Astarta Holding PLC

Thank you for joining the call today. We are pleased to report our financial results for the first six months of this year. I'm just going to go briefly through our key numbers. I think everyone appreciates that the external environment in which the business operates was very difficult this year. Nonetheless, we are pleased to report a good level of profitability in the first half of the year. We had significant increase in our revenue on account of agricultural produce. We will talk about this in more detail, but we managed to sell higher volumes of our grain before the war. We also have growth on the revenue in every other segment, which includes sugar, soybean processing and cattle farming. Profitability was down on the gross profit margin on account of the effect of the re-measurement of agricultural produce. This is the crops which are still growing in the ground as we report our results. If we strip the effect of IS41, which is a biological assets revaluation on our P&L, you can see also very solid margins on the gross profit and EBITDA level. Last week we also reported harvesting of our winter crops, which is wheat and rapeseed. The weather conditions were less favorable than last year and we can see that the yields are slightly down. Now going to the cash flows and our balance sheet, we managed to preserve our cash flows and preserve our low leverage. Operating cash flows before working capital changes in fact increased by 40% and our net financial debt was down if we take into account the significant cash balances on the balance sheet. Our investment program was limited to maintenance CAPEX, on comparable scale as of last year. The only difference is that last year we had divested a few of smaller assets. If we drill down to our segment results, one can see strong sales of corn in the first half of the year. That was before the war started. Then we continued our efforts on exporting our produce. In the second quarter, that was mostly overland, but Ukraine also worked on the seaborne routes reopening for Greater Odessa. And since August, we can see this route to be delivering the first million tons since opening. As we also explained during our first quarter results, given the logistical problems of exporting from Ukraine, we managed to adjust our crop mix for this year targeting lower acreage of corn and increasing acreage under wheat and soybeans and sunflower seeds which are processed domestically in Ukraine. When presenting the market picture, we are showing current prices on ex-works basis, because unfortunately when Ukrainian ports were shut, except for Danube route, the FOB market quotes for Ukrainian wheat and corn were not present. So here we present the statistics on an ex works basis. And as we mentioned, we see very encouraging growth in traffic through the greater Odessa port. Currently, the government authorities target increase in its capacity to 3 million tons. which looks achievable in light of the 28 days, 1 million ton turnover. Also, we can see an increase of volumes through deny ports. For July, the turnover was 1.4 million and the target is 2 million. So overall, according to the market consultancy, such as UkraAgra Consult, it is within reach for Ukraine to export 5 million tons per month going forward. Sugar was delivering better volumes in the second quarter of this year. During the first quarter, what results call, we explained there was some decline for one month of the initial military hostilities in Ukraine. Since then, we see not only retail volumes, but also industrial consumption of sugar recovering in Ukraine. And we also see a strong volumes and we also see better prices. Also, since the EU opened its doors to Ukrainian goods on a quarter-free, duty-free basis, there is an opportunity for the sugar players to export into the EU market. We also managed to export 4000 tons since the market reopening and we can see that this particular segment might be delivering strong in the second quarter of this year. It would be difficult to estimate of focus consumption of sugar in Ukraine, because that will depend on how many residents will return to their homes in the second half of this year. But in terms of the sugar output, according to Ukr Sugar Association, production is expected to be around 1.1 million tons. This is lower than last year and that will result in a smaller number of sugar mills operating. The estimate is 23 out of 33 sugar plants.

Soybean processing.

Again, we can see strong volumes of crashing as well as sales. Our plant operated on a non-stop level, except for the first two weeks of the aggression. And there was a strong demand domestically for meal. and oil from domestic poultry and livestock players in the market that allowed us to not only increase the volumes of production, but also to achieve higher profitability. That was due to stronger demand on the domestic side. You can see our gross profit margin widening by 100% and same goes at the EBITDA level. Since Ukrainian farmers anticipated difficulties with exporting grain, they increased acreage under soybeans. in line with what Astarte did, and we expect a good harvest at the acreage of 1.5 million tons this year. Kettle farming is also a beacon of stability for our business. This segment managed to increase production slightly and increase productivity yield per head of livestock. We had stable sales and the pricing was also favorable. That allowed us to increase our profitability. And we expect the demand to remain strong. We can discuss outlook in more detail during the Q&A session, but we would like to repeat that, of course, the current environment remains very volatile. And we it was it would be difficult to estimate any. Key trends, but what we promised to our investors and partners that we will never. We will still do our commitments under sustainability. We. restarted our project for improving our climate corporate governance and working on decarbonization strategy of our business together with EBRD and ENY. And we also continue a more dedicated program to the agriculture on decarbonization of agricultural activities, specifically with Syngenta. The summary of our sustainability assets so far you can find on the next slide. And we also continue our humanitarian efforts. helping displaced people and those who are affected by military hostilities. The number of partners of our project is growing, and this is the help which continues, unfortunately, to be in need for the millions of Ukrainians. If you would like to contribute or know the partner who can join this project, please contact us separately.