ROSS GROUP PLC

Earnings Release • Feb 28, 2022

National Storage Mechanism | Additional information

RNS Number : 0029D

Ros Agro PLC

28 February 2022

28 February 2022

ROS AGRO financial results for 12M 2021 and 4Q 2021

28 February 2022 - Today ROS AGRO PLC (the "Company"), the holding company

of Rusagro Group (the "Rusagro"), a leading Russian diversified food producer with vertically integrated operations, has announced the financial results for the year ended 31 December 2021.

12M 2021 HIGHLIGHTS

-     Sales amounted to RUB 222,932 million (US$ 3,027 million1), an increase of RUB 63,961 million (+40%) compared to 12M 2020;

-     Adjusted EBITDA2 amounted to RUB 48,060 million (US$ 653 million), an increase of             RUB 16,076 million (+50%) compared to 12M 2020;

-     Adjusted EBITDA margin rose from 20% in 12M 2020 to 22% in 12M 2021;

-     Net profit for the period amounted to RUB 41,434 million (US$ 563 million), an increase of RUB 17,137 million (+71%);

-     Net debt position3 as of 31 December 2021 amounted to RUB 73,409 million (US$ 988 million);

-     Net Debt/Adjusted EBITDA (LTM4) as of 31 December 2021 was 1.53.

Commenting on the results, Timur Lipatov, CEO of Rusagro, said:

"In 2021 Rusagro achieved impressive results and managed to earn the highest adjusted EBITDA in the Company's history. In 4Q 2021 Rusagro Sales increased across all business segments. Revenue growth was supported by positive trend in sales volume of Sugar segment as well as sugar beet and soybean in Agriculture segment.

In 4Q 2021 Rusagro showed growth of adjusted EBITDA in all business segments except Meat.  Rusagro improved adjusted EBITDA margin of Agriculture segment (+7 p.p.) and Sugar segment (+7 p.p.) as Revenue grew higher than corresponding increase in costs. Adjusted EBITDA of Oil & Fats segment remained relatively flat (+1 p.p.). Adjusted EBITDA of Meat segment decreased by 8 p.p. following negative influence of higher costs of feed and animal health protection as well as additional expenses relating to the start of operations in Primorye."

Key consolidated financial performance indicators

in RR million	Year ended		Variance		Three months ended		Variance
31 December 2021	31 December 2020	Units	%	31 December 2021	31 December 2020	Units	%
Sales	222,932	158,971	63,961	40	65,356	50,209	15,147	30
Gross profit 1	57,093	43,739	13,354	31	11,491	13,296	(1,805)	(14)
Gross margin, %	26%	28%	(2) pp		18%	26%	(8) pp
Adjusted EBITDA	48,060	31,984	16,076	50	17,338	11,789	5,549	47
Adjusted EBITDA margin, %	22%	20%	2 pp		27%	23%	4 pp
Net profit for the period 2,3	41,434	24,297	17,137	71	6,012	8,618	(2,606)	(30)
Net profit margin %	19%	15%	4 pp		9%	17%	(8) pp

1 Adjustment was made to published 9M and 3Q 2021: Gross profit increased by RUB 718 million due to reclassification of income from recognition of sunflower surplus on elevators.

2 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.

3 Adjustment for valuation of SolPro loans made in 4Q20 caused Net profit to increase by RUB 2,846 compared to the published earlier amount, 12M20 remained unchanged

Key financial performance indicators by segments

in RR million	Year ended		Variance		Three months ended		Variance
31 December 2021	31 December 2020	Units	%	31 December 2021	31 December 2020	Units	%
Sales, incl.	222,932	158,971	63,961	40	65,356	50,209	15,147	30
Sugar	36,361	28,113	8,248	29	12,248	7,034	5,214	74
Meat	39,628	32,434	7,194	22	11,170	9,588	1,583	16
Agriculture	41,881	34,348	7,534	22	23,170	19,596	3,574	18
Oil and Fat	125,237	79,726	45,510	57	31,278	25,173	6,105	24
Other	719	631	88	14	180	234	(53)	(23)
Eliminations	(20,894)	(16,281)	(4,613)	(28)	(12,690)	(11,416)	(1,276)	(11)
Gross profit, incl.	57,093	43,739	13,354	31	11,491	13,296	(1,805)	(14)
Sugar	9,510	6,885	2,625	38	3,686	1,512	2,174	144
Meat	5,513	4,377	1,135	26	(826)	(372)	(454)	(122)
Agriculture	25,717	18,870	6,847	36	5,615	9,614	(3,999)	(42)
Oil and Fat	16,381	15,179	1,202	8	3,543	3,809	(267)	(7)
Other	348	153	195	127	162	77	85	110
Eliminations	(376)	(1,725)	1,349	78	(689)	(1,344)	655	49
Adjusted EBITDA, incl.	48,060	31,984	16,076	50	17,338	11,789	5,549	47
Sugar	8,962	6,352	2,610	41	3,134	1,347	1,787	133
Meat	5,895	6,473	(579)	(9)	860	1,539	(679)	(44)
Agriculture	23,251	15,191	8,060	53	13,780	10,176	3,604	35
Oil and Fat	12,786	9,375	3,411	36	2,719	2,008	712	35
Other	(2,092)	(1,300)	(792)	(61)	(337)	(206)	(131)	(64)
Eliminations	(742)	(4,107)	3,365	82	(2,818)	(3,075)	256	8
Adjusted EBITDA margin, %	22%	20%	2 pp		27%	23%	4 pp
Sugar	25%	23%	2 pp		26%	19%	7 pp
Meat	15%	20%	(5) pp		8%	16%	(8) pp
Agriculture	56%	44%	12 pp		59%	52%	7 pp
Oil and Fat	10%	12%	(2) pp		9%	8%	1 pp

