Six months of AB Akola Group 117 0 Kommentare grain trade retreated, food production grew profitably - Seite 3

The ‘Farming’ segment with the revenue of EUR 25 million accounted for 3% of the Group's revenue. The gross loss from this activity was EUR 1.6 million, and the operating loss was EUR 3.1 million.

‘Loss is decreasing compared to Q1, but still, the results of farming companies are strongly influenced by global trends, with crop production having to be sold at prices 30-35% lower than last year. Although we sold 29% more crop production than at the same time last year, income from crop production fell by almost 9%, and the activity generated a loss of EUR 0.7 million due to increased operating costs, as the cost of producing the 2023 crop was 20-25% higher than in 2022. We sold almost 4% more milk than at the same time last year, but milk sales revenue shrank by almost 23%, and milk production was loss-making. While milk farm gate prices have been falling since autumn 2022, the cost of milk production is falling at a slower pace. There is good news - winter crops are overwintering and looking good," M. Šileika described the situation in the agricultural companies.

The ‘Other Products and Services’ segment that accounted for 1% of the Group’s revenue grew by 1% year-on-year to over EUR 10 million. The gross profit from this business was EUR 2.0 million, and the operating profit was EUR 0.05 million.

"It is difficult to compare the segment's results with previous periods when the results included various activities from other segments. However, as we have narrowed the segment’s activities down to the three main ones, we can see that both the scale of operations and profitability are increasing. All the activities in this segment have improved their results, with an 11% increase in veterinary pharmaceuticals, a 32% increase in revenue from pest control and hygiene products, and a 41% increase in revenue from extruded products, the major part of which is pet food. Focusing on premium products, we are producing and selling lower quantities of it, thus increasing the profitability of this activity, and this is already showing in the results, with the segment's gross profit up 24%," said M. Šileika.

About AB Akola Group

AB Akola Group (formerly AB Linas Agro Group), which changed its name in December, operates the largest agricultural and food production group in the Baltics, with 4.9 thousand employees and annual revenue of EUR 2 billion. The Group operates along the entire food production chain from field to fork, producing, preparing, and marketing agricultural and food products, and providing goods and services to farmers. The Group's financial year starts on 1 July. Last July, the Group acquired a ready-to-eat food production plant in Širvintos (Lithuania).

Attached:
Consolidated Unaudited Financial statements and Consolidated Interim Report of AB Akola Group for the six-month period ended 31 December 2023