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Report on interim financial results of AUGA group, AB for six-months period ended 30 June 2021

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In the first half of 2021, the sales revenue of AUGA group, AB and its subsidiaries (hereinafter - the Group) amounted to EUR 33.13 million and was 4% lower compared to the same period last year, when the sales revenue totalled EUR 34.69 million.

In the first half of 2021, the Group’s gross profit was EUR 8.50 million. A decrease of 1% is reported compared to the same period last year, when the gross profit amounted to EUR 8.58 million. In 2021, the Group earned a EUR 0.75 million net profit, compared to EUR 1.30 million a year earlier.

The Group’s EBITDA in the first half of 2021 amounted to EUR 11.14 million. During the same period last year, EBITDA was EUR 11.53 million.

“Although the weather at the end of last year and in the first half of this year allowed us to expect a good harvest in 2021, the extreme heat wave recorded in the summer have forced us to adjust forecasts. We will only be able to measure the final results after the harvest, but we believe that yield especially summer crops could be significantly lower than last year. Rising production prices and better quality of basic crops will partially offset these losses, however, lower yield forecasts are also adjusting our results in the crop growing segment.

The Group’s companies continue to pay great attention to the implementation of the strategy, R&D activities, and the development of innovative technologies, as these will serve as the basis for the company’s growth and value. We hope that, in the near future, we will be able to present the results of the innovative projects being developed", says Kęstutis Juščius, CEO of AUGA group, AB.

Crop growing segment

In total, in the first half of 2021, the Group’s companies calculated a profit of EUR 6.53 million on the recognition of biological assets at fair value. This result is similar in comparison with the same period last year when it reached EUR 6.38 million. Once the forecasts for lower yields have been confirmed, the profit on the recognition of biological assets at fair value in the next six-month period could be significantly lower. A similar change was in 2020.

The sales volumes of the crop growing segment depend on the seasonal harvest, the terms of contracts with buyers, and the market situation. Despite the higher harvest in the previous season, compared it to the 2018/2019 season, sales revenue decreased in the first half of 2021 as the Group sold a larger part of the 2019/2020 season harvest in 2020. Meanwhile, the 2018/2019 harvest was sold in similar parts during 2019 and 2020.

In the first half of 2021, the gross profit of the crop growing segment, including the result of agricultural produce sales, changes in the fair value of biological assets and agricultural subsidies, reached EUR 7.51 million, and was 2% higher than in the same period last year.

Dairy segment

The Group’s companies faced challenges in the production process at the beginning of the year, so the planned goal of increasing milk yields was not met. However, the strong focus placed on this segment resulted in June’s yields now already exceeding the 2020 result by 4%. Positive market trends are visible, with the average sales price in the first half of 2021 being 4% higher than the same period in 2020.

In the first half of 2021, the sales revenue of the segment was EUR 6.73 million, compared to the sales revenue of EUR 6.66 million last year. Challenges in production and higher losses from the revaluation of biological assets resulted in a loss of EUR 0.27 million accumulated in the first half of 2021, compared to EUR 0.09 million in profit last year.

The number of cows changed insignificantly in the second quarter of 2021 but the Group plans to further increase the number of cows to 3,600 units.

Further attention to this segment, herd renewal and the use of new technologies are expected to improve segment performance.

Mushroom growing segment

In the first half of 2021, the total sales revenue of the mushroom growing segment amounted to EUR 14.33 million and was 6% lower compared to EUR 15.21 million in the previous year.

In the second quarter of 2021, the Group company operating in this segment faced the challenges with an increase in the number of workers suffering from COVID-19 in its production units. As a result, the company had to reduce its production and sales volumes, and the long production process did not reduce the costs incurred in production. These risks are expected to be avoided in the future, with vaccination rates in mushroom production units now reaching 60-69%.

It is also important to note that the COVID-19 pandemic and the hot summer weather have led to a general decrease in production capacity across the market, leading to a situation where demand exceeds supply at the end of the half year.

The gross profit of the mushroom growing segment amounted to EUR 0.59 million. This represents a decrease of 44%, compared to the previous year.

Fast-moving consumer goods (FMCG) segment

During the first half of 2021, segment sales amounted to EUR 2.59 million, while last year’s segment sales amounted to EUR 1.99 million.

Higher growth was recorded in the first quarter of this year than in the second, however, the FMCG segment continues to demonstrate good results. The slowdown in the second quarter was driven by transport challenges – capacity shortage in logistics and increased transportation costs. These reasons have led customers to reduce a quantity of orders but increase their value, with a large proportion of orders being moved to the third quarter of 2021. Sales in July 2021 were 69% higher than in July 2020.

The segment’s profitability margin remains at the similar level, reaching 25% in the first half of 2021.

Operating expenses

The Group's operating expenses during the first half of 2021 amounted to EUR 5.15 million, compared to EUR 4.59 million in the same period last year. Operating expenses increased mainly due to increased salaries, selling expenses and share-based payment expenses. Additionally, the operating expenses of Grybai LT KB is fully represented in 2021, while operating expenses of Grybai LT KB were only partly represented in the comparative period in 2020 as the respective entity was only included in consolidated financial statements as of 1 June 2020.

Financial data in MS Excel file

In order to ensure more convenient access to, and analysis of, the financial data of the Group, AUGA group, AB has prepared and published the data from previous and the most recent reporting periods in MS Excel format available at the following link: http://auga.lt/en/investors/reports-and-presentations/#tabs

Contacts:
Mindaugas Ambrasas, AUGA group, AB CFO
Phone: +370 620 67296
Email: m.ambrasas@auga.lt

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