SUGAR SEGMENT

In 12M21 Sugar segment earned RUB 8,962 million of adjusted EBITDA (+41% y-o-y) with 25% margin (+2 pp y-o-y). The financial results of the Sugar Segment of 12M21 and 4Q21 compared to 12M20 and 4Q20 respectively are presented in the table below:

Sugar segment 12M and 4Q 2021 Financial Results

in RR million	Year ended		Variance		Three months ended		Variance
31 December 2021	31 December 2020	Units	%	31 December 2021	31 December 2020	Units	%
Sales	36,361	28,113	8,248	29	12,248	7,034	5,214	74
Cost of sales	(26,850)	(21,238)	(5,612)	(26)	(8,562)	(5,522)	(3,040)	(55)
Net gain/ (loss) from trading derivatives	-	11	(11)	-	-	-	-	-
Gross profit/ (loss)	9,510	6,885	2,626	38	3,686	1,512	2,174	144
Gross profit margin	26%	24%	2 pp		30%	21%	9 pp
Distribution and selling expenses	(2,476)	(1,964)	(512)	(26)	(1,017)	(479)	(538)	(112)
General and administrative expenses	(1,482)	(1,436)	(46)	(3)	(353)	(389)	35	9
Other operating income/ (expenses), net	677	602	75	12	181	(17)	197	-
incl. reimbursement of operating costs (government grants)	577	180	397	221	150	107	42	39
incl. other adjustments to EBITDA (non-recurring items)	106	425	(319)	(75)	35	(51)	86	-
Operating profit	6,229	4,088	2,142	52	2,496	628	1,868	297
Adjusted EBITDA	8,962	6,352	2,610	41	3,134	1,347	1,787	133
Adjusted EBITDA margin	25%	23%	2 pp		26%	19%	7 pp

In 12M21 in comparison to 12M20 Sales of Sugar segment improved by 29% - RUB 8,248 million. Sugar market showed positive trend in comparison to 12M20. During the first 9M21 Rusagro's sugar sales price to retail chains in Russia did not exceed 36 RUB/kg incl. VAT for white sugar in 50 kg bags at the plant. Sales volumes decreased by 5% y-o-y to 769 thousand mainly due to reduction of opening sugar balance in 2021 compare to 2020. In 4Q21 sales volumes increased due to the growth of sugar production (as the result of higher sugar beet harvest) and limited storage capacity.

In addition, Sugar segment Sales for 12M21 increased due to the growth in sales of packing and sugar beet processing services offered to customers by sugar plants of RUB 526 million together with the increase in sales of beet pulp, molasses and betaine by RUB 216 million. Revenue from sales of buckwheat and rice decreased by RUB 171 million. 

Cost of sales in 12M21 increased y-o-y due to higher sugar beet costs.

Production and sales volume of sugar in 12M and 4Q 2021

		Year ended				Variance			Three months ended				Variance
31 December 2021		31 December 2020		Units		%	31 December 2021		31 December 2020		Units	%
Sugar production volume, thousand tonnes	791		764		27		4	583		484		99	20
Sales volume, thousand tonnes	769		812		(43)		(5)	228		142		86	61

MEAT SEGMENT

In 12M21 Meat segment earned RUB 5,895 million of adjusted EBITDA (-9% y-o-y) with 15% margin (-5 pp y-o-y). The financial results of the Meat Segment of 12M21 and 4Q21 compared to 12M20 and 4Q20 respectively are presented in the table below.

Meat segment 12M and 4Q 2021 Financial Results

in RR million	Year ended		Variance		Three months ended			Variance
31 December 2021	31 December 2020	Units	%	31 December 2021	31 December 2020		Units	%
---	---	---	---	---	---	---	---	---	---
Sales	39,628	32,434	7,194	22	11,170	9,588	1,583		17
Net gain/ (loss) on revaluation of biological assets and agricultural produce	(370)	(681)	311	46	(1,704)	(1,504)	(199)		(13)
Cost of sales	(33,745)	(27,376)	(6,369)	(23)	(10,292)	(8,455)	(1,837)		(22)
Gross profit/ (loss)	5,513	4,377	1,135	26	(826)	(372)	(454)		(122)
Gross profit margin	14%	13%	1 pp		(7)%	(4) %	(3)pp
Gross profit excl. effect of biological assets revaluation	5,883	5,059	825	16	878	1,132	(254)		(22)
Adjusted gross profit margin	15%	16%	(1) pp		8%	12%	(4)pp
Distribution and selling expenses	(1,670)	(1,204)	(466)	(39)	(569)	(342)	(227)		(66)
General and administrative expenses	(4,058)	(1,509)	(2,549)	(169)	(941)	(549)	(392)		(71)
Other operating income/ (expenses), net	1,353	654	699	107	284	258	26		10
incl. reimbursement of operating costs (government grants)	517	105	412	393	58	42	16		38
incl. other adjustments to EBITDA (non-recurring items)	490	460	30	6	9	181	(172)		(95)
Operating profit	1,137	2,318	(1,180)	(51)	(2,052)	(1,005)	(1,047)		(104)
Adjusted EBITDA	5,895	6,473	(579)	(9)	860	1,539	(679)		(44)
Adjusted EBITDA margin	15%	20%	(5) pp		8%	16%	(8) pp

Sales of the Meat segment increased by 22% in 12M21 and by 17% in 4Q21 compared to the respective periods of the prior year mainly due to positive market dynamics of all meat products except for livestock during 4Q21. The growth of total sales volume by 1% in 12M21 compared to 12M20 triggered by 1% pigs production increase achieved as new pig farms in Tambov Region reached full capacity and start of production in Primorye.          

