MCB Agricole Financial Statements for 2010 audited by Baker Tilly

Please click here to download financial statements for 2010 audited by Baker Tilly.  Here is Auditors' opinion, as well.

Explanatory comments to audited 2010 financials

 The positive 2010 financial result in comparison with the unprofitable 2009 is due primarily to price increases for agricultural commodities and also to successful changes in crop rotation.

 Notable price increases on agricultural commodities in 2010 led to sales growing by 39% and to a significant profit from net change in the fair value of agricultural products and biological assets.

 The land bank of MCB Agricole subsidiary Ukrzernoprom Agro did not appreciably change in 2010. However, crop rotation was changed significantly (see Table 1). Planted area with winter wheat and winter rapeseed was reduced, but at the same time area such profitable crops as corn and sunflower was increased; also soybean was planted, cultivation of which will be increased in the future. 

 Table 1.Ukrzernoprom Agro. Planted area and yields 09/10

In general yields are lower than in the 2008-2009 Marketing year, but successful crop rotation and high prices compensated for this. One of the main factors of crop reduction was bad weather: lack of moisture during the spring planting campaign, large snow cover over the period of 3 months in the east, north, and west regions of Ukraine; summer drought; long-term precipitation during harvesting campaign in the south region. 

Ukrzernoprom Agro increased its land bank by 30 000 ha in summer 2008.Therefore, the company had to adapt these lands over 2-3 years in order to integrate them into the overall crop rotation and reach high yields. 

Effectiveness of machinery usage in 2010 was the highest in the last 6 years. It was achieved through effective planning and operative relocation of machinery between branches.

The economic situation in the world has stabilized, which allowed the company to borrow capital and not to incur exchange rate losses. Our current liabilities portfolio rose by more than 2.5 times, and unlike in 2009, Ukrzernoprom Agro obtained short-term loans. Ukrzernoprom Agro in 2010 supplied 15.5 t. of harvested rapeseed to Toepfer in a forward contract. Also the company concluded a forward contract on selling in 2011 11.6 t. of harvested rapeseed with a leading world grain trader. As the company planned, EBITDA is positive ($16,3 mln.) in the 2010 financial year.