Page 153 - RusRPTJun21

of RUB 90 (39% ETR).
9.2.4 Construction & Real estate corporate news 9.2.5 Retail corporate news
9.2.6 Agriculture corporate news
RusAgro has released strong 1Q21 IFRS results. EBITDA of RUB11bn was a 2.2x y/y increase and 11% ahead of our bullish estimates.
The company benefited from still-elevated prices amid a certain stabilisation (up a blended 5% q/q and 50% y/y), while profitability improved 7pp y/y to a 22% EBITDA margin in 1Q21. During the conference call, management guided that the impressive results were sustainable for 2Q21. We have fine-tuned our model, and now see 2021F EBITDA growing 15% y/y to a new record high level of RUB37bn (6% higher than in our previous forecast). Longer term, we forecast stabilisation, with 2021-25F EBITDA and net income 5% higher than previously. Thus, we lift our 12-month Target Price 7% to $15.00. As this implies an ETR of 33%, we maintain our Buy recommendation.
The stock has gained 25% since the beginning of the farming year in September, and now demands 2021F EV/EBITDA of 5.1x, which we view as appealing. The company made dividend-supportive comments on the call, and we forecast a 12-month yield of 12% based on a 50% payout assumption.1Q21 IFRS results. Rusagro had previously released its operating data, which featured a 52% y/y increase in revenues on an elevated pricing environment (up a blended 50% y/y), while price capping initiatives have brought certain stabilisation (up 5% q/q). The consolidated EBITDA margin gained 7pp y/y to 22%, while remaining largely unchanged q/q. EBITDA surged 2.2x y/y to RUB11bn, 11% ahead of our estimates, mostly on better margins, despite a more expensive cost base. During the quarter, the company generated RUB8.4bn in NOCF and spent RUB2bn in capex. Net debt declined 10% to RUB62bn while net debt/EBITDA reached 1.6x vs. 2.2x as of YE20.
Forecast revision. During the call, management said that the strong results were sustainable into 2Q21. We anticipate more details over the planting campaign and summer weather conditions. However, Rusagro sees the sugar planting area growing by as much as 8% y/y in the next season (after the 20% y/y decline in MY21), which we
153 RUSSIA Country Report June 2021 www.intellinews.com