Production and sales volume of pork products in 12M and 4Q 2021

	Year ended				Variance				Three months ended				Variance
31 December 2021		31 December 2020		Units		%		31 December 2021		31 December 2020		Units		%
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Pigs production, thousand tonnes in live weight		309		308		1		0		82		85		(3)		(4)
Sales volume, thousand tonnes		249		248		1		0		67		71		(5)		(6)

Cost of sales increased by 23% in 12M21 and by 22% in 4Q21 compared to the respective periods of the prior year mainly due to higher costs of feed and animals health protection.

Net loss on revaluation of biological assets and agricultural produce in 12M21 resulted mainly from higher growth of costs than an increase in fair value for both bearer and consumable livestock pigs during the reporting period compared to the respective figures at the end of 2020.

An increase in Distribution and selling expenses in 12M21 in comparison to 12M20 is mainly due to the rise in the costs of advertising and marketing activities.

General and administrative expenses in 12M21 compared to prior year period increased mainly due realization of pork production cluster project in the Primorie Territory.

An increase in Other operating income in 12M21 in comparison to 12M20 is mainly due to partial reimbursement of feed purchase costs and insurance costs.

AGRICULTURAL SEGMENT

As at 31 December 2021 Rusagro's area of controlled land stands at 688 thousand hectares (31 December 2020: 641 thousand hectares). In 12M21 Agriculture segment earned RUB 23,251 million of adjusted EBITDA (+53 % y-o-y) with 56% margin (+12 pp y-o-y). The financial results of the Agricultural Segment of 12M21 and 4Q21 compared to 12M20 and 4Q20 respectively are presented below.

Agriculture segment 12M and 4Q 2021 Financial Results

in RR million	Year ended		Variance		Three months ended		Variance
31 December 2021	31 December 2020	Units	%	31 December 2021	31 December 2020	Units	%
---	---	---	---	---	---	---	---	---
Sales	41,881	34,348	7,534	22	23,170	19,596	3,574	18
Net gain/ (loss) on revaluation of biological assets and agricultural produce	2,610	3,583	(973)	(27)	(7,904)	(56)	(7,848)	(14,028)
Cost of sales	(18,774)	(19,060)	286	2	(9,651)	(9,926)	275	3
Gross profit/ (loss)	25,717	18,870	6,847	36	5,615	9,614	(3,999)	(42)
Gross profit margin	61%	55%	6 pp		24%	49%	(25) pp
Gross profit excl. effect of biological assets and agricultural produce revaluation	23,107	15,288	7,820	51	13,519	9,670	3,850	40
Adjusted gross profit margin	55%	45%	10 pp		58%	49%	9 pp
Distribution and selling expenses	(1,935)	(2,370)	435	18	(856)	(918)	62	7
General and administrative expenses	(1,461)	(1,363)	(98)	(7)	(439)	(414)	(25)	(6)
Other operating income/ (expenses), net	598	460	139	30	494	458	36	8
incl. reimbursement of      operating costs (government grants)	546	299	247	83	305	188	117	62
incl. other adjustments to EBITDA (non-recurring items)	(38)	71	(109)	-	129	109	20	18
Operating profit	22,919	15,597	7,322	47	4,814	8,740	(3,925)	(45)
Adjusted EBITDA	23,251	15,191	8,060	53	13,780	10,176	3,604	35
Adjusted EBITDA margin	56%	44%	12 pp		59%	52%	7 pp

In 12M21 in comparison to 12M20 Sales of the Agriculture segment increased by 22% to RUB 41,881 million. Higher volume of sugar beet and wheat sold was partially compensated by lower sales volumes of barley, corn and sunflower. Meanwhile, Cost of sales, General and administrative expenses remained relatively stable.

Higher sales volume of wheat in 12M21 compared to 12M20 was affected by management decision in 2020 to push sales timing towards 2021, whereas 2019 wheat harvest was mainly sold in 2019. 2021 wheat harvest was mainly sold in 2021.

Sugar beet sales volume increase in 12M21 compared to 12M20 was caused by higher yield of sugar beet in 2021.

In 4Q21 in comparison to 4Q20 Sales of the Agriculture segment increased by 18% to RUB 23,170 million. Higher volume of sugar beet and soybean was partially compensated by lower sales volumes of wheat, barley, corn and sunflower.

Lower sales volume of wheat in 4Q21 compared to 4Q20 was affected by management decision in 2021 to make sales earlier in the season - in 3Q21.

Higher sales volume of soybean in 4Q21 compared to 4Q20 was affected by management decision in 2021 to make sales earlier in the 2021 due to favourable market conditions.

