Interim report
For the six months ended 30 June 2022
Interim report 2Q2022
CONTENTS | |
Single management report | |
War in Ukraine | 3 |
Financial and operational results | 10 |
Alternative performance measures | 16 |
Selected Financial Data | 17 |
Condensed consolidated interim financial statements | |
Management responsibility statement | 39 |
Condensed consolidated interim statement of comprehensive income | 46 |
Condensed consolidated interim statement of financial position | 47 |
Condensed consolidated interim statement of changes in equity | 48 |
Condensed consolidated interim statement of cash flows | 49 |
Notes to the Condensed consolidated interim financial statements | 51 |
2
Interim report 2Q2022
Single management report
War in Ukraine
Single management report
War in Ukraine
On 24 February 2022 Russian troops invaded Ukraine and Russia has started a full-scale war against Ukraine.
Production sites and lands cultivated by enterprises of IMC S.A. are located in Chernihiv, Sumy and Poltava regions of Ukraine, where active hostilities were underway. Part of Chernihiv and Sumy regions were occupied, but the Armed Forces of Ukraine managed to liberate these regions. As of the date of publication of this Report all the Group's assets are located in the de-occupied territories.
As a result, the Group's business activities have been affected as follows:
- None of the Group's critical facilities or infrastructure has suffered any significant damage.
- All of the Group's inventories are in good condition and are in safe storage.
- As of today all the Group's assets are located in the de-occupied territories.
- The Group does not have a labor shortage and has managed to retain its staff. The Group's key personnel and top managers continue working. Most of the staff at the enterprises returned to work in the office or in production.
- The Group's companies continue to pay all taxes required by law and to comply with all business rules, regardless of martial law.
- The Group provides comprehensive assistance and support in the fight against the occupier. IMC provides all available material resources of the company, which are necessary for the protection of our Motherland and the people of Ukraine. 86 employees of IMC enterprises defend Ukraine in the ranks of the Armed Forces of Ukraine.
- Till August 2022 Black Sea ports in Ukraine remained blocked for export activities. Alternative logistics chains for grain exports through seaports of other neighboring countries were developed by IMC team, but such logistics is very challenging, with numerous bottlenecks along the road making it impossible to recover any sizable export volumes, as well as with vast amount of capital expenditures required to establish the efficient logistics infrastructure on new export routes. It results in low export volumes of grain since 24 February 2022.
- On 15 May 2022 the most difficult spring sowing in the entire 15-year history of IMC company was completed. A total of 19.2 thousand hectares of sunflower and 50.2 thousand hectares of corn were sown. Given the 18.4 thousand hectares of winter wheat sown in the fall of 2021, as of today 73% of the Company's land bank is sown. The rest of the lands in the Chernihiv region were under active hostilities, this area was inspected for explosives (mines, blind artillery and mortar shells, missile remnants, etc) and we plan to return these lands to production in the fall.
- On 21 August 2022 IMC completed the harvesting of winter wheat. Crop was harvested from an area of 18.3 thousand hectares with an average yield of 6.7 t/ha, which is a record result for all years of the company's economic activity, and is 18% higher than wheat yield in IMC in 2021.
Management has identified the following specific risks to the Group's activities due to the war:
- Destruction of fixed assets;
- Loss of stocks of inventories;
- Loss of access to the assets in case of occupation of territories;
- Employee-relatedrisks;
- Disruption of logistics routes in Ukraine;
- Inability to conduct export activities;
- Potential cyber attack.
The Group has no influence on most factors, but the Management has taken possible precautionary measures:
- Part of the mobile machineries was moved from the northern branches to other regions of the Group, as there is a risk of re-occupation.
- Training work was carried out with the staff on behavior and personal safety in wartime, certain work processes were reconfigured to ensure the safety of employees in the performance of their duties, the number of fire protection equipment and first aid kits at workplaces was increased.
- Cyber attack response plans have been developed.
