Astarta Holding PLC

Thank you very much for joining this call. I suggest we're still letting people into the room, so just bear with us with a couple more minutes. We would like to ask everyone to be on mute, given the number of people online. so that we do not have interference. And after a very brief presentation of our nine-month results, we'll go into Q&A, which we will also ask to be in writing in the box so that we can read it out for everyone. So, we start with our revenues. One can see that we managed to increase our top line in all business segments except for soybean processing. This is a technical, because of the lower prices for soybean products. Profitability remains solid on the gross and EBITDA margin. If we are talking about our EBITDA margin, it is stable at 30%, courtesy of strong development on the biological assets growing in the ground. and our net profit margin even expanded from 14% to 17%. Without IS41 effect, we also show our profitability on the same page, and it is slightly lower on the gross margin level at 37% and slightly lower on EBITDA margin. Talking about our cash flows, we still focus on maximizing our operating cash flows, and we are pleased to report that they increased by almost three quarters to 136 million euros. We were able to continue investments For the nine months of this year, the key investments went into agriculture and sugar making. Specifically in sugar making, we are building a new silo, which became operational to preserve the quality of our sugar, especially for the premium export markets. We are still on track to invest into the soybean protein concentrate project that we started last year, but this investment is likely to appear in the fourth quarter of this year. But also despite our increase in CAPEX in the cash flows, the leverage still remains quite low, below one times net debt to EBITDA. Agriculture. We see a positive pricing environment, especially for wheat and rapeseeds. Corn acreage was reduced this year as we are focusing on soybeans and sugar beet, which we process in-house. Nonetheless, the revenues and profitability for the crops that we sell to third parties of takers rather than processing internally remains at a very good level. What was not as favorable this year is the weather conditions for growing our crops. For winter crops such as wheat and rapeseeds, Ukraine was enjoying relatively favorable conditions, but drought and hot weather in summer unfortunately affected our late crops. We can see average yields in Ukraine in general and for us in specifically down by 15 to 25 percent, whether it's corn, sunflower seeds or soybeans. We are still in the finishing stages of harvesting sugar beets. And we also expect a similar impact on our yields there, which will bring our yields closer to the average Ukrainian levels. We finished winter crop sowing rapeseeds and wheat for next year marketing season. And this is also in line with general progress in Ukraine at which 98% of winter crops were already completed for next year's harvest. The pricing environment is better than last year, specifically for wheat in Ukraine, but also we can see that the farmers in Ukraine are able to earn more on a per ton basis because the pricing differential between wheat Global prices and Ukrainian ex-works prices are narrowing down. Odessa-based ports continue to operate at high throughput capacity despite more aggressive attacks from Russia and unfortunately fatalities and casualties involved. The volumes continue to flow out. So if this throughput capacity remains intact, Ukraine will be able to further reduce its logistics costs, which is very favorable to the local growers of grain and oil seeds. Sugar production, the pricing environment is worsening now, but if we take nine months overall, the prices were down by almost 100 euros, which... obviously hit our profitability with gross margin contracting from 29% to 24% and EBITDA margin at half of what it used to be last year. Sugar beet harvesting started earlier this year. We have our five plants fully operational, and by now we already processed almost two million tons of sugar beet and produce 270,000 tons of sugar, which was higher than last year during the same period. We continue to rely mostly on our own crops in sugar making at more than 80% of total sugar beet processed. With regards to Ukraine, the average yield is closer to 48 tons per hectare. So the overall sugar production is not known yet as sugar plants continue to operate, but it is likely to be slightly lower than last year on the account of lower sugar beet yields. The pricing environment generally, as long as it remains above $500, remains more or less favorable despite the 20% drop compared to last year, which allows the Ukrainian sugar producers to actively pursue exports of sugar outside Ukraine. After the EU quota was exhausted by the end of the first half of this year, everyone is waiting to restart exports into the EU markets under 110,000 tonne quota. from January, but in the meantime, Ukrainian sugar produces export on MENA markets until the reopening of the EU. Soybean processing demonstrating very steady margin despite lower prices for both soybean meal and oil. This is because management is focusing on the crushing margin and makes sure that it remains at good levels, 33% at gross margin level and EBITDA margin nearly 30%. Generally, there is an expectation of continuation of good margin environment for the crushes in Ukraine because the farmers increased production of soybeans from under 4 million tons before the war to 6 million tons this year. and higher availability of soybeans is very favorable for the crusher's margin. Cattle farming continues growing from strength to strength. We are increasing milk production, our herd and daily milk yields. Pricing environment also remains favorable because there is consolidation trend in the market. The household producers of raw milk numbers going down while industrial producers such as Astarta keep increasing production market share. and commanding premium price for its high quality raw material this is it for the nine months results and we would be very happy to answer your questions One second, we are just looking for the box with the questions, and we'll read out the first one soon.

Okay.

First question coming from Adam. How many percentage of sugar amount that can be imported to... Do you mean EU rather than UAE? I hope this is Europe. From Ukraine will be assigned for Astarta. Or company like Astarta may export as much as we want. I'm going to pass the floor to our commercial director, Vyacheslav Chuk.