Ekotechnika AG

Earnings Release • Jun 30, 2014

News Details

Corporate | 30 June 2014 18:14

Ekotechnika GmbH publishes figures for the first half of fiscal year 2013/14

DGAP-News: Ekotechnika GmbH / Key word(s): Half Year Results/Bond

30.06.2014 / 18:14

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Ekotechnika GmbH publishes figures for the first half of fiscal year
2013/14

• Sales and earnings adversely affected by exchange rate effects in the
  seasonally weaker first half
• EBITDA of EUR 0.5 million, EBIT of EUR -1.1 million
• Successful reduction in receivables leads to positive operating cash flow

Walldorf, 30 June 2014 - Ekotechnika GmbH, the German holding company of
the Ekoniva Technika Group, the largest dealer of international
agricultural machinery in Russia, generated sales of EUR 65.1 million
(previous year: EUR 71.2 million) in the first half of the financial year
2013/14 (30 September). The reduction in consolidated sales in what is
traditionally the weaker half-year due to seasonal factors is exclusively
attributable to exchange rate effects. The company's sales in roubles were
about 5% higher in the period from October 2013 to March 2014. Compared to
the prior year period, the rouble depreciated against the euro from 40.25
to 46.09. Sine the interim reporting date on 31 March 2014, the Russian
currency has recovered markedly from 49.05 to 46.02 (as at 27 June).

For the first half of fiscal year, the exchange rate effects on the
operational activities of Ekotechnika were negative, as the value of the
rouble has continued to decline. This results from the fact that the
valuation of stocks as of 31 March 2014 was made at a lower exchange rate
than at the time of purchase. Conversely, when selling machines based on
EUR or USD prices respectively, the prices will be converted in roubles at
the current rate, so that falling prices lead to higher sales.

Revenues from the sale of agricultural machinery are the biggest revenue
item in the first half-year, which accounted for EUR 48.2 million or 74%.
John Deere, the world's largest agricultural equipment manufacturer, is the
Group's main supplier and accounted for about two thirds of its sales.
Other important suppliers include JCB, Väderstad and GEA. Revenues from
spare parts sales showed a clearly positive trend and picked up by 56% to
EUR 13.4 million (21% of total sales). The Service segment and Other
Revenues increased from EUR 2.1 million to EUR 2.6 million (5% of total
sales). The gross profit rose by 6% to approx. EUR 14 million due to the
increase in the high-margin spare parts business.

The above-mentioned exchange losses totalling approx. EUR 6.2 million had
an adverse impact on earnings. EBITDA amounted to EUR 0.5 million, compared
to EUR 1.9 million in the previous year. First-half EBIT stood at EUR -1.1
million (previous year: EUR 0.8 million), while the net loss for the period
amounted to EUR -10.6 million (previous year: EUR -5.3 million). As
described above, the company expects positive exchange rate effects in the
second half of the year, which will lead, from today's perspective, to
improved results.

Successful reduction in receivables leads to positive operating cash flow

As announced in March, the company achieved considerable progress in
reducing its trade receivables. This had a positive cash effect of EUR 9.2
million. Cash flow from operations totalled EUR 25.3 million and amounted
to EUR 20.2 million after interest and taxes.

Overall, the preconditions for continued growth in Russia's agricultural
sector remain intact. Says Wolfgang Bläsi, Managing Director of Ekotechnika
GmbH: "It is the medium-term objective of the Russian government that
roughly 85% of all key agricultural commodities consumed in Russia are
produced locally. To achieve this goal, farmers must continue to invest in
highly efficient agricultural machinery. While the situation in 2014 is
clearly dominated by the weakness of the rouble and the more difficult
financing conditions for farmers resulting from the Ukraine crisis, the
medium-term outlook of Russia's agricultural machinery market remains
positive." In light of the current difficult business environment and a
weakening market as a whole, the management is satisfied with the stable
development of the business operations.

Capital base strengthened by EUR 6 million

With a view to strengthening its equity capitalisation, Ekotechnika
allocated EUR 6 million to its capital reserve after the balance sheet date
on 31 March. Together with the anticipated reduction in seasonal influences
and exchange rate effects in the second half of the year, this will clearly
improve the company's currently negative equity base.

The full unaudited report for the first six months of 2013/14 is available
on the company's website at
www.ekotechnika.de/en/investor-relations/documents.

End of Corporate News

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30.06.2014 Dissemination of a Corporate News, transmitted by DGAP - a
company of EQS Group AG.
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Language: English
Company: Ekotechnika GmbH
Johann-Jakob-Astor-Str. 49
69190 Walldorf
Germany
Phone: +49 (0) 6227 3 58 59 60
E-mail: info@ekotechnika.de
Internet: www.ekotechnika.de
ISIN: DE000A1R1A18
WKN: A1R1A1
Listed: Freiverkehr in Berlin, Düsseldorf, Hamburg, Hannover,
München, Stuttgart (bondm); Frankfurt in Open Market

End of News DGAP News-Service

275972 30.06.2014