KSG Agro S.A.

Management Reports • Mar 16, 2020

TheBoard of KSG Agro S.A. headquartered in Luxembourg (the "Issuer")reports that it does not currently provide for the significant adverseeffects of the coronavirus COVID-19 epidemic on the Issuer's financialresults in 2020.Thecompany is resistant to fluctuations in exchange rates, because, at themoment, settlements in foreign currency do not occupy a significantshare in the total cost structure. During 2019, the Issuer restructuredmost of the debt in foreign currency, while freeing up reserves in theamount of more than $ 10 million. In addition, in order to minimizeexternal risks, starting in 2014, the Issuer implemented a program tobuild a vertically integrated structure, a closed production cycle andreduce production costs.Themain activity of the Issuer is pork production, and the main market isthe domestic market of Ukraine, where over the past week there has beenan increase in both price and demand for pork (by 12%). In addition,problems in international trade have led to the blocking of thecompetitive products import. All this leads to an increase in theIssuer's sales and income.Despitethis, the Board of the Issuer provides regular monitoring of thesituation related to the consequences of the spread of the coronavirusCOVID-19 and the impact of the epidemic on the Issuer's activities. Theissuer will provide more detailed information on the impact of COVID-19on the activities of KSG Agro S.A. and its financial results in theannual report for 2019.Inaddition, given the health and safety of employees, KSG Agro S.A. took anumber of measures to prevent the spread of COVID-19 at the Issuer'senterprises. Screening for staff temperature and disinfection activitiesare being carried out. Also, business trips and relocation of employeeswere reduced to the required minimum.