Page 164 - RusRPTApr21

business and fewer promotions during the pandemic. SG&A costs rose 4.9ppts y/y as a percentage of revenue due to the burden of fixed costs during the period when most of the company’s stores were closed. As a result, Obuv Rossii’s 2020 EBITDA dropped 36% y/y to RUB2.3bn for a 21.4% margin (vs. 26.1% a year ago). The company generated net income of RUB868mn in 2H20 after reporting a net loss in 1H20, taking the FY20 tally to RUB563mn, which is only a third of the figure reported a year ago. The contraction in Obuv Rossii’s EBITDA resulted in increased leverage (ND/EBITDA of c. 5.5x) as of YE20. Although OpCF was at negative RUB497mn in 2020, this was less than the figure reported in 2019 (negative RUB2.9bn). Working capital improved the most due mainly to increased payables and a less significant build-up in inventory vs. 2019.
9.2.6 Agriculture corporate news
RusAgro reported strong 4Q20 and 2020 IFRS results that lagged behind consolidated forecasts due to eliminations. The company managed to sustain its record q/q profitability in 4Q20, as the agriculture segment’s extraordinary results offset lower margins in the sugar, pork and oil-and-fats divisions.
The sugar segment generated EBITDA of c. RUB1.3bn in 4Q20 for a 19.1% margin vs. 21.3% in 3Q20 due to increased beet costs for the sugar produced and sold in 4Q20. The meat business brought in RUB1.5bn for a 16.1% margin, down 15.7ppts q/q due to lower prices and increased production costs amid more expensive grains. The oil- and-fats division’s EBITDA margin more than halved q/q to c. 8% in 4Q20, which we associate with increased production costs due to higher sunflower prices. The agriculture business compensated for lower q/q profitability in other segments with a record 51.9% EBITDA margin amid surging prices for soft commodities.
That said, consolidated EBITDA was weighed down by over RUB3bn in inter-segment eliminations, resulting in a consolidated EBITDA of RUB11.8bn (+53% y/y), which was 14% below our forecast (which did not account for eliminations). Rusagro’s 2020 EBITDA reached a historic level of almost RUB32bn (+65% y/y) with a c. 20% margin.
The 4Q20 bottom line was up 41% y/y to RUB5.8bn, while the FY20 tally soared 2.5x y/y to RUB24.3bn. The company’s OpCF dropped c. 43% y/y to RUB12.1bn in 2020 due to a build-up in working capital, mostly in inventories and biological assets. Capex fell 44% y/y to RUB13.5bn, while ND/EBITDA dropped to 2.1x at YE20 vs. 3.1x at YE19.
More importantly, the company’s BoD recommended 2H20 dividends of almost $140mn, or $1.04/GDR, implying a dividend yield of c. 8.5%.
164 RUSSIA Country Report April 2021 www.intellinews.com