Sales volume of crops in 12M and 4Q 2021

Thousand tonnes	Year ended		Variance			Three months ended		Variance
31 December 2021	31 December 2020	Units	%		31 December 2021	31 December 2020	Units	%
---	---	---	---	---	---	---	---	---	---
sugar beet	3,589	2,952	637	22		2,869	2,120	749	35
wheat	768	653	115		17	184	386	(202)	(52)
soybean	330	331	(1)		(0)	169	97	72	73
corn	71	149	(78)		(52)	14	57	(43)	(76)
sunflower seeds	59	78	(19)		(24)	51	59	(1)	(13)
barley	10	122	(112)	(91)		4	30	(26)	(88)

Net gain/(loss) on revaluation of biological assets and agricultural produce depends on revaluation amounts in opening and closing inventory balances. Revaluation between opening and closing inventory balances grew higher in 12M20 than in 12M21.

Net loss on revaluation of biological assets and agricultural produce in 4Q21 compared to 4Q20 is higher due to realisation of gain from current year harvest revaluation recognized in 3Q21. In 4Q20 realisation of gain from 2020 year harvest revaluation was neutralised by recognition of additional gain from revaluation of harvested crops to fair value less estimated point-of-sale costs.

Net gain/(loss) on revaluation of crops and its subsequent realisation do not affect the Adjusted EBITDA figure.

Distribution and selling expenses decreased despite overall sales volumes remaining at the same level, which is caused mainly by changes in sales channels of soybean, export in 12M2020 vs. domestic in 12M2021.

An increase in Other operating income in 12M21 in comparison to 12M20 is mainly due to higher government reimbursement of operating costs.

OIL AND FAT SEGMENT

In 12M21 Oil and Fat segment earned RUB 12,786 million of adjusted EBITDA (+36 % y-o-y) with 10% margin (-2 pp y-o-y). The financial results of the Oil and Fat Segment for 12M21 and 4Q21 compared to 12M20 and 4Q20 respectively are presented below.

Oil and Fat segment 12M and 4Q 2021 Financial Results

in RR million	Year ended			Variance				Three months ended				Variance
31 December 2021	31 December 2020		Units	%		31 December 2021		31 December 2020		Units		%
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Sales	125,237	79,726	45,510			57		31,278		25,173		6,105		24
Cost of sales	(108,856)	(64,547)	(44,308)			(69)		(27,735)		(21,363)		(6,372)		(30)
Gross profit/ (loss)	16,381	15,179	1,202			8		3,543		3,809		(267)		(7)
Gross profit margin	13%	19%	(6) pp					11%		15%		(4) pp
Distribution and selling expenses	(5,488)	(4,915)	(573)			(12)		(2,097)		(1,836)		(261)		(14)
General and administrative expenses	(1,975)	(1,816)	(159)			(9)		(553)		(321)		(231)		(72)
Other operating income/ (expenses), net	(726)	(533)	(193)			(36)		(349)		(334)		(15)		(5)
incl. reimbursement of      operating costs (government grants)	496	347	149			43		190		107		83		78
incl. Other adjustments to EBITDA (non-recurring items)	(1,368)	(732)	(636)			(87)		(756)		(445)		(311)		(70)
Operating profit/ (loss)	8,192	7,915	277			3		544		1,318		(774)		(59)
Adjusted EBITDA	12,786	9,375	3,411			36		2,719		2,008		712		35
Adjusted EBITDA margin	10%	12%	(2) pp					9%		8%		1 pp

In 2021 results of Dairy Products segment are included in Oil and Fat segment due to consolidation of these two businesses. For comparison purpose financial results of the previous years were corrected accordingly. 

Sales volumes to third parties in 12M and 4Q 2021

Thousand tonnes	Year ended		Variance					Three months ended		Variance
31 December 2021	31 December 2020		Units		%	31 December 2021		31 December 2020	Units	%
---	---	---	---	---	---	---	---	---	---	---	---
Meal	582		589		(7)	(1)		139	146	(7)	(5)
crude oil	391		384		7	2		71	98	(27)	(27)
industrial fats	335		310		25	8		96	91	5	6
dry whey mixes	15		15		-	6		4	4	-	14
consumer oil&fat products	325		341		(16)	(5)		91	94	(3)	(4)
consumer dairy products	14		13		1	9		4	3	-	11

In 12M21 in comparison to 12M20 Sales of the Oil and Fat segment increased by 57% to RUB 125,237 million partially due to rise of sales volume of industrial fats, crude oil and consumer dairy products.

Sales price of bottled sunflower oil to retail in Russia did not exceed established by Russian Government limit of 95 RUB/l incl. VAT at the plant during the first 9M21.

Cost of sales in 12M21 in comparison to 12M20 increased due to higher costs of raw materials, including sunflower seeds, sunflower and tropical oil.

Distribution and selling expenses increased as the result of export duties on sunflower oil imposed by Russian Government starting from September 2021.

Other adjustments to EBITDA (non-recurring items) in 12M21 changed mainly due to negative dynamics in forex losses in 12M20 and higher provisions for bad debts in 12M21.

