096,322
Profit is attributable to:
Owners of ROS AGRO PLC	24,359,786	9,808,204	5,795,529	4,112,237
Non-controlling interest	(63,059)	(99,695)	(23,083)	(15,915)
Profit for the period	24,296,727	9,708,509	5,772,446	4,096,322
Total comprehensive income is attributable to:
Owners of ROS AGRO PLC	24,409,272	9,808,204	5,845,015	4,112,237
Non-controlling interest	(63,059)	(99,695)	(23,083)	(15,915)
Total comprehensive income for the period	24,346,213	9,708,509	5,821,932	4,096,322
Earnings per ordinary share for profit attributable to the owners of ROS AGRO PLC, basic and diluted (in RR per share)	905.39	364.62	215.40	152.87

Appendix 2. Segment information for the Year ended 31 December 2020 (in RR thousand)

12M 2020	Sugar	Meat	Agriculture	Oil and Fat	Other	Eliminations	Total
Sales	28,112,519	32,434,214	34,347,506	76,160,418	4,406,702	(16,490,324)	158,971,035
Net gain/ (loss) on revaluation of biological assets and agricultural produce	-	(681,302)	3,582,520	-	-	2,989,229	5,890,447
Cost of sales	(21,238,160)	(27,375,635)	(19,059,850)	(61,382,829)	(3,854,140)	11,777,956	(121,132,658)
incl. Depreciation	(2,605,853)	(3,716,132)	(2,861,216)	(536,301)	(17,164)	(75,387)	(9,812,053)
Net gain/ (loss) from trading derivatives	10,552	-	-	-	-	-	10,552
Gross profit	6,884,911	4,377,277	18,870,176	14,777,589	552,562	(1,723,139)	43,739,376
Distribution and Selling, General and administrative expenses	(3,399,788)	(2,713,324)	(3,732,770)	(6,313,621)	(2,121,408)	1,142,621	(17,138,290)
incl. Depreciation	(83,738)	(218,146)	(386,864)	(181,013)	(187,619)	75,387	(981,993)
Other operating income/(expenses), net	602,466	653,934	459,868	(256,767)	15,305,841	(14,472,325)	2,293,017
incl. Reimbursement of operating costs (government grants)	179,564	104,836	299,020	347,210	-	-	930,630
incl. Other adjustments to EBITDA (non-recurring items)	425,102	459,983	71,372	(463,483)	15,257,311	(13,936,656)	1,813,629
Provision for impairment of loans issued	-	-	-	-	(5,070,598)	-	(5,070,598)
Operating profit / (loss)	4,087,589	2,317,887	15,597,274	8,207,201	8,666,397	(15,052,843)	23,823,505
Adjustments:
Depreciation included in Operating Profit	2,689,591	3,934,278	3,248,080	717,314	204,783	-	10,794,046
Other adjustments to EBITDA (non-recurring items)	(425,102)	(459,983)	(71,372)	463,483	(15,257,311)	13,936,656	(1,813,629)
Net gain/ (loss) on revaluation of biological assets and agricultural produce	-	681,302	(3,582,520)	-	-	(2,989,229)	(5,890,447)
Provision for impairment of loans issued	-	-	-	-	5,070,598	-	5,070,598
Adjusted EBITDA*	6,352,078	6,473,484	15,191,462	9,387,998	(1,315,533)	(4,105,416)	31,984,073

* Non-IFRS measure

Appendix 2 (continued). Segment information for the Year ended 31 December 2019 (in RR thousand)

