Agroland Agribusiness post 51.1 million lei revenue and a net profit of 1.7 million lei, up 41%, in the first nine months of 2022

Agroland Agribusiness post 51.1 million lei revenue and a net profit of 1.7 million lei, up 41%, in the first nine months of 2022

Agroland Agribusiness (BVB: AAB), a Romanian entrepreneurial company, part of the Agroland group, specialized in the sale of inputs for agriculture, post 51.1 million lei operating revenue in the first nine months of 2022, a 130% increase compared to the same period last year, EBITDA of 3.2 million lei, a 110% appreciation and net profit of 1.7 million lei, a 41% increase compared to the same period last year.

In the third quarter of the year, the Agroland Agribusiness team managed to secure the client portfolio with traditional farmers who operate medium-large lands, with many of whom the collaboration started last year. In addition, we recorded an increase in invoiced clients from 215 in 9M 2021 to 286 in 9M 2022. Compared to the same period last year, the value of transactions increased due to the accelerated expansion of the covered area with sales representatives of Agroland Agribusiness, but also the diversification of the service and product portfolio intended for the setting up crops. Thus, at the turnover level, the highest increase was recorded for fertilizers, a 123% increase in the first nine months of 2022, up to 23.8 million lei, followed by grain trading activity, which generated revenues of 12.8 million lei, a more than 40 times increase. The third largest contributor to revenues was the category of pesticide, 11.7 million lei, an 18% increase, followed by the sale of seeds, with 7.9 million lei, a 40% appreciation,” stated Florin Radu, CEO of Agroland Agribusiness.

The company’s grain trading activity was strongly influenced by external factors, including the conflict in Ukraine and the foreign exchange market, aspects that influenced the price formation and the willingness of farmers to sell the harvested goods, these being corroborated with the price increases in the input market and with severe drought. The large quantities of goods from Ukraine that entered the Romanian market at low prices negatively influenced the prices of agricultural products in the country. Although, traditionally, Romania is an exporter of rapeseed, wheat, sunflower, and corn, large quantities of all these agricultural products were imported this year.

Also, according to Agroland Agribusiness data, the current agricultural year has been heavily influenced by drought, affecting grain and oilseed crops. The drought during the summer had a significant impact, especially on crops in the areas of eastern and southeastern Romania. The rest of the regions were indirectly and, to a lesser extent, influenced, especially in terms of lower harvest and quality, losses that were partly covered by the high price of grains relative to the costs per hectare for setting up the respective crops.

With the end of the third quarter, the prolonged drought gradually extended to the south and south-west regions, where, according to the National Meteorological Administration, are areas in which an extreme pedological drought is manifested, such as Moldova, Dobrogea, and areas of Muntenia. This context creates negative consequences for autumn crops, especially in terms of their growth rate and vegetative processes, which will be slower. In addition, the price of wheat rose on the European exchange above the threshold of 350 euros per ton only at the end of September, registering at that time the highest value in the last three months. The price of corn had the same growth trend, but because the final cost for the farmer was lower, it stopped selling the goods.

Thus, at the level of September 30, 2022, large grain stocks are recorded, which generate both storage and financing costs for farmers. In this context, including the prolonged drought this autumn, the most pressing issue for farmers is funding, with the need twice as great as in previous years. Therefore, in the company’s experience, distributors and banks limit the amounts exposed in the sector, trying to reduce their financial risk. As for farmers, they are currently waiting for rainfall, which could give them a different outlook on 2023 production.

“Despite all the difficulties encountered, we remain optimistic and confident that we will continue to be able to offer our farmers the most favorable financing options. We are giving our best to help them in the difficult context we are going through, including by offering advisory services on all business lines, both from an agronomic and financial point of view. We are aware of the evolution of the stock market, where favorable conditions are expected for the sale of inventories, and we are in a position to make competitive offers in this regard,” added Florin Radu.

Agroland Agribusiness shares are listed on the AeRO market of the Bucharest Stock Exchange as of June 15, 2021, and are traded under the AAB symbol. Currently, the company has a market capitalization of over 30 million lei.


About Agroland Agribusiness

Agroland Agribusiness is a Romanian entrepreneurial company specialized in the sale of inputs for agriculture. The company is currently operating in the southern part of the country, respectively in the counties of Dolj, Olt, Mehedinți, Argeș, Teleorman, Vâlcea, Gorj, Dâmbovița, Ilfov, Ialomița, Călărași, Tulcea, Brăila and Constanța. The main agricultural inputs sold by Agroland Agribusiness are fertilizers, pesticides, seeds, and fuels, so the company sells the entire set of inputs needed by farmers. Secondly, Agroland Agribusiness is also involved in grain trading. It purchases grain from farmers and capitalizes it on large traders who operate only at fixed points or only in ports. Thus, Agroland Agribusiness operates as a supplier for farmers through the inputs it sells and as a potential buyer of farmers’ crops. Agroland Agribusiness shares are listed on the AeRO market of the Bucharest Stock Exchange as of June 15, 2021, under the symbol AAB.

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