KSG Agro S.A.

Earnings Release • Sep 15, 2021

The Board of KSG Agro S.A. headquartered in Luxembourg("the Issuer") hereby informs that on September 15, 2021, the ratingcommittee of RA "Expert-Rating" decided to update a long-term creditrating of KSG Agro S.A. at the level BBB according to the agency'sinternational scale. The borrower or the particular debt instrument withrating BBB is characterized by high creditworthiness compared to otherUkrainian borrowers or debt instruments. The level of creditworthinessis susceptible to the impact of adverse commercial, financial andeconomic conditions. The Agency updated the credit rating after theanalysis of data of the consolidated statements of KSG Agro S.A for thefirst half of 2021. According to the results of the analysis, thefollowing main conclusions have been drawn:1.Throughout the period from 30.06.2020 to 30.06.2021 the key balancesheet indicators of KSG Agro S.A. demonstrated multidirectionaldynamics. In particular, the shareholders' equity of the Company grew by52,46% up to USD 14,47 mln, including due to its profitable activity andthe reduction of retained loss. For the same period, the liabilities ofKSG Agro S.A. decreased by 12,52% down to USD 55,7 mln. The decrease inliabilities of KSG Agro S.A. was mainly due to selling three subsidiarycompanies in May 2021. The corresponding movement of indicators resultedin an increase in the ratio between shareholders' equity and liabilitiesof KSG Agro S.A. by 11,07 p.p. up to 25,98%.2.Accounts receivable and payable of KSG Agro S.A. for the period from30.06.2020 to 30.06.2021 decreased significantly: by 75,15% and 62,89%,respectively, which indicates an improvement in settlement and paymentdiscipline in the Company. In the structure of long-term liabilities ofKSG Agro S.A. as of 30.06.2021, the predominant share was occupied bylong-term loans: their volume in the analyzed period grew by 7,52% up toUSD 27,25 mln. At the same time, short-term bank and other loans,obtained by KSG Agro S.A., for the period from 30.06.2020 to 30.06.2021decreased by 54,19% down to USD 2,91 mln.3.The current macroeconomic situation did not significantly affect thesales volumes of the Company's products. In particular, net salesrevenue for the first half of 2021 compared to the same period of 2020decreased by 12,08% to USD 6,81 mln. The amount of net profit, receivedby KSG Agro S.A. according to the results of the first half of 2021,grew by USD 13,42 mln up to USD 13,7 mln compared to the first half of2020. The main factor in the growth of the Company's profit in theanalyzed period was the sale of its three subsidiaries. Therefore,according to the results of the first half of 2021, KSG Agro S.A.demonstrated high profitability indicators.4.Analysis of the consolidated financial statements of KSG Agro S.A.showed that EBITDA in the first half of 2021 compared to the first halfof 2020 decreased by 22,49% and amounted to USD 2,69 mln. At the sametime, the ratio between EBITDA for the two quarters of 2021 and thevolume of loans as of 30.06.2021 amounted to 8,95%, which, although wasby 2,03 p.p. less than for the same period of 2020, but testified to theCompany's ability to service its debt liabilities.Therefore,having analyzed the financial statements of KSG Agro S.A. for the firsthalf of 2021, the Agency notes an increase in the level of shareholders'equity coverage with liabilities, a profitable activity of the Company,and a good level of the ratio between EBITDA and loans.