12M 2019	Sugar	Meat	Agriculture	Oil and Fat	Other	Eliminations	Total
Sales	31,194,715	25,833,637	25,844,693	62,375,087	4,164,293	(11,240,001)	138,172,424
Net gain/ (loss) on revaluation of biological assets and agricultural produce	-	(852,455)	(1,559,526)	-	-	(1,699,966)	(4,111,947)
Cost of sales	(25,758,275)	(21,717,486)	(18,583,596)	(53,461,301)	(3,640,734)	12,690,429	(110,470,963)
incl. Depreciation	(1,925,029)	(2,696,297)	(2,462,063)	(472,629)	(12,507)	(70,938)	(7,639,463)
Net gain/ (loss) from trading derivatives	(7,342)	-	-	-	(6)	-	(7,348)
Gross profit	5,429,098	3,263,696	5,701,571	8,913,786	523,553	(249,538)	23,582,166
Distribution and Selling, General and administrative expenses	(3,516,890)	(2,135,635)	(4,168,971)	(6,011,841)	(1,606,311)	909,864	(16,529,784)
incl. Depreciation	(74,134)	(183,169)	(437,344)	(141,980)	(74,800)	70,938	(840,489)
Other operating income/(expenses), net	544,406	326,251	(95,492)	(452,519)	14,973,889	(13,369,849)	1,926,686
incl. Reimbursement of operating costs (government grants)	71,290	56,562	130,623	141,791	-	-	400,266
incl. Other adjustments to EBITDA (non-recurring items)	467,932	366,207	(17,158)	(321,376)	15,073,830	(13,369,849)	2,199,586
Provision for impairment of loans issued	-	-	-	-	-	-	-
Operating profit / (loss)	2,456,614	1,454,312	1,437,108	2,449,426	13,891,131	(12,709,523)	8,979,068
Adjustments:
Depreciation included in Operating Profit	1,999,163	2,879,466	2,899,407	614,609	87,307	-	8,479,952
Other adjustments to EBITDA (non-recurring items)	(467,932)	(366,207)	17,158	321,376	(15,073,830)	13,369,849	(2,199,586)
Net gain/ (loss) on revaluation of biological assets and agricultural produce	-	852,455	1,559,526	-	-	1,699,966	4,111,947
Provision for impairment of loans issued	-	-	-	-	-	-	-
Adjusted EBITDA*	3,987,845	4,820,026	5,913,199	3,385,411	(1,095,392)	2,360,292	19,371,381

* Non-IFRS measure

Appendix 3. Consolidated statement of financial position as at 31 December 2020

(in RR thousand)

	31 December 2020	31 December 2019
ASSETS
Current assets
Cash and cash equivalents	11,866,798	2,170,779
Restricted cash	143,637	39
Short-term investments	19,583,523	23,456,552
Trade and other receivables	9,512,286	8,068,349
Prepayments	2,941,224	3,018,658
Current income tax receivable	646,162	225,315
Other taxes receivable	5,506,675	4,349,400
Inventories and short-term biological assets	69,001,368	49,386,797
Total current assets	119,201,673	90,675,889
Non-current assets
Property, plant and equipment	87,519,088	80,629,483
Inventories intended for construction	3,353,330	3,157,369
Right-of-use assets	6,934,567	6,230,707
Goodwill	2,364,942	2,364,942
Advances paid for non-current assets	6,905,003	8,721,155
Long-term biological assets	2,528,128	2,279,335
Long-term investments and receivables	42,692,320	42,636,323
Investments in associates	257,782	165,070
Deferred income tax assets	3,566,168	1,852,983
Other intangible assets	619,793	608,635
Other non-current assets	205,793	173,002
Total non-current assets	156,946,914	148,819,004
Total assets	276,148,587	239,494,893
LIABILITIES and EQUITY
Current liabilities
Short-term borrowings	51,753,475	31,834,699
Lease liabilities	943,859	916,791
Trade and other payables	16,016,138	17,492,614
Provisions	179,796	-
Current income tax payable	69,546	123,846
Other taxes payable	4,096,199	3,468,034
Total current liabilities	73,059,013	53,835,984
Non-current liabilities
Long-term borrowings	63,175,720	66,040,784
Government grants	8,536,899	8,306,779
Lease liabilities	4,855,508	3,989,801
Deferred income tax liability	487,049	494,977
Total non-current liabilities	77,055,176	78,832,341
Total liabilities	150,114,189	132,668,325
Equity
Share capital	12,269	12,269
Treasury shares	(490,607)	(490,607)
Additional paid-in capital	26,964,479	26,964,479
Other reserves	1,363,177	1,313,691
Retained earnings	98,185,038	78,960,843
Equity attributable to owners of ROS AGRO PLC	126,034,356	106,760,675
Non-controlling interest	42	65,893
Total equity	126,034,398	106,826,568
Total liabilities and equity	276,148,587	239,494,893

Appendix 4. Consolidated statement of cash flows for the Year ended 31 December 2020 (in RR thousand) - NOT IFRS PRESENTATION (*)

