Cibi e Bevande
Company announcement no 3/2022 - Annual Account 2021 and Interim Report Q4 2021
EBITDA fixed herd prices (FHP) for Q4 2021 decreased to -1.039 mEUR (Q4 2020: 486 kEUR), corresponding to an EBITDA margin FHP of
-5.1% (Q4 2020: 2.1%). The quarterly EBITDA in Q4 2021 decreased by 1.525 kEUR (compared to Q4 2020). Comparing the periods changes in sales and feed prices neutralize each other, but missing volume from Ostrov farm impact the result with roughly 1,5 mEUR.
Impact of Ostrov out of production is that Russian production only is 67% of norm normal, but we still have various capacity cost in Ostrov of 0.5 mEUR. Sales prices in Q4 were 1.00 EUR/kg live weight, up from 0.92 EUR/kg (Q4 2020). The outlook is negative in EU/Lithuania for first half of 2021. Nevertheless, pork production in Northern Europe is currently being reduced, which is expected to impact sales prices positive from mid-2022 positively.
Feed prices in Q4 2021 were 251 EUR/T (compared to 240 EUR/T Q1-Q3 2021). That prices did not increase more is due to hedging policy, as market price increases were significant higher. Looking ahead is a significant amount of grain is hedged until harvest 2022 either in storage, on fields, or contracts, reducing future increases in feed price, as raw materials as grain have been increasing. End December 2021 4.3 mEUR hedging gains are included in Group equity in other reserves, which will be released into EBITDA during next 9 months.
The herd valuation in Q4 decreased by 2,125 kEUR (compared to 30.09.2021). The decrease is driven on price pressure in EU due to over production of pork, as the export from EU to China currently is on a minimum, due to low prices in China. FY2021 the herd prices are almost unchanged with increase of 271 kEUR. Free cash flow was 6,130 kEUR in Q4 2021 (Q4 2020: -748 kEUR), due to payment of insurance sum for Ostrov.
Net interest-bearing debt (NIBD) decreased to EUR 78.5m in 2021, being EUR 9.2m lower than in 2020 (87.9 mEUR). Nevertheless, the following need to be considered EUR 4,3 from hedging transactions which will be included in EBITDA in 2022 and cost to repopulate Ostrov, which will be made in 2022. Idavang has almost four years duration with the EUR 75m bond left, hence having very stable financing.
Tensions between Russia and Ukraine increased during February, as first Russia mobilized its military on the borders, and afterward, on the 24th February, Russia entered into Ukraine. EU, USA and other countries applied sanctions on Russia twice during this period. Idavang is currently not aware of any sanctions that will directly negatively impact Russia's operations. Nevertheless, Idavang might be negatively affected with either sanction unknown to Idavang already approved or future sanctions.
Idavang did withdraw 4,1 mEUR from Russia to Denmark at the beginning of February of the intercompany loan (after approval from Nordic Trustee and Jyske Bank). The withdrawn amount was for February/May interest on bonds and excess cash repayment on bonds after annual release. After the transfer, the management considers the short-term liquidity reserve in both Russia and Lithuania/Denmark strong. Still, it has further reserves in working capital e.g., implementing factoring in Lithuania (3 mEUR allowed in bond terms). Focus has also been on increasing operational stability, increasing inventories of everything from spare parts to feed components. Idavang Lithuania has hedged around half of the grain consumption for next harvest season (September 2022 - August 2023), limiting the impact of volatile world markets.
Further information
Bondholders - Claus Baltsersen, CEO phone +370 (685) 34 104
Media - Jytte Rosenmaj, Board Member phone +45 26 73 46 99
Attachments
2321 Rosecrans Avenue. Suite 2200
90245 El Segundo Stati Uniti