KEY CONSOLIDATED CASH FLOW INDICATORS (NOT IFRS PRESENTATION*)

The key consolidated cash flow indicators presented according to management accounts methodology

in mln Roubles	Year ended		Variance		Three months ended		Variance
31 December 2021	31 December 2020	Units	%	31 December 2021	31 December 2020	Units	%
Net cash from operating activities, incl.	30,733	12,117	18,616	154	(1,522)	(12,560)	11,037	88
Operating cash flow before working capital changes	46,821	31,899	14,923	47	16,509	11,528	4,981	43
Working capital changes	(12,409)	(17,748)	5,340	30	(15,876)	(23,041)	7,165	31
Net cash from investing activities, incl.	(41,276)	(13,494)	(27,782)	(206)	(4,198)	(3,627)	(570)	(16)
Purchases of property plant and equipment and inventories intended for construction	(13,770)	(14,066)	296	2	(4,955)	(3,976)	(979)	(25)
Acquisition of SolPro assets	(28,735)	0	(28,735)	-	-	-	-	-
Net cash from financing activities	45,387	10,892	34,494	317	(4,721)	18,512	(23,233)	-
Net effect of exchange rate changes on cash and cash equivalents	(248)	180	(429)	-	(62)	(111)	49	44
Net increase / (decrease) in cash and cash equivalents	34,595	9,696	24,899	257	(10,502)	2,214	(12,717)	-

(*) See Appendix 4

Сash inflow corresponding to loans and interest repaid as the result of SolPro assets acquisition is included in line Net cash from financing activities.

The key investments in property, plant and equipment and inventories intended for construction during 12M21 were made in the Meat segment in the amount of RUB 8,052 million (12M20: RUB 8,750 million) due to the purchases related to the construction project in the Russian Far East. Investments in the Oil and Fat segment in the amount of RUB 2,058 million (12M20: RUB 1,784 million), Agriculture segment in the amount of RUB 2,660 million (12M20: RUB 2,038 million) and Sugar segment in the amount of RUB 1,000 million (12M20: RUB 1,494 million) mainly relate to purchases of machinery and equipment for production facilities renewal and maintenance.

Debt position and liquidity management

in RUB million	31 December 2021	31 December 2020	Variance
Units	%
Gross debt	172,724	114,929	57,795	50
Short-term borrowings	108,749	51,753	56,996	110
Long-term borrowings	63,975	63,176	799	1
Cash and cash equivalents, bank deposits and bonds	(99,315)	(46,029)	(53,286)	(116)
Short-term cash, deposits and bonds	(65,344)	(12,064)	(53,280)	(442)
Long-term cash, deposits and bonds	(33,971)	(33,965)	(6)	(0)
Net debt	73,409	68,900	4,509	7
Short-term borrowings, net	43,405	39,689	3,716	9
Long-term borrowings, net	30,004	29,211	793	3
Adjusted EBITDA (LTM4)	48,060	31,984	16,076	50
Net debt/ Adjusted EBITDA (LTM)	1.53	2.15	(0.6) pp
Adjusted EBITDA (LTM)5 without other operating income/expenses	48,314	32,435	15,879	49
Net debt/ Adjusted EBITDA (LTM)5 without other operating income/expenses	1.52	2.12	(0.6) pp

Net finance income/ (expense)

in RR million	Year ended		Variance		Three months ended		Variance
31 December 2021	31 December 2020	Units	%	31 December 2021	31 December 2020	Units	%
---	---	---	---	---	---	---	---	---
Net interest expense	(5,499)	(4,805)	(694)	(14)	(1,496)	(1,085)	(411)	(38)
Gross interest expense	(10,567)	(6,448)	(4,119)	(64)	(3,242)	(1,558)	(1,685)	(108)
Reimbursement of interest expense	5,068	1,643	3,425	208	1,746	473	1,274	269
Interest income	8,611	7,165	1,446	20	2,303	2,535	(232)	(9)
Net gain/ (loss) from bonds held for trading	(2)	(16)	14	87	1	0	0	162
Other financial income, net	(705)	(1,844)	1,139	62	(216)	(353)	137	39
Net foreign exchange gain/ (loss)	(111)	(1,234)	1,123	91	(61)	(116)	55	47
Other financial income / (expenses), net	(594)	(610)	16	3	(155)	(237)	82	35
Total net finance income/ (expenses)	2,405	500	1,905	381	592	1,098	(506)	(46)

Net debt increased at 31 December 2021 compared at 31 December 2020 as a result of an increase in short-term borrowings.

In 12M21 Rusagro continued to enjoy benefits from the state agriculture subsidies programme. The Rusagro 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 12M21 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 12M20 in the sum of RUB 500 million increased to RUB 2,405 million in 12M21 as the result of negative dynamics in forex losses in 12M20 and increase in interest income on bank deposits in 12M21, partially compensated by lower interest income of SolPro loans.

________________________________

(1) The exchange rates used for translation of RUB 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 Rusagro 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".

(5) Starting from the beginning of 2020 part of other operating income and expensed (recurring items) was included in Adjusted EBITDA calculation. Figures of 2021 and 2020 calculated using prior periods' logic (excluding other operating income/expenses) are shown in table Debt position and liquidity management above and in the diagram with Net debt/ LTM EBITDA trend analysis for comparative purposes

NOTE

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

Agricultural:

Rusagro currently controls one of the largest land banks among Russian agriculture producers, with 688 thousand hectares of land under control located in the highly fertile Black Earth region of Russia (in the Belgorod, Tambov, Voronezh, Kursk, Orel regions), in Saratov region and in the Far East Primorye 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 corn, sunflower seeds and soybeans. These products are partially consumed by the Meat and Oil and Fat segments, supporting a synergistic effect and lowering price change risk.

