April 2, 2012

 

Agrowill Group, AB signs futures contracts for 2012 harvest sale

Agrowill Group, AB has signed futures contracts for a part of harvest 2012 sale amounting to around LTL11 million (US$4.2 million).

 

In order to avoid fluctuation of prices the Group has already chosen this kind of sales for 10,000 tonnes of wheat and 25,000 thousand tonnes of winter rape harvest.

 

At a given moment prices at international commodities markets for wheat and rapeseed are at the highest since September 2011.

 

As Agrowill Group, AB plans it, the total amount of harvest in 2012 should reach 50,000 tonnes of grain with a possible increase in case of friendly natural conditions.

 

"From the summer of 2010, stable prices of grain have been preserved in the global market. However, the forecasts for the future harvest of the major markets, demand and supply ratio, state of crops after the winter, restrictions on export in some countries and a few other factors influence prices and imposes conditions them to variant significantly. The Managing Board of the Company has approved a new strategy on harvest sales. We plan to sell up to 30% of expected harvest upon a futures contract during March-April of every harvest year, "-Vladas Bagavicius, Chairman of the Board of the Agrowill Group, AB explains.

 

As he puts it, the mentioned possibility for this year has been already realised, indeed.

 

Traditionally companies uses to store grain, while looking forward to an increase of prices, but a risk of possible variation of markets and reduction of prices should be assumed in that case.

 

Agrowill Group thinks there is no purpose to assume such an ill-grounded risk. Futures sale of part of the harvest upon an attractive price helps to ensure stable industrial activity and finances of a company in order to gain good financial indexes and take a conservative risk.

 

Revenues from grain sale reach about 40% of Agrowill Group's annual revenues.

 

The Group will cultivate grain, rape and fodder cultures, necessary for its companies work, within 22,000 hectares of land in 2012.

 

Agrowill Group is pleased with a successful year 2011. The turnover has grown by 25% to LTL56.58 million (US$21.85 million), compared to 2010. EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization). They increased from LTL8.7 million (US$3.4 million) in 2010 to LTL12.6 million (US$4.9 million) in year 2011.

 

Founded in 2003 Agrowill Group is centrally managed and one of the largest primary agricultural production companies in Eastern Europe. Currently Agrowill Group unites more than 40 companies, which by proprietary or lease rights manage 30,500 hectares agricultural land, manages more than 700 units of various techniques, 250,000 square metres of multi-purpose building, which hosts a variety of manufacturing processes and keeps more than 26,000 dairy cows.

 

Agrowill Group's largest shareholders- "Vretola Holdings Limited, Volemer Holdings Limited, Eastern Agro Holdings, UAB. The Company's shares are listed on the NASDAQ OMX Vilnius and Warsaw stock exchanges.