KSG Agro is increasing the number of pigs by growing the number of pig farms, – experts at RA Expert Rating
KSG Agro is increasing the number of pigs by growing the number of pig farms. This became one of the main factors in the renewal of the credit rating of KSGAgro on December 25, 2023, based on the results of 9 months of 2023 at the level of uaA+ on the national scale (rating on the international scale at the level of BBB) by the rating agency Expert Rating (http://expert-rating.com/rus/rating-list_individualnye_reitingi_promyshlennye_kompanii_ksg_agro_s.a._onovleno_reiting_ksg_agro_s.a. (4)/). This was reported by the press service of the agricultural holding.
The Rating Committee of RA Expert-Rating, despite the large-scale aggression of the Russian Federation and the difficult situation in the Ukrainian agricultural sector, on December 25, 2023, according to the results, renewed the long-term credit rating of KSG Agro on the national scale at uaA+ (rating on the international scale at BBB) (http://expert-rating.com/rus/rating-list_individualnye_reitingi_promyshlennye_kompanii_ksg_agro_s.a._onovleno_reiting_ksg_agro_s.a.(4)/). This means that a borrower or a debt instrument with a uaA rating is characterized by high creditworthiness compared to other Ukrainian borrowers or debt instruments. The agency assigned the credit rating based on the analysis of KSG Agro's consolidated financial statements for 9 months of 2023.
Expert Rating experts note that EBITDA for the first 9 months of 2023 increased by 66.67% to $4.54 million compared to the same period of 2022, and the ratio between EBITDA for the first 9 months of 2023 and the volume of loans as of 30.09.2023 increased by 6.88 p.p. to 16.53% compared to the previous year, which is a positive factor.
According to the analysts of RA Expert Rating, it is important that the revenue from sales of KSG Agro products for 9 months of 2023 increased by 16.41% to $11.9 million compared to the same period in 2022. The increase in sales revenue in the first nine months of 2023 was due to a relatively low comparison base in 2022 (when the company's sales in the first quarter of 2022 fell significantly due to the Russian invasion of Ukraine). At the same time, in 2023, KSG Agro began exporting grain crops, thereby increasing sales compared to 2022. KSG Agro's net profit for 9 months of 2023 increased almost 14 times (by $1.24 million) to $1.34 million compared to the same period in 2022.
The agency notes that since the beginning of the Russian invasion, there have been no hostilities in the immediate vicinity of the agricultural holding's assets, and KSG Agro's pig farm and fields are located in the center of Ukraine, where there are no hostilities. They were also not affected by the floods caused by the Russian Federation's undermining of the Kakhovka hydroelectric power plant dam and have alternative sources of water supply.
"During the first nine months of 2023, KSG Agro used more of its own grain for feed production instead of purchasing it, which reduced the agricultural holding's dependence on external suppliers of feed components during the war. As part of its strategy change, in 2023, the Group continues to replace sows of European genetics with Canadian genetics and limits the number of pigs per farm (to reduce the risk of losing the entire pig population in the event of a missile or drone strike). Instead, it is increasing the number of pigs by increasing the number of farms. The company has successfully completed the summer harvesting campaign, as well as sunflower harvesting," reads the report of RA Expert Rating.
