Page 179 - RusRPTMay21

forecasts unchanged, which are for flattish y/y EBITDA and EPS in 2021F, and mostly depend on the new season’s (MY22 from June) balances. Rusagro’s GDRs have added 8% YTD and now demand 2021F EV/EBITDA of 5x.”
VTBC has not changed its 12-month target price for the name of $14 that implies a 30% return and reiterated its BUY recommendation.
RusAgro’s total revenues rose 51% y/y to RUB51bn, mostly reflecting materially improved economics vs. the previous season, although they were 17% lower q/q on the seasonally high base for farming sector sales and stabilisation in prices after the state introduced capping initiatives.
The vegetable oil segment accounted for 54% of total revenues and saw almost flat y/y and q/q oil production volumes. Prices for consumer-oriented industrial fats gained 68% y/y and 17% q/q.
Sugar prices have been particularly volatile recently after they jumped by half in recent months and was the second largest contributor to earnings, with 17% of the total turnover of RUB8.6bn. Volumes gained 19% y/y to 202kt from a modest base, with a 22% contribution to VTBC’s annual forecast. The price was RUB39.30/kg (up 58% y/y, flat q/q) with stabilisation coming from price caps that were prolonged through June.
Meat revenues gained 26% y/y to RUB8.6bn as a 4% y/y advance in production on greater utilisation came together with 22% y/y price growth that we believe followed higher feeding costs across the segment.
Farming sales were seasonally low in 1Q21 at RUB6bn. Total growth of 35% y/y mostly corresponded to advances in grains (volumes up 2.5x; prices 17% higher), while oil crops underperformed (volumes down 42% y/y; prices 66-97% higher) as sales were greatly skewed to 4Q20 during harvesting.
“The company plans to publish its full IFRS accounts on 17 May, and the top line trends suggest a strong outlook. We keep our 2021F estimates for EBITDA and net income at RUB35bn and RUB19.5bn, respectively, implying flattish y/y results. However, we await details of the implementation of the tighter export regime for the new season and the final soft commodity balances for the new farming year (which starts in June),” VBTC said.
Rusagro’s GDRs have gained 8% YTD and 27% since the launch of the current season, reflecting record high financial results and dividend distribution (10% annualised yield).
179 RUSSIA Country Report May 2021 www.intellinews.com