3
Interim report 2Q2022
Single management report
Financial and operational results
Financial and operational results
Financial and operational results
The following table sets forth the Company's results of operations derived from the Consolidated financial statements:
(in thousand USD)
CONTINUING OPERATIONS
Revenue
Gain from changes in fair value of biological assets and agricultural produce, net
Cost of sales
GROSS PROFIT
Administrative expenses
Selling and distribution expenses
Other operating income
Other operating expenses
Write-offs of property, plant and equipment
OPERATING PROFIT/(LOSS)
Financial expenses, net
Effect of lease of right-of-use assets
Foreign currency exchange (loss)/gain, net
PROFIT/(LOSS) BEFORE TAX FROM CONTINUING OPERATIONS
Income tax expenses, net
NET PROFIT/(LOSS) FOR THE PERIOD FROM CONTINUING OPERATIONS
For the six | For the six | |
months ended | months ended | Changes, % |
30 June 2022 | 30 June 2021 | |
44 526 | 84 781 | -47% |
30 331 | 77 700 | -61% |
(44 902) | (71 357) | -37% |
29 955 | 91 124 | -67% |
(4 923) | (5 130) | -4% |
(5 561) | (7 725) | -28% |
516 | 3 206 | -84% |
(1 970) | (1 326) | 49% |
(14) | (56) | -74% |
18 003 | 80 093 | -78% |
(49) | (490) | -90% |
(3 516) | (3 295) | 7% |
(2 547) | 2 106 | -221% |
11 891 | 78 414 | -85% |
(555) | (1 016) | -45% |
11 336 | 77 398 | -85% |
Normalised EBITDA | 28 977 | 91 925 | -68% |
Company's Normalised EBITDA decreased in 1H2022 in comparison with 1H2021 due to decrease in sales volume and prices used in valuation of biological assets and agricultural produce under fair value.
Revenue
The Company's revenue from sales of finished products decreased by 47% in 1H2022 in comparison with previous period.
The following table sets forth the Company's sales revenue by products indicated:
For the six | For the six | ||
(in thousand USD) | months ended | months ended | Changes, % |
30 June 2022 | 30 June 2021 | ||
Corn | 43 351 | 83 111 | -48% |
Sunflower | 40 | 117 | -66% |
Wheat | 201 | 67 | 200% |
Milk | 286 | 738 | -61% |
Cattle | 286 | 104 | 175% |
Other | 281 | 514 | -45% |
44 445 | 84 651 | -47% | |
4
Interim report 2Q2022
Single management report
Financial and operational results
The most significant portion of the Company's revenue comes from selling corn, which represented 97,5% in 1H2022 and 98,2% in 1H2021 of total revenue.
The following table sets forth the volume of the Company's main crops and revenues generated from the sales of such crops:
(in thousand USD)
Corn
Sales of produced corn (in tonnes)
Realization price (U.S. $ per ton)
Revenue from produced corn (U.S. $ in thousands)
Sunflower
Sales of produced sunflower (in tonnes) Realization price (U.S. $ per ton)
Revenue from produced sunflower (U.S. $ in thousands)
Wheat
Sales of produced wheat (in tonnes) Realization price (U.S. $ per ton)
Revenue from produced wheat (U.S. $ in thousands)
Other (produced only) Total sales volume (in tonnes)
Total revenues (U.S. $ in thousands)
Total sales volume (in tonnes)
Total revenue from sale of crops (U.S. $ in thousands)
Decrease in sales volume in 1H2022 has led to a decrease in revenue.
Cost of sales
For the six | For the six |
months ended | months ended |
30 June 2022 | 30 June 2021 |
208 853 | 405 742 |
208 | 205 |
43 351 | 83 111 |
93 | 185 |
426 | 630 |
40 | 117 |
645 | 280 |
312 | 241 |
201 | 67 |
3 850 | 3 328 |
281 | 514 |
213 441 | 409 535 |
43 873 | 83 809 |
The Company's cost of sales changed to USD 44,9 million in current period from USD 71,4 million in previous period. The following table sets forth the principal components of the Company's cost of sales for the periods indicated:
(in thousand USD)
Raw materials
Change in inventories and work-in-progress Depreciation and amortization
Wages and salaries of operating personnel and related charges Fuel and energy supply
Third parties' services Rent
Repairs and maintenance
Taxes and other statutory charges Other expenses
For the six | For the six | |
months ended | months ended | Changes, % |
30 June 2022 | 30 June 2021 | |
(48 733) | (59 563) | -18% |
23 600 | 8 403 | 181% |
(10 476) | (10 857) | -4% |
(5 021) | (5 365) | -6% |
(3 059) | (2 484) | 23% |
(461) | (599) | -23% |
(244) | (221) | 10% |
(263) | (372) | -29% |
(201) | (244) | -18% |
(44) | (55) | -20% |
(44 902) | (71 357) | -37% |
A 37% decrease in cost of sales in 1H2022 is consistent with a decrease in sales volume.
5
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IMC SA published this content on 29 August 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 August 2022 00:11:22 UTC.