Page 130 - RusRPTFeb21

9.2.6​ Agriculture corporate news
Rusagro​ has published its 4Q20 sales results, which showed revenue growth of 36% y/y​. This growth was driven by the company’s agriculture and oil & fats divisions on the back of strong pricing for their respective products. We believe that the strong price dynamics should bode well for 4Q20 margins.
● Oil & fats division.​ The sales volumes dynamics in Rusagro’s oil & fats division were mixed across various products, as bottled oil and industrial fats showed growth y/y, whereas sales volumes for other products dropped y/y. However, this was more than offset by the strong price growth y/y across all B2C and B2B products, which is possibly explained by solid demand, increased production costs (sunflower seeds) and a weaker ruble y/y. As a result, the segment was the largest contributor to Rusagro’s top line (c. 39% of 4Q20 revenue) and showed revenue growth of 36% y/y, reaching RUB24.2bn in 4Q20.
● Agriculture business.​ The agriculture division saw revenue surge 81% y/y to RUB19.6bn in 4Q20 amid a combination of soaring prices and solid sales volumes (especially in corn and soybean).
● Sugar division​. Sales volumes fell 52% y/y in 4Q20 to 140kt, while production decreased 24% y/y last quarter due to a smaller sugar beet
harvest and lower yields. On the other hand, the growth in the sugar price rose 79% y/y last quarter to c. RUB39/kg (+30% q/q). This helped contain the decline in sugar revenue to 11% y/y in 4Q20 despite sales volumes halving.
● Meat division​. Meat sales were up 16% y/y to 71kt in 4Q20. The average livestock price rose 13% y/y to c. RUB82/kg but retreated from the 3Q20 level, which is in line with seasonal demand patterns. The weighted average price in the pork segment (accounting for the sales mix of various meat products) was up c. 10% y/y, on our estimates, as prices for large cuts (which made up 51% of total meat sales in 4Q20) grew at a slower pace compared to livestock prices. All in all, increased sales volumes together with higher prices resulted in the segment’s revenue expanding 28% y/y to RUB9.6bn.
● Milk products.​ Rusagro showed revenue of c. RUB1bn from its milk business, accounting for c. 2% of the company’s 4Q20 revenue (excluding inter-segment eliminations).
9.2.7​ TMT corporate news
130 ​RUSSIA Country Report​ February 2021 www.intellinews.com
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