Oil and Fat:

Rusagro is the leading crude sunflower oil and consumer margarine producer, second largest industrial fats and mayonnaise producer in Russia with products sold under eleven key brands, such as EZhK, Schedroye Leto, Mechta Khozyaiki, umbrella brand Ya Lublu Gotovit (includes Moskovskiy Provansal, Novosibirskiy Provansal and Saratovskiy Provansal), Rossiyanka and Saratovskiy Slivochniy, Benefitto, Maslava and Leto Krasno (红色夏日), which is sold on the Chinese market. Rusagro also produces dry industrial mixes, cheeses, butter and cream sold under three brands: Milie, Syrnaya Kultura and Ya Lublu Gotovit. Rusagro owns four crushing and two oil & fats plants and leases two milk processing plants. Owning its sunflower and soy oil production allows Rusagro to control the source of the sunflower and soybean oil required to produce oil and fats products.

Sugar:

Rusagro is one of the leading Russian sugar producers (№2 in Russia and №1 on cube white sugar market), producing sugar from sugar beet at nine production sites in four regions. Group produces white and brown sugar sold under the brands Russkii Sakhar, Chaikofsky, Mon Cafeand Brauni. The Sugar segment is vertically integrated and sugar beets are supplied by Rusagro's Agriculture segment, which ensures a consistent supply. The sugar segment also operates a cereal plant and sells buckwheat and rice under the brand Tyoplye Traditsii.

Meat:

Rusagro is №3 largest pork producer in Russia in Russia. It operates large commercial pig breeding complexes adhering to best practices regarding biosecurity standards, nucleus farms, compound feed plants, slaughterhouses and meat processing plants in Tambov and Belgorod Regions and in the Russian Far East. Since 2016, Rusagro sells retail products under its own brand Slovo Myasnika (Butcher's word).

CONFERENCE CALL

Rusagro management is organizing a conference call on Company's 12M and 4Q 2021 financial results for investors and analysts.

Details of the call:

Date:	28 February 2022
Time:	10:00 AM (Moscow) / 07:00 AM (London)
Subject:	ROS AGRO PLC 12M and 4Q 2021 Financial results
Password:	043773
Link:	https://ib-translations.zoom.us/j/88086186455?pwd=YUtyTlcxREtoSitwSWpCK2ZSWDlVUT09

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.

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 2021 (in RUB thousand)

	Year ended 31 December		Three months ended 31 December
	2021	2020	2021	2020
Sales	222,932,439	158,971,035	65,356,350	50,208,835
Net gain/(loss) on revaluation of biological assets and agricultural produce	3,409,309	5,890,447	(7,160,698)	461,484
Cost of sales	(169,248,281)	(121,132,658)	(46,704,627)	(37,374,419)
Net gain/(loss) from trading derivatives	(5)	10,552	-	-
Gross profit	57,093,462	43,739,376	11,491,025	13,295,900
Distribution and selling expenses	(10,475,137)	(9,760,841)	(4,053,794)	(3,252,990)
General and administrative expenses	(10,975,898)	(7,377,449)	(2,653,301)	(1,891,956)
Reversal of provision/(provision) for impairment of loans issued	4,574,481	(5,070,598)	924,914	(1,813,877)
Other operating income/(expenses), net	2,334,177	2,293,017	1,132,615	1,110,454
Operating profit / (loss)	42,551,085	23,823,505	6,841,459	7,447,531
Interest expense	(5,498,991)	(4,804,995)	(1,496,062)	(1,084,823)
Interest income	8,610,888	7,164,816	2,303,114	2,585,844
Net (loss)/gain from bonds	(1,630)	(15,698)	732	279
Other financial income/ (expenses), net	(705,356)	(1,844,130)	(215,617)	(352,567)
Profit before income tax	44,955,996	24,323,498	7,433,626	8,596,264
Income tax expense	(3,522,144)	(26,771)	(1,421,872)	22,142
Profit for the period	41,433,852	24,296,727	6,011,754	8,618,406
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	41,433,852	24,346,213	6,011,754	8,667,892
Profit is attributable to:
Owners of ROS AGRO PLC	41,477,865	24,359,786	6,036,405	8,641,489
Non-controlling interest	(44,013)	(63,059)	(24,651)	(23,083)
Profit for the period	41,433,852	24,296,727	6,011,754	8,618,406
Total comprehensive income is attributable to:
Owners of ROS AGRO PLC	41,477,865	24,409,272	6,036,405	8,690,975
Non-controlling interest	(44,013)	(63,059)	(24,651)	(23,083)
Total comprehensive income for the period	41,433,852	24,346,213	6,011,754	8,667,892
Earnings per ordinary share for profit attributable to the owners of ROS AGRO PLC, basic and diluted (in RR per share)	1,541.57	905.39	224.35	321.17

Appendix 2. Segment information for the Year ended 31 December 2021 (in RUB thousand)

