Rusagro post 1H 2011 net loss of 72 million roubles as materials costs bite bottom line

Leading Russian food producer, Rusagro Group, has posted a 1H 2011 net loss of 72 million roubles under IFRS.

The net result compares with the 1H 2010 net profit of 2.04 billion roubles, as Adjusted EBITDA declined 53% year on year to 1.5 billion roubles, despite sales increasing 30% to 18.8 billion roubles from 14.4 billion roubles posted in 1H 2010. RusAgro said it sugar business generated most of the company's revenue, with its sugar refineries having produced529,000 tonnes of sugar in 1H 2011, up 25% year on year. But the drought and hot weather in central Russia in summer 2010 affected the financials through raw material price increases.Board member, Maxim Basov, said that, despite this, management focus had shielded the bottom line.“Looking at the 1st half of the year 2011 results we acknowledge that despite negative consequences of 2010 drought on 1Q 2011 results the company has managed to show good performance and has met its 1H targets. In general, we are not able to influence raw material prices, but we are able to organize our operational activity and procedures in a way to compete successfully with other market players whatever the pricing situation is. Cumulative production and sales volumes of the Group demonstrate positive dynamics. We have achieved progress in modernization and expansion of our production capacities in each business division.”