Russian Black Earth Farming sees red in Q4 on winterkill damage

Black Earth Farming revealed that the cold winter had decimated its autumn-sown rapeseed crop, and caused substantial losses in wheat, as the farm operator unveiled a fourth-quarter in the red.

Shares in the group, which is listed in Stockholm but operates in Russia, closed down more than 7% at a 13-month low.

Sture Gustavsson, the group's chief executive said that after a "long and cold winter", only 800 hectares remained of the 8,500 hectares of rapeseed it had sown last autumn.

Some 74,400 hectares of winter wheat had survived, out of plantings Black Earth pegged in February at 82,000 hectares.

Nonetheless, with affected areas being reseeded, the group was on track to plant 200,000 hectares for this year's harvest, despite cold weather delaying the start of spring sowings.

Gustavsson noted a first quarter in which fell into an after tax loss of RUB270.4 million (US$9.21 million), compared with earnings of RUB1.83 million in the first three months of 2009 – its last quarter in the black.

He blamed the group's fall into the black on a lack of oilseeds sold in the quarter, with Black Earth's revenues of RUB412.6 million, down 11.4% year on year, gained from shifting less expensive crops, such as barley, corn and wheat.

However, the company has been actively selling inventory in order to avoid incurring excessive storage costs in the light of continued lack of short-term upside potential for grain prices, he said.

Shares ended down 7.7% at SKr21.50, their lowest finish since April last year.