Agriculture

MCB Agricole [4GW1 GR, U/R] has signed a USD 5.8 mln forward contract to sell 17 thsd tonnes of rapeseed, the shipment of which is scheduled for August-September 2010. The price set is USD 340 per tonne, CPT. The Company has received an advance payment of USD 2.9 mln, which will be used for its spring sowing campaign.

Landkom International PLC [LKI LN, U/R], a Ukrainian producer of agricultural commodities, announced its results for 10M2009ending 31 October 2009. The Company’s net revenues for that period were USD 14.6 mln vs. just USD 10.6 mln for the whole year in 2008.

On February 25, 2010, the Antimonopoly Committee of Ukraine granted Kernel Holding S.A. [KER PW, BUY] approval for the acquisition of Allseeds. This will allow the Holding to exercise the option agreements signed by the Company earlier and concentrate a 93.4% stake in Allseeds.

The Minister of Agrarian Policy of Ukraine, Yuriy Melnyk, has announced delays in the sowing campaign in Ukraine due to unfavorable weather conditions. In the previous season, a few hundred thsd ha were sown at a similar date. Another factor that makes this season less favorable than the 2008/09 season is the fact that 7% of the winter crops sown are covered with a crust of ice, which will probably cause the loss of these crops.

The Ukrros sugar union, a major sugar producer in Ukraine, has announced its plans to produce 50 thsd tonnes of cane sugar out of raw cane sugar, which was imported according to WTO quotes for 2010 for the Palmir Sugar Mill. The Holding has already produced 15.7 thsd tonnes of cane sugar, which was also imported according to WTO quotes for 2009.

IFC plans to provide USD 75 mln in financing to the Mriya [MAYA GR] agro holding, a major producer of crops in Ukraine. The issue is to be considered by the IFC’s Board of Directors on March 31, 2010. Preliminarily, the IFC financing should consist of a USD 25 mln subordinated loan, another USD 25 mln one-year loan with an option of prolongation, and USD 25 mln in warrant purchases. A warrant is a security that gives its owner the right to purchase a certain number of shares at a specified future date at a specified price.

On February 12, 2010, Kernel Holding S.A. [KER PW, BUY] signed the call option agreement to acquire the 37.6% minority stake in the Allseeds Group, subject to the approval of this transaction by the Antimonopoly Committee of Ukraine.

Kernel Holding S.A. [KER PW, BUY] has reported on its 2Q2010 results. Its revenue decreased 6.5% YoY, from USD 291.2 mln in 2Q2009 to USD 272.3 mln in 2Q2010. Revenues fell due to relatively lower commodity prices, which were, however, compensated by higher volumes. The Company’s gross profit increased 6% YoY to USD 93.9 mln, while its gross margin grew from 30% to 34%, driven primarily by 50% growth in bulk oil sales and 22% growth in grain terminal throughput. Kernel’s EBIT increased 7% YoY to USD 51.6 mln and its operating profit margin increased YoY from 17% to 19%. Net income rose by 8% YoY to USD 43.2 mln for 2Q2010.

Sintal Agriculture [SNPS GR] has commenced construction of a new silo in the Kharkiv Region, with a projected capacity of 115 thsd tonnes. Construction is scheduled for completion by 2011, while the first stage – the elevator – should be finished in May 2010. According to the Holding’s CEO, Vadym Mohyla, the Company is in the process of finalizing the purchase of another silo in the Crimea, as well as of the expansion of its land bank in the Kherson region.

Astarta [AST PW, BUY], a major vertically-integrated agro-holding with a stronghold on the Ukrainian sugar industry, has announced plans to expand its agricultural machinery fleet in 2010. The Holding intends to invest USD 10 mln in purchasing more than 90 units of modern agricultural machinery and equipment from leading EU and US producers. This program is being financed through long-term loans.