- Paris-listed farm operator grows crops in Ukraine
- Says non-bank finance, crop switches helped in crisis
- Eyes export-fuelled growth after maintaining core profit
PARIS, April 21 (Reuters) - Farm operator AgroGeneration stands to benefit from a boom in Ukrainian grain exports and a recovery in commodity prices after using non-bank financing and crop rotations to get through a turbulent two years, its vice-chairman said.
The Paris-listed company expects grain markets to stay tough in 2016 in the face of large global supplies, but sees itself as on a solid footing after posting an operating profit for the second year in a row in 2015, Pierre Danon told Reuters.
"This year will be a case of tightening the belt again. But the day the market turns around, it will be a windfall for AgroGeneration," he said.
International grain prices have traded at their lowest since 2010 during the past year, but adverse weather in South America and investment fund inflows have spurred a rally this month.
AgroGeneration has also weathered economic and geopolitical upheaval in Ukraine, partly by finding alternatives to scarce bank credit for its working capital needs, Danon said.
The group has just concluded a forward sale contract with Quadra Commodities under which the international trading house is to pay 10 million euros upfront for grain to be delivered after this summer's harvest, he said.
It has also negotiated deals for deferred payment when it buys fertiliser and crop seeds, he said.
AgroGeneration reported on Thursday earnings before interest, tax, depreciation and amortisation (EBITDA) of 19.9 million euros in 2015 against 20.7 million the previous year. It posted another net loss, of 7.9 million euros against 21.7 million in 2014, mainly due to currency effects on dollar-denominated loans.
The group has also maintained core earnings by shifting away from maize (corn), towards crops such as sunseed and soybeans that are now more profitable, he said.
Wheat continued to be the company's main crop, accounting for around 40 percent of its area, he added.
Under Ukrainian-born Chairman Michael Bleyzer, AgroGeneration has also reorganised its debt by issuing convertible bonds in the past year.
The firm plans to raise the area it farms this year to 110,000 hectares from 108,000 last year, and Danon reiterated its ambitions to expand by acquiring operators weakened by Ukraine's economic crisis.
Despite uncertainty over an International Monetary Fund support programme following a change of government, AgroGeneration sees Ukraine's economy improving and welcomes the country's focus on boosting grain exports.
The share of AgroGeneration's output sold for export could rise to 50 percent next season from 40 percent, encouraged by the phasing out of sales tax refunds on domestic deals, he said.
(Reporting by Gus Trompiz, editing by David Evans)
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