	Year ended
	31 December 2020	31 December 2019
Cash flows from operating activities
Profit before income tax	24,323,498	10,444,263
Adjustments for:
Depreciation and amortization	10,794,046	8,479,952
Interest expense	6,448,154	6,829,598
Government grants	(3,216,290)	(2,363,233)
Interest income	(7,164,816)	(7,304,845)
Loss / (gain) on disposal of property, plant and equipment	(335,640)	110,601
Net (gain) / loss on revaluation of biological assets and agricultural produce	(5,890,447)	4,111,947
Change in provision for impairment of loans issued	5,070,598	-
Lease finance expense	580,276	590,777
The result from early repayment of the loan	131,363	-
Realised deferred day-one gain	(993,558)	(1,592,001)
Change in provision for net realisable value of inventory	732,237	(29,168)
Change in provision for impairment of receivables and prepayments	13,592	75,855
Foreign exchange (gain) / loss, net	1,698,846	(177,728)
Lost harvest write-off	188,536	122,468
Share based remuneration	-	(12,888)
Net (gain) / loss from bonds held for trading	15,698	27,711
Settlement of loans and accounts receivable previously written-off	(2)	(147)
Change in provision for impairment of advances paid for property, plant and equipment	(29,620)	29,066
Change in other provisions	179,796	-
Dividend income	(560,568)	-
Gain on sale of subsidiaries, net	-	(364,880)
Loss / (gain) on sale of assets held for sale	-	412,111
Other non-cash and non-operating expenses, net	(87,028)	33,552
Operating cash flow before working capital changes	31,898,671	19,423,011
Change in trade and other receivables and prepayments	(1,920,133)	(2,509,233)
Change in other taxes receivable	(1,157,274)	70,610
Change in inventories and short-term biological assets	(15,169,512)	(87,367)
Change in trade and other payables	(209,572)	4,902,852
Change in other taxes payable	708,163	(428,669)
Cash generated from operations	14,150,343	21,371,204
Income tax paid	(2,033,327)	(206,139)
Net cash from operating activities	12,117,016	21,165,065
Appendix 4 (continued). Consolidated statement of cash flows the Year ended 31 December 2020 (in RR thousand) - NOT IFRS PRESENTATION (*)
	Year ended
Cash flows from investing activities	31 December 2020	31 December 2019
Purchases of property, plant and equipment	(12,405,295)	(15,056,765)
Purchases of other intangible assets	(418,808)	(261,046)
Purchases of land lease rights	(86,729)	-
Proceeds from sales of property, plant and equipment	687,757	288,096
Purchases of inventories intended for construction	(1,660,923)	(1,741,948)
Purchases of investments in third parties	-	(8,500,000)
Purchases of associates	(92,712)	(78,150)
Dividends received	560,568	-
Movement in restricted cash	(143,454)	(6,241)
Proceeds from sale of subsidiaries, net of cash disposed	-	478,710
Proceeds from sale of assets held for sale	-	408,839
Proceeds from sales of other investments	-	145,000
Other investing activities	65,938	-
Net cash from investing activities	(13,493,658)	(24,323,505)
Cash flows from financing activities
Proceeds from borrowings	77,932,773	91,687,403
Repayment of borrowings	(65,389,365)	(91,118,861)
Interest and other finance cost paid	(4,196,451)	(5,024,201)
Purchases of bonds with maturity over three months*	(197,523)	-
Proceeds from cash withdrawals from deposits*	-	4,623,323
Deposits placed with banks*	-	(2,012,991)
Proceeds from sales of bonds with maturity over three months*	-	2,314,831
Proceeds from sales of promissory notes*	-	100,000
Purchases of loan issued*	(13,829)	(372,899)
Loans repaid*	1,012,854	1,864,061
Interest received*	4,808,803	4,820,116
Proceeds from government grants	2,192,483	2,086,446
Purchases of non-controlling interest	-	(600)
Dividends paid to owners Ros Agro PLC	(5,134,426)	(5,046,515)
(Repayment)/proceeds of lease liabilities-principal	(123,044)	(235,859)
Other financial activities	-	(10,998)
Net cash from  financing activities	10,892,275	3,673,256
Net effect of exchange rate changes on cash and cash equivalents	180,386	(72,433)
Net increase/ (decrease) in cash and cash equivalents	9,696,019	442,383
Cash and cash equivalents at the beginning of the period	2,170,779	1,728,396
Cash and cash equivalents at the end of the period	11,866,798	2,170,779

(*) For the purpose of conformity with the methodology of the Group's net debt calculation investments in financial assets related to financial activities are presented in Cash flows from financing activities in the Group's management accounts.

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