12M 2021	Sugar	Meat	Agriculture	Oil and Fat	Other	Eliminations	Total
Sales	36,360,566	39,628,064	41,881,010	125,236,601	719,452	(20,893,254)	222,932,439
Net gain/ (loss) on revaluation of biological assets and agricultural produce	-	(370,486)	2,609,949	-	-	1,169,846	3,409,309
Cost of sales	(26,850,141)	(33,744,934)	(18,773,771)	(108,855,523)	(371,867)	19,347,955	(169,248,281)
incl. Depreciation	(2,766,162)	(3,965,508)	(2,547,072)	(2,877,234)	(9,186)	(85,607)	(12,250,769)
Net gain/ (loss) from trading derivatives	-	(5)	-	-	-	-	(5)
Gross profit	9,510,425	5,512,639	25,717,188	16,381,078	347,585	(375,453)	57,093,462
Distribution and Selling, General and administrative expenses	(3,958,396)	(5,728,548)	(3,396,730)	(7,463,073)	(2,646,176)	1,741,888	(21,451,035)
incl. Depreciation	(72,862)	(910,976)	(357,854)	(348,591)	(90,102)	85,607	(1,694,778)
Other operating income/(expenses), net	677,174	1,353,391	598,467	(726,058)	27,175,376	(26,744,173)	2,334,177
incl. Reimbursement of operating costs (government grants)	576,559	516,862	546,424	495,720	-	-	2,135,565
incl. Other adjustments to EBITDA (non-recurring items)	105,924	489,812	(37,563)	(1,368,049)	27,067,942	(25,805,013)	453,053
Reversal of provision/(provision) for impairment of loans issued	-	-	-	-	4,574,481	-	4,574,481
Operating profit / (loss)	6,229,203	1,137,482	22,918,925	8,191,947	29,451,266	(25,377,738)	42,551,085
Adjustments:
Depreciation included in Operating Profit	2,839,024	4,876,484	2,904,926	3,225,825	99,288	-	13,945,547
Other adjustments to EBITDA (non-recurring items)	(105,924)	(489,812)	37,563	1,368,049	(27,067,942)	25,805,013	(453,053)
Net gain/ (loss) on revaluation of biological assets and agricultural produce	-	370,486	(2,609,949)	-	-	(1,169,846)	(3,409,309)
Reversal of provision/(provision) for impairment of loans issued	-	-	-	-	(4,574,481)	-	(4,574,481)
Adjusted EBITDA*	8,962,303	5,894,640	23,251,465	12,785,821	(2,091,869)	(742,571)	48,059,789

* Non-IFRS measure

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

12M 2020	Sugar	Meat	Agriculture	Oil and Fat	Other	Eliminations	Total
Sales	28,112,519	32,434,214	34,347,506	79,726,251	631,108	(16,280,563)	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)	(64,547,430)	(477,625)	11,566,042	(121,132,658)
incl. Depreciation	(2,605,853)	(3,716,132)	(2,861,216)	(542,826)	(10,639)	(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	15,178,821	153,483	(1,725,292)	43,739,376
Distribution and Selling, General and administrative expenses	(3,399,788)	(2,713,324)	(3,732,770)	(6,730,675)	(1,704,354)	1,142,621	(17,138,290)
incl. Depreciation	(83,738)	(218,146)	(386,864)	(184,327)	(184,305)	75,387	(981,993)
Other operating income/(expenses), net	602,466	653,934	459,868	(533,103)	15,582,175	(14,472,323)	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	(732,371)	15,526,199	(13,936,656)	1,813,629
Reversal of provision/(provision) for impairment of loans issued	-	-	-	-	(5,070,598)	-	(5,070,598)
Operating profit / (loss)	4,087,589	2,317,887	15,597,274	7,915,043	8,960,706	(15,054,994)	23,823,505
Adjustments:
Depreciation included in Operating Profit	2,689,591	3,934,278	3,248,080	727,153	194,944	-	10,794,046
Other adjustments to EBITDA (non-recurring items)	(425,102)	(459,983)	(71,372)	732,371	(15,526,199)	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)
Reversal of provision/(provision) for impairment of loans issued	-	-	-	-	5,070,598	-	5,070,598
Adjusted EBITDA*	6,352,078	6,473,484	15,191,462	9,374,567	(1,299,951)	(4,107,567)	31,984,073

Appendix 3. Consolidated statement of financial position as at 31 December 2021

(in RUB thousand)

	31 December 2021	31 December 2020
ASSETS
Current assets
Cash and cash equivalents	46,462,179	11,866,798
Restricted cash	47	143,637
Short-term investments	21,001,760	19,583,523
Trade and other receivables	12,558,401	9,512,286
Prepayments	5,414,032	2,941,224
Current income tax receivable	1,532,726	646,162
Other taxes receivable	8,321,193	5,506,675
Inventories and short-term biological assets	77,509,033	69,001,368
Total current assets	172,799,371	119,201,673
Non-current assets
Property, plant and equipment	119,159,412	87,519,088
Inventories intended for construction	1,604,570	3,353,330
Right-of-use assets	7,346,538	6,934,567
Goodwill	2,364,942	2,364,942
Advances paid for non-current assets	7,355,467	6,905,003
Long-term biological assets	2,744,863	2,528,128
Long-term investments and receivables	42,527,657	42,692,320
Investments in associates	359,782	257,782
Deferred income tax assets	4,835,268	3,566,168
Other intangible assets	1,144,057	619,793
Other non-current assets	79,125	205,793
Total non-current assets	189,521,681	156,946,914
Total assets	362,321,052	276,148,587
LIABILITIES and EQUITY
Current liabilities
Short-term borrowings	108,748,840	51,753,475
Lease liabilities	1,130,831	943,859
Trade and other payables	15,440,635	16,016,138
Provisions	494,709	179,796
Current income tax payable	464,471	69,546
Other taxes payable	7,454,558	4,096,199
Total current liabilities	133,734,044	73,059,013
Non-current liabilities
Long-term borrowings	63,975,025	63,175,720
Government grants	9,325,530	8,536,899
Lease liabilities	5,535,014	4,855,508
Deferred income tax liability	1,876,244	487,049
Total non-current liabilities	80,711,813	77,055,176
Total liabilities	214,445,857	150,114,189
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	1,363,177
Retained earnings	120,080,307	98,185,038
Equity attributable to owners of ROS AGRO PLC	147,929,625	126,034,356
Non-controlling interest	(54,430)	42
Total equity	147,875,195	126,034,398
Total liabilities and equity	362,321,052	276,148,587

Appendix 4. Consolidated statement of cash flows for the Year ended 31 December 2021 (in RUB thousand) - NOT IFRS PRESENTATION (*)

	Year ended
	31 December 2021	31 December 2020
Cash flows from operating activities
Profit before income tax	44,955,996	24,323,498
Adjustments for:
Depreciation and amortization	13,945,546	10,794,046
Interest expense	10,566,994	6,448,154
Government grants	(7,846,960)	(3,216,290)
Interest income	(8,610,888)	(7,164,816)
Loss/ (gain) on disposal of property, plant and equipment	4,424	(335,640)
Net (gain) / loss on revaluation of biological assets and agricultural produce	(3,409,309)	(5,890,447)
Change in provision for impairment of loans issued	(4,574,481)	5,070,598
Interest expense on leases	591,558	580,276
The result from early repayment of the loan	-	131,363
Realised deferred day-one gain	(552,748)	(993,558)
Change in provision for net realisable value of inventory	1,240,531	732,238
Change in provision for impairment of receivables and prepayments	824,151	13,592
Foreign exchange (gain) / loss, net	(59,354)	1,698,846
Lost / (reversal of) harvest write-off	272,407	188,536
Net (gain) / loss from bonds held for trading	1,630	15,698
Settlement of loans and accounts receivable previously written-off	(1)	-
Change in provision for impairment of advances paid for property, plant and equipment	26,084	(29,620)
Change in other provisions	314,918	179,796
Dividend income	(754,538)	(560,568)
Loss on disposal of other assets	256,144	-
Gain on SolPro loans redemption	(515,233)	-
Other non-cash and non-operating expenses, net	144,326	(87,031)
Operating cash flow before working capital changes	46,821,197	31,898,671
Change in trade and other receivables and prepayments	(6,377,712)	(1,920,133)
Change in other taxes receivable	(2,814,518)	(1,157,275)
Change in inventories and biological assets	(6,577,388)	(15,169,512)
Change in trade and other payables	82,068	(209,572)
Change in other taxes payable	3,278,845	708,164
Cash generated from operations	34,412,492	14,150,343
Income tax paid	(3,679,541)	(2,033,327)
Net cash from operating activities	30,732,951	12,117,016

Appendix 4 (continued). Consolidated statement of cash flows the Year ended 31 December 2021 (in RUB thousand) - NOT IFRS PRESENTATION (*)
	Year ended
	31 December 2021	31 December 2020
Cash flows from investing activities
Purchases of property, plant and equipment including SolPro assets acquisition	(42,029,048)	(12,405,295)
Purchases of other intangible assets	(1,042,618)	(418,808)
Purchases of land lease rights	(68,772)	(86,729)
Proceeds from sales of property, plant and equipment	896,286	687,757
Purchases of inventories intended for construction	(476,322)	(1,660,923)
Purchases of associates	(102,000)	(92,712)
Purchases of other investments	(19,083)	-
Movement in restricted cash	140,894	(143,454)
Dividends received	754,600	560,568
Proceeds from sales of other assets	217,591	-
Proceeds from sales of other investments	18,000	-
Other investing activities	434,632	65,938
Net cash from investing activities	(41,275,840)	(13,493,658)
Cash flows from financing activities
Proceeds from borrowings	107,856,022	77,932,773
Repayment of borrowings	(52,668,951)	(65,389,365)
Interest paid	(4,591,935)	(4,196,451)
Change in cash on bank deposits	(18,000,000)	-
Purchases of bonds with maturity over three months*	-	(197,523)
Proceeds from sales of bonds with maturity over three months*	220,282	-
Purchases of loans issued*	(2,256,313)	(13,829)
Loans repaid*	22,959,494	1,012,854
Interest received*	8,786,038	4,808,803
Proceeds from government grants	2,879,218	2,192,483
Purchases of non-controlling interest	(66,000)	-
Dividends paid to owners Ros Agro PLC	(19,417,565)	(5,134,426)
Repayment of lease liabilities	(335,167)	(123,044)
Other financial activities	21,631	-
Net cash from  financing activities	45,386,754	10,892,275
Net effect of exchange rate changes on cash and cash equivalents	(248,484)	180,386
Net increase/ (decrease) in cash and cash equivalents	34,595,381	9,696,019
Cash and cash equivalents at the beginning of the period	11,866,798	2,170,779
Cash and cash equivalents at the end of the period	46,462,179	11,866